$3,630,000 CHARTER TOWNSHIP OF SAGINAW COUNTY OF SAGINAW, STATE OF MICHIGAN 2017 REFUNDING BONDS (LIMITED TAX GENERAL OBLIGATION)

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1 NEW ISSUE-Book-Entry-Only RATING : S&P Global Ratings: AA- In the opinion of the Miller, Canfield, Paddock and Stone, P.L.C., Bond Counsel, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes and the Bonds and interest thereon are exempt from all taxation by the State of Michigan or by any taxing authority within the State of Michigan except inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof. See TAX MATTERS and APPENDIX E, FORM OF APPROVING OPINION OF BOND COUNSEL herein for a description of certain provisions of the Internal Revenue Code of 1986, as amended (the Code ), which may affect the tax treatment of interest on the Bonds for certain Bondholders. Dated: September 6, 2017 $3,630,000 CHARTER TOWNSHIP OF SAGINAW COUNTY OF SAGINAW, STATE OF MICHIGAN 2017 REFUNDING BONDS (LIMITED TAX GENERAL OBLIGATION) Due: May 1, as shown below The 2017 Refunding Bonds (Limited Tax General Obligation) (the Bonds ) are being issued by the Charter Township of Saginaw, County of Saginaw, State of Michigan (the Township ), pursuant to Act 34, Public Acts of Michigan, 2001, as amended ( Act 34 ), and a resolution adopted by the Township on July 10, 2017 (the Resolution ) for the purpose of refunding all or a portion of a prior bond issue of the Township and paying the costs of issuance incurred with respect to the Bonds. The Township has pledged its limited tax full faith and credit for the prompt payment of the Bonds. The Township shall each year budget the amount of the debt service coming due in the next fiscal year on the principal of and interest on the Bonds and shall advance moneys as a first budget obligation from its general funds available therefor, or, if necessary, levy taxes upon all taxable property in the Township subject to applicable constitutional, statutory and charter tax rate limitations, such sums as may be necessary to pay such debt service in said fiscal year. The Bonds have been designated as qualified tax-exempt obligations for purposes of deduction of interest expense by financial institutions pursuant to Section 265(b)(3) of the Code. See QUALIFIED TAX-EXEMPT OBLIGATIONS herein. The Bonds are issuable only as fully registered bonds without coupons and, when issued, will be registered in the name of Cede & Co., as Bondholder and nominee for The Depository Trust Company ( DTC ), New York, New York. DTC will act as securities depository for the Bonds. Purchases of beneficial interests in the Bonds will be made in book-entry-only form in the denomination of $5,000 or any integral multiple thereof. Purchasers of beneficial interests in the Bonds (the Beneficial Owners ) will not receive certificates representing their beneficial interest in Bonds purchased. So long as Cede & Co. is the Bondholder, as nominee of DTC, references herein to the Bondholders or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Bonds. See THE BONDS Book-Entry-Only System herein. Principal of and interest on the Bonds will be paid by The Huntington National Bank, Grand Rapids, Michigan (the Transfer Agent ). So long as DTC or its nominee, Cede & Co., is the Bondholder, such payments will be made directly to such Bondholder. Disbursement of such payments to the DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of the DTC Participants and Indirect Participants, as more fully described herein. Interest will be payable semiannually on May 1 and November 1, commencing November 1, 2017, to the Bondholders of record as of the applicable record dates herein described. MATURITY SCHEDULE (Base CUSIP : ) Maturity (May 1) Amount Interest Rate Price CUSIP Maturity (May 1) Amount Interest Rate Price CUSIP 2019 $280, % % KL $370, % % KR , % % KM , % % KS , % % KN , % % KT , % % KP , % % KU , % % KQ , % % KV5 THE BONDS MATURING IN THE YEARS 2019 TO 2027, INCLUSIVE, SHALL NOT BE SUBJECT TO REDEMPTION PRIOR TO MATURITY. THE BONDS MATURING ON OR AFTER MAY 1, 2028 ARE SUBJECT TO OPTIONAL REDEMPTION BEGINNING MAY 1, 2027, IN THE MANNER AND AT THE TIMES DESCRIBED HEREIN. SEE THE BONDS Optional Redemption HEREIN. The Bonds will be offered when, as and if issued by the Township and accepted by the Underwriter subject to the approving legal opinion of Miller, Canfield, Paddock and Stone, P.L.C., Detroit, Michigan, Bond Counsel. Certain legal matters will be passed upon for the Underwriter by Dickinson Wright PLLC, Troy, Michigan. It is expected that the Bonds will be available for delivery through DTC on or about September 6, This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. The date of this Official Statement is August 16, 2017 For an explanation of the rating, see RATING herein. CUSIP is a registered trademark of the American Bankers Association. CUSIP numbers are provided by CUSIP Global Services, which is managed on behalf of the American Bankers Association by S&P Capital IQ. The CUSIP numbers are provided for convenience and reference only. Neither the Township nor the Underwriter are responsible for the selection or use of CUSIP numbers, nor is any representation made as to their correctness on the Bonds or as set forth in this Official Statement.

2 No dealer, broker, salesperson or other person has been authorized to give any information or to make any representation other than as contained in this Official Statement in connection with the offer made hereby and, if given or made, such other information or representation must not be relied upon as having been authorized by the Township or the Underwriter. This Official Statement and the information contained herein are subject to completion and amendment. These securities may not be sold nor may an offer to buy these securities be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Information herein has been obtained from the Township, The Depository Trust Company, and other sources believed to be reliable. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibility to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information (except for information under the section captioned UNDERWRITING which was obtained from the Underwriter). Upon issuance, the Bonds will not be registered under the Securities Act of 1933, as amended, or any state securities law and will not be listed on any stock or other securities exchange. Neither the Securities and Exchange Commission nor any other federal, state, municipal or other governmental entity or agency will have passed upon the adequacy of this Official Statement, or, except for the Township, approved the Bonds for sale. IN CONNECTION WITH THE OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE INFORMATION PRESENTED IN THIS OFFICIAL STATEMENT CONCERNING THE TOWNSHIP AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

3 TABLE OF CONTENTS Page INTRODUCTION... 1 PURPOSE AND SECURITY... 1 QUALIFIED TAX-EXEMPT OBLIGATIONS... 1 REFUNDING PLAN... 1 VERIFICATION OF ARITHMETICAL AND MATHEMATICAL COMPUTATIONS... 2 ESTIMATED SOURCES AND USES OF FUNDS... 2 THE BONDS... 2 Description and Form of the Bonds... 2 Book-Entry-Only System... 3 Transfer Outside Book-Entry-Only System... 4 Optional Redemption... 4 Notice of Redemption and Manner of Selection... 5 LITIGATION... 5 TAX MATTERS... 5 Tax Treatment of Accruals on Original Issue Discount Bonds... 6 Amortizable Bond Premium... 6 Market Discount... 6 Information Reporting and Backup Withholding... 7 Future Developments... 7 APPROVAL OF LEGAL PROCEEDINGS... 7 APPROVAL BY MICHIGAN DEPARTMENT OF TREASURY... 8 RATING... 8 UNDERWRITING... 8 REGISTERED MUNICIPAL ADVISOR TO THE TOWNSHIP... 8 CONTINUING DISCLOSURE... 9 OTHER MATTERS... 9 APPENDIX A: Charter Township of Saginaw General Description and Statistical Information APPENDIX B: Charter Township of Saginaw General Fund Budget Summary for Fiscal Years Ended March 31, 2017 and Ending March 31, 2018 APPENDIX C: Charter Township of Saginaw Financial Statements for Fiscal Year Ended March 31, 2016 APPENDIX D: General Fund Statements of the Charter Township of Saginaw for Fiscal Years Ended March 31, 2016, 2015 and 2014 APPENDIX E: Form of Approving Opinion of Bond Counsel APPENDIX F: Form of Continuing Disclosure Undertaking

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5 OFFICIAL STATEMENT relating to $3,630,000 CHARTER TOWNSHIP OF SAGINAW COUNTY OF SAGINAW, STATE OF MICHIGAN 2017 REFUNDING BONDS (LIMITED TAX GENERAL OBLIGATION) INTRODUCTION The purpose of this Official Statement, which includes the cover page and Appendices, is to furnish information in connection with the issuance and sale by the Charter Township of Saginaw, County of Saginaw, State of Michigan (the Township ) of its 2017 Refunding Bonds (Limited Tax General Obligation) (the Bonds ) in the amount of $3,630,000. PURPOSE AND SECURITY The Bonds are authorized by the Township by a resolution adopted on July 10, 2017, and under and in full compliance with the Constitution and statutes of the State of Michigan, including specifically Act 34, Public Acts of Michigan, 2001, as amended ( Act 34 ), for the purpose of (i) refunding all or portion of the outstanding principal amount of the Township s 2008 Capital Improvement Bonds (Limited Tax General Obligation), dated as of July 1, 2008, maturing in the years 2018 through 2028, inclusive (the Refunded Bonds ), that were issued to pay the costs of certain capital improvements to the Township s sanitary sewage disposal system, including improvements and upgrades to the Wastewater Treatment Plant, and (ii) paying the costs of issuance incurred with respect to the Bonds. The Township has pledged its limited tax full faith and credit for the prompt payment of the Bonds. The Township shall each year budget the amount of the debt service coming due in the next fiscal year on the principal of and interest on the Bonds and shall advance as a first budget obligation from its general funds available therefor, or, if necessary, levy taxes upon all taxable property in the Township such sums as may be necessary to pay such debt service in said fiscal year, subject to applicable constitutional, statutory and charter tax rate limitations. QUALIFIED TAX-EXEMPT OBLIGATIONS THE BONDS HAVE BEEN DESIGNATED AS "QUALIFIED TAX-EXEMPT OBLIGATIONS" UNDER SECTION 265(b)(3) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. REFUNDING PLAN A portion of the proceeds of the Bonds will be used to pay certain costs relating to the refunding of the Refunded Bonds and to establish an escrow fund (the Escrow Fund ) composed of cash and non-callable direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America or other obligations the principal of and interest on which are fully secured by the foregoing, which will be held by the designated corporate trust office of The Huntington National Bank, Grand Rapids, Michigan, as escrow agent (the Escrow Agent ) and will be used to pay the principal of and interest on the Refunded Bonds when due or called for redemption. The Escrow Fund will be held by the Escrow Agent pursuant to an escrow agreement (the Escrow Agreement ), which irrevocably directs the Escrow Agent to make the payment of principal of and interest on the Refunded Bonds. The Escrow Fund will be such that the cash and the principal and interest payments received on the investments will be sufficient, without reinvestment, except as provided in the Escrow Agreement, to pay the principal of and interest on the Refunded Bonds as they become due or are called for earlier redemption, as set forth in the table below.

6 Principal of and Interest on the Refunded Bonds to be Paid from the Escrow Fund Date Principal Interest to Call D/S to Call 11/01/ $ 81, $ 81, /01/2018 $3,900, , ,981, Total $3,900, $163, $4,063, VERIFICATION OF ARITHMETICAL AND MATHEMATICAL COMPUTATIONS The accuracy of the mathematical computations of the (i) adequacy of cash and certain obligations to be held in the Escrow Fund and used, together with the earnings thereon, to pay the principal of and interest on the Refunded Bonds when due or at call for redemption, and (ii) the yield on the Refunded Bonds and the securities purchased with the contribution from the Refunded Bonds debt retirement funds, supporting the conclusion of Bond Counsel that the interest on the Bonds is excludable from gross income for federal income tax purposes as indicated under the caption TAX MATTERS below, will be verified by Robert Thomas CPA, LLC, Shawnee Mission, Kansas. Such verification of accuracy of the computations shall be based upon information supplied by the Underwriter and the interpretations of Section 148 of the Internal Revenue Code of 1986, as amended, as provided by Bond Counsel. ESTIMATED SOURCES AND USES OF FUNDS SOURCES Par Amount of Bonds $3,630, Original Issue Premium 440, Prior Issue Debt Service Funds 61, Total Sources $4,131, USES Deposit to Escrow Fund $4,033, Underwriter s Discount 22, Estimated Costs of Issuance* 75, Total Uses $4,131, *Includes, but is not limited to, contingency, financial, legal and rating fees. Description and Form of the Bonds THE BONDS The Bonds will be issued in book-entry-only form as one fully registered Bond per maturity, without coupons, in the aggregate principal amount for each maturity set forth on the cover page hereof and may be purchased in denominations of $5,000 or any integral multiple thereof. The Bonds will be dated as of and bear interest from the date of issuance. Interest on the Bonds shall be payable semiannually each May 1 and November 1 to maturity or early redemption, commencing November 1, Interest on the Bonds shall be computed using a 360-day year with twelve 30-day months, and the Bonds will mature on the dates and in the principal amounts and will bear interest at the rates as set forth on the cover of this Official Statement. The corporate trust office of The Huntington National Bank, Grand Rapids, Michigan, or its successor will serve as the transfer agent (the Transfer Agent ) and also as bond registrar and paying agent if the Bonds cease to be held in bookentry-only form. For a description of payment of principal and interest, transfers and exchanges and notice of redemption on the Bonds, which are held in the book-entry-only system, see Book-Entry-Only System below. In the event the Bonds cease to be held in the book-entry-only system, then interest on the Bonds shall be payable when due by check or draft to the person or entity who or which is, as of the fifteenth (15th) day of the month preceding each interest payment date (the Record Date ), the registered owner of record, at the owner s registered address. See Transfer Outside Book-Entry-Only System below. 2

7 Book-Entry-Only System The information in this section has been furnished by The Depository Trust Company, New York, New York ( DTC ). No representation is made by the Township, the Transfer Agent or the Underwriter as to the completeness or accuracy of such information or as to the absence of material adverse changes in such information subsequent to the date hereof. No attempt has been made by the Township, the Transfer Agent or the Underwriter to determine whether DTC is or will be financially or otherwise capable of fulfilling its obligations. Neither the Township nor the Transfer Agent will have any responsibility or obligation to DTC Participants, Indirect Participants (both as defined below) or the persons for which they act as nominees with respect to the Bonds, or for any principal, premium, if any, or interest payment thereof. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has a S&P Global Rating s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC s records. The ownership interest of each actual purchaser of each Bond ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and 3

8 transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Township as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments of principal, interest and redemption amounts, if any, on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the Township or the Transfer Agent, on the payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC (nor its nominee), Transfer Agent, or Township, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments of principal, interest and redemption amounts, if any, to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) are the responsibility of the Township or Transfer Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Township or Transfer Agent. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The Township may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC. Transfer Outside Book-Entry-Only System In the event that the book-entry-only system is discontinued, the following provisions would apply to the Bonds. The Transfer Agent shall keep the registration books for the Bonds (the Bond Register ) at its corporate trust office. Subject to the further conditions contained in the Resolution, the Bonds may be transferred or exchanged for one or more Bonds in different authorized denominations upon surrender thereof at the corporate trust office of the Transfer Agent by the registered owners or their duly authorized attorneys; upon surrender of any Bonds to be transferred or exchanged, the Transfer Agent shall record the transfer or exchange in the Bond Register and shall authenticate replacement bonds in authorized denominations; during the fifteen (15) days immediately preceding the date of mailing of any notice of redemption or any time following the mailing of any notice of redemption, the Transfer Agent shall not be required to effect or register any transfer or exchange of any bond which has been selected for such redemption, except the Bonds properly surrendered for partial redemption may be exchanged for new Bonds in authorized denominations equal in the aggregate to the unredeemed portion; the Township and the Transfer Agent shall be entitled to treat the registered owners of the Bonds, as their names appear in the Bond Register as of the appropriate dates, as the owners of such Bonds for all purposes under the Resolution. No transfer or exchange made other than as described above and in the Resolution shall be valid or effective for any purposes under the Resolution. Optional Redemption The Bonds maturing in the years 2019 to 2027, inclusive, shall not be subject to redemption prior to maturity. The Bonds or portions of Bonds in multiples of $5,000, maturing in the year 2028 and thereafter shall be subject to redemption prior to maturity, at the option of the Township, in such order as the Township may determine in any order of maturity and by lot within any maturity, on any date on or after May 1, 2027, at par and accrued interest to the date fixed for redemption. 4

9 Notice of Redemption and Manner of Selection Notice of redemption of any Bond shall be given not less than thirty (30) days prior to the date fixed for redemption by mail to the registered owner at the registered address shown on the registration books kept by the Transfer Agent. The Bonds shall be called for redemption in multiples of $5,000 and Bonds of denominations of more than $5,000 shall be treated as representing the number of Bonds obtained by dividing the face amount of the Bond by $5,000 and such Bonds may be redeemed in part. The notice of redemption for Bonds redeemed in part shall state that upon surrender of the Bond to be redeemed a new Bond or Bonds in an aggregate face amount equal to the unredeemed portion of the Bond surrendered shall be issued to the registered owner thereof. If less than all of the Bonds of any maturity shall be called for redemption prior to maturity, unless otherwise provided, the particular Bonds or portions of Bonds to be redeemed shall be selected by lot by the Transfer Agent, in the principal amounts designated by the Township. Any Bonds selected for redemption will cease to bear interest on the date fixed for redemption, whether presented for redemption, provided funds are on hand to redeem said Bonds. Upon presentation and surrender of such Bonds at the corporate trust office of the Transfer Agent, such Bonds shall be paid and redeemed. So long as the book-entry-only system remains in effect, in the event of a partial redemption the Transfer Agent will give notice to Cede & Co., as nominee of DTC, only, and only Cede & Co. will be deemed to be a holder of the Bonds. DTC is expected to reduce the credit balances of the applicable DTC Participants in respect of the Bonds and in turn the DTC Participants are expected to select those Beneficial Owners whose ownership interests are to be extinguished or reduced by such partial redemption, each by such method as DTC or such DTC Participants, as the case may be, deems fair and appropriate in its sole discretion. LITIGATION The Township has not been served with any litigation, administrative action or proceeding, and to the knowledge of the appropriate officials of the Township, no litigation or administrative action or proceeding has been threatened against it, seeking to restrain or enjoin the issuance and delivery of the Bonds, or questioning or contesting the validity of the Bonds or the proceedings or authorities under which they are authorized to be issued, sold, executed and delivered. A certificate to such effect will be delivered to the Underwriter at the time of the original delivery of the Bonds. TAX MATTERS In the opinion of Miller, Canfield, Paddock and Stone, P.L.C., Bond Counsel, under existing law, the interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. It should be noted, however, that with respect to corporations (as defined for federal income tax purposes) such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on such corporations. Bond Counsel is also of the opinion that, under existing law, the Bonds and the interest thereon are exempt from all taxation by the State of Michigan or by any taxing authority within the State of Michigan, except inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof. Bond Counsel will express no opinion regarding any other federal or state tax consequences arising with respect to the Bonds and the interest thereon. The opinions on federal and State of Michigan tax matters are based on the accuracy of certain representations and certifications, and continuing compliance with certain covenants, of the Township contained in the transcript of proceedings and which are intended to evidence and assure the foregoing, including that the Bonds are and will remain obligations the interest on which is excludable from gross income for federal and State of Michigan income tax purposes. The Township has covenanted to take the actions required of it for the interest on the Bonds to be and to remain excludable from gross income for federal and State of Michigan income tax purposes, and not to take any actions that would adversely affect that exclusion. Bond Counsel s opinions assume the accuracy of the Township s certifications and representations and the continuing compliance with the Township s covenants. Noncompliance with these covenants by the Township may cause the interest on the Bonds to be included in gross income for federal and State of Michigan income tax purposes retroactively to the date of issuance of the Bonds. After the date of issuance of the Bonds, Bond Counsel will not undertake to determine (or to so inform any person) whether any actions taken or not taken, or any events occurring or not occurring, or any other matters coming to Bond Counsel s attention, may adversely affect the exclusion from gross income for federal and State of Michigan income tax purposes of interest on the Bonds or the market prices of the Bonds. 5

10 The opinions of Bond Counsel are based on current legal authority and cover certain matters not directly addressed by such authority. They represent Bond Counsel s legal judgment as to the excludability of interest on the Bonds from gross income for federal and State of Michigan income tax purposes but are not a guarantee of that conclusion. The Federal income tax opinion is not binding on the Internal Revenue Service ("IRS") or any court. Bond Counsel cannot give and has not given any opinion or assurance about the effect of future changes in the Internal Revenue Code of 1986, as amended (the "Code"), the applicable regulations, the interpretations thereof or the enforcement thereof by the IRS. Ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry the Bonds. Bond Counsel will express no opinion regarding any such consequences. Tax Treatment of Accruals on Original Issue Discount Bonds Under existing law, if the initial public offering price to the public (excluding bond houses and brokers) of a Bond is less than the stated redemption price of such Bonds at maturity, then such Bond is considered to have "original issue discount" equal to the difference between such initial offering price and the amount payable at maturity (such Bonds are referred to as "OID Bonds"). Such discount is treated as interest excludable from federal gross income to the extent properly allocable to each registered owner thereof. The original issue discount accrues over the term to maturity of each such OID Bonds on the basis of a constant interest rate compounded at the end of each six-month period (or shorter period) from the date of original issue with straight-line interpolations between compounding dates. The amount of original issue discount accruing during each period is added to the adjusted basis of such OID Bonds to determine taxable gain upon disposition (including sale, redemption or payment on maturity) of such OID Bonds. The Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of OID Bonds who purchase such OID Bonds after the initial offering of a substantial amount thereof. Owners who do not purchase such OID Bonds in the initial offering at the initial offering prices should consult their own tax advisors with respect to the tax consequences of ownership of such OID Bonds. All holders of the OID Bonds should consult their own tax advisors with respect to the allowance of a deduction for any loss on a sale or other disposition of an OID Bond to the extent such loss is attributable to accrued original issue discount. Amortizable Bond Premium For federal income tax purposes, the excess of the initial offering price to the public (excluding bond houses and brokers) at which a Bond is sold over the amount payable at maturity thereof constitutes for the original purchasers of such Bonds (collectively, the "Original Premium Bonds") an amortizable bond premium. Bonds other than Original Premium Bonds may also be subject to an amortizable bond premium determined generally with regard to the taxpayer s basis (for purposes of determining loss on a sale or exchange) and the amount payable on maturity or, in certain cases, on an earlier call date (such bonds being referred to herein collectively with the Original Premium Bonds as the "Premium Bonds"). Such amortizable bond premium is not deductible from gross income. The amount of amortizable bond premium allocable to each taxable year is generally determined on the basis of the taxpayer s yield to maturity determined by using the taxpayer s basis (for purposes of determining loss on sale or exchange) of such Premium Bonds and compounding at the close of each sixmonth accrual period. The amount of amortizable bond premium allocable to each taxable year is deducted from the taxpayer s adjusted basis of such Premium Bonds to determine taxable gain upon disposition (including sale, redemption or payment at maturity) of such Premium Bonds. All holders of the Premium Bonds should consult with their own tax advisors as to the amount and effect of the amortizable bond premium. Market Discount The "market discount rules" of the Code apply to the Bonds. Accordingly, holders acquiring their Bonds subsequent to the initial issuance of the Bonds will generally be required to treat market discount recognized under the provisions of the Code as ordinary taxable income (as opposed to capital gain income). Holders should consult their own tax 6

11 advisors regarding the application of the market discount provisions of the Code and the advisability of making any of the elections relating to market discount allowed by the Code. Information Reporting and Backup Withholding Information reporting requirements apply to interest paid after March 31, 2007 on tax-exempt obligations, including the Bonds. In general, such requirements are satisfied if the interest recipient completes, and provides the payor with, a Form W-9, "Request for Taxpayer Identification Number and Certification," or unless the recipient is one of a limited class of exempt recipients, including corporations. A recipient not otherwise exempt from information reporting who fails to satisfy the information reporting requirements will be subject to "backup withholding," which means that the payor is required to deduct and withhold a tax from the interest payment, calculated in the manner set forth in the Code. For the foregoing purpose, a "payor" generally refers to the person or entity from whom a recipient receives its payments of interest or who collects such payments on behalf of the recipient. If an owner purchasing the Bonds through a brokerage account has executed a Form W-9 in connection with the establishment of such account no backup withholding should occur. In any event, backup withholding does not affect the excludability of the interest on the Bonds from gross income for federal income tax purposes. Any amounts withheld pursuant to backup withholding would be allowed as a refund or a credit against the owner s federal income tax once the required information is furnished to the IRS. Future Developments Bond Counsel s engagement with respect to the Bonds ends with the issuance of the Bonds and, unless separately engaged, Bond Counsel is not obligated to defend the Township in the event of an audit examination by the IRS. The IRS has a program to audit tax-exempt obligations to determine whether the interest thereon is includible in gross income for federal income tax purposes. If the IRS does audit the Bonds, under current IRS procedures, the IRS will treat the Township as the taxpayer and the beneficial owners of the Bonds will have only limited rights, if any, to obtain and participate in judicial review of such audit. NO ASSURANCE CAN BE GIVEN THAT ANY FUTURE LEGISLATION OR CLARIFICATIONS OR AMENDMENTS TO THE CODE, IF ENACTED INTO LAW, WILL NOT CONTAIN PROPOSALS WHICH COULD CAUSE THE INTEREST ON THE BONDS TO BE SUBJECT DIRECTLY OR INDIRECTLY TO FEDERAL OR STATE OF MICHIGAN INCOME TAXATION, ADVERSELY AFFECT THE MARKET PRICE OR MARKETABILITY OF THE BONDS, OR OTHERWISE PREVENT THE HOLDERS FROM REALIZING THE FULL CURRENT BENEFIT OF THE STATUS OF THE INTEREST THEREON. BOND COUNSEL EXPRESSES NO OPINION REGARDING ANY PENDING OR PROPOSED FEDERAL OR STATE OF MICHIGAN TAX LEGISLATION. FURTHER, NO ASSURANCE CAN BE GIVEN THAT ANY ACTIONS OF THE INTERNAL REVENUE SERVICE, INCLUDING, BUT NOT LIMITED TO, SELECTION OF THE BONDS FOR AUDIT EXAMINATION, OR THE COURSE OR RESULT OF ANY EXAMINATION OF THE BONDS, OR OTHER BONDS WHICH PRESENT SIMILAR TAX ISSUES, WILL NOT AFFECT THE MARKET PRICE OF THE BONDS. INVESTORS SHOULD CONSULT WITH THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THEIR ACQUISITION, HOLDING OR DISPOSITION OF THE BONDS, INCLUDING THE IMPACT OF ANY PENDING OR PROPOSED FEDERAL OR STATE OF MICHIGAN TAX LEGISLATION. APPROVAL OF LEGAL PROCEEDINGS Legal matters incident to the authorization, issuance and sale of the Bonds are subject to the approval of Miller, Canfield, Paddock and Stone, P.L.C., Detroit, Michigan, Bond Counsel. A copy of the opinion of Bond Counsel will be provided with the Bonds, which opinion will be in substantially the form set forth in APPENDIX E. The legal fees of Bond Counsel in connection with the issuance of the Bonds are expected to be paid from Bond proceeds. Miller, Canfield, Paddock and Stone, P.L.C. is currently representing Fifth Third Securities, Inc. in certain matters unrelated to the issuance of the Bonds. Both the Township and Fifth Third Securities, Inc. have consented to these unrelated representations. 7

12 Certain legal matters will be passed upon for the Underwriter by its counsel, Dickinson Wright PLLC, Troy, Michigan. APPROVAL BY MICHIGAN DEPARTMENT OF TREASURY The Township has received a letter from the Department of Treasury of the State of Michigan stating that the Township is in material compliance with the criteria of Act 34, for a municipality to be granted qualified status. The Township may therefore proceed to issue the Bonds without further approval from the Department of Treasury of the State of Michigan. RATING S&P Global Ratings ( S&P ) has assigned its municipal bond rating of AA- to the Bonds. No application has been made to any other ratings service for a rating on the Bonds. The Township furnished to S&P certain materials and information in addition to that provided here. Generally, the rating agency bases its rating on such information and materials, and on investigations, studies and assumptions. There is no assurance that such ratings will prevail for any given period of time or that they will not be revised downward or withdrawn entirely by S&P if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse affect on the market price of the Bonds. Any rating assigned represent only the view of S&P. Further information is available upon request from S&P Global Ratings, 55 Water Street, New York, NY (212) UNDERWRITING Fifth Third Securities, Inc. (the Underwriter ), has agreed, subject to the terms of the Bond Purchase Agreement, to purchase the Bonds from the Township. The Bond Purchase Agreement provides, in part, that the Underwriter, subject to certain conditions, will purchase from the Township the aggregate principal amount of Bonds for a purchase price as set forth therein. The Underwriter has further agreed to offer the Bonds to the public at the approximate initial offering prices as set forth on the cover hereto. The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the offering prices stated on the cover hereto. The offering prices may be changed from time to time by the Underwriter. The aggregate underwriting fee equals percent of the aggregate principal amount of the Bonds. The Bond Purchase Agreement provides that the obligations of the Underwriter are subject to certain conditions, including, among other things, that (i) no event has occurred which impairs or threatens to impair the status of the Bonds or interest thereon as exempt from taxation in the State (except inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof) and (ii) proceedings relating to the Bonds are not pending or threatened by the Securities and Exchange Commission. The Bond Purchase Agreement further provides that the Township will provide to the Underwriter within five business days of the date of the Bond Purchase Agreement sufficient copies of the Official Statement to enable the Underwriter to comply with the requirements of Rule 15c2-12(b)(4) under the Securities Exchange Act of 1934, as amended. REGISTERED MUNICIPAL ADVISOR TO THE TOWNSHIP Bendzinski & Co., Municipal Finance Advisors, Detroit, Michigan, (the Municipal Advisor ) is a Registered Municipal Advisor in accordance with the rules of the Municipal Securities Rulemaking Board ( MSRB ). The Municipal Advisor has been retained by the Township to provide certain financial advisory services relating to the planning, structuring and issuance of the Bonds, including preparation of certain parts of the deemed final Preliminary Official Statement and the final Official Statement (the Official Statements ). The information contained in the Official Statements was prepared in form by the Municipal Advisor and is based on information supplied by various officials from records, statements and reports required by various local, county or state agencies of the State of Michigan, in accordance with constitutional or statutory requirements. To the best of the Municipal Advisor s knowledge, all of the information contained in part of the Official Statements, which it assisted in preparing, while it may be summarized is (i) complete and accurate; (ii) does not contain any untrue statement of a material fact; and (iii) does not omit any material fact, or make any statement which would be misleading in light of the circumstances under which these statements are being made. However, the Municipal Advisor has not and will not independently verify the completeness and accuracy of the information contained in the Official Statements. 8

13 The Municipal Advisor is not engaged in the business of underwriting, trading, marketing or the distribution of securities or any other negotiable instruments. The Municipal Advisor s duties, responsibilities and fees arise solely as Registered Municipal Advisor to the Township and it has not secondary obligation or other responsibility. The Municipal Advisor s fees are expected to be paid from Bond proceeds. CONTINUING DISCLOSURE Prior to delivery of the Bonds, the Township will execute a Continuing Disclosure Undertaking (the Undertaking ) for the benefit of the holders of the Bonds and the Beneficial Owners (as hereinafter defined under this caption only) to send certain information annually and to provide notice of certain events to certain information repositories pursuant to the requirements of Rule 15c2-12(b)(5) (the Rule ) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Beneficial Owner means, under this caption only, any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including any person holding Bonds through nominees, depositories or any other intermediaries). The information to be provided on an annual basis, the events which will be noticed on an occurrence basis and the other terms of the Undertaking, are set forth in APPENDIX F, FORM OF CONTINUING DISCLOSURE UNDERTAKING to this Official Statement. A failure by the Township to comply with its Undertaking will not constitute an event of default under the Resolution and holders of the Bonds or Beneficial Owners are limited to the remedies described in the Undertaking. A failure by the Township to comply with its Undertaking must be reported by the Township in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. The Township has not failed to comply in any material respect with the requirements as described in subsection (b)(5) of the Rule of any continuing disclosure undertaking made by the Township within the past 5 years. OTHER MATTERS All information contained in this Official Statement, in all respects, is subject to the complete body of information contained in the original sources thereof. In particular, no opinion or representation is rendered as to whether any projection will approximate actual results, and all opinions, estimates and assumptions, whether or not expressly identified as such, should not be considered statements of fact. The Township has neither sought nor received the consent of its independent auditors to the use of the Township s financial statements herein. The Township certifies that to the best of its knowledge and belief, this Official Statement, insofar as it pertains to the Township and its economic and financial condition, is true and correct as of the date of this Official Statement, and does not contain, nor omit, any material facts or information which would make the statements contained herein misleading. CHARTER TOWNSHIP OF SAGINAW COUNTY OF SAGINAW STATE OF MICHIGAN By: /s/ Robert Grose Manager 9

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15 APPENDIX A CHARTER TOWNSHIP OF SAGINAW GENERAL DESCRIPTION AND STATISTICAL INFORMATION A-1

16 CHARTER TOWNSHIP OF SAGINAW LOCATION AND DESCRIPTION The Charter Township of Saginaw (the Township ) is located in Saginaw County, adjacent to the northwest boundaries of the City of Saginaw. The Township encompasses approximately 25.6 square miles. FORM OF GOVERNMENT The Township is governed by a Board of Trustees which is composed of seven members who are elected for four year terms. The Board is composed of a Supervisor, a Clerk, a Treasurer and four Trustees. The Supervisor is the chief administrative and executive officer of the Township. The Board is vested with all legislative powers except those otherwise provided by law. POPULATION 2010 U.S. Census 2000 U.S. Census 1990 U.S. Census 1980 U.S. Census 40,840 39,657 37,684 38,688 FISCAL YEAR April 1 to March 31 PROPERTY VALUATIONS Article IX, Section 3, of the Michigan Constitution provides that the proportion of true cash value at which property shall be assessed shall not exceed 50% of true cash value. The Michigan Legislature by statute has provided that property shall be assessed at 50% of its true cash value, except as described below. The Michigan Legislature or the electorate may at some future time reduce the percentage below 50% of true cash value. On March 15, 1994, the electors of the State approved an amendment to the Michigan Constitution permitting the Legislature to authorize ad valorem taxes on a non-uniform basis. The legislation implementing this constitutional amendment added a new measure of property value known as "Taxable Value." Since 1995, taxable property has two valuations -- State equalized valuation ("SEV") and Taxable Value. Property taxes are levied on Taxable Value. Generally, Taxable Value of property is the lesser of (a) the Taxable Value of the property in the immediately preceding year minus any losses, multiplied by the lesser of 1.05 or the inflation rate, plus additions, or (b) the property's current SEV. Under certain circumstances, therefore, the Taxable Value of property may be different from the same property's SEV. When property is sold or transferred, Taxable Value is adjusted to the SEV, which under existing law is 50% of the current true cash value. The Taxable Value of new construction is equal to current SEV. Taxable Value and SEV of existing property are also adjusted annually for additions and losses. On March 15, 1994, the electors of the State of Michigan also voted to amend the State Constitution to increase the state sales tax from 4% to 6% and to place a yearly cap on property value assessment increases. The State now levies a property tax to finance education, and a higher real estate transfer tax is imposed on the sale of real property. REAL PROPERTY TAX ASSESSMENTS Responsibility for assessing taxable real property rests with the local assessing officer of each township and city. Any property owner may appeal the assessment to the local assessor, the local Board of Review and ultimately to the Michigan Tax Tribunal. The Michigan Constitution also mandates a system of equalization for assessments. Although the assessors for each local unit of government within a county are responsible for actually assessing at 50% of true cash value, adjusted for Taxable Value purposes, the final SEV and Taxable Value are arrived at through several steps. Assessments are established initially by the municipal assessor. Municipal assessments are then equalized to the 50% levels as determined by the County's Department of Equalization. Thereafter, the State equalizes the various counties in relation to each other. SEV is important, aside from its use in determining Taxable Value for the purpose of levying ad valorem property taxes, because of its role in the spreading of taxes between overlapping jurisdictions, the distribution of various State aid programs, State revenue sharing and in the calculation of debt limits. A-2

17 Real property that is exempt from property taxes, e.g., churches, government property, public schools, is not included in the SEV and Taxable Value data in this Official Statement. Property granted tax abatements under the Michigan Plant Rehabilitation and Industrial Development District Act, Act 198, Public Acts of Michigan, 1974, as amended ("Act 198") are recorded on separate tax rolls while subject to tax abatement. The valuation of tax abated property is based upon SEV but is not included in either the SEV or Taxable Value data in this Official Statement except as noted. APPEAL OF PROPERTY ASSESSMENTS Property taxpayers may appeal their assessments to the Michigan Tax Tribunal. Unless otherwise ordered by the Tax Tribunal, before the Tax Tribunal renders a decision on an assessment appeal, the taxpayer must have paid the tax bill. The Township has several tax appeals pending before the Tax Tribunal (including personal property appeals, none of which are expected to have a significant impact on the Township s State Equalized Valuation, Taxable Value or the resulting taxes. INDUSTRIAL FACILITIES TAX Act 198 provides significant property tax incentives to industry to renovate and expand aging industrial facilities and to build new industrial facilities in Michigan. Under the provisions of Act 198, qualifying cities, villages and townships may establish districts in which industrial firms are offered certain property tax incentives to encourage restoration or replacement of obsolete industrial facilities and to attract new industrial facilities. Property owners situated in such districts pay an Industrial Facilities Tax ("IFT") in lieu of ad valorem property taxes on plant and equipment for a period of up to 12 years. For rehabilitated plant and equipment, the IFT is determined by calculating the product of the taxable value of the replacement facility in the year before the effective date of the abatement certificate multiplied by the total mills levied by all taxing units in the current year. For abatements granted prior to January 1, 1994, new plant and equipment is taxed at one-half the total mills levied by all taxing units, except for mills levied for local school district operating purposes or under the State Education Tax Act, plus one-half of the number of mills levied for local school district operating purposes in For new facility abatements granted after 1993, new plant and equipment is taxed at one-half of the total mills levied as ad valorem taxes by all taxing units, except mills levied under the State Education Tax Act, plus the number of mills levied under the State Education Tax Act. For new facility abatements granted after 1993, the State Treasurer may permit abatement of all, none or one-half of the mills levied under the State Education Tax Act. It must be emphasized, however, that ad valorem property taxes on land and inventory are not reduced in any way since both land and inventory are specifically excluded under Act 198. The Township has ten (10) IFT exemption certificates currently outstanding, aggregating $4,021,521in 2017 Equivalent Taxable Value. Source: Saginaw County Equalization Department MICHIGAN PROPERTY TAX REFORM HISTORY OF PROPERTY VALUATIONS Year State Equalized Valuation Taxable Value 2017 $1,321,603,400 $1,236,257, ,277,006,300 1,222,988, ,259,670,300 1,220,772, ,244,107,900 1,217,013, ,247,316,700 1,224,281, ,252,837,100 1,228,992, ,284,985,300 1,258,242, ,370,158,100 1,313,319, ,435,748,500 1,365,971, ,508,610,800 1,387,261,596 On March 28 and April 1, 2014, Governor Snyder signed into law a package of bills amending and replacing legislation enacted in 2012 to reform personal property tax in Michigan. Commercial and industrial personal property of each owner with a combined true cash value in a local taxing unit of less than $80,000 is exempt from ad valorem taxes beginning in All eligible manufacturing personal property purchased or put into service beginning in 2013 and used more than A-3

18 50% of the time in industrial processing or direct integrated support becomes exempt beginning in The legislation extends certain personal property tax exemptions and tax abatements for technology parks, industrial facilities and enterprise zones that were to expire after 2012, until the newly enacted personal property tax exemptions take effect. The legislation also includes a formula to reimburse local governments for lost personal property tax revenue. To provide the reimbursement, the legislation reduces the state use tax and creates a Local Community Stabilization Authority which will levy a local use tax component and distribute that revenue to qualifying local units. The final impact of this legislation cannot be determined at this time. The ultimate nature, extent and impact of any other future amendments to Michigan s property tax laws on the Township s finances cannot be predicted. Purchasers of the Bonds should consult with their legal counsel and financial advisors as to the consequences of any such legislation on the market price or marketability of the Bonds, the security therefor and the operations of the Township. An analysis of State Equalized Valuation is as follows: BY CLASS Real Property $1,250,060,200 $1,204,876,700 $1,187,582,200 Personal Property 71,543,200 72,129,600 72,088,100 TOTAL $1,321,603,400 $1,277,006,300 $1,259,670,300 BY USE Residential $871,298,000 $850,733,500 $835,736,900 Agriculture 5,221,700 3,059,500 $2,989,100 Commercial 366,769, ,526, ,571,900 Industrial 6,770,900 7,354,700 7,082,200 Developmental 0 2,202,100 2,202,100 Personal Property 71,543,200 72,129,600 72,088,100 TOTAL $1,321,603,400 $1,277,006,300 $1,259,670,300 An analysis of Taxable Value is as follows: BY CLASS Real Property $1,164,713,883 $1,150,859,192 $1,148,684,189 Personal Property 71,543,200 72,129,600 72,088,100 TOTAL $1,236,257,083 $1,222,988,792 $1,220,772,289 Residential Source: Saginaw County Equalization Department BY USE $824,128,265 $812,094,353 $809,411,868 Agriculture 3,303,935 2,300,203 2,292,943 Commercial 331,057, ,627, ,684,489 Industrial 6,224,631 6,776,336 6,236,373 Developmental 0 1,060,339 1,058,516 Personal Property 71,543,200 72,129,600 72,088,100 TOTAL $1,236,257,083 $1,222,988,792 $1,220,772,289 A-4

19 MAJOR TAXPAYERS According to Township officials the 2017 Taxable Value of each of the Township's major taxpayers is as follows: 2017 Taxable Taxpayer Value JG Saginaw LLC/Fashion Square Mall $25,164,250 Fashion Square Mall Realty, LLC * 24,031,131 LPC Partners LC/Morley Companies 7,889,941 Bre DDR BR West Valley MI, LLC 6,634,578 Saginaw Control & Engineering, Inc. 6,407,745 Wellspring Lutheran Services 5,073,438 Galileo Green Acres MI, LLC 4,311,700 St. Marys Medical Center 4,188,754 Waterside 4,076,949 Wal-Mart Property Tax Department 3,979,416 * This taxpayer is appealing its property valuations. See APPEAL OF PROPERTY ASSESSMENTS ", herein. Source: Charter Township of Saginaw Charter Township of Saginaw TAX RATES* (Per $1,000 of Taxable Value) Non Non Non Principal Principal Principal Principal Principal Principal Residence Residence Residence Residence Residence Residence Operating $ $ $ $ $ $ Police (Voted) (1) Fire (Voted) (2) County of Saginaw Saginaw School District Local Debt State Education Tax (SET) Saginaw County ISD Delta Community College Total All Jurisdictions $ $ $ $ $ $ (1) Voted millage expires 2028 (2) Special Assessment real property only. * Principal residence includes qualified agricultural property, qualified forest property and industrial personal property, which is excluded from taxes levied for school operating purposes. Moreover, commercial personal property is exempt from a portion of taxes levied for school operating purposes. Non Principal Residence is property not included in the above definition. Source: Charter Township of Saginaw and Saginaw County Equalization Department A-5

20 TAX RATE LIMITATIONS (1) The Township is authorized pursuant to Act 359, Public Acts of Michigan, 1947, as amended (the Charter Township Act ) to levy the following tax rates: (1) The Michigan Constitution places certain restrictions on new taxes and tax increases and limits taxes for the payment of principal and interest on bonds or other evidences of indebtedness outstanding on or after December 23, 1978, unless such obligations are approved by the electors of the issuing public corporation. (2) Maximum Maximum Expiration Millage Millage to Date Purpose Authorized be Levied (2) of Millage General Operating $ $ In perpetuity See "PROPERTY VALUATIONS" and "CONSTITUTIONAL MILLAGE ROLL-BACK" herein In addition, Article IX, Section 6, permits the levy of millage in excess of the above for: 1. All debt service on tax supported bonds issued prior to December 23, 1978 or tax supported issues which have been approved by the voters for which the issuer has pledged its full faith and credit. 2. Operating purposes for a specified period of time provided that said increase is approved by a majority of the qualified electors of the local unit. 3. Payment of valid judgments levied in accordance with State law. CONSTITUTIONAL MILLAGE ROLL-BACK Article IX, Section 31 of the Michigan Constitution requires that if the total value of existing taxable property in a local taxing unit, exclusive of new construction and improvements, increases faster than the U.S. Consumer Price Index from one year to the next, the maximum authorized tax rate for that local taxing unit must be permanently reduced through a Millage Reduction Fraction unless reversed by a vote of the electorate of the local taxing unit. TAX LEVIES AND COLLECTIONS Fiscal Year Ended Collections to March 1 March 31, Tax Levy of Following Year 2017 $9,799,523 $9,373, % ,780,292 9,355, % ,520,062 9,150, % ,494,644 6,248, % ,524,397 6,254, % ,694,063 6,412, % ,990,027 6,632, % ,272,678 6,907, % ,397,353 7,035, % ,251,430 6,839, % Source: Charter Township of Saginaw Audited Comprehensive Annual Financial Report A-6

21 The Township's taxes are due and payable and a lien created upon the assessed property on July 1, each year. Taxes remaining unpaid on the following March 1 are turned over to the County Treasurer for collection. The delinquent real property taxes are subject to additional penalties and interest by the county. Unless the delinquent real property taxes are paid within approximately 25 months from the date of delinquency the underylying property is foreclosed upon and sold at public auction. Saginaw County has established a Delinquent Tax Revolving Fund which pays all real property taxes and special assessments returned delinquent to the County Treasurer as of March 1 of each year. Said fund pays all local units, school districts, villages, townships and the County general fund for the full amount of taxes and special assessments levied against real property. If feasible, it is anticipated that the County will continue to reimburse the Township for any uncollected taxes and special assessments, but there is no assurance that this will be the case since the County is not obligated to continue this fund in future years. Uncollected personal property taxes must be collected by the local treasurer and are negligible. REVENUES FROM THE STATE OF MICHIGAN The Township receives revenue sharing payments from the State of Michigan under the State Constitution and the State Revenue Sharing Act of 1971, as amended. The revenue sharing payments are composed of two components a constitutional distribution and a statutory distribution. The constitutional distribution is mandated by the State Constitution and distributed on a per capita basis to townships, cities and villages. The amount of the constitutionally mandated revenue sharing component distributed to the Township can vary depending on the population of the Township and the receipt of sales tax revenues by the State. The statutory distribution is authorized by legislative action and distribution is subject to annual State appropriation by the State Legislature. Statutory distributions may be reduced or delayed by Executive Order during any State fiscal year in which the Governor, with the approval of the State Legislature s appropriations committees, determines that actual revenues will be less than the revenue estimates on which appropriations were based. On July 14, 2017, Governor Snyder signed into law the budget for fiscal year The budget includes a constitutional revenue sharing distribution to cities, villages and townships of approximately $798.1 million. The budget continues the incentive-based revenue sharing program known as the City, Village, and Township Revenue Sharing (or CVTRS ) program begun in fiscal year 2015, similar to Economic Vitality Incentive Program ( EVIP ) that, from fiscal year 2012 through fiscal year 2014, distributed revenue sharing to cities, villages and townships that meet requirements for accountability and transparency, including making a citizen s guide to its financed, a performance dashboard, a debt service report and a two-year budget projection available for public viewing. The fiscal year 2018 budget retains $5.8 million for distribution to cities, villages and townships as a one-time payment based on population and added an additional appropriation of $6.2 million for distribution to eligible cities, villages and townships as an additional one-time payment based on population. The fiscal year 2018 budget continues funding for the revenue sharing grant program for financially distressed communities at $5 million. Any portion of the CVTRS payment that the City would be eligible to receive would be subject to certain benchmarks that the Township would need to meet, and there can be no assurance what amount, if any, the Township would receive under the CVTRS program. The Township received CVTRS payments of $108,087* in fiscal year 2017 and anticipates meeting the requirements to receive $108,087* in CVTRS payments for fiscal year Purchasers of the Bonds should be alerted to further modifications to revenue sharing payments to Michigan local governmental units, to potential consequent impact on the Township s general fund condition, and to the potential impact upon the market price or marketability of the Bonds resulting from changes in revenues received by the Township from the State. * Estimate A-7

22 The following table sets forth the annual revenue sharing payments and other moneys received by the Township for the State of Michigan fiscal years ended September 30, 2013 through September 30, * Estimate Source: Michigan Department of Treasury Website - LABOR AGREEMENTS The Township has three (3) employee bargaining units which have negotiated comprehensive salary, wage, fringe benefit and working conditions contracts with the Township. The duration of these agreements are as follows: Source: Charter Township of Saginaw Fiscal Year Ended Constitutional Revenue Sharing CVTRS September 30, Payments Payments Total 2017 $3,267,694 $108,087 $3,375,781 * DEFINED CONTRIBUTION PENSION PLAN ,108, ,087 3,216, ,111, ,087 3,219, ,063, ,063, ,993, ,993,414 Number of Expiration Date Employee Group Employeees of Contract Command Officers Association of Michigan 7 03/31/2018 Police Officers Association of Michigan 33 03/31/2018 Teamsters Local /31/2019 RETIREMENT PLANS * The Saginaw Charter Township Municipal Government Employees Pension Plan is a defined contribution pension plan, which is held in trust and covers 79 full time employees, over the age of 18, employed with the Township for more than four months prior to April 1 st. The Plan is administered by a third-party. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. Defined contribution pension cost to the Township for this fiscal year ending March 31, 2016, was $767,367, which represented 15% of current year covered payroll. Defined contribution pension cost to the employees was $177,735. Contributions to the plan recognized when due and payable. Plan provisions and contribution rates are set for union employees by contract and for non-union employees by resolution of the Township board under the Township s Pension Ordinance. Employees may make voluntary contributions not to exceed 25% of total wages. The Township s policy is to fund pension costs representing 15% of the annual salaries of covered employees, as follows: Police Union Non Union Union Local 406 Township contribution rate 15% 15% 15% Reequired employee contribution rate 2% 2% 2% 17% 17% 17% The Township s contribution for each employee is fully vested after five years for non-union/police union employees and 10 years for Union Local 406 employees. Unvested benefits forfeited by employees who leave employment early are used to reduce future Township contributions. At March 31, 2016, assets of the defined contributions plan were valued at $22,375,221. * See Note 8 contained in the Township s Audited Comprehensive Annual Financial Reports, fiscal year ended March 31, 2016 for further information. A-8

23 DEFINED BENEFIT PENSION PLAN As of April 1, 2010, members of the police union must enroll in the Municipal Employees Retirement System of Michigan (MERS) defined benefit pension. For police union employees choosing the Township s defined benefit pension plan, the plan provides retirements and disability benefits, annual cost of living adjustments, and death benefits to plan members and beneficiaries. MERS is an agent multiple employer, statewide public employee pension plan established by the Michigan Legislature under Public Act 135 of 1945 and administered by a nine member Retirement Board. Public Act 427 of 1984, as amended established and amends the benefit provisions of the participants in MERS. MERS issues a publicly available financial report that incudes financial statements and required supplementary information. This report may be obtained accessing the MERS website at Pension benefits are calculated as final average compensation (based on a 5 year period) and multiplier of 2.00/2.50 (new/old members) percent. Participants are considered to be fully vested in the plan after 6/10 (new/old members) years. Normal retirement age is 60 with early retirement at age 55/50 (new/old members) with 25 years of service. Member contributions are 9.19%. Employees Covered by Benefit Terms. At December 31, 2015, plan membership consisted of the following: Inactive plan members or beneficiaries currently receiving benefits 24 Inactive plan members entitled to but not yet receiving benefits 8 Active plan members 33 Total membership 65 The Township is required to contribute at an actuarially determined rate; the current rate is 15% of annual covered payroll. The Township s contribution is capped at 15%. If the actuarially determined rate is higher than the cap, the difference is paid by the employees. Employees are currently required to contribute 9.19% to the Plan. The contribution requirements established and may be amended by the MERS Retirement Board. The contribution requirements of plan members, if any, are established ban may be amended by the Township depending on the MERS contribution program adopted by the Township. {This space has been left intentionally blank.} A-9

24 Schedule of Changes in Township s Net Pension Liability and Related Ratios Fiscal Year Ended Total Pension Liability 3/31/2016 Service cost $406,867 Interest 1,531,237 Changes in benefit terms - Differences between expected and actual experience - Other changes (19,688) Benefit payments, including refunds (1,028,871) Net change in total pension liability 889,545 Total pension liability - Beginning of year 18,871,446 Total pension liability -End of year $19,760,991 Plan Fiduciary Net Position Contributions - Employer $322,586 Contributions - Member 234,135 Net Invesment income (179,018) Administrative expenses (26,326) Benefit payments, including refunds (1,028,871) Other - Net change in plan fiduciary net position (677,494) Plan fiduciary net position - Beginning of year 12,149,844 Plan fiduciary net position - End of year $11,472,350 Township's net pension liability - Ending $8,288,641 Plan Fiduciary Net Position as a Percentage of Total Pension Liability 58.1% Covered Employee Payroll $2,055,071 Net Pension Liability as a Percentage of Covered Employee Payroll 403.3% Schedule of Contributions Fisal Year Ended 3/31/2016 Actuarially determined contribution $322,525 Contributions in relation to the actuarilly determined contribution 336,723 Contribution Deficiency $ (14,198) Covered Employee Payroll $2,283,884 Contributions as a % of Covered Employee Payroll 14.7% A-10

25 Trust. OTHER POST EMPLOYMENT BENEFITS ** The Township administers a single-employer defined benefit postemployment healthcare plan, the Retiree Health Membership of the plan consisted of the following at April 1, 2015, the date of the last actuarial valuation: Inactive plan members or beneficiaries currently receiving benefits 27 Active plan members 115 Total membership 142 The Retiree Health Trust financial statements are prepared using the accrual basis of accounting. 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. Investments are reported at fair value. Investments that are traded on a national securities exchange are valued at the last reported sales price on the last business day of the Township's fiscal year. Investments traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the last reported bid price. The Township provides postemployment health care benefits in accordance with a Township resolution to all nonunion employees who retire between the ages of 55 and 65 with at least 20 years of service, all police union employees retiring between the ages of 52 and 65 with 25 years of service, and Local 406 (Department of Public Services, "DPS") employees retiring between the ages of 55 and 65 with 25 years of service. Prior to age 65, non-union and DPS employees are entitled to 50% of Blue Cross/Blue Shield health insurance premiums to a maximum annual benefit of $2,500/$5,000 and $2,750/$5,500, respectively. Payments are expensed as incurred in the individual funds. Police union retirees are eligible for 100% of Blue Cross/BlueShield health insurance coverage annually. In addition, non-union police command employees are eligible for the 100% benefits which are not advance funded. Currently 17 retirees meet the eligibility requirements for these benefits. During the year, employer contributions totaled $360,000 and expenditures of $212,001 were recognized for the retiree health benefit premiums. Upon attaining age 65, the Township reimburses the Medicare supplement premiums for retirees and their qualified spouses up to $1,418 per person annually. Expenditures for the reimbursement are recognized as they are paid in the health benefit internal service fund. Currently 14 retirees meet the eligibility requirements. The Township's annual required contribution of the employer (ARC) is an amount actuarially determined in accordance with the parameters of GASB Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. The Township's unfunded actuarial accrued liability, if any, is being amortized as a level percentage of projected payroll on an open basis. Township employees are not required to contribute to the plan. {This space has been left intentionally blank.} ** See Note 9 contained in the Township s Audited Financial Statements, fiscal year ended March 31, 2016 for further information. A-11

26 For 2016, the components of the Township s annual OPEB (other postemployment benefits) cost for the year, the amount actually contributed to the Plan, and changes in the Township s net OPEB obligation to the Plan are as follows: Annual required contribution (recommended) $738,659 Interest on net OPEB obligation 106,494 Adjustment to the annual required contribution (148,042) Annual OPEB cost 697,111 Contributions made (572,011) Increase in net OPEB obligation 125,110 Net OPEB obligation, beginning year 2,662,350 OPEB obligation - end of year $2,787,460 For the governmental activities, the OPEB obligation is generally liquidated by the general, fire protection, and police funds. The Township s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation, for the plan is as follows: Plan provisions and contribution requirements are established and may be amended by the Township Board. As of April 1, 2015, the date of the latest actuarial valuation, the Plan was 25.4% funded. The actuarial accrued liability for benefits was $10,109,362, and the actuarial value of assets was $2,566,542, resulting in an unfunded actuarial accrued liability (UAAL) of $7,542,820. The covered payroll (annual payroll of active employees covered by the plan) was $7,142,382, and the ratio of the UAAL to the covered payroll was 106%. Schedule of Funding Progress Net OPEB obligation reconciliation Governmental activities $2,230,803 Business - type activities Water fund 206,830 Sewer fund 349,827 Net OPEB obligation, end of year $2,787,460 Annual % of Annual Net Year OPEB OPEB Cost OPEB Ended Cost Contributed Obligation 2014 $1,030, % $2,218, ,037, % 2,662, , % 2,787,460 Actuarial Actuarial Actuarial Accrued Unfunded Annual UAAL Valuation Value of Liability AAL Funded Covered as a % Date Assets (AAL) (UAAL) Ratio Payroll of Payroll 3/31/2011 $872,338 $7,691,250 $6,818, % $6,825, % 4/1/2012 1,120,014 11,400,758 10,280, % 6,731, % 4/1/2015 2,566,542 10,109,362 7,542, % 7,142, % A-12

27 Schedule of Employer Contributions As of March 31, Fiscal Annual Year Required Percentage Ended Contribution Contributed 2014 $1,057, % ,072, % , % Source: Charter Township of Saginaw Audited Comprehensive Annual Financial Report for fiscal year ended March 31, GENERAL FUND-FUND BALANCE The Township's General Fund fund balance for the last five fiscal years is as follows: Fiscal Year Ending March 31, Fund Balance 2016 $5,451, ,661, ,417, ,515, ,150,543 Source: Charter Township of Saginaw Audited Comprehensive Annual Financial Reports A-13

28 A-14

29 A-15

30 Major employers in the Township are as follows: MAJOR EMPLOYERS Approximate Number of Name of Employer Product/Service Employees Morley Companies Business consulting/marketing 1,800 HealthSource Saginaw Healthcare 650 Saginaw Township Community Schools Education 621 Saginaw Intermediate School District Education 613 Consumers Energy Utility 525 Wal-Mart Supercenter Retail 320 Saginaw Control & Engineering Electrical enclosures 280 United Parcel Service Courier 215 Covenant Healthcare Healthcare 200 Kroger Co. of Michigan #778 Grocery 193 Source: Charter Township of Saginaw Audited Comprehensive Annual Financial Report, fiscal year ended March 31, A-16

31 LABOR CHARACTERISTICS The U.S. Census American Community Survey 5-Year Estimates lists the labor force characteristics for the Township, for employed persons 16 years and over, as follows: By Occupation Management, business, science, and arts occupations Service occupations Sales and office occupations Natural resources, construction, and maintenance occupations Production, transportation, and material moving occupations Total By Industry Agriculture, forestry, fishing and hunting and mining Construction Manufacturing Wholesale trade Retail trade Transportation and warehousing, and utilities Information Finance, insurance, real estate, and rental and leasing Professional, scientific, management, administrative, and waste management services Educational, health and social services Arts, entertainment, recreation, accomodation and food services Other services (except professional administration) Public administration Total Number of Employees 7,520 2,980 5, ,271 18, , , ,269 1,403 5,393 1, ,649 A-17

32 UNEMPLOYMENT DATA According to the Michigan Department of Career Development, Employment Security Agency, Office of Labor Market Information, the unemployment statistics for the Township and the State of Michigan during the current year and the last three calendar years are as follows: Charter Township of Saginaw January February March April May June July August September October November December Annual Average % 3.0% 3.9% 5.0% 3.5% 3.1% 3.6% 5.0% 2.9% 3.1% 3.5% 5.0% 2.2% 2.7% 3.1% 4.0% 2.4% 2.7% 3.4% 4.4% 2.6% 2.9% 3.3% 4.4% 3.3% 3.6% 4.9% 2.8% 2.9% 4.1% 2.5% 2.5% 3.5% 2.5% 2.5% 3.3% 2.3% 2.4% 3.2% 2.5% 2.5% 3.2% 2.8% 3.1% 4.2% State of Michigan January February March April May June July August September October November December Annual Average % 5.1% 6.6% 8.4% 5.7% 5.1% 6.1% 8.5% 4.8% 5.3% 5.9% 8.3% 3.7% 4.5% 5.1% 7.0% 3.7% 4.5% 5.8% 7.5% 4.0% 5.2% 5.9% 7.6% 5.8% 6.3% 8.4% 5.2% 5.2% 7.3% 4.8% 4.6% 6.5% 4.8% 4.7% 6.3% 4.2% 4.3% 5.8% 4.5% 4.4% 5.6% 4.9% 5.4% 7.3% Source: Michigan Department of Technology, Management and Budget Website - A-18

33 BUILDING PERMITS AND ESTIMATED CONSTRUCTION VALUE The number of building permits and estimated construction value issued in the Township during the last three calendar years is as follows: Number of Estimated Number of Estimated Number of Estimated Permits Value Permits Value Permits Value 316 $19,296, $26,600, $19,043,145 Source: Charter Township of Saginaw RESIDENTIAL CHARACTERISTICS There are 19,359 housing units located within the Township according to the US Census 2010 Profile of General Population and Housing Characteristics, of which 64.8% are owner-occupied. A breakdown of the dwelling units according to the U.S. Census American Community Survey 5-Year Estimates is as follows: Single Family 67.1% Multi Family 29.3% Mobile Home 3.6% According to the U.S. Census American Community Survey 5-Year Estimates, the median value of an owner-occupied residence in the Township is $117,300. INCOME CHARACTERISTICS There were 17,844 households in the Township, according to the U.S. Census American Community Survey 5-Year Estimates of economic characteristics, which had a median household income of $49,136. A breakdown of the income for the Township's households is as follows: Number of Income of Household Less than $10,000 $10,000 to $14,999 $15,000 to $24,999 $25,000 to $34,999 $35,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 $100,000 to $149,999 $150,000 or more The per capita income for the Township according to the U.S. Census , American Community Survey 5- Year Estimates was $30,264. AGE STATISTICS Households 1,133 Age groups for the Township's residents, according to the U.S. Census, are as follows: 714 1,899 2,378 2,938 3,294 2,196 2,025 1, US Census US Census Percentage Percentage Under 5 Years 5.0% 5.1% 5 to 19 Years 18.5% 17.4% 20 to 24 Years 6.6%. 7.6% 25 to 44 Years 24.8% 22.2% 45 to 64 Years 25.8% 28.1% Over 65 Years 19.3% 19.6% A-19

34 EDUCATIONAL CHARACTERISTICS The primary and secondary educational needs of the residents of the Township are adequately handled by the Saginaw Township Public School District which serves the Township. Higher educational opportunities are available at the following institutions, which are located within driving distance of the Township's residents: Central Michigan University Davenport University Delta College Michigan State Universtiy Mott Community College Northwood University Saginaw Valley State University University of Michigan - Flint According to the U.S. Census American Community Survey 5-Year Estimates, the educational characteristics for the Township are as follows: Years of School Completed Less than 9th grade 9th to 12th grade no diploma High School graduate Some college, no degree Associate degree Bachelor's degree Graduate or professional degree Persons 25 and Over 2.3% 3.7% 25.5% 24.6% 10.4% 20.9% 12.6% UTILITIES The Township purchases water from the City of Saginaw and local sewage treatment is available to approximately ¾ of the Township. Electric and natural gas service are supplied by Consumers Energy. TRANSPORTATION The Township is easily accessible via Interstate Highway 675 which connects to Interstate Highway 75. MBS International Airport is located approximately 3 miles north of the Township. Public bus service is available for portions of the Township through the Saginaw Transit System. Railroad service is available through CSX Transportation and Central Michigan Railway. BANKING The banking needs of the Township's residents can be adequately served by the following, all of which have branches located in the Township: Bank of America Chemical Bank Fifth Third Bank First State Bank Flagstar Bank, FSB Huntington National Bank Independent Bank JPMorgan Chase Bank, N.A. Source: Charter Township of Saginaw A-20

35 APPENDIX B CHARTER TOWNSHIP OF SAGINAW GENERAL FUND BUDGET SUMMARY FOR FISCAL YEARS ENDED MARCH 31, 2017 AND ENDING MARCH 31, 2018 B-1

36 B-2

37 B-3

38 B-4

39 B-5

40 B-6

41 APPENDIX C CHARTER TOWNSHIP OF SAGINAW FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED MARCH 31, 2016 C-1

42 (This Page Intentionally Left Blank)

43 Saginaw Charter Township, Michigan Year Ended March 31, 2016 Comprehensive Annual Financial Report Prepared by: Fiscal Services Department

44

45 SAGINAW CHARTER TOWNSHIP, MICHIGAN Table of Contents INTRODUCTORY SECTION Page Principal Township Officials 1 Letter of Transmittal 2 Table of Organization 7 GFOA Certificate of Achievement 8 FINANCIAL SECTION Independent Auditors Report 10 Management s Discussion and Analysis 14 Basic Financial Statements Government-wide Financial Statements: Statement of Net Position 25 Statement of Activities 26 Fund Financial Statements: Balance Sheet Governmental Funds 28 Reconciliation of Fund Balances of Governmental Funds to Net Position of Governmental Activities 30 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds 31 Reconciliation of Net Changes in Fund Balances of Governmental Funds to Change in Net Position of Governmental Activities 33 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual: General Fund 34 Fire Protection Fund 35 Police Fund 36 Garbage and Rubbish Collection Fund 37 Statement of Net Position Proprietary Funds 38 Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds 39 Statement of Cash Flows Proprietary Funds 40 Statement of Fiduciary Net Position - Fiduciary Funds 41 Statement of Changes in Fiduciary Net Position - Retiree Health Trust 42 Notes to Financial Statements 44

46 SAGINAW CHARTER TOWNSHIP, MICHIGAN Table of Contents Required Supplementary Information MERS Agent Multiple-Employer Defined Benefit Pension Plan: Schedule of Changes in Township's Net Pension Liability and Related Ratios 70 Schedule of the Net Pension Liability 71 Schedule of Contributions 72 Postemployment Healthcare Plan - Retiree Health Trust - Schedules of Funding Progress and Employer Contributions 73 Combining and Individual Fund Financial Statements and Schedules General Fund: Schedule of Revenues - Budget and Actual 76 Schedule of Expenditures - Budget and Actual 78 Nonmajor Governmental Funds: Combining Balance Sheet 84 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 86 Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual: Community Development 88 Fire Improvement 89 Art in Public Places 90 Internal Service Funds: Combining Statement of Net Position 92 Combining Statement of Revenues, Expenses and Changes in Fund Net Position 93 Combining Statement of Cash Flows 94 Agency Funds: Combining Statement of Fiduciary Assets and Liabilities 96 Combining Statement of Changes in Fiduciary Assets and Liabilities 98 STATISTICAL SECTION (UNAUDITED) TABLE 1 Net Position by Component Changes in Net Position Governmental Activities Tax Revenue by Source Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds Assessed Value and Taxable Value of Property Property Tax Rates, Direct and Overlapping Governments Principal Property Taxpayers Property Tax Levies and Collections Direct and Overlapping Debt Legal Debt Margin Information Pledged-Revenue Coverage Ratios of Outstanding Debt by Type Demographic and Economic Statistics Principal Employers Full-time Equivalent Township Employees by Function Operating Indicators by Function Capital Asset Statistics by Function 133

47 INTRODUCTORY SECTION

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49 SAGINAW CHARTER TOWNSHIP, MICHIGAN PRINCIPAL TOWNSHIP OFFICIALS For the Year Ended March 31, 2016 TOWNSHIP BOARD Timothy J. Braun Supervisor Shirley M. Wazny - Clerk Florence P. Connolly Jon R. Howell Steven G. Gerhardt - Treasurer Lori L. Gorney James S. Kelly Rob Grose Township Manager Michele L. Gadd Director of Fiscal Services Matthew J. Reno Director of Community Development Donald F. Pussehl, Jr. Police Chief David J. Kern Director of Assessing Jim I. Peterson Fire Chief Herbert L. Grunwell, III Director of Public Services Mark T. Mahlberg Township Attorney 1

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51 Saginaw Charter Township 4980 Shattuck Rd. P.O. Box 6400, Saginaw, MI (fax) To the Saginaw Charter Township Board: Profile of the Government Local Economy September 6, 2016 State law requires that all local governments, subject to certain size criteria, publish within six months of the close of each fiscal year a complete set of financial statements presented in conformance with generally accepted accounting principles (GAAP) and audited in conformity with auditing standards generally accepted in the United States of America by a firm of licensed certified public accountants. Pursuant to those requirements, we hereby issue the comprehensive annual financial report for the Saginaw Charter Township for the fiscal year ended March 31, Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal controls should not exceed the anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Rehmann Robson, Certified Public Accountants, has issued an unmodified ( clean ) opinion on the Township s financial statements for the year ended March 31, The independent auditors report is located at the front of the financial section of this report. Management s discussion and analysis (MD&A) immediately follows the independent auditors report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and it should be read in conjunction with it. The management of the Township is overseen by an elected Township Board. Saginaw Charter Township is the second largest governmental unit in Saginaw County, Michigan, with a population of 40,840 (2010 U.S. Census). Saginaw Township is a residential, retail, and medical community with a few small light industrial areas. It serves the Great Lakes Bay Region of Saginaw, Bay City, and Midland. Saginaw Township is a full service community in that it provides many services to its residents including police, fire, sanitation, water, planning and zoning, indoor and outdoor recreation, refuse collection, library and general administrative services. Like many other communities throughout the State of Michigan, Saginaw Charter Township has experienced a moderate decline in economic growth and development which has adversely affected property values. The Township strives to keep its neighborhoods, both retail and residential, as viable and livable places for its many residents. Relying on community Core Values (see on the following page), we have focused on a variety of community and economic initiatives to maintain neighborhood stability while fostering growth and re-investment within our boundaries. 2

52 In 2015, Saginaw Control & Engineering completed construction of a 73,000 sq. ft. addition to its local facility, investing $5.2 million. The company specializes in manufacturing standard and custom designed sheet metal electrical enclosures. Morley Companies, Inc. continues to hire new associates due to the expansion of existing business and new contracts. Morley has added customers in health care, insurance, auto and other industries that have helped it to diversify and grow rapidly. Kapex Manufacturing, located in Saginaw Charter Township, consolidated another location, upgraded Computer Numerical Control ("CNC") systems, purchased a larger CNC machine and added employees. This organization designs and manufactures equipment for plastics, food, and energetic materials industries. Long-term Financial Planning Saginaw Charter Township continues to refine and update its financial forecast model to address changes and trends identified. By reviewing the potential outcomes available, the Township can position itself to maintain current levels of service. The Board continues to identify areas where costs can be reduced, as well as examine future sources of revenue to ensure financial stability. In the fiscal year ended March 31, 2010, the Township completed a water and sewer rate study to develop a long-term rate plan. This plan will help to ensure the viability of the water and sewer utilities. Relevant Financial Policies The accounting policies of the Township conform to accounting principles generally accepted in the United States of America (GAAP) as applicable to government units. There were no policies that had a significant or unusual impact on the current period s financial statements. Major Initiatives There is continued interest toward enhancing our viability and quality of life in Saginaw Charter Township. Our vision remains the same: A planned community identified with pride and excellence in living, medical care, regional/local shopping and recreational activities; Where the quality of life is desirable and safe; Where government is unobtrusive and economical yet effective and efficient in the management of land, infrastructure, services and recreation; and A community which serves as a model for innovation and regional cooperation, with its focus on the future. The Core Values In 2005 the Township Board established a set of core community values. These core values form the nucleus by which all Township Departments carry out their activities and programs: Providing for a Safe Community, Promoting a Neat, Clean, Attractive Community with Beautiful neighborhoods, Providing Quality of Life Opportunities 3

53 Maintaining a Professionally Well Run, Efficient Government One that Provides High Quality Services to its Residents. Saginaw Charter Township's activities are focused within the context of the above four core values. The underlying objective is to maintain the community as a quality living environment. To date, we believe that maintenance of the core values has helped to keep the Township a model of stability at a time when other communities are showing the strain of a tight economy. Activities in included such projects as: Rehabilitation of the tennis courts in Olson Park Watermain Replacement-Leila to Green Street Reconstruction of Shattuckville Road Upgrade the traffic signals and mast arms at Tittabawassee Road and Fashion Square Boulevard Replacement of playground equipment in Sandhill Park The Coming Year As the Michigan economy begins to show signs of improvement, Saginaw Charter Township continues to maintain its services and infrastructure. One can expect to see: Purchase of a Rescue Squad and a Fire Engine. Rehabilitation of roads through increased crack sealing and concrete replacement. Continued work on revitalizing our commercial corridors. Continued water transmission system improvements. Financial Management The Township Board is responsible for establishing and maintaining internal control designed to ensure that the assets of the Township are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. Budgeting Control The Township maintains budgetary control with the objective to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the Township Board of Trustees. Activities of the general and special revenue funds are included in the annual appropriation budget. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established by activity in the general fund and at the fund level for special revenue funds. The Township also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbered amounts lapse at year-end and are re-appropriated as part of the following year's budget. 4

54 As demonstrated by the statements and schedules included in the financial section of this report, the Township continues to meet its responsibility for sound financial management. Independent Audit The Michigan Uniform Accounting and Budgeting Act requires an annual audit by independent certified public accountants. The accounting firm of Rehmann Robson was selected by the Saginaw Charter Township Board of Trustees to perform the Township's annual audit. The auditor's report on the financial statements and combining and individual fund statements and schedules is included in the financial section of this report. Accounting Systems and Reports The Township's accounting records for traditional governmental operations; i.e., general fund, special revenue funds, and capital project funds, are maintained on a modified accrual basis of accounting. As a result, the more significant revenues such as property taxes, intergovernmental revenues and investment earnings are recognized as earned and other revenues are generally recognized only when received. Expenditures are recorded when incurred and encumbrances placed when purchase orders are issued. Employees' accumulated unused annual leave is also recognized on the modified accrual basis. Budgetary control is maintained by an annual allotment system. Allotments, or appropriation, balances are encumbered by the simultaneous issuance and recording of purchase orders. Purchase orders that exceed allotted balances are not released until additional appropriations or appropriate budgetary adjustments are made available. Generally accepted accounting standards require that management provide a narrative introduction, overview, and analysis to accompany these basic financial statements in the form of a management s discussion and analysis ( MD&A ) letter. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. Saginaw Charter Township s MD&A can be found immediately following the report of the independent auditors. Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Saginaw Charter Township for its comprehensive annual financial report for the fiscal year ended March 31, In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a report of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. 5

55 Acknowledgements Appreciation is extended to the Fiscal Services Department and various employees throughout the Township responsible for financial management and reporting. Their adherence to following the law, utilizing proper accounting methods and eliminating waste from processes has greatly improved the efficiency and accountability of the entire Township. Respectfully submitted, Rob Grose Township Manager Michele L. Gadd Director of Fiscal Services 6

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57 SAGINAW CHARTER TOWNSHIP, MICHIGAN Table of Organization 7

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59 SAGINAW CHARTER TOWNSHIP, MICHIGAN GFOA Certificate of Achievement 8

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61 FINANCIAL SECTION This section is composed of the following: Independent Auditors' Report Management's Discussion and Analysis Basic Financial Statements Required Supplementary Information Combining and Individual Fund Financial Statements and Schedules 9

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63 Rehmann Robson INDEPENDENT AUDITORS' REPORT 5800 Gratiot Rd. Suite 201 Saginaw, MI Ph: Fx: rehmann.com September 6, 2016 Members of the Township Board of Saginaw Charter Township Saginaw, Michigan We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Saginaw Charter Township, Michigan (the Township ), as of and for the year ended March 31, 2016, and the related notes to the financial statements, which collectively comprise the Township s basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Independent Auditors' Responsibility 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. 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 involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Rehmann is an independent member of Nexia International. CPAs & Consultants Wealth Advisors Corporate Investigators 10

64 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Township as of March 31, 2016, and the respective changes in financial position and, where applicable, cash flows thereof, and the respective budgetary comparison for the general fund and each major special revenue fund, for the year then ended in accordance with accounting principles generally accepted in the United States of America. Implementation of GASB Statement No. 68 As described in Note 17, the Township implemented the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, in the current year. Accordingly, beginning net position of governmental activities was restated. Our opinion is not modified with respect to this matter. Restatement of Beginning Net Position As discussed in Note 17 to the financial statements, beginning net position of water and sewer enterprise funds and the business-type activities were restated to record the unbilled utility receivables in the year that they were earned. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management s Discussion and Analysis and the schedules for the pension and other postemployment benefits plans, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 11

65 Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Township s basic financial statements. The introductory section, combining and individual fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 12

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67 MANAGEMENT'S DISCUSSION AND ANALYSIS 13

68 SAGINAW CHARTER TOWNSHIP, MICHIGAN Management's Discussion and Analysis As management of Saginaw Charter Township, Michigan, we offer readers of the Township s financial statements this narrative overview and analysis of the financial activities of the Township for the fiscal year ended March 31, We encourage readers to consider the information presented here in conjunction with the additional information that is furnished in the financial statements and notes to the financial statements. Financial Highlights The assets and deferred outflows of resources of the Township exceeded its liabilities at the close of the most recent fiscal year by $64,683,716 (net position). Of this amount, $9,178,547 (unrestricted net position) may be used to meet the government s ongoing obligations to citizens and creditors. As of the close of the current fiscal year, the Township s governmental funds reported a combined ending fund balance of $13,331,593, an increase of $1,528,438 in comparison with the prior year. Approximately 38 percent of this total amount, or $5,106,154, is available for spending at the government s discretion (unassigned fund balance). At the end of the current fiscal year, unassigned fund balance for the general fund was $5,106,154 or 85 percent of total general fund expenditures. The Township s total bonded debt decreased by $580,170 during the current fiscal year; net amount includes retired bonded debt of $613,200 and additions adjustment of $33,030. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Township s basic financial statements. The Township s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the Township s finances, in a manner similar to a private sector business. The statement of net position presents information on all of the Township s assets, deferred outflows of resources, and liabilities, with the difference between reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Township is improving or deteriorating. The statement of activities presents information showing how the government s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected special assessments). Both of the government-wide financial statements distinguish functions of the Township that are principally supported by taxes and intergovernmental revenues (governmental activities ) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities ). The governmental activities of the Township include general government, public safety, public works, highway and streets, community development, and recreation and culture. The business-type activities of the Township include sewer and water operations. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Township, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. All of the funds of the Township can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. 14

69 SAGINAW CHARTER TOWNSHIP, MICHIGAN Management's Discussion and Analysis Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Township maintains several individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general, fire protection, police, and garbage and rubbish collection funds, each of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The Township adopts an annual appropriated budget for its general and special revenue funds. Budgetary comparison statements or schedules have been provided herein to demonstrate compliance with those budgets. Proprietary Funds. The Township maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The Township uses enterprise funds to account for its water and sewer operations. Internal service funds are an accounting device used to accumulate and allocate cost internally among the Township s various functions. The Township uses internal service funds to account for its self-insurance operations for employees healthcare coverage and property and liability coverage. Because both of these services predominately benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the sewer and water operations, both of which are considered to be major funds of the Township. Conversely, both internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the Township s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. 15

70 SAGINAW CHARTER TOWNSHIP, MICHIGAN Management's Discussion and Analysis Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information. Required supplementary information includes this management's discussion and analysis and the schedules for the Township's pension and postemployment benefit plans. The combined statements referred to earlier in connection with nonmajor governmental funds are presented immediately following the required supplementary information. Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government s financial position. In the case of the Township, assets and deferred outflows of resources exceeded liabilities by $64,683,716 at the close of the most recent fiscal year. The largest portion of the Township s net position (77 percent) reflects its investment in capital assets (e.g., land, construction in progress, land improvements, building and improvements, plants and mains, equipment, and vehicles), less any related debt used to acquire those assets that is still outstanding. The Township uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the Township s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Net Position Governmental Activities Business-type Activities Total Assets Current and other assets $ 15,140,188 $ 13,804,873 $ 12,780,508 $ 12,451,323 $ 27,920,696 $ 26,256,196 Capital assets, net 12,535,467 11,972,309 45,371,708 46,934,545 57,907,175 58,906,854 27,675,655 25,777,182 58,152,216 59,385,868 85,827,871 85,163,050 Deferred outflows of resources 1,017, ,017,865 - Liabilities Long-term liabilities 885, ,975 8,505,346 9,175,878 9,390,857 10,126,853 Other liabilities 11,628,858 3,030,095 1,142,305 1,566,013 12,771,163 4,596,108 12,514,369 3,981,070 9,647,651 10,741,891 22,162,020 14,722,961 Net position Net investment in capital assets 12,535,467 11,972,309 37,055,679 37,959,130 49,591,146 49,931,439 Restricted 5,914,023 4,212, ,914,023 4,212,572 Unrestricted (deficit) (2,270,339) 5,611,231 11,448,886 10,684,847 9,178,547 16,296,078 Total net position $ 16,179,151 $ 21,796,112 $ 48,504,565 $ 48,643,977 $ 64,683,716 $ 70,440,089 At the end of the current fiscal year, the Township is able to report positive balances in all of the categories of net position for the government as a whole, as well as positive balances for its separate governmental and business-type activities with the exception of the unrestricted net position in governmental activities this year due to the implementation of GASB 68. In the prior fiscal year, the Township had positive net position for governmental and business-type activities. 16

71 SAGINAW CHARTER TOWNSHIP, MICHIGAN Management's Discussion and Analysis The following condensed financial information was derived from the government-wide statement of activities and reflects how the Township s net position changed during the fiscal year: Change in Net Position Governmental Activities Business-type Activities Total Program revenues Charges for services $ 4,134,219 $ 3,749,361 $ 10,998,802 $ 12,191,320 $ 15,133,021 $ 15,940,681 Operating grants and contributions 216, , , ,073 Capital grants and contributions ,350 60, ,350 60,159 General revenues Property taxes 9,772,762 9,466, ,772,762 9,466,064 Grants and contributions not restricted to specific programs 3,213,789 3,282, ,213,789 3,282,325 Unrestricted investment earnings 14,204 19,427 43,885 25,855 58,089 45,282 Franchise fees 785, , , ,698 Miscellaneous 61,596 57,892 96, , , ,650 Total revenues 18,199,220 17,610,840 11,431,535 12,381,092 29,630,755 29,991,932 #REF! Expenses General government 2,330,484 2,288, ,330,484 2,288,834 Public safety 8,969,486 8,453, ,969,486 8,453,387 Public works 1,965,834 1,839, ,965,834 1,839,469 Highways and streets 1,411,497 1,095, ,411,497 1,095,794 Community development 460, , , ,366 Recreation and culture 2,031,047 2,059, ,031,047 2,059,299 Sewer - - 6,299,380 6,341,458 6,299,380 6,341,458 Water - - 5,271,567 5,071,970 5,271,567 5,071,970 Total expenses 17,168,653 16,224,149 11,570,947 11,413,428 28,739,600 27,637,577 Change in net position 1,030,567 1,386,691 (139,412) 967, ,155 2,354,355 Net position: Beginning of year, as restated 21,795,112 20,408,421 48,643,977 47,676,313 70,439,089 68,084,734 Restatement for implementation of GASB 68 (6,646,528) (6,646,528) - 15,148,584 20,408,421 48,643,977 47,676,313 63,792,561 68,084,734 End of year $ 16,179,151 $ 21,795,112 $ 48,504,565 $ 48,643,977 $ 64,683,716 $ 70,439,089 17

72 SAGINAW CHARTER TOWNSHIP, MICHIGAN Management's Discussion and Analysis Governmental activities. Governmental activities decreased the Township s net position by $5,615,961, which is a result of the restatement of $6,646,528 to implement GASB 68 offset by a positive change in net position of $1,030,567. The positive change in net position can be attributed to a 5.5 millage levy approved in 2014 for police services. The intent is to build a fund balance during the early years that will sustain the police department for the 15 year life of the levy. In comparison with the prior year, revenues increased $588,380, while expenses increased $944,504. Revenue for governmental activities totaled $18,199,220 for the year ended March 31, A total of $9,772,762 was in the form of property taxes, an increase of $306,698, due primarily to an increase in the special assessment levy for the Fire Department. Overall, expenses increased by 6 percent. The general fund initiated two construction projects, rehabilitating the tennis courts and resurfacing a portion of roadway. Labor and benefit costs also added to the increase in expenses. Expenses and Program Revenues - Governmental Activities $10,000,000 $9,000,000 $8,000,000 $7,000,000 Expense Program Revenues $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 General government Public safety Public works Highways and streets Community development Recreation and culture Revenues by Source - Governmental Activities Grants and contributions not restricted to specific programs 17% Other 6% Charges for services 23% Property taxes 54% 18

73 SAGINAW CHARTER TOWNSHIP, MICHIGAN Management's Discussion and Analysis Business-type activities. In the later part of 2009, the Township completed the first comprehensive study of utility rates in approximately 20 years. Prior rate adjustments were made as needed to keep pace with basic operating expenses. The goal of the study was to keep rates as low as possible for all customers, yet generate the revenues required to meet anticipated operations, maintenance, capital, and debt requirements. The sewer fund had an excess of cash that would be useful in moderating the impact of anticipated rate increases in future years. The cash position in the water fund was not as strong and needed to be improved. The revised rate structures should enable the Township to meet immediate cash needs and establish reserves to ensure financial stability in both funds. Business-type activities increased the Township s net position by $826,742, which is a result of the restatement of $966,154 to correctly accrue unbilled utility receivables in the correct year. The restatement is offset by a negative change in net position of $139,412. The negative change in net position can be attributed to commodity charges in both the water and sewer funds fell again this year based on the decline in consumption by our water customers. Expenses for repairs and maintenance of our aging systems continues to out-pace revenues. Capital investments in the water fund included the completion of one watermain replacement project. Expenses and Program Revenues - Business-type Activities $6,400,000 $6,200,000 Expenses Program Revenues $6,000,000 $5,800,000 $5,600,000 $5,400,000 $5,200,000 $5,000,000 $4,800,000 $4,600,000 Sewer Water 19

74 SAGINAW CHARTER TOWNSHIP, MICHIGAN Management's Discussion and Analysis Revenues by Source - Business-type Activities Other 4% Charges for services 96% Financial Analysis of the Government's Funds As noted earlier, the Township uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. Governmental Funds. The focus of the Township s governmental funds is to provide information on near term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Township s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Township s governmental funds reported combined ending fund balances of $13,331,593, an increase of $1,528,438 in comparison with the prior year. Approximately 38 percent of this total amount ($5,106,154) constitutes unassigned fund balance, which is available for spending at the government s discretion. The remainder of fund balance is not available for new spending because it is either in a nonspendable form ($317,100), restricted ($5,836,495), committed ($954,071) or assigned ($1,117,773). The general fund is the chief operating fund of the Township. At the end of the current fiscal year, unassigned fund balance of the general fund was $5,106,154, and total fund balance was $5,451,367. As a measure of the general fund s liquidity, it may be useful to compare unassigned fund balance to total fund expenditures. Unassigned fund balance represents approximately 85 percent of total general fund expenditures. The fund balance of the Township s general fund decreased by $209,946 during the current fiscal year. Two key projects, tennis court rehabilitation and re-surfacing of Shattuckville Road, were initiated with the expectation of using fund balance. Conservative spending in several other areas allowed the Township to take on these projects and minimize the impact to the overall fund balance. 20

75 SAGINAW CHARTER TOWNSHIP, MICHIGAN Management's Discussion and Analysis The fire protection fund has a total fund balance of $714,358, which decreased by $1,273 during the year. The fund balance has shown a decline in the past two years as overall expenditures out pace revenues. The Township has authority to levy 2.5 mills for fire protection and raised the currently levy from 1.5 mills to 1.7 mills for the fiscal year ending March 31, The Board will continue to monitor areas where costs can be reduced. The police fund has a total fund balance of $4,029,331, which increased by $1,943,157 during the year. In August 2014 voters approved a 15 year millage request for 5.5 mills. The millage request was designed to build a fund balance in the early years of the levy that will sustain a consistent level of service as costs increase throughout the life of the levy. By securing support for this request, the Township has ensured funding to provide police services to the community for the next 15 years. The garbage and rubbish collection fund has a total fund balance of $1,627,641 which increased by $120,215 during the year. The increase is attributed to the re-determination of cost for trash/yard waste and curbside recycling service approved by the Township Board in November This re-determination took into consideration the recently negotiated contract with Waste Management to provide future services. Proprietary Funds. The Township s proprietary funds provide the same type of information found in the governmentwide financial statements, but in more detail. Total net position of the water and sewer funds at the end of the year amounted to $22,696,234 and $25,803,068, respectively. The water fund had an increase in net position for the year of $290,892. The sewer fund had a decrease in net position for the year of $412,006. Other factors concerning the finances of these two funds have already been addressed in the discussion of the Township s business-type activities. General Fund Budgetary Highlights Over the course of the year, the Township amended the budget to take into account various events occurring during the year. Differences between the original and final amended budgets for expenditures were relatively minor with the exception of the amendments for the rehabilitation of the tennis courts at Olson Park and reconstruction of Shattuckville Road. After considering these projects for several years the Township Board chose to move forward anticipating a $523,500 allocation from fund balance to finance these projects. Ultimately, the change in fund balance was $209,946. The Township takes an active role in monitoring department needs and budget requests throughout the fiscal year. The Township will continue to find ways to reduce costs and yet provide essential services, allowing for favorable budgetary results. Capital Asset and Debt Administration Capital Assets. The Township s investment in capital assets as of March 31, 2016, amounted to $57,907,175 (net of accumulated depreciation). This investment in capital assets includes land, construction in progress, land improvements, building and improvements, plants and mains, equipment, and vehicles. Major capital asset events during the fiscal year included the following: Purchase of several parcels of land to be held for future development Purchase of five replacement staff vehicles Purchase of five police patrol vehicles Purchase of a fire rescue squad vehicle and a fire engine Purchase of a utility van and pick-up truck Purchase of a utility tractor Purchase of two mowers for grounds maintenance Center Road CSO scum weir replacement Completion of the watermain replacement - Leila to Green Street 21

76 SAGINAW CHARTER TOWNSHIP, MICHIGAN Management's Discussion and Analysis Capital Assets (Net of Depreciation) Governmental Activities Business-type Activities Total Land $ 1,168,098 $ 1,164,054 $ 283,260 $ 261,573 $ 1,451,358 $ 1,425,627 Construction in progress 239,182-98, , , ,645 Land improvements 2,011,653 2,173, ,011,653 2,173,757 Buildings and improvements, plants and mains 6,600,516 6,869,501 44,276,725 45,844,227 50,877,241 52,713,728 Equipment 273, , , , , ,817 Vehicles 2,242,857 1,517, , ,234 2,531,680 1,767,280 Total capital assets, net $ 12,535,467 $ 11,971,309 $ 45,371,708 $ 46,934,545 $ 57,907,175 $ 58,905,854 Additional information on the Township s capital assets can be found in the notes to the financial statements. Debt Administration. At the end of the current fiscal year, the Township had total long-term debt outstanding of $9,390,857. Of this amount, $8,302,795 represents bonds secured solely by specified revenue sources (i.e., revenue bonds), $13,234 represents the remaining balance of an installment purchase, and $1,074,828 represents accrued compensated absences. Long-term Debt Governmental Activities Business-type Activities Total Bonds payable $ - $ - $ 8,302,795 $ 8,882,965 $ 8,302,795 $ 8,882,965 Installment purchase ,234 92,450 13,234 92,450 Compensated absences 885, , , ,463 1,074,828 1,151,438 Total debt $ 885,511 $ 950,975 $ 8,505,346 $ 9,175,878 $ 9,390,857 $ 10,126,853 State statutes limit the amount of general obligation debt a governmental entity may issue to 10 percent of its total assessed valuation. The current debt limitation for the Township is $125,967,030 which is significantly in excess of the Township s outstanding general obligation debt. Additional information on the Township s long-term debt can be found in the notes to the financial statements. Economic Factors and Next Year s Budget and Rates The following factors were considered in preparing the Township s budget for the fiscal year: The March 2016 unemployment rate for the Saginaw County metropolitan area (the Township is in the Saginaw area) was 5.3 percent, which is a decrease of 0.8 percent from a year ago. The Township rate was 2.9 percent. The State average was 5.1 percent and the National rate was 5.1 percent. The Township is comprised principally of residential areas with several key commerce corridors. There is a stable business base. Inflationary trends in the region compare favorably to national indices. 22

77 SAGINAW CHARTER TOWNSHIP, MICHIGAN Management's Discussion and Analysis Requests for Information This financial report is designed to provide a general overview of the Township s finances for all those with an interest in the government s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Township Fiscal Services Department, 4980 Shattuck Rd, Saginaw, Michigan

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79 BASIC FINANCIAL STATEMENTS 24

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81 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statement of Net Position March 31, 2016 Primary Government Governmental Business-type Activities Activities Total Assets Cash and cash equivalents $ 12,947,160 $ 8,330,611 $ 21,277,771 Investments 90,124-90,124 Receivables 1,522,296 4,382,829 5,905,125 Internal balances 235,170 (235,170) - Inventory 25, , ,697 Prepaid items and other assets 319,627 48, ,979 Capital assets not being depreciated 1,407, ,440 1,788,720 Capital assets being depreciated, net 11,128,187 44,990,268 56,118,455 Total assets 27,675,655 58,152,216 85,827,871 Deferred outflows of resources Deferred pension amounts 1,017,865-1,017,865 Liabilities Accounts payable 534, , ,847 Accrued liabilities 214,961 35, ,380 Unearned revenue - 419, ,835 Due to others 360, ,000 Long-term liabilities: Due within one year 524, ,407 1,309,982 Due in more than one year 360,936 7,719,939 8,080,875 Net pension liability 8,288,641-8,288,641 Net other postemployment benefit obligation 2,230, ,657 2,787,460 Total liabilities 12,514,369 9,647,651 22,162,020 Net position Net investment in capital assets 12,535,467 37,055,679 49,591,146 Restricted for: Fire protection 714, ,358 Police 3,097,331-3,097,331 Garbage and rubbish collection 1,627,641-1,627,641 Fire improvement 474, ,693 Unrestricted (deficit) (2,270,339) 11,448,886 9,178,547 Total net position $ 16,179,151 $ 48,504,565 $ 64,683,716 The accompanying notes are an integral part of these basic financial statements. 25

82 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statement of Activities For the Year Ended March 31, 2016 Program Revenues Operating Capital Charges Grants and Grants and Net (Expense) Functions / Programs Expenses for Services Contributions Contributions Revenue Primary government Governmental activities: General government $ 2,330,484 $ 731,223 $ - $ - $ (1,599,261) Public safety 8,969, , ,932 - (8,487,982) Public works 1,965,834 1,920, (45,586) Highways and streets 1,411, , (958,330) Community development 460, , (61,166) Recreation and culture 2,031, , (1,665,177) Total governmental activities 17,168,653 4,134, ,932 - (12,817,502) Business-type activities: Sewer 6,299,380 5,716,178-78,138 (505,064) Water 5,271,567 5,282, , ,269 Total business-type activities 11,570,947 10,998, ,350 (279,795) Total primary government $ 28,739,600 $ 15,133,021 $ 216,932 $ 292,350 $ (13,097,297) continued The accompanying notes are an integral part of these basic financial statements. 26

83 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statement of Activities For the Year Ended March 31, 2016 Primary Government Governmental Business-type Activities Activities Total Changes in net position Net expense $ (12,817,502) $ (279,795) $ (13,097,297) General revenues: Property taxes 9,772,762-9,772,762 Grants and contributions not restricted to specific programs 3,213,789-3,213,789 Unrestricted investment earnings 14,204 43,885 58,089 Franchise fees 785, ,718 Miscellaneous 61,596 96, ,094 Total general revenues 13,848, ,383 13,988,452 Change in net position 1,030,567 (139,412) 891,155 Net position, beginning of year, as restated 15,148,584 48,643,977 63,792,561 Net position, end of year $ 16,179,151 $ 48,504,565 $ 64,683,716 concluded The accompanying notes are an integral part of these basic financial statements. 27

84 SAGINAW CHARTER TOWNSHIP, MICHIGAN Balance Sheet Governmental Funds March 31, 2016 Special Revenue Funds Garbage and General Fire Rubbish Fund Protection Police Collection Assets Cash and cash equivalents $ 4,583,579 $ 618,299 $ 3,718,200 $ 1,518,711 Accounts receivable 23,725 31,336 28,163 - Taxes receivable 91,277 67, ,160 91,547 Special assessments receivable 73, Due from other funds 240, Due from other governmental units 490, Inventory 25, Prepaids 69,297 9,575 67,953 - Advance to Mid Michigan Waste Authority ,100 Advance to Soccer Association 138, Total assets $ 5,736,287 $ 726,328 $ 4,106,476 $ 1,754,358 Liabilities Accounts payable $ 84,403 $ 2,892 $ 3,617 $ 126,442 Accrued liabilities 125,338 9,078 73, Deposits payable 2, Due to other funds Total liabilities 211,786 11,970 77, ,717 Deferred inflows of resources Special assessments 73, Fund balances Nonspendable 233,197 9,575 67,953 - Restricted - 704,783 3,029,378 1,627,641 Committed Assigned 112, ,000 - Unassigned 5,106, Total fund balances 5,451, ,358 4,029,331 1,627,641 Total liabilities, deferred inflows of resources, and fund balances $ 5,736,287 $ 726,328 $ 4,106,476 $ 1,754,358 The accompanying notes are an integral part of these basic financial statements. 28

85 Nonmajor Governmental Funds Total $ 1,488,688 $ 11,927,477 1,031 84, ,102 25,676 98, ,540 18, ,340-25,811 6, , , ,089 $ 1,540,275 $ 13,863,724 $ 56 $ 217,410 5, ,759-2, , ,321 25,676 98,810 6, , ,693 5,836, , ,071 73,757 1,117,773-5,106,154 1,508,896 13,331,593 $ 1,540,275 $ 13,863,724 29

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87 SAGINAW CHARTER TOWNSHIP, MICHIGAN Reconciliation Fund Balances of Governmental Funds To Net Position of Governmental Activities March 31, 2016 Fund balances - total governmental funds $ 13,331,593 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Capital assets not being depreciated 1,407,280 Capital assets being depreciated, net 11,128,187 Because the focus of governmental funds is on short-term financing, some assets will not be available to pay for current expenditures. Those assets (i.e., receivables) are offset by deferred inflows of resources in the governmental funds and, therefore, are not included in fund balance. Deferred special assessments 98,810 Certain pension-related amounts, such as the net pension liability and deferred amounts are not due and payable in the current period or do not represent current financial resources and therefore are not reported in the funds. Net pension liability (8,288,641) Deferred pension amounts 1,017,865 Internal service funds are used by management to charge the costs of certain insurances to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. Net position of governmental activities accounted for in internal service funds 605,634 Net position allocated to business-type activities from governmental activities internal service fund (5,263) Certain liabilities are not due and payable in the current period and therefore are not reported in the funds. Compensated absences (885,511) Net other postemployment benefit obligation (2,230,803) Net position of governmental activities $ 16,179,151 The accompanying notes are an integral part of these basic financial statements. 30

88 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended March 31, 2016 Special Revenue Funds Garbage and General Fire Rubbish Fund Protection Police Collection Revenues Property taxes $ 1,568,274 $ 1,542,593 $ 6,695,771 $ - Licenses and permits 819,132-27,371 - Intergovernmental - State sources 3,182,971-61,288 - Charges for services 350,252 10,958 16,404 1,919,969 Fines and forfeits 109, Special assessments 490, Interest 5, Other 278,736 42, , Total revenues 6,804,554 1,596,247 7,020,470 1,920,578 Expenditures Current: General government 910, Public safety 434,669 1,597,520 6,009,313 - Highway and streets 1,361, Public works 123, ,800,363 Community development Recreation and culture 2,039, Other 1,144, Total expenditures 6,015,500 1,597,520 6,009,313 1,800,363 Revenues over (under) expenditures 789,054 (1,273) 1,011, ,215 Other financing sources (uses) Transfers in ,000 - Transfers out (999,000) Total other financing sources (uses) (999,000) - 932,000 - Net change in fund balances (209,946) (1,273) 1,943, ,215 Fund balances, beginning of year 5,661, ,631 2,086,174 1,507,426 Fund balances, end of year $ 5,451,367 $ 714,358 $ 4,029,331 $ 1,627,641 The accompanying notes are an integral part of these basic financial statements. 31

89 Nonmajor Governmental Funds Total $ 400,121 $ 10,206, ,800 1,245,303-3,244,259 10,966 2,308, ,496 27, ,028 3,448 9,536 39, , ,495 18,222, , ,308 8,841,810-1,361,756-1,924, , ,305 10,597 2,050,363-1,144,932 1,271,210 16,693,906 (390,715) 1,528,438 67, ,000 - (999,000) 67,000 - (323,715) 1,528,438 1,832,611 11,803,155 $ 1,508,896 $ 13,331,593 32

90 SAGINAW CHARTER TOWNSHIP, MICHIGAN Reconciliation Net Changes in Fund Balances of Governmental Funds To Change in Net Position of Governmental Activities For the Year Ended March 31, 2016 Net change in fund balances - total governmental funds $ 1,528,438 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. Capital outlay 1,320,564 Depreciation expense (752,050) Loss on disposal of capital assets (4,356) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds, but rather are deferred to subsequent fiscal years. Change in deferred special assessments (27,792) Internal service funds are used by management to charge the costs of certain insurances to individual funds. The change in the internal service funds net position is reported with governmental activities. Change in net position from governmental activities accounted for in internal service funds (398,418) Change in net position from governmental activities accounted for in internal service fund charged to business-type activities 18,298 Some expenses reported in the statement of activates do not require the use of current financial resources and therefore are not reported as expenditures in the funds. Change in the accrual of compensated absences 65,464 Change in the other postemployment benefit obligation (95,333) Change in net pension liability and related deferred amounts (624,248) Change in net position of governmental activities $ 1,030,567 The accompanying notes are an integral part of these basic financial statements. 33

91 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - General Fund For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget Revenues Property taxes $ 1,535,008 $ 1,535,008 $ 1,568,274 $ 33,266 Licenses and permits 825, , ,132 (6,268) Intergovernmental - State sources 3,248,551 3,302,593 3,182,971 (119,622) Charges for services 346, , ,252 3,552 Fines and forfeits 119, , ,496 (10,004) Special assessments 495, , ,307 (4,693) Interest 5,000 5,000 5, Other 179, , ,736 99,691 Total revenues 6,754,204 6,808,246 6,804,554 (3,692) Expenditures Current: General government 850, , ,717 (47,323) Public safety 413, , ,669 (23,125) Highway and streets 1,205,477 1,442,167 1,361,756 (80,411) Public works 76, , ,660 (253) Recreation and culture 1,873,793 2,126,424 2,039,766 (86,658) Other 1,275,321 1,211,945 1,144,932 (67,013) Total expenditures 5,694,837 6,320,283 6,015,500 (304,783) Revenues over expenditures 1,059, , , ,091 Other financing uses Transfers out (1,059,367) (1,066,711) (999,000) (67,711) Net change in fund balance - (578,748) (209,946) 368,802 Fund balance, beginning of year 5,661,313 5,661,313 5,661,313 - Fund balance, end of year $ 5,661,313 $ 5,082,565 $ 5,451,367 $ 368,802 The accompanying notes are an integral part of these basic financial statements. 34

92 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Fire Protection Fund For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget Revenues Property taxes $ 1,558,085 $ 1,558,085 $ 1,542,593 $ (15,492) Intergovernmental - Federal sources - 11,225 - (11,225) Charges for services 11,075 11,075 10,958 (117) Interest (370) Other 39,800 42,300 42, Total revenues 1,609,460 1,623,185 1,596,247 (26,938) Expenditures Current: Public safety: Salaries and wages 651, , ,448 (16,568) Contractual services 1,000 1,000 1,000 - Volunteer firemen 419, , ,312 (6,693) Supplies 61,500 75,225 68,892 (6,333) Services 80,670 80,670 78,918 (1,752) Gas and oil 17,000 17,000 13,786 (3,214) Insurance 44,500 44,500 49,025 4,525 Public utilities 77,000 77,000 81,785 4,785 Repairs and maintenance 111, , ,391 (8,409) Education and training 28,000 28,000 26,442 (1,558) Computer expense 6,500 6,500 9,398 2,898 Workmen's compensation insurance 25,500 25,500 31,321 5,821 Less workmen's compensation dividend (6,500) (6,500) (10,174) (3,674) Capital outlay 59,000 59,000 76,976 17,976 Total expenditures 1,576,646 1,609,716 1,597,520 (12,196) Net change in fund balance 32,814 13,469 (1,273) (14,742) Fund balance, beginning of year 715, , ,631 - Fund balance, end of year $ 748,445 $ 729,100 $ 714,358 $ (14,742) The accompanying notes are an integral part of these basic financial statements. 35

93 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Police Fund For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget Revenues Property taxes $ 6,686,300 $ 6,686,300 $ 6,695,771 $ 9,471 Licenses and permits 27,300 27,300 27, Intergovernmental - State sources 119, ,128 61,288 (57,840) Charges for services 13,800 13,800 16,404 2,604 Interest 1,000 1, (757) Other 157, , ,393 61,733 Total revenues 7,005,188 7,005,188 7,020,470 15,282 Expenditures Current: Public safety: Salaries and wages 5,035,873 5,035,873 4,877,420 (158,453) Supplies 111, , ,428 (7,192) Contractual services 46,876 46,876 34,065 (12,811) Gas and oil 130, ,000 72,413 (57,587) Insurance 95,500 95, ,526 19,026 Public utilities 20,600 20,600 16,618 (3,982) Repairs and maintenance 118, ,600 99,640 (18,960) Education and training 21,500 21,500 19,028 (2,472) Miscellaneous 450, , ,789 (45,292) Workmen's compensation insurance 61,800 61,800 60,250 (1,550) Less workmen's compensation dividend (16,000) (16,000) (19,466) (3,466) Capital outlay 238, , ,602 (12,971) Total expenditures 6,315,023 6,315,023 6,009,313 (305,710) Revenues over expenditures 690, ,165 1,011, ,992 Other financing sources Transfers in 932, , ,000 - Net change in fund balance 1,622,165 1,622,165 1,943, ,992 Fund balance, beginning of year 2,086,174 2,086,174 2,086,174 - Fund balance, end of year $ 3,708,339 $ 3,708,339 $ 4,029,331 $ 320,992 The accompanying notes are an integral part of these basic financial statements. 36

94 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Garbage and Rubbish Collection Fund For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget Revenues Charges for services $ 1,593,250 $ 1,593,250 $ 1,919,969 $ 326,719 Interest Other 2,625 2, (2,345) Total revenues 1,595,875 1,595,875 1,920, ,703 Expenditures Current: Public works: Salaries and wages 17,018 17,018 14,505 (2,513) Sanitation collection 1,797,475 1,797,475 1,715,453 (82,022) Supplies 5,000 5,000 7,306 2,306 Other 97,650 97,650 63,099 (34,551) Total expenditures 1,917,143 1,917,143 1,800,363 (116,780) Net change in fund balance (321,268) (321,268) 120, ,483 Fund balance, beginning of year 1,507,426 1,507,426 1,507,426 - Fund balance, end of year $ 1,186,158 $ 1,186,158 $ 1,627,641 $ 441,483 The accompanying notes are an integral part of these basic financial statements. 37

95 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statement of Net Position Proprietary Funds March 31, 2016 Governmental Business-type Activities - Enterprise Funds Activities Internal Water Sewer Service Fund Fund Total Fund Assets Current assets: Cash and cash equivalents $ 2,723,299 $ 5,607,312 $ 8,330,611 $ 1,019,683 Investments ,124 Accounts receivable 1,364,609 2,453,388 3,817,997 5,600 Current portion of special assessment receivable - 22,270 22,270 - Inventory 253, ,886 - Prepaids 13,267 35,085 48, ,427 Total current assets 4,355,061 8,118,055 12,473,116 1,281,834 Noncurrent assets: Special assessment receivable, net of current portion - 542, ,562 - Capital assets not being depreciated 128, , ,440 - Capital assets being depreciated, net 18,818,387 26,171,881 44,990,268 - Total noncurrent assets 18,946,744 26,967,526 45,914,270 - Total assets 23,301,805 35,085,581 58,387,386 1,281,834 Liabilities Current liabilities: Accounts payable 7, , , ,998 Accrued liabilities 13,428 21,991 35, ,202 Deposits payable 1,000-1,000 - Current portion of bonds and installment purchase payable 35, , ,367 - Current portion of accrued compensated absences 60,276 94, ,040 - Due to other governmental units - 19,117 19,117 - Due to other funds 87, , ,433 - Unearned revenue 13, , ,835 - Total current liabilities 218,087 1,393,401 1,611, ,200 Noncurrent liabilities: Bonds and installment purchase payable, net of current portion 165,000 7,520,662 7,685,662 - Accrued compensated absences, net of current portion 15,654 18,623 34,277 - Net other postemployment benefit obligation 206, , ,657 - Total noncurrent liabilities 387,484 7,889,112 8,276,596 - Total liabilities 605,571 9,282,513 9,888, ,200 Net position Net investment in capital assets 18,746,744 18,308,935 37,055,679 - Unrestricted 3,949,490 7,494,133 11,443, ,634 Total net position $ 22,696,234 $ 25,803,068 48,499,302 $ 605,634 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 5,263 Net position of business-type activities $ 48,504,565 The accompanying notes are an integral part of these basic financial statements. 38

96 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds For the Year Ended March 31, 2016 Governmental Business-type Activities - Enterprise Funds Activities Internal Water Sewer Service Fund Fund Total Fund Operating revenues Charges for services $ 5,282,624 $ 5,705,488 $ 10,988,112 $ 2,449,507 Special assessments - 10,690 10,690 - Other 36,764 34,884 71,648 - Total operating revenues 5,319,388 5,751,062 11,070,450 2,449,507 Operating expenses Operation and maintenance 966,528 1,562,095 2,528,623 - Administration 86, , , ,783 Professional services 59, , ,640 - Supplies 50, , ,518 - Property and liability claims ,032 Other services and charges 91, , ,773 - Insurance 35,399 81, ,931 2,381,778 Utilities 37, , ,115 - Cost of goods sold 2,974,459 1,477,656 4,452,115 - Repairs and maintenance 249, , ,685 - Education and training 3,320 1,390 4,710 - Depreciation 689,721 1,552,939 2,242,660 - Total operating expenses 5,245,189 5,979,200 11,224,389 2,852,593 Operating income (loss) 74,199 (228,138) (153,939) (403,086) Nonoperating revenues (expenses) Gain on sale of capital assets - 24,850 24,850 - Interest revenue 11,977 31,908 43,885 4,668 Interest expense (9,496) (318,764) (328,260) - Total nonoperating revenues (expenses) 2,481 (262,006) (259,525) 4,668 Income (loss) before capital contributions 76,680 (490,144) (413,464) (398,418) Capital contributions 214,212 78, ,350 - Change in net position 290,892 (412,006) (121,114) (398,418) Net position, beginning of year, as restated 22,405,342 26,215,074 1,004,052 Net position, end of year $ 22,696,234 $ 25,803,068 $ 605,634 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (18,298) Change in net position of business-type activities $ (139,412) The accompanying notes are an integral part of these basic financial statements. 39

97 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statement of Cash Flows Proprietary Funds For the Year Ended March 31, 2016 Governmental Business-type Activities - Enterprise Funds Activities Internal Water Sewer Service Fund Fund Total Funds Cash flows from operating activities Cash received from customers $ 5,234,263 $ 5,582,432 $ 10,816,695 $ - Cash received from employees and retirees ,425 Cash received from interfund services 11,475-11,475 2,360,706 Cash payments for interfund services - (36,983) (36,983) - Cash payments to employees (984,037) (1,578,093) (2,562,130) - Cash payments to suppliers for goods and services (3,807,678) (3,059,296) (6,866,974) (2,192,469) Net cash provided by operating activities 454, ,060 1,362, ,662 Cash flows from capital and related financing activities Acquisition of capital assets (268,660) (118,813) (387,473) - Proceeds from sale of capital asset - 24,850 24,850 - Proceeds from the issuance of debt - 33,030 33,030 - Principal paid on long-term debt (32,500) (659,916) (692,416) - Interest and fiscal charges paid on long-term debt (9,496) (318,764) (328,260) - Net cash used in capital and related financing activities (310,656) (1,039,613) (1,350,269) - Cash flows from investing activities Purchases of investments (190) Interest received 11,977 31,908 43,885 4,668 Net cash provided by investing activities 11,977 31,908 43,885 4,478 Net increase (decrease) in cash and cash equivalents 155,344 (99,645) 55, ,140 Cash and cash equivalents, beginning of year 2,567,955 5,706,957 8,274, ,543 Cash and cash equivalents, end of year $ 2,723,299 $ 5,607,312 $ 8,330,611 $ 1,019,683 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) $ 74,199 $ (228,138) $ (153,939) $ (403,086) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation 689,721 1,552,939 2,242,660 - Change in operating assets and liabilities that provided (used) cash: Accounts receivable (73,778) (190,900) (264,678) 624 Special assessments receivable - 22,270 22,270 - Due from other funds 14,840 1,040 15,880 - Inventory 10,898-10,898 - Prepaids (13,267) (21,499) (34,766) 87,015 Accounts payable (216,369) (192,748) (409,117) 211,907 Accrued liabilities (20,865) (31,273) (52,138) 1,202 Accrued compensated absences (7,525) (3,621) (11,146) - Due to other governmental units - 19,117 19,117 - Due to other funds (3,365) (38,023) (41,388) - Due to others ,000 Unearned revenue (11,347) - (11,347) - Net other postemployment benefit obligation 10,881 18,896 29,777 - Net cash provided by operating activities $ 454,023 $ 908,060 $ 1,362,083 $ 257,662 Noncash capital activities: Capital contributions $ 214,212 $ 78,138 $ 292,350 $ - The accompanying notes are an integral part of these basic financial statements. 40

98 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statement of Fiduciary Net Position Fiduciary Funds March 31, 2016 Retiree Agency Health Trust Funds Assets Cash and cash equivalents $ - $ 20,342 Investments - mutual funds 2,898,201 - Delinquent personal property taxes - 84,834 Due from others - 13,403 Total assets 2,898,201 $ 118,579 Liabilities Due to others - $ 38,412 Due to other governmental units - 80,167 Total liabilities - $ 118,579 Net position restricted for retiree healthcare $ 2,898,201 The accompanying notes are an integral part of these basic financial statements. 41

99 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statement of Changes in Fiduciary Net Position Retiree Health Trust For the Year Ended March 31, 2016 Retiree Health Trust Additions Contributions: Employer $ 360,000 Current premium contributions 212,001 Total contributions 572,001 Investment income: Net depreciation in fair value of investments (42,001) Total additions 530,000 Deductions Retiree healthcare premium payments 212,001 Administration 6,340 Total deductions 218,341 Change in net position 311,659 Net position, beginning of year 2,586,542 Net position, end of year $ 2,898,201 The accompanying notes are an integral part of these basic financial statements. 42

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101 NOTES TO FINANCIAL STATEMENTS 43

102 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of Saginaw Charter Township (the Township ) conform to generally accepted accounting principles as applicable to governmental units. The following is a summary of the significant policies: Reporting Entity Saginaw Charter Township is a municipal corporation governed by an elected Board. As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the Township. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government. For the most part, the effect of the interfund activity has been removed from these statements. Governmental activities, which normally are 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. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly 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 properly included among program revenues are reported instead as general revenues. 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 government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements, except for agency funds which do not have a measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 44

103 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period, or within one year for reimbursement based grants. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, intergovernmental revenues and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. The government reports the following major governmental funds: The general fund is the government s primary operating fund. It accounts for all financial resources of the general government, except those accounted for and reported in another fund. The fire protection special revenue fund accounts for the separate voted millage and related operation of the fire department. The policespecialrevenuefund accounts for the separate voted millage and the related operation of the police department. The garbage and rubbish collection special revenue fund accounts for separate charges for service and the related operation of garbage and rubbish collection. The government reports the following major proprietary funds: The water enterprise fund accounts for the activities of the government s water distribution system. The sewer enterprise fund treatment system. accounts for the activities of the government s sewage disposal and Additionally, the Township reports the following fund types: Special revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than capital projects. Capital project funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Internal service funds account for health benefits and risk management services provided to other departments or agencies of the government on a cost reimbursement basis. 45

104 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements The retiree health trust fund accounts for the accumulation of resources to be used for certain health costs for retirees. The agency funds are custodial in nature and do not present results of operations or have a measurement focus. These funds are used to account for assets held for other governments in an agency capacity, including tax collections. 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 government s water and sewer functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues of the sewer and water enterprise funds are charges to customers for sales and services. The enterprise funds also recognize as operating revenues the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the Township s policy to use restricted resources first, then unrestricted resources as they are needed. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Equity Deposits and Investments The government s cash and cash equivalents are considered to be cash on hand, demand deposits and shortterm investments with original maturities of three months or less from the date of acquisition. State statutes authorize the government to deposit in the accounts of federally insured banks, credit unions, and savings and loan associations, and to invest in obligations of the U.S. Treasury, certain commercial paper, repurchase agreements, banker s acceptances, and mutual funds composed of otherwise legal investments. Investments are reported at fair value. Receivables and Payables All receivables and payables are reported at their gross value and, where appropriate, are reduced by the estimated portion that is expected to be uncollectible. 46

105 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either due to/from other funds (i.e., the current portion of interfund loans) or advances to/from other funds (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as due to/from other funds. Any residual balances outstanding between the governmental activities and business type activities are reported in the government wide financial statements as internal balances. Inventory and Prepaids Inventory maintained by the general fund and water enterprise fund is valued at cost using the first-in, firstout method. Inventory of expendable supplies in other funds have not been recorded and the amount of any such inventory is not considered material. The cost value of such inventory was recorded as an expenditure at the time of purchase. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Items are recorded as prepaid at the time of payment if the Township is to receive a future benefit. Prepaids in governmental funds are accounted for using the purchase method. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure such as water and sewer systems, are reported in the governmental and business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation. The governmental activities have no infrastructure assets. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are expensed when incurred. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities, if any, is included as part of the capitalized value of the assets constructed. No such interest expense was incurred during the current fiscal year. Capital assets of the primary government are depreciated using the straight-line method over the following estimated useful lives: Years Land improvements Buildings and improvements Water / sewer plants and mains 5-40 Equipment 5-20 Vehicles

106 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Deferred Outflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to one or more future periods and so will not be recognized as an outflow of resources (expense/expenditure) until then. The Township reports deferred outflows of resources related to its pension plan for the difference between expected and actual investment returns, changes in assumptions, and changes in benefits provided to pension plan participants. Long-term Obligations In the government-wide financial statements and 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 position. Bond premiums and discounts 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. In the fund financial statements, governmental fund types recognize bond premiums 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 on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Deferred Inflows of Resources In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The governmental funds report unavailable revenues, which arises only under a modified accrual basis of accounting, from special assessments receivable. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. Fund Equity Governmental funds report nonspendable fund balance for amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted fund balance is reported when externally imposed constraints are placed on the use of resources by grantors, contributors, or laws or regulations of other governments. Committed fund balance is reported for amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the Board of Trustees (the government s highest level of decision-making authority). A formal resolution of the Board of Trustees is required to establish, modify, or rescind a fund balance commitment. The Township reports assigned fund balance for amounts that are constrained by the government s intent to be used for specific purposes, but are neither restricted nor committed. The Board of Trustees by resolution has delegated the authority to assign fund balance to the Fiscal Services Director. Unassigned fund balance is the residual classification for the general fund. 48

107 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements When the government incurs an expenditure for purposes for which various fund balance classifications can be used, it is the government's policy to use restricted fund balance first, then committed fund balance, assigned fund balance, and finally unassigned fund balance. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the plan and additions to/deductions from the plan fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The Township utilizes various investment instruments which are exposed to various risks, such as interest rate, credit and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements. 2. BUDGETARY INFORMATION Comparisons to budget are presented for the general and special revenue funds as required by generally accepted accounting principles. The Township follows these procedures in establishing the budgetary data reflected in the financial statements: 1. Prior to March 31, the Township Manager submits to the Township Board a proposed operating budget for the fiscal year commencing the following April 1. The operating budget includes proposed expenditures and the means of financing them. A public hearing is conducted to obtain taxpayer comments The budget is legally enacted through passage of a resolution on or before March 31. Budgets for the general and special revenue funds are legally adopted on a basis consistent with generally accepted accounting principles (GAAP). The budget for the general fund and special revenue funds is adopted by activity level. Expenditures are reported using the administrative detail for informational purposes Adoption and amendments of all budgets used by the Township are governed by Michigan Public Act 621, which was complied with during the year ended March 31, Any amendment of the original budget must meet the requirements of Public Act 621. The Township amended its budget for the year ended March 31, The Township Board must approve amendments to the budget for changes in activities which exceed $1,500 in the general fund. Management can amend appropriations in the budget between activities for amounts less than $1,500 without the approval of the Board. Changes in total expenditures in the special revenue funds must be approved by the Township Board. 49

108 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Budgeted amounts are as originally adopted, or as amended by the Township Board. Encumbered appropriations lapse at year-end and amounts are reappropriated for expenditures to be incurred in the next fiscal year. During the year ended March 31, 2016, the Township expenditures were within budgeted amounts in the general and special revenue funds. 3. DEPOSITS AND INVESTMENTS A reconciliation of cash and investments as shown in the basic financial statements to the Township s deposits and investments is as follows: Statement of net position Cash and cash equivalents $ 21,277,771 Investments 90,124 Statement of fiduciary net position Cash and cash equivalents 20,342 Investments 2,898,201 Total $ 24,286,438 Deposits and investments Bank deposits $ 21,296,663 Investments 2,988,325 Cash on hand 1,450 Total $ 24,286,438 The Township chooses to disclose its investments by specifically identifying each. As of March 31, 2016, the Township had the following investments: Maturity Fair Value S&P Rating MBIA Michigan Class Pool N/A $ 90,124 AAAm MERS Total Market Pool N/A 2,898,201 Not rated Total $ 2,988,325 Interest Rate Risk. State law limits the allowable investments and the maturities of some of the allowable investments as identified below. The Township s investment policy does not have specific limits in excess of state law on investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk. State law limits investments to specific government securities, certificates of deposit and bank accounts with qualified financial institutions, commercial paper with specific maximum maturities and ratings when purchased, bankers acceptances of specific financial institutions, qualified mutual funds and qualified external investment pools as identified in the list of authorized investments in the summary of significant accounting policies. The Township s investment policy does not have specific limits in excess of state law on investment credit risk. Credit risk ratings, where applicable, are noted above. 50

109 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Custodial Credit Risk - Deposits. Custodial credit risk is the risk that in the event of a bank failure, the Township s deposits may not be returned. State law does not require and the Township does not have a policy for deposit custodial credit risk. As of year-end $21,058,204 of the Township s bank balance of $22,656,757 was exposed to custodial credit risk because it was uninsured and uncollateralized. Custodial Credit Risk - Investments. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the Township will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. State law does not require and the Township does not have a policy for investment custodial credit risk. The MERS total market pool and MBIA investments above are held in the counterparty s trust department in the Township s name, so are not exposed to custodial credit risk. Concentration of Credit Risk. State law limits allowable investments but does not limit concentration of credit risk as identified below. The Township s investment policy does not have specific limits in excess of state law on concentration of credit risk. The Township Board is authorized to designate depositories for Township funds, and to determine that the funds are invested in accordance with State of Michigan statutory authority. The Township s deposits are in accordance with statutory authority. The MBIA Michigan Class and MERS total market pools operate in accordance with appropriate state laws and regulations. The reported value of the pools is the same as the fair value of the pooled shares. 4. RECEIVABLES Receivables of the primary government are as follows: Governmental Activities Business-type Activities Taxes $ 542,102 $ - Accounts 89,855 3,817,997 Special assessments: Due within one year 24,028 22,270 Due after one year 74, ,562 Intergovernmental 509,340 - Advance to Soccer Association Due within one year 79,181 - Due after one year 58,908 - Advance to Mid Michigan Waste Authority 144,100 - $ 1,522,296 $ 4,382,829 Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not earned. At the end of the current fiscal year, the Township has recorded $98,810 of deferred inflows of resources for special assessments receivable. 51

110 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements 5. CAPITAL ASSETS Capital asset activity for the year ended March 31, 2016, was as follows: Beginning Balance Additions Disposals Transfers Ending Balance Governmental Activities Capital assets not being depreciated: Land $ 1,164,054 $ 4,044 $ - $ - $ 1,168,098 Construction in progress - 239, ,182 1,164, , ,407,280 Capital assets being depreciated: Land improvements 6,808, ,808,080 Buildings and improvements 11,592, ,592,410 Equipment 1,253,249 88,329 (100,018) - 1,241,560 Vehicles 4,715, ,009 (331,455) - 5,372,843 24,369,028 1,077,338 (431,473) - 25,014,893 Less accumulated depreciation for: Land improvements (4,634,323) (162,104) - - (4,796,427) Buildings and improvements (4,722,909) (268,985) - - (4,991,894) Equipment (1,006,298) (57,763) 95,662 - (968,399) Vehicles (3,198,243) (263,198) 331,455 - (3,129,986) (13,561,773) (752,050) 427,117 - (13,886,706) Total capital assets being depreciated, net 10,807, ,288 (4,356) - 11,128,187 Governmental activities capital assets, net $ 11,971,309 $ 568,514 $ (4,356) $ - $ 12,535,467 52

111 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Beginning Balance Additions Disposals Transfers Ending Balance Business-type Activities Capital assets not being depreciated: Land $ 261,573 $ 21,687 $ - $ - $ 283,260 Construction in progress 109, ,501 - (192,966) 98, , ,188 - (192,966) 381,440 Capital assets being depreciated: Buildings, plants and mains 90,131, , ,966 90,668,864 Equipment 1,682,263 45,183 (79,927) - 1,647,519 Vehicles 871,200 87,160 (45,200) - 913,160 92,685, ,635 (125,127) 192,966 93,229,543 - Less accumulated depreciation for: Buildings, plants and mains (44,287,379) (2,104,760) - - (46,392,139) Equipment (1,213,397) (89,329) 79,927 - (1,222,799) Vehicles (620,966) (48,571) 45,200 - (624,337) (46,121,742) (2,242,660) 125,127 - (48,239,275) Total capital assets being depreciated, net 46,563,327 (1,766,025) - 192,966 44,990,268 Business-type activities capital assets, net $ 46,934,545 $ (1,562,837) $ - $ - $ 45,371,708 Depreciation expense was charged to functions/programs of the primary government as follows: Depreciation of governmental activities by function General government $ 74,827 Public safety 362,708 Public works 41,810 Highways and streets 49,741 Recreation and culture 222,964 $ 752,050 Depreciation of business-type activities by function Water 689,721 Sewer 1,552,939 $ 2,242,660 53

112 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements 6. INTERFUND RECEIVABLES AND PAYABLES AND TRANSFERS The composition of interfund balances as of March 31, 2016, was as follows: Due from Other Funds Due to Other Funds General fund $ 240,540 $ - Police fund Water fund - 87,690 Sewer fund - 152, LONG-TERM LIABILITIES $ 240,540 $ 240,540 The above balances generally resulted from a time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur, transactions are recorded in the accounting system, and payments between funds are made. Transfers are used to: (1) move revenues from the fund that is required to collect them to the fund that is required or allowed to expend them; (2) move receipts restricted to or allowed for debt service from the funds collecting the receipts to the debt service fund as debt service payments become due; and (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. The interfund transfer from the general fund to the police fund and nonmajor governmental funds is to subsidize those operations. Long-term debt activity for the year ended March 31, 2016, was as follows: Beginning Balance Additions Deductions Ending Balance Due Within One Year Governmental Activities Compensated absences $ 950,975 $ 459,111 $ (524,575) $ 885,511 $ 524,575 Business-type Activities Bonds payable $ 8,882,965 $ 33,030 $ (613,200) $ 8,302,795 $ 617,133 Installment purchase 92,450 - (79,216) 13,234 13,234 8,975,415 33,030 (692,416) 8,316, ,367 Compensated absences 200, ,894 (155,040) 189, ,040 Total business-type activities $ 9,175,878 $ 176,924 $ (847,456) $ 8,505,346 $ 785,407 Water and sewer bonds payable are supported by revenues of the water and sewer funds. The Township has bonds payable debt that can be levied if there is no revenue to cover the obligation. For the governmental activities, the compensated absences are generally liquidated by the general, fire protection, and police funds. 54

113 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Business-type activities Bonds payable and installment purchase at March 31, 2016, are comprised of the following individual issues: 2008 Capital Improvement Bonds due in annual installments of $200,000 to $500,000 through May 1, 2028, with interest at 4.20%. $ 4,600, NWUA Sewage Disposal System Improvement Bonds. The Township participated, as a member of the NWUA, in a pump station improvement program. To finance this project $4,450,000 in bonds were issued by the NWUA. The Township has a contract with NWUA for the cost of the construction attributable to its 3 year average flow. For the year ended March 31, 2016, the Township's share was $551,924, plus their portion of the flow ( %), based on the 3 year average. Prorata share of annual installments varies from $55,353 to $136,926 through May 1, 2040, with interest at 3.00% Special Assessments Bonds due in annual installments of $85,000 to $90,000 through May 1, 2023, with interest ranging from 2.60% to 4.90%. 2,386, , Capital Improvement Bonds due in annual installments of $65,000 to $90,000 through November 1, 2020 with interest at 4.35%. 400, NWUA Improvement and Refunding Bonds. The Township participated, as a member of the Northwest Utilities Authority (NWUA), in a pump station improvement program. To finance this project and to defease the eligible bonds on the 1990 NWUA debt, $3,690,000 in bonds were issued by Saginaw County. The Township has a contract with Saginaw County DPW for the cost of the construction attributable to its 3 year average flow. Debt service share varies annually based upon this flow. For the year ended March 31, 2016, the Township's share of the flow was %. The contract principal portion owed by the Township of Saginaw has been recorded as a liability of the sewer fund. The assets related to this debt are recorded as assets of the sewer fund. Prorata share of annual installments varies from $60,559 to $150,120 through May 1, 2016, with interest ranging from 4.5% to 5.5%. 150, Weiss In-line Detention Bonds due in annual installments of $56,660 through October 1, 2016 with interest at 2.25%. 56,660 Total bonds payable 8,302, Jack Doheny Supplies Installment Purchase due in two monthly installments of $6,617 through June 1, 2016 with interest at 3.15%. 13,234 Total bonds payable and installment purchase $ 8,316,029 55

114 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Business-type bond and installment purchase service requirements to maturity are as follows: Year Ended March 31, Principal Interest 2017 $ 630,367 $ 302, , , , , , , , , ,454, , ,983, , , , ,845 41,289 $ 8,316,029 $ 2,541, BENEFIT PLANS Defined Contribution Pension Plan The Saginaw Charter Township Municipal Government Employees Pension Plan is a defined contribution pension plan, which is held in trust and covers 79 full-time employees, over the age of 18, employed with the Township for more than four months prior to April 1st. The Plan is administered by a third-party. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. Defined contribution pension cost to the Township for the fiscal year ending March 31, 2016, was $767,367, which represented 15 percent of current year covered payroll. Defined contribution pension cost to the employees was $177,735. Contributions to the plan are recognized when due and payable. Plan provisions and contribution rates are set for union employees by contract and for non-union employees by resolution of the Township Board under the Township s Pension Ordinance. Employees may make voluntary contributions not to exceed 25 percent of total wages. The Township s policy is to fund pension costs representing 15 percent of the annual salaries of covered employees, as follows: Non-Union Police Union Union Local 406 Township contribution rate 15% 15% 15% Required employee contribution rate 2% 2% 2% 17% 17% 17% The Township s contributions for each employee are fully vested after five years for non-union/police union employees and 10 years for Union Local 406 employees. Unvested benefits forfeited by employees who leave employment early are used to reduce future Township contributions. At March 31, 2016, assets of the defined contribution plan were valued at $22,376,

115 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Defined Benefit Pension Plan Plan Description. As of April 1, 2010, members of the police union must enroll in the Municipal Employees Retirement System of Michigan (MERS) defined benefit pension. For police union employees choosing the Township s defined benefit pension plan, the plan provides retirement and disability benefits, annual costof-living adjustments, and death benefits to plan members and beneficiaries. MERS is an agent multipleemployer, statewide public employee pension plan established by the Michigan Legislature under Public Act 135 of 1945 and administered by a nine member Retirement Board. Public Act 427 of 1984, as amended, establishes and amends the benefit provisions of the participants in MERS. MERS issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained accessing the MERS website at Benefits Provided. Pension benefits are calculated as final average compensation (based on a 5 year period) and multiplier of 2.00/2.50 (new/old members) percent. Participants are considered to be fully vested in the plan after 6/10 (new/old members) years. Normal retirement age is 60 with early retirement at age 55/50 (new/old members) with 25 years of service. Member contributions are 9.19 percent. Employees Covered by Benefit Terms. At December 31, 2015, plan membership consisted of the following: Inactive employees or beneficiaries currently receiving benefits 24 Inactive employees entitled to but not yet receiving benefits 8 Active employees 33 Total membership 65 Contributions. The Township is required to contribute at an actuarially determined rate; the current rate is 15% of annual covered payroll. The Township s contribution is capped at 15%. If the actuarially determined rate is higher than the cap, the difference is paid by the employees. Employees are currently required to contribute 9.19% to the Plan. The contribution requirements of the Township are established and may be amended by the MERS Retirement Board. The contribution requirements of plan members, if any, are established and may be amended by the Township depending on the MERS contribution program adopted by the Township. Net Pension Liability. The Township's net pension liability was measured as of December 31, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, Actuarial Assumptions. The total pension liability in the December 31, 2014 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 3% to 4% Salary increases 4.5% in the long-term (1%, 2% and 3% for calendar years 2014, 2015 and 2016, respectively) Investment rate of return 8.25%, net of investment expense and including inflation Although no specific price inflation assumptions are needed for the valuation, the 4.5 percent long-term wage inflation assumption would be consistent with a price inflation of 3-4 percent. 57

116 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Mortality rates used were based on the 1994 Group Annuity Mortality Table of a 50% Male and 50% Female blend. For disabled retirees, the regular mortality table is used with a 10-year set forward in ages to reflect the higher expected mortality rates of disabled members. The actuarial assumptions used in the December 31, 2014 valuation were based on the results of an actuarial experience study conducted in (The MERS Retirement Board is currently conducting an actuarial experience study covering the period from January 1, 2009, through December 31, 2013.) The long-term expected rate of return on pension plan investments was determined using a model method in which the best-estimate ranges of expected future real rates of return (expected returns, net of investment and administrative expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset Class Target Allocation Long-term Expected Real Rate of Return Expected Money- Weighted Rate of Return Global equity 57.50% 5.02% 2.89% Global fixed income 20.00% 2.18% 0.44% Real assets 12.50% 4.23% 0.53% Diversifying strategies 10.00% 6.56% 0.64% 100% Inflation 3.50% Administrative expenses netted above 0.25% Investment rate of return 8.25% Discount Rate. The discount rate used to measure the total pension liability is 8.25% for The projection of cash flows used to determine the discount rate assumes that employer and employee contributions will be made at the rates agreed upon for employees and the actuarially determined rates for employers. Based on these assumptions, the pension plan s fiduciary net position was projected to be available to pay all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 58

117 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Changes in Net Pension Liability The components of the change in the net pension liability are summarized as follows: Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability (a) - (b) Balances at December 31, 2014 $ 18,871,446 $ 12,149,844 $ 6,721,602 Changes for the year: Service cost 406, ,867 Interest 1,531,237-1,531,237 Employer contributions - 322,586 (322,586) Employee contributions - 234,135 (234,135) Net investment income - (179,018) 179,018 Benefit payments, including refunds of employee contributions (1,028,871) (1,028,871) - Administrative expense - (26,326) 26,326 Other changes (19,688) - (19,688) Net changes 889,545 (677,494) 1,567,039 Balances at December 31, 2015 $ 19,760,991 $ 11,472,350 $ 8,288,641 The pension obligation is expected to be liquidated by the police special revenue fund. Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net pension liability of the Township, calculated using the discount rate of 8.25%, as well as what the Township s net pension liability would be if it were calculated using a discount rate that is 1% lower (7.25%) or 1% higher (9.25%) than the current rate: 1% Decrease (7.25%) Current Discount Rate (8.25%) 1% Increase (9.25%) Township's net pension liability $ 10,753,616 $ 8,288,641 $ 6,257,847 Pension Plan Fiduciary Net Position. Detailed information about the pension plan s fiduciary net position is available in the separately issued Plan financial statements. 59

118 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Pension Expense and Deferred Outflows of Resources Related to Pensions For the year ended March 31, 2016, the Township recognized pension expense of $624,248. The Township reported deferred outflows of resources related to pensions from the following sources: Deferred Outflows of Resources Net difference between projected and actual earnings on pension plan investments $ 928,654 Contributions subsequent to the measurement date 89,211 Total $ 1,017,865 The amount reported as deferred outflows of resources resulting from contributions subsequent to the measurement date will be recognized as a reduction in the total pension liability for the year ending March 31, Other amounts reported as deferred outflows of resources related to pension will be recognized in pension expense as follows: Year Ended March 31, Amount 2017 $ 232, , , ,162 Total $ 928,654 Payable to the Pension Plan. At March 31, 2016, the Township did not have any outstanding payables for contributions to the pension plan. 9. OTHER POSTEMPLOYMENT BENEFITS Saginaw Township administers a single-employer defined benefit postemployment healthcare plan, the Retiree Health Trust. A separately issued financial report of the plan has not been prepared. Membership of the plan consisted of the following at April 1, 2015, the date of the latest actuarial valuation: Retirees and beneficiaries receiving benefits Active plan members Total

119 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements The Retiree Health Trust financial statements are prepared using the accrual basis of accounting. 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. Investments are reported at fair value. Investments that are traded on a national securities exchange are valued at the last reported sales price on the last business day of the Township's fiscal year. Investments traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the last reported bid price. The Township provides postemployment health care benefits in accordance with a Township resolution to all non-union employees who retire between the ages of 55 and 65 with at least 20 years of service, all police union employees retiring between the ages of 52 and 65 with 25 years of service, and Local 406 (Department of Public Services, "DPS") employees retiring between the ages of 55 and 65 with 25 years of service. Prior to age 65, non-union and DPS employees are entitled to 50% of Blue Cross/Blue Shield health insurance premiums to a maximum annual benefit of $2,500/$5,000 and $2,750/$5,500, respectively. Payments are expensed as incurred in the individual funds. Police union retirees are eligible for 100% of Blue Cross/Blue Shield health insurance coverage annually. In addition, non-union police command employees are eligible for the 100% benefits which are not advance funded. Currently 17 retirees meet the eligibility requirements for these benefits. During the year, employer contributions totaled $360,000 and expenditures of $212,001 were recognized for the retiree health benefit premiums. Upon attaining age 65, the Township reimburses the Medicare supplement premiums for retirees and their qualified spouses up to $1,418 per person annually. Expenditures for the reimbursement are recognized as they are paid in the health benefit internal service fund. Currently 14 retirees meet the eligibility requirements. The Township's annual required contribution of the employer (ARC) is an amount actuarially determined in accordance with the parameters of GASB Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. The Township's unfunded actuarial accrued liability, if any, is being amortized as a level percentage of projected payroll on an open basis. Township employees are not required to contribute to the plan. 61

120 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements For 2016, the components of the Township s annual OPEB (other postemployment benefits) cost for the year, the amount actually contributed to the Plan, and changes in the Township s net OPEB obligation to the Plan are as follows: Annual required contribution $ 738,659 Interest on net OPEB obligation 106,494 Adjustment to annual required contribution (148,042) Net OPEB cost 697,111 Contributions made (572,001) Increase in net OPEB obligation 125,110 Net OPEB obligation, beginning of year 2,662,350 Net OPEB obligation, end of year $ 2,787,460 Net OPEB obligation reconciliation Governmental activities $ 2,230,803 Business-type activities: Water fund 206,830 Sewer fund 349,827 Net OPEB obligation, end of year $ 2,787,460 For the governmental activities, the OPEB obligation is generally liquidated by the general, fire protection, and police funds. The Township s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation is as follows: Year Ended Three-Year Trend Information Annual OPEB Cost Percentage of Annual OPEB Cost Contributed Net OPEB Obligation 2014 $ 1,030, % $ 2,218, ,037, % 2,662, , % 2,787,460 Plan provisions and contribution requirements are established and may be amended by the Township Board. As of April 1, 2015, the date of the latest actuarial valuation, the Plan was 25.4 percent funded. The actuarial accrued liability for benefits was $10,109,362, and the actuarial value of assets was $2,566,542, resulting in an unfunded actuarial accrued liability (UAAL) of $7,542,820. The covered payroll (annual payroll of active employees covered by the plan) was $7,142,382, and the ratio of the UAAL to the covered payroll was 106 percent. 62

121 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Actuarially determined amounts are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedules of funding progress, presented as required supplementary information following the notes to the financial statements, present multiyear trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the actuarial accrued liabilities or benefits. The schedule of employer contributions, presented as required supplementary information (RSI) following the notes to the financial statement, presents trend information about the amounts contributed to the plan by employers in comparison to the ARC, an amount that is actuarially determined in accordance with the parameters of GASB Statement 43. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost for each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The following actuarial assumptions were used in the development of Saginaw Charter Township s retiree health cost projections. Where consistent with the terms of the plan, actuarial assumptions have utilized the proposed assumptions for the Michigan Employees Retirement System (MERS), and Michigan State Police Retirement System (MSPRS) as provided in their April 1, 2015, actuarial valuation reports. Inflation rate: % per year. Projected salary increase: 2.5% per year compounded annually. Interest discount rate: 4.00% compounded annually. Amortization period: 30 years Mortality: 50% male/50% female blend of the 1994 Group Annuity Mortality table. For disabled retirees, the table 50% male/50% female of the 1994 Group Annuity Mortality Table is used with a 10-year set forward in ages. Mortality improvements have not been assumed. Employee Turnover/Withdrawal: MERS for all employees. Disablement: MERS disability rates for all employees. Retirement: Actuary developed rates between 5 and 40 percent, based on years of service. Percentage of retirees participating in retiree medical coverage: Future retirees - 100% of current employees are expected to participate in Saginaw Charter Township's retiree health insurance plan. Current retirees - Actual retiree participation. Percentage of retirees electing family coverage: Future retirees - 75% of future retirees that take coverage are assumed to elect two-party coverage. Current retirees - Actual family coverage. Age difference of active employees and spouses: Spouses are the same age as the employees. Annual medical trend rate assumptions: Based on "Getzen" model published by the Society of Actuaries for purposes of evaluating long-term medical trend. 11.1% per annum for 2015 grading down to 10.0% per annum over an 6-year period. 63

122 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements Expected monthly medical and dental costs per retiree: Estimates of monthly medical costs per retiree by age based on the Township s current premiums, adjusted for demographic differences between retirees and all participants. Saginaw Charter Township has a self-funded health plan administered by Blue Cross/Blue Shield of Michigan that they offer to their employees and retirees. 10. RISK MANAGEMENT Generally Accepted Accounting Principles (GAAP) requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. A summary of the Township s self-insurance is as follows. Health Benefit - The Township initiated a self-insurance health benefit package August 10, As of March 31, 2016, the maximum aggregate health liability to the Township was $2,360,630. Amounts above this are covered by an insurance policy. In addition, insurance was purchased for individual health claims which have a $35,000 per person deductible. Life insurance premiums, short-term disability benefits of 70% of compensation, police early-retiree health insurance and medigap premium reimbursement are also paid by this fund. Assets of this plan of $1,183,281 are recorded in an internal service fund. Liabilities of $418,850 represent accrued wages and unpaid medical invoices which are incurred but not reported as of March 31, 2016, and are expected to be paid in the next year. The changes in the claims liability for the years ended March 31, 2016 and 2015, are as follows: Beginning of Year Liability Current Year Claims and Changes in Claim End of Year Estimates Payments Liability 2015 $ 66,253 $ 1,789,675 $ 1,782,145 $ 73, ,783 1,977,950 1,994,085 57,648 The Township is exposed to various risks of loss related to torts; theft of, damage to, and distribution of assets; errors and omissions; injuries to employees and natural disasters. The Township carries commercial insurance to cover any potential claims associated with these risks and has had no claims that exceeded the insurance coverage during the past three years. Property and Liability - Saginaw Charter Township entered into a Joint Exercise of Powers Agreement with the Michigan Municipal Risk Management Authority (MMRMA) on July 19, Net position (deficit) of $158,797 represents Saginaw Charter Township s excess claims over cash which is recorded in the internal service funds. The liability of the fund is $257,350 in estimated claims that were incurred but not reported (IBNR) as of March 31, 2016, and are expected to be paid in the next year. 64

123 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements The changes in the claims liability for the years ended March 31, 2016 and 2015, are as follows: Beginning of Year Liability Current Year Claims and Changes in Estimates Claim Payments End of Year Liability 11. PROPERTY TAXES 2015 $ 120,646 $ (14,502) $ 76,836 $ 29, , ,528 94, ,350 Currently, the Township self-insures the first $100,000 for each liability claim. After the first $100,000 and up to $15,000,000, the Michigan Municipal Risk Management Authority (MMRMA) is responsible for the claims. Each property claim is subject to a $1,000 deductible, paid by the Township. A stop loss coverage through the MMRMA protects the Township from aggregate liability claims exceeding $250,000. The revenues for this fund s operation are reimbursements from various funds. The funds are charged for general liability insurance based on number of employees, previous claims, number of vehicles and other pertinent information. Losses, damages and administrative expenses are all paid from this fund. There were no significant reductions in insurance coverage from the prior year and there were no insurance settlements exceeding insurance coverage in any of the past three years for either the health benefit or property and liability insurance. Township property taxes are attached as an enforceable lien on property as of December 1 and recorded in the Township ledgers as receivables as of that date. Township taxes are levied December 1 and are due without penalty on or before February 14. The December tax bills include the Township s own property taxes, special assessments and taxes billed on behalf of Saginaw County. Real property and special assessment taxes not collected as of March 1 are turned over to Saginaw County for collection, which advances the Township 100% for those delinquent taxes. Collection of delinquent personal property taxes remains the responsibility of the Township Treasurer. Property taxes levied in December of each year and collected within sixty days after the fiscal year-end are recognized as revenue in that fiscal year. The Township acts as a collection agent for Saginaw County, Saginaw Intermediate Schools, Delta College and Saginaw Charter Township Community Schools for property taxes. Taxes collected on behalf of the educational institutions and Saginaw County are turned over to the districts and the County following collection and are accounted for in designated agency funds. 65

124 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements 12. COMMITMENTS AND CONTINGENCIES In the normal course of its activities, the Township is a party to various legal actions. After taking into consideration legal counsel s evaluation of pending actions, the Township is of the opinion that the potential claims not covered by insurance will not have a material effect on the financial statements. In addition, the Township has received federal and state grants for specific purposes that are subject to review and audit by the grantor agencies. Although such audits could generate expenditure disallowance under terms of the grants, management believes that any required reimbursements would not be material. As of March 31, 2016, the Township has a commitment of $46,438 remaining for Olson Park tennis courts rehabilitation. 13. OPERATING LEASES The Township has several vehicles, copiers, and printers obtained through operating leases. The summary lease payment schedule for future years is as follows: Year Ended March 31, Amount 14. NET INVESTMENT IN CAPITAL ASSETS 2017 $ 23, ,379 Total $ 46,758 Rent expense on operating leases was $23,106 for the year ended March 31, The composition of net investment in capital assets as of March 31, 2016, was as follows: Governmental Activities Business-type Activities Capital assets: Capital assets not being depreciated $ 1,407,280 $ 381,440 Capital assets being depreciated, net 11,128,187 44,990,268 12,535,467 45,371,708 Related debt: Bonds payable - 8,302,795 Installment purchase - 13,234-8,316,029 Net investment in capital assets $ 12,535,467 $ 37,055,679 66

125 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements 15. FUND BALANCES - GOVERNMENTAL FUNDS In accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, the Township classifies fund balances based primarily on the extent to which it is bound to observe constraints imposed upon the use of the resources reported in governmental funds. Detailed information on fund balances of governmental funds is as follows: General Fund Fire Protection Police Garbage and Rubbish Collection Nonmajor Governmental Funds Total Nonspendable Inventory $ 25,811 $ - $ - $ - $ - $ 25,811 Prepaids 69,297 9,575 67,953-6, ,200 Long-term advances 138, , ,197 9,575 67,953-6, ,100 Restricted Fire protection - 704, ,783 Police - - 3,029, ,029,378 Garbage and rubbish collection ,627,641-1,627,641 Fire improvement , , ,783 3,029,378 1,627, ,693 5,836,495 Committed Special assessments , ,071 Assigned Police , ,000 Center courts 112, ,016 Building capital projects ,421 46,421 Art in public places ,589 8,589 Parks ,127 14,127 Community development ,620 4,620 Total assigned 112, ,000-73,757 1,117,773 Unassigned 5,106, ,106,154 Total fund balances - governmental funds $ 5,451,367 $ 714,358 $ 4,029,331 $ 1,627,641 $ 1,508,896 $ 13,331, SUBSEQUENT EVENTS In May 2016, the Township entered into a construction contract for approximately $169,000 to replace the Weiss street water main. Also, in May 2016, the Township changed over to secondary power at the waterwater treatment plant for approximately $79,

126 SAGINAW CHARTER TOWNSHIP, MICHIGAN Notes To Financial Statements 17. RESTATEMENTS The Township adopted the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, in the current year. As a result of this change, beginning net position of governmental activities was decreased by $6,646,528. The Township's 2015 beginning net position for the Water and Sewer enterprise funds and the business-type activities was increased by $451,370, $514,784 and $966,154, respectively, to properly recognize unbilled utility billings related to fiscal year ended March 31, The impact on the March 31, 2015 statement of activities would have been a decrease to operating revenues of $10,426, $2,757, and $13,183 for the Water Fund, Sewer Fund and the business-type activities, respectively. 68

127 REQUIRED SUPPLEMENTARY INFORMATION 69

128 SAGINAW CHARTER TOWNSHIP, MICHIGAN Required Supplementary Information MERS Agent Multiple-Employer Defined Benefit Pension Plan Schedule of Changes in Township's Net Pension Liability and Related Ratios Year Ended March 31, 2016 Total pension liability Service cost $ 406,867 Interest 1,531,237 Benefit payments, including refunds of employee contributions (1,028,871) Other changes (19,688) Net change in total pension liability 889,545 Total pension liability, beginning of year 18,871,446 Total pension liability, end of year 19,760,991 Plan fiduciary net position Employer contributions 322,586 Employee contributions 234,135 Net investment income (179,018) Benefit payments, including refunds of employee contributions (1,028,871) Administrative expense (26,326) Net change in plan fiduciary net position (677,494) Plan fiduciary net position, beginning of year 12,149,844 Plan fiduciary net position, end of year 11,472,350 Township's net pension liability $ 8,288,641 Plan fiduciary net position as a percentage of total pension liability 58.1% Covered-employee payroll $ 2,055,071 City's net pension liability as a percentage of covered-employee payroll 403% Notes: The amounts presented for each fiscal year were determined as of December 31 of the preceding year. GASB 68 was implemented in fiscal year This schedule is being built prospectively. Ultimately, 10 years of data will be presented. 70

129 SAGINAW CHARTER TOWNSHIP, MICHIGAN Required Supplementary Information MERS Agent Multiple-Employer Defined Benefit Pension Plan Schedule of the Net Pension Liability Fiscal Year Ended March 31, Total Pension Liability Plan Net Position Net Pension Liability Plan Net Position as Percentage of Total Pension Liability Covered- Employee Payroll Net Pension Liability as Percentage of Covered Payroll 2016 $ 19,760,991 $ 11,472,350 $ 8,288, % $ 2,055, % The amounts presented for each fiscal year were determined as of December 31 of the preceding year. Note: GASB 68 was implemented in fiscal year This schedule is being built prospectively. Ultimately, 10 years of data will be presented. 71

130 SAGINAW CHARTER TOWNSHIP, MICHIGAN Required Supplementary Information MERS Agent Multiple-Employer Defined Benefit Pension Plan Schedule of Contributions Fiscal Year Ended March 31, Actuarially Determined Contribution Contributions in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess) Covered- Employee Payroll Contributions as Percentage of Covered- Employee Payroll 2016 $ 322,525 $ 336,723 $ (14,198) $ 2,283, % Note: GASB 68 was implemented in fiscal year This schedule is being built prospectively. Ultimately, 10 years of data will be presented. Notes to Schedule of Contributions Valuation date Actuarially determined contribution rates are calculated as of December 31, which is 15 months prior to the beginning of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates: Actuarial cost method Entry-age normal Amortization method Level percent of payroll Remaining amortization period 24 years Asset valuation method Open; 10-year smooth market Inflation 3.0% to 4.0% Salary increases 4.5% in the long-term (2% and 3% for calendar years, 2015, and 2016, respectively) Investment rate of return 8.0% Retirement age Age-based table of rates that are specific to the type of eligibility condition. Last updated for the December 31, 2011 valuation. The next study is scheduled for Mortality 50% Male - 50% Female blend of the 1994 Group Annuity Mortality Table. For disabled retirees, the regular mortality table is used with a 10-year set forward rate. 72

131 SAGINAW CHARTER TOWNSHIP, MICHIGAN Required Supplementary Information Postemployment Healthcare Plan - Retiree Health Trust Schedule of Funding Progress Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (a / b) (c) ((b-a) / c) 3/31/2011 $ 872,338 $ 7,691,250 $ 6,818, % $ 6,825, % 4/1/2012 1,120,014 11,400,758 10,280, % 6,731, % 4/1/2015 2,566,542 10,109,362 7,542, % 7,142, % Schedule of Employer Contributions Annual Year Ended Required Percentage March 31, Contribution Contributed 2014 $ 1,057, % ,072, % , % 73

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133 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES These financial statements provide a more detailed view of the "Basic Financial Statements" presented in the preceding subsection. Combining statements are presented when there is more than one fund of a given fund type. Individual fund statements are presented when there is only one fund of a given type. They are also necessary to present budgetary comparisons. 74

134 GENERAL FUND The general fund accounts for all revenues and expenditures used to finance the traditional services associated with Township government, which are not accounted for and reported in other funds. In the Township these services include elections, data processing, motor pool, parks, public services, library and general administration services, and any other activity for which a special fund has not been created. 75

135 SAGINAW CHARTER TOWNSHIP, MICHIGAN Schedule of Revenues Budget and Actual - General Fund For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget Property taxes: Operating $ 1,129,880 $ 1,129,880 $ 1,134,277 $ 4,397 Administration fee 396, , ,115 24,187 Interest and penalties on delinquent taxes 8,200 8,200 12,882 4,682 Total taxes 1,535,008 1,535,008 1,568,274 33,266 Licenses and permits: Ordinance 229 fees-business 25,900 25,900 26, Mobile home fees 4,100 4,100 3,914 (186) Peddler's permits 1,800 1,800 2, Miscellaneous 2,000 2, (1,350) Franchise fees 791, , ,718 (5,882) Total licenses and permits 825, , ,132 (6,268) Intergovernmental - State sources: Sales tax - constitutional 3,194,509 3,194,509 3,072,164 (122,345) Sales tax - statutory 54, , ,087 3 States grants - - 2,720 2,720 Total intergovernmental - State sources 3,248,551 3,302,593 3,182,971 (119,622) Charges for services: Recreation fees 276, , ,735 (1,765) Sales 1,950 1,950 2, Administration fees 3,600 3,600 5,059 1,459 Zoning fees 6,500 6,500 7, Site review fees 4,500 4,500 8,385 3,885 Weed cutting (170) Other 53,000 53,000 51,681 (1,319) Total charges for services 346, , ,252 3,552 Fines and forfeits: Parking 22,000 22,000 18,150 (3,850) Circuit court 96,500 96,500 90,061 (6,439) Ordinance 1,000 1,000 1, Total fines and forfeits 119, , ,496 (10,004) continued 76

136 SAGINAW CHARTER TOWNSHIP, MICHIGAN Schedule of Revenues Budget and Actual - General Fund For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget Special assessments: Street lighting $ 460,000 $ 460,000 $ 453,167 $ (6,833) Other 35,000 35,000 37,140 2,140 Total special assessments 495, , ,307 (4,693) Interest 5,000 5,000 5, Other: Vehicles and equipment 1,075 1,075 12,288 11,213 Rent 70,880 70,880 80,297 9,417 Donations-private sources 10,100 10,100 13,925 3,825 Other miscellaneous 96,990 96, ,226 75,236 Total other 179, , ,736 99,691 Total revenues $ 6,754,204 $ 6,808,246 $ 6,804,554 $ (3,692) concluded 77

137 SAGINAW CHARTER TOWNSHIP, MICHIGAN Schedule of Expenditures Budget and Actual - General Fund For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget General government Township board: Fees and per diem $ 10,084 $ 20,000 $ 19,583 $ (417) Supplies 9,400 9,400 9,376 (24) Dues and conferences 12,260 11,760 11,017 (743) Total township board 31,744 41,160 39,976 (1,184) Township supervisor: Salaries and wages 19,462 19,774 19,771 (3) Miscellaneous 2,128 2,128 1,099 (1,029) Total township supervisor 21,590 21,902 20,870 (1,032) Township manager: Salaries and wages 174, , ,543 (1,022) Supplies 1,250 1,250 1,071 (179) Contractual service 5,000 15,000 14,700 (300) Education and training 4,010 4,010 4, Miscellaneous 500 3,500 3, Total township manager 184, , ,995 (1,330) Fiscal services: Salaries and wages 207, , ,338 (35) Supplies (327) Education and training 1,040 1, (680) Miscellaneous (200) Total fiscal services 209, , ,821 (1,242) Elections/clerk: Elections Salaries and wages 67,287 91,727 84,780 (6,947) Supplies 7,300 7,300 3,903 (3,397) Computer services and maintenance 4,800 4,300 2,730 (1,570) Education and training (63) Equipment - 3,000 2,954 (46) Miscellaneous 600 1,100 1,016 (84) Clerk Salaries 78,091 81,835 79,632 (2,203) Supplies 1,500 1, (701) Contractual services 6,250 6,250 2,133 (4,117) Education and training 3,925 3,925 4, Equipment repairs (300) Total elections/clerk 170, , ,525 (18,912) continued 78

138 SAGINAW CHARTER TOWNSHIP, MICHIGAN Schedule of Expenditures Budget and Actual - General Fund For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget General government (continued) Data processing: Consultant services $ 12,000 $ 12,000 $ 13,719 $ 1,719 Repairs and maintenance 28,925 43,925 28,407 (15,518) Supplies 3,900 3,900 3,119 (781) Education and training - - 1,600 1,600 Internet services 11,743 12,518 12,508 (10) Total data processing 56,568 72,343 59,353 (12,990) Assessors: Salaries and wages 360, , , Supplies 16,150 16,650 16, Contractual services (86) Miscellaneous (800) Repairs and maintenance (500) Education and training 4,650 4,650 4, Equipment Total assessors 383, , ,790 (493) Township attorney 102, ,800 98,637 (4,163) Board of review: Fees and per diem 3,600 3,600 2,040 (1,560) Miscellaneous Total board of review 3,950 3,950 2,442 (1,508) Treasurer's office: Salaries 120, , ,697 1,884 Supplies 2,600 2,600 1,053 (1,547) Repairs and maintenance (265) Education and training 2,000 2,000 1,309 (691) Equipment (100) Miscellaneous Total treasurer's office 126, , ,896 (667) Township property: Salaries 24,648 24,648 25, Postage 38,275 38,275 39,643 1,368 Operating supplies 15,100 15,100 11,136 (3,964) Telephone 17,030 17,030 14,340 (2,690) Insurance 52,000 52,000 57,784 5,784 Public utilities 42,500 42,500 36,494 (6,006) Repairs and maintenance 40,900 51,900 51,463 (437) Equipment - 3,400 3,400 - Miscellaneous ,046 1,796 Total township property 230, , ,849 (3,254) continued 79

139 SAGINAW CHARTER TOWNSHIP, MICHIGAN Schedule of Expenditures Budget and Actual - General Fund For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget General government (continued) Motor vehicle - equipment pool: Supplies $ 30,500 $ 30,500 $ 17,602 $ (12,898) Gas and oil 28,000 28,000 22,493 (5,507) Repairs and maintenance 15,000 15,000 9,468 (5,532) Insurance 24,100 24,100 26,180 2,080 Equipment 40,652 40,652 39,776 (876) Miscellaneous (46) Total motor vehicle - equipment pool 139, , ,273 (22,779) Less: administration reimbursement (809,941) (809,941) (787,710) 22,231 Total general government 850, , ,717 (47,323) Public safety Parking enforcement: Salaries 25,459 25,459 15,767 (9,692) Supplies (390) Miscellaneous 9,250 9,250 4,903 (4,347) Equipment (250) Total parking enforcement 35,459 35,459 20,780 (14,679) Housing inspection: Salaries - 8,000 7,999 (1) Services-maintenance 30,000 55,000 50,423 (4,577) Total housing inspection 30,000 63,000 58,422 (4,578) Planning: Planning department: Salaries and wages 300, , ,306 (9,315) Operating supplies 4,500 4,500 2,744 (1,756) Contractual services 34,400 34,400 35, Development plan 9,000 9,000 2,070 (6,930) Education and training 8,500 8,500 8,133 (367) Miscellaneous 2,700 2,700 2,421 (279) Zoning board of appeals: Wages 1,260 1,260 1, Education and training 1,050 1, (749) Total planning 362, , ,467 (18,564) Less: administration reimbursement (14,696) (14,696) - 14,696 Total public safety 413, , ,669 (23,125) continued 80

140 SAGINAW CHARTER TOWNSHIP, MICHIGAN Schedule of Expenditures Budget and Actual - General Fund For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget Highway and streets Department of public services: Salaries $ 414,286 $ 419,976 $ 400,998 $ (18,978) Operating supplies 18,091 18,091 18, Contractual services 9,500 9,500 13,067 3,567 Education and training 1,250 1, (1,146) Miscellaneous 1,000 1, (549) Total department of public services 444, , ,321 (16,496) Sidewalks: Engineering fees 2,000 2,000 - (2,000) Repairs 45,000 20,000 18,083 (1,917) Total sidewalks 47,000 22,000 18,083 (3,917) Road construction and resurfacing County Road Commission 209, , ,642 (47,708) Street lighting 505, , ,710 (12,290) Total highway and streets 1,205,477 1,442,167 1,361,756 (80,411) Public works: Drains - public benefit Storm water authority 36,913 36,913 36, Drains-at-large 40,000 87,000 86,684 (316) Total public works 76, , ,660 (253) Recreation and culture Parks and recreation: Salaries 381, , ,892 1,968 Officials 70,000 70,000 54,890 (15,110) Operating supplies 42,550 42,550 42, Contractual services 9,475 9,475 6,878 (2,597) Public utilities 55,000 55,000 49,025 (5,975) Repairs and maintenance - equipment 201, , ,737 (38,663) Miscellaneous 13,085 13,085 11,948 (1,137) Education and training (534) Total parks and recreation 774,310 1,026, ,315 (62,007) continued 81

141 SAGINAW CHARTER TOWNSHIP, MICHIGAN Schedule of Expenditures Budget and Actual - General Fund For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget Recreation and culture (continued) Center courts: Salaries $ 129,861 $ 129,861 $ 114,501 $ (15,360) Operating supplies 16,160 16,160 12,465 (3,695) Contractual services 7,010 7,010 4,899 (2,111) Public utilities 75,869 75,869 77,117 1,248 Repairs and maintenance 52,500 82,500 81,583 (917) Miscellaneous (190) Equipment 1,400 1,400 1,267 (133) Total center courts 283, , ,842 (21,158) Library: Salaries - maintenance 23,063 23,063 23, Supplies - operating 6,000 6,000 6, Services - Public Libraries of Saginaw 700, , ,000 - Public utilities 35,000 35,000 28,074 (6,926) Repairs and maintenance 52,420 23,039 25,749 2,710 Total library 816, , ,609 (3,493) Total recreation and culture 1,873,793 2,126,424 2,039,766 (86,658) Other Employee benefits: Social security - township share 159, , ,366 (3,907) Health insurance - cash benefit 15,600 15,600 5,760 (9,840) Hospitalization insurance 437, , ,182 6,266 Life insurance 10,065 10,065 10,056 (9) Disability insurance 22,763 22,763 22,734 (29) Retirement contribution 331, , ,885 (1,715) Retiree health 159, , ,703 (50,000) Unemployment compensation 2,025 2, (1,223) Workmen's compensation insurance 32,000 32,000 24,662 (7,338) Less workmen's compensation dividend (8,500) (8,500) (7,475) 1,025 Total employee benefits 1,162,821 1,180,445 1,113,675 (66,770) Other functions 112,500 31,500 31,257 (243) Total other 1,275,321 1,211,945 1,144,932 (67,013) Total expenditures $ 5,694,837 $ 6,320,283 $ 6,015,500 $ (304,783) concluded 82

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143 NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special revenue funds are used to account for revenues derived from specific taxes or other "earmarked" revenue sources. The Township utilizes the following special revenue funds: Community Development - This fund was established in April 2000 to comply with regulations issued for compliance with PA 245 of Michigan Public Acts of It accounts for the revenues and expenditures for construction site plan review, inspection, and construction code enforcement. Fire Improvement - This fund was established in 1983 to purchase fire equipment, construct fire stations and other major capital outlay. Funding is currently received from the fire protection tax levy. Art in Public Places - This fund is used to account for private donations received to fund an annual art show and display art works throughout the year at the township office. Capital Project Funds Building Capital Improvement - This fund was established in 2009 to receive transfers from the general, fire and police funds. The fund accounts for renovations made to various Township buildings. Parks - This fund was established to construct park improvements from the proceeds of the sale of property adjacent to the Harvey Randall Wickes Recreational Complex. Special Assessment Revolving - This fund was established by the budget resolution to receive transfers from the general fund consisting of balances on closed out water and sewer special assessment debt service funds. These monies are used to finance construction of public improvements supported by special assessments. 83

144 SAGINAW CHARTER TOWNSHIP, MICHIGAN Combining Balance Sheet Nonmajor Governmental Funds March 31, 2016 Special Revenue Funds Art In Community Fire Public Development Improvement Places Assets Cash and cash equivalents $ 9,236 $ 457,348 $ 8,589 Accounts receivable 1, Special assessments receivable Due from other governmental units - 17,401 - Prepaids 6, Total assets $ 16,642 $ 474,749 $ 8,589 Liabilities Accounts payable $ - $ 56 $ - Accrued liabilities 5, Total liabilities 5, Deferred inflows of resources Special assessments Fund balances Nonspendable 6, Restricted - 474,693 - Committed Assigned 4,620-8,589 Total fund balances 10, ,693 8,589 Total liabilities, deferred inflows of resources and fund balances $ 16,642 $ 474,749 $ 8,589 84

145 Capital Projects Funds Building Special Capital Assessment Improvement Parks Revolving Total $ 46,421 $ 14,127 $ 952,967 $ 1,488, , ,676 25, ,104 18, ,375 $ 46,421 $ 14,127 $ 979,747 $ 1,540,275 $ - $ - $ - $ , , ,676 25, , , , ,071 46,421 14,127-73,757 46,421 14, ,071 1,508,896 $ 46,421 $ 14,127 $ 979,747 $ 1,540,275 85

146 SAGINAW CHARTER TOWNSHIP, MICHIGAN Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds For the Year Ended March 31, 2016 Special Revenue Funds Art In Community Fire Public Development Improvement Places Revenues Property taxes $ - $ 400,121 $ - Licenses and permits 398, Charges for services - - 1,845 Special assessments Interest Other ,000 4,100 Total revenues 399, ,360 5,947 Expenditures Current: Public safety - 800,308 - Community development 460, Recreation and culture - - 6,862 Total expenditures 460, ,308 6,862 Revenues over (under) expenditures (61,156) (364,948) (915) Other financing sources Transfers in 67, Net change in fund balances 5,844 (364,948) (915) Fund balances, beginning of year 5, ,641 9,504 Fund balances, end of year $ 10,995 $ 474,693 $ 8,589 86

147 Capital Projects Funds Building Special Capital Assessment Improvement Parks Revolving Total $ - $ - $ - $ 400, ,800 9, , ,721 27, ,176 3, ,439 9, , , , ,305-3,735-10,597-3,735-1,271,210 9,135 (3,728) 30,897 (390,715) ,000 9,135 (3,728) 30,897 (323,715) 37,286 17, ,174 1,832,611 $ 46,421 $ 14,127 $ 954,071 $ 1,508,896 87

148 SAGINAW CHARTER TOWNSHIP, MICHIGAN Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Community Development For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget Revenues Licenses and permits $ 357,700 $ 357,700 $ 398,800 $ 41,100 Interest Other Total revenues 357, , ,149 41,269 Expenditures Community development: Current: Salaries and wages 395, , ,872 (28,444) Supplies 1,000 1,000 2,138 1,138 Contractual services 43,215 43,215 42,360 (855) Repairs and maintenance Training and education 4,750 4,750 3,087 (1,663) Miscellaneous 39,810 39,810 36,908 (2,902) Total expenditures 485, , ,305 (32,286) Revenues under expenditures (127,367) (134,711) (61,156) 73,555 Other financing sources Transfers in 127, ,711 67,000 (67,711) Net change in fund balance - - 5,844 5,844 Fund balance, beginning of year 5,151 5,151 5,151 - Fund balance, end of year $ 5,151 $ 5,151 $ 10,995 $ 5,844 88

149 SAGINAW CHARTER TOWNSHIP, MICHIGAN Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Fire Improvement For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget Revenues Property taxes $ 403,135 $ 403,135 $ 400,121 $ (3,014) Interest 2,000 2, (1,761) Other 85,000 85,000 35,000 (50,000) Total revenues 490, , ,360 (54,775) Expenditures Current: Public safety 797, , ,308 (42) Net change in fund balance (307,015) (310,215) (364,948) (54,733) Fund balance, beginning of year 839, , ,641 - Fund balance, end of year $ 532,626 $ 529,426 $ 474,693 $ (54,733) 89

150 SAGINAW CHARTER TOWNSHIP, MICHIGAN Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Art in Public Places For the Year Ended March 31, 2016 Actual Over Original Amended (Under) Budget Budget Actual Amended Budget Revenues Charges for services $ 3,000 $ 3,000 $ 1,845 $ (1,155) Interest Other 4,200 4,200 4,100 (100) Total revenues 7,200 7,200 5,947 (1,253) Expenditures Current: Recreation and culture 7,200 7,200 6,862 (338) Net change in fund balance - - (915) (915) Fund balance, beginning of year 9,504 9,504 9,504 - Fund balance, end of year $ 9,504 $ 9,504 $ 8,589 $ (915) 90

151 INTERNAL SERVICE FUNDS The Township uses the following internal service funds: Health Benefit - This fund was created in 1981 to account for the receipt of revenues from the various operating funds of the Township to be used for payment of employee health benefits, short-term disability income, and third party processing costs and reinsurance. MMRMA Self Insurance - This fund receives contributions from the other Township funds for property and liability self insurance and is used to account for transactions made on behalf of the Township by the Michigan Municipal Risk Management Authority. 91

152 SAGINAW CHARTER TOWNSHIP, MICHIGAN Combining Statement of Net Position Internal Service Funds March 31, 2016 Health MMRMA Benefit Self Insurance Total Assets Cash and cash equivalents $ 921,130 $ 98,553 $ 1,019,683 Investments 90,124-90,124 Accounts receivable 5,600-5,600 Prepaids 166, ,427 Total assets 1,183,281 98,553 1,281,834 Liabilities Accounts payable 57, , ,998 Accrued wages 1,202-1,202 Due to others 360, ,000 Total liabilities 418, , ,200 Net position Unrestricted (deficit) $ 764,431 $ (158,797) $ 605,634 92

153 SAGINAW CHARTER TOWNSHIP, MICHIGAN Combining Statement of Revenues, Expenses and Changes in Fund Net Position Internal Service Funds For the Year Ended March 31, 2016 Health MMRMA Benefit Self Insurance Total Operating revenues Charges for services $ 2,269,767 $ 179,740 $ 2,449,507 Operating expenses Administration - 357, ,783 Property and liability claims - 113, ,032 Health insurance benefit claims 2,381,778-2,381,778 Total operating expenses 2,381, ,815 2,852,593 Operating loss (112,011) (291,075) (403,086) Nonoperating revenues Interest 191 4,477 4,668 Change in net position (111,820) (286,598) (398,418) Net position, beginning of year 876, ,801 1,004,052 Net position (deficit), end of year $ 764,431 $ (158,797) $ 605,634 93

154 SAGINAW CHARTER TOWNSHIP, MICHIGAN Combining Statement of Cash Flows Internal Service Funds For the Year Ended March 31, 2016 Health MMRMA Benefit Self Insurance Total Cash flows from operating activities Cash received from employees and retirees $ 89,425 $ - $ 89,425 Cash received from interfund services 2,180, ,740 2,360,706 Cash payments to suppliers for goods and services (1,949,696) (242,773) (2,192,469) Net cash provided by (used in) operating activities 320,695 (63,033) 257,662 Cash flows from investing activities Purchases of investments (190) - (190) Interest received 191 4,477 4,668 Net cash provided by investing activities 1 4,477 4,478 Net increase (decrease) in cash and cash equivalents 320,696 (58,556) 262,140 Cash and cash equivalents, beginning of year 600, , ,543 Cash and cash equivalents, end of year $ 921,130 $ 98,553 $ 1,019,683 Reconciliation of operating loss to net cash provided by (used in) operating activities: Operating loss $ (112,011) $ (291,075) $ (403,086) Adjustments to reconcile operating loss to net cash provided by (used in) operating activities: Change in operating assets and liabilities that provided (used) cash: Accounts receivable Prepaids 87,015-87,015 Accounts payable (16,135) 228, ,907 Accrued wages 1,202-1,202 Due to others 360, ,000 Net cash provided by (used in) operating activities $ 320,695 $ (63,033) $ 257,662 94

155 AGENCY FUNDS Clearing Account - This fund is used to account for monies deposited with the Treasurer but requiring disbursement to multiple funds or other entities. Current Tax Collections - This fund is used to account for current property tax collections. Delinquent Tax Collections - This fund is used to account for unpaid personal property taxes. Imprest Payroll - This fund is used to account for all payroll disbursements. Golfside - This fund is used to account for the reimbursement of police patrol costs for special patrol of the Golfside subdivision. Private Finance Construction - This fund is used to account for deposits by private developers for construction, by the Township, of water and sewer lines. Contractor's Retainage - This fund is used to account for retainage deposits made on behalf of a contractor for the purpose of earning interest in the contractor's name. 95

156 SAGINAW CHARTER TOWNSHIP, MICHIGAN Combining Statement of Fiduciary Assets and Liabilities Agency Funds March 31, 2016 Delinquent Clearing Current Tax Tax Imprest Account Collections Collections Payroll Assets Cash and cash equivalents $ 1,128 $ 18,432 $ - $ - Delinquent personal property taxes ,834 - Due from others ,406 Total assets $ 1,128 $ 18,432 $ 84,834 $ 5,406 Liabilities Due to others $ 1,128 $ 766 $ 22,333 $ 5,406 Due to other governmental units - 17,666 62,501 - Total liabilities $ 1,128 $ 18,432 $ 84,834 $ 5,406 96

157 Private Finance Contractor's Golfside Construction Retainage Totals $ 552 $ - $ 230 $ 20, ,834 7, ,403 $ 8,549 $ - $ 230 $ 118,579 $ 8,549 $ - $ 230 $ 38, ,167 $ 8,549 $ - $ 230 $ 118,579 97

158 SAGINAW CHARTER TOWNSHIP, MICHIGAN Combining Statement of Changes in Fiduciary Assets and Liabilities Agency Funds For the Year Ended March 31, 2016 Balance Balance April 1, March 31, 2015 Additions Deductions 2016 Clearing Account Fund Assets Cash and cash equivalents $ 295 $ 79,509 $ 78,676 $ 1,128 Liabilities Due to others $ 295 $ 79,509 $ 78,676 $ 1,128 Current Tax Collections Fund Assets Cash and cash equivalents $ 288 $ 45,928,095 $ 45,909,951 $ 18,432 Liabilities Due to others $ 288 $ 12,313,041 $ 12,312,563 $ 766 Due to other governmental units - 33,615,054 33,597,388 17,666 Total liabilities $ 288 $ 45,928,095 $ 45,909,951 $ 18,432 Delinquent Tax Collections Fund Assets Cash and cash equivalents $ - $ 43,822 $ 43,822 $ - Delinquent personal property taxes 62,791 64,660 42,617 84,834 Total assets $ 62,791 $ 108,482 $ 86,439 $ 84,834 Liabilities Due to others $ 12,337 $ 30,315 $ 20,319 $ 22,333 Due to other governmental units 50,454 73,903 61,856 62,501 Penalties and interest payable - 4,264 4,264 - Total liabilities $ 62,791 $ 108,482 $ 86,439 $ 84,834 continued 98

159 SAGINAW CHARTER TOWNSHIP, MICHIGAN Combining Statement of Changes in Fiduciary Assets and Liabilities Agency Funds For the Year Ended March 31, 2016 Balance Balance April 1, March 31, 2015 Additions Deductions 2016 Imprest Payroll Fund Assets Cash and cash equivalents $ - $ 10,871,466 $ 10,871,466 $ - Due from others - 5,406-5,406 Total assets $ - $ 10,876,872 $ 10,871,466 $ 5,406 Liabilities Due to others $ - $ 11,231,466 $ 11,226,060 $ 5,406 Golfside Assets Cash and cash equivalents $ 5,004 $ 63,993 $ 68,445 $ 552 Due from others 5,909 65,437 63,349 7,997 Total assets $ 10,913 $ 129,430 $ 131,794 $ 8,549 Liabilities Due to others $ 10,913 $ 129,430 $ 131,794 $ 8,549 Private Finance Construction Assets Cash and cash equivalents $ 207,769 $ 16,343 $ 224,112 $ - Liabilities Due to others $ 207,769 $ 16,343 $ 224,112 $ - Contractor's Retained Fund Assets Cash and cash equivalents $ 230 $ - $ - $ 230 Liabilities Due to others $ 230 $ - $ - $ 230 continued 99

160 SAGINAW CHARTER TOWNSHIP, MICHIGAN Combining Statement of Changes in Fiduciary Assets and Liabilities Agency Funds For the Year Ended March 31, 2016 Balance Balance April 1, March 31, 2015 Additions Deductions 2016 Total-all agency funds Assets Cash and cash equivalents $ 213,586 $ 57,003,228 $ 57,196,472 $ 20,342 Delinquent personal property taxes 62,791 64,660 42,617 84,834 Due from others 5,909 70,843 63,349 13,403 Total assets $ 282,286 $ 57,138,731 $ 57,302,438 $ 118,579 Liabilities Due to others $ 231,832 $ 23,800,104 $ 23,993,524 $ 38,412 Due to other governmental units 50,454 33,688,957 33,659,244 80,167 Penalties and interest payable - 4,264 4,264 - Total liabilities $ 282,286 $ 57,493,325 $ 57,657,032 $ 118,579 concluded 100

161 STATISTICAL SECTION Statistical tables differ from the financial statements because they usually cover more than one year and may present non-accounting data. These tables reflect social and economic data, financial trends and the fiscal capability of the Township. 101

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163 SAGINAW CHARTER TOWNSHIP, MICHIGAN Statistical Section Table of Contents This part of the Township s Comprehensive Annual Financial Report presents detailed information to assist the user in understanding what the financial statements, note disclosures and required supplementary information say about the overall economic condition of Saginaw Township. Financial Trends Tables 1-2 Revenue Capacity Tables 3-9 Debt Capacity Tables Demographic and Economic Information Table 14 Operating Information Tables Page These schedules contain trend information to help the reader understand and evaluate how the Township s financial condition, performance and well-being have changed over time These schedules contain information to help the reader assess the Township s ability to generate its most significant local revenue source, the property tax These schedules present information to help the reader assess the affordability of the Township s current levels of outstanding debt and its ability to issue additional debt in the future These schedules present various demographic and economic indicators to help the reader understand the environment within which the Township operates and how they affect the Township s financial activities. 127 These schedules contain information about the Township s operations and resources to help the reader understand how the information in the Township s financial report relates to the services the Township provides and the activities it performs Sources: Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Report for the relevant year. 102

164 SAGINAW CHARTER TOWNSHIP, MICHIGAN Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) Governmental activities Net investment in capital assets $ 10,010,647 $ 10,462,873 $ 10,233,919 $ 11,000,826 Restricted Unrestricted (deficit) 16,133,110 15,557,839 15,581,369 13,144,843 Total governmental activities net position 26,143,757 26,020,712 25,815,288 24,145,669 Business-type activities Net investment in capital assets 39,371,187 38,676,447 40,143,550 41,822,045 Unrestricted 4,776,398 5,387,951 7,984,596 7,951,227 Total business-type activities net position 44,147,585 44,064,398 48,128,146 49,773,272 Primary government Net investment in capital assets 49,381,834 49,139,320 50,377,469 52,822,871 Restricted Unrestricted 20,909,508 20,945,790 23,565,965 21,096,070 Total primary government net position $ 70,291,342 $ 70,085,110 $ 73,943,434 $ 73,918,

165 Table 1 Unaudited $ 11,423,393 $ 11,194,476 $ 12,050,162 $ 12,332,959 $ 11,971,309 $ 12,535,467-5,309,504 4,066,819 4,212,572 5,914,023 12,896,395 12,379,500 4,636,419 4,008,643 5,611,231 (2,270,339) 24,319,788 23,573,976 21,996,085 20,408,421 21,795,112 16,179,151 39,982,111 39,710,508 39,336,705 38,486,362 37,959,130 37,055,679 9,010,974 8,454,692 8,911,212 9,189,951 9,718,693 11,448,886 48,993,085 48,165,200 48,247,917 47,676,313 47,677,823 48,504,565 51,405,504 50,904,984 51,386,867 50,819,321 49,930,439 49,591,146-5,309,504 4,066,819 4,212,572 5,914,023 21,907,369 20,834,192 13,547,631 13,198,594 15,329,924 9,178,547 $ 73,312,873 $ 71,739,176 $ 70,244,002 $ 68,084,734 $ 69,472,935 $ 64,683,

166 SAGINAW CHARTER TOWNSHIP, MICHIGAN Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) Expenses Governmental activities General government $ 2,661,020 $ 2,835,027 $ 2,499,264 $ 3,077,367 Public safety 6,528,417 7,352,925 7,530,896 8,179,947 Public works 1,696,950 2,517,508 2,418,256 1,801,809 Highway and streets 1,077,331 1,335,667 1,076,199 1,016,195 Community development 414, , , ,762 Recreation and culture 1,894,384 1,799,826 1,891,829 1,969,197 Total governmental activities expenses 14,272,586 16,270,514 15,861,679 16,507,277 Business-type activities: Sewer 4,872,862 4,960,853 5,192,550 5,366,142 Water 3,851,112 4,169,997 4,201,443 4,615,918 Total business-type activities expenses 8,723,974 9,130,850 9,393,993 9,982,060 Total primary government expenses 22,996,560 25,401,364 25,255,672 26,489,337 Program Revenues Governmental activities: Charges for services: General government 625, , , ,859 Public safety 136, , , ,814 Public works 1,617,109 1,765,763 1,725,061 1,583,867 Highways and streets 337, , , ,148 Community development 310, , , ,485 Recreation and culture 334, , , ,780 Operating grants and contributions 340, , , ,060 Capital grants and contributions - 55, Total governmental activities program revenues 3,703,497 3,801,718 3,828,907 3,788,013 Business-type activities: Charges for services: Sewer 5,035,705 5,073,123 5,071,210 5,096,825 Water 3,590,716 3,855,270 3,889,194 4,668,896 Capital grants and contributions 1,131, ,609 4,225,615 1,749,462 Total business-type activities program revenues 9,757,892 9,053,002 13,186,019 11,515,183 Total primary government program revenues 13,461,389 12,854,720 17,014,926 15,303,

167 Table 2 Unaudited $ 2,800,950 $ 2,580,093 $ 2,926,236 $ 2,909,911 $ 2,288,834 $ 2,330,484 8,027,261 7,727,872 8,080,467 8,293,347 8,453,387 8,969,486 1,936,945 1,976,678 1,616,090 1,793,059 1,839,469 1,965,834 1,091,335 1,178,305 1,007,096 1,542,996 1,095,794 1,411, , , , , , , ,427 1,785,970 2,061,903 1,448,412 2,059,299 2,031,047 15,177,331 15,681,226 16,126,971 16,397,810 16,224,149 17,168,653 5,549,570 6,174,723 5,833,084 6,240,183 6,341,458 6,299,380 4,921,684 4,960,007 5,247,437 5,338,405 5,071,970 5,271,567 10,471,254 11,134,730 11,080,521 11,578,588 11,413,428 11,570,947 25,648,585 26,815,956 27,207,492 27,976,398 27,637,577 28,739, , , , , , , , , , , , ,572 1,586,100 1,589,300 1,591,170 1,597,724 1,599,655 1,920, , , , , , , , , , , , , , , , , , , , , , , , , ,946,941 3,751,588 3,824,936 3,988,808 4,013,464 4,351,151 4,547,499 4,929,566 5,488,665 5,664,342 6,008,509 5,716,178 4,965,184 5,005,409 5,335,282 5,304,823 5,216,657 5,282, , , , ,792 60, ,350 9,750,735 10,336,804 11,040,454 11,124,957 11,285,325 11,291,152 13,697,676 14,088,392 14,865,390 15,113,765 15,298,789 15,642,

168 SAGINAW CHARTER TOWNSHIP, MICHIG Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) Net (expense)/revenue Governmental activities $ (10,569,089) $ (12,257,576) $ (12,032,772) $ (12,719,264) Business-type activities 1,033,918 (77,848) 3,792,026 1,533,123 Total primary government net expense (9,535,171) (12,335,424) (8,240,746) (11,186,141) General revenues Governmental activities: Property taxes 6,566,607 6,512,631 6,453,425 6,419,913 Grants and contributions not restricted to specific programs 2,951,812 2,974,433 2,851,361 2,527,758 Unrestricted investment earnings 653, , , ,464 Franchise fees 450, , , ,706 Miscellaneous 125,433 35,971 98,488 72,914 Transfers - internal activities 183, , , ,214 Total governmental activities 10,931,566 10,805,721 10,405,449 9,935,969 Business-type activities: Unrestricted investment earnings 108, , ,554 37,717 Gain on sale of capital assets 8,850 9,439 45,777 22,759 Other revenue 64,809 9,004 78,562 13,160 Transfers - internal activities (183,266) (193,657) (223,047) (228,214) Total business-type activities (853) (5,339) 27,846 (154,578) Total primary government 10,930,713 10,800,382 10,433,295 9,781,391 Change in net position Governmental activities 362,477 (123,045) (205,424) (1,669,619) Business-type activities 1,033,065 (83,187) 4,063,748 1,645,126 Total primary government $ 1,395,542 $ (206,232) $ 3,858,324 $ (24,493) 107

169 Table 2 Unaudited $ (11,230,390) $ (11,929,638) $ (11,858,921) $ (11,918,780) $ (12,210,715) $ (12,817,502) (720,519) (797,926) (40,067) (453,631) (128,103) (279,795) (11,950,909) (12,727,564) (11,898,988) (12,372,411) (12,338,818) (13,097,297) 6,393,806 6,391,591 6,422,463 6,406,329 9,466,064 9,772,762 2,712,958 3,054,233 2,973,296 3,025,985 3,282,325 3,213,789 86,497 88,779 61,473 34,195 19,427 14, , , , , , , , ,017 53,814 62,736 57,892 61, , , , , ,183,951 10,649,889 10,425,870 10,488,853 13,597,406 13,848,069 21,926 14,649 9,152 8,260 25,855 43,885-51, ,251 44,445 76,457 66, ,758 96,498 (218,739) (213,832) (218,000) (229,856) - - (135,562) (103,187) (132,391) (155,390) 129, ,383 10,048,389 10,546,702 10,293,479 10,333,463 13,727,019 13,988, ,119 (745,813) (1,577,891) (1,587,664) 1,386,691 1,030,567 (780,187) (827,885) 82,717 (571,604) 1,510 (139,412) $ (606,068) $ (1,573,698) $ (1,495,174) $ (2,159,268) $ 1,388,201 $ 891,

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171 SAGINAW CHARTER TOWNSHIP, MICHIGAN Table 3 Unaudited Governmental Activities Tax Revenue by Source Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year Property Tax 2007 $ 7,432, ,330, ,203, ,867, ,763, ,176, ,974, ,978, ,466, ,772,

172 SAGINAW CHARTER TOWNSHIP, MICHIGAN Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) General fund Reserved $ 793,024 $ 651,991 $ 572,385 $ 446,120 Unreserved 4,098,085 4,101,484 4,145,024 3,709,258 Nonspendable Assigned Unassigned Total general fund $ 4,891,109 $ 4,753,475 $ 4,717,409 $ 4,155,378 All other governmental funds Reserved $ 9,776 $ 12,728 $ 11,694 $ 1,873 Unreserved: Special revenue funds 9,433,584 9,397,486 9,223,482 7,811,247 Capital projects funds 1,149, , , ,372 Nonspendable Restricted Committed Assigned Total all other governmental funds $ 10,592,464 $ 10,220,874 $ 9,848,413 $ 8,588,492 The Township implemented GASB 54 in

173 Table 4 Unaudited $ 398,662 $ - $ - $ - $ - $ - 4,112, ,700, , , , , , , , , ,016-4,673,788 5,151,361 5,089,006 5,333,621 5,106,154 $ 4,511,205 $ 8,480,843 $ 5,515,665 $ 5,417,792 $ 5,661,313 $ 5,451,367 $ 1,982 $ - $ - $ - $ - $ - 7,423, , , , ,410 4,379 83,903-7,306,732 5,155,039 4,066,214 4,212,572 5,836, , ,071-17,998 22,557 59,795 1,001,717 1,005,757 $ 8,202,657 $ 7,469,783 $ 5,332,061 $ 4,281,419 $ 6,141,842 $ 7,880,

174 SAGINAW CHARTER TOWNSHIP, MICHIGAN Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Revenues Property taxes $ 7,601,577 $ 8,079,249 $ 7,725,394 $ 7,723,530 Licenses and permits 809, , , ,304 Intergovernmental: Federal sources 4,131 3,816 4,591 97,598 State sources 3,187,937 3,148,526 2,977,815 2,638,422 Charges for services 1,902,423 2,090,378 2,063,488 1,944,417 Fines and forfeits 122, , , ,745 Special assessments 357, , , ,220 Interest and rent 582, , ,032 93,852 Other 443, , , ,196 Total revenues 15,011,523 15,575,553 15,268,626 14,729,284 Expenditures General government 1,624,439 1,608,170 1,949,237 2,031,048 Public safety 6,474,902 7,556,701 7,385,006 8,606,160 Highway and streets 1,026,591 1,278,118 1,015, ,150 Public works 1,684,365 2,502,987 2,402,686 1,789,291 Community development 414, , , ,762 Recreation and culture 1,672,726 1,859,297 1,670,055 1,746,450 Other 943,249 1,043,600 1,171,987 1,186,589 Total expenditures 13,840,756 16,278,434 16,039,488 16,779,450 Revenues over (under) expenditures 1,170,767 (702,881) (770,862) (2,050,166) Other financing sources (uses) Proceeds from issuance of debt ,288 - Transfers in 1,832,263 2,164,857 2,185,222 2,524,289 Transfers out (1,648,997) (1,971,200) (1,962,175) (2,296,075) Total other financing sources (uses) 183, , , ,214 Net change in fund balances $ 1,354,033 $ (509,224) $ (408,527) $ (1,821,952) Debt service as a percentage of noncapital expenditures 0% 0% 0% 0% 112

175 Table 5 Unaudited $ 7,427,816 $ 7,073,901 $ 6,877,313 $ 6,880,790 $ 9,889,748 $ 10,206,759 1,033,842 1,108,323 1,144,719 1,151,056 1,223,704 1,245,303 99,256 5,026 63, ,723 32,846-2,719,524 3,122,439 3,108,758 3,139,771 3,338,768 3,244,259 2,010,531 1,988,686 1,978,825 1,973,572 1,999,074 2,308, , , , , , , , , , , , ,028 68,311 67,250 49,446 27,151 13,730 9, , , , , , ,414 15,084,137 14,943,522 14,411,231 14,652,011 17,664,126 18,222,344 1,492,652 1,533,323 1,571,657 1,915,867 1,000, ,717 7,542,536 7,349,964 8,964,704 7,587,756 8,265,739 8,841,810 1,038,134 1,126, ,162 1,488,464 1,043,195 1,361,756 1,926,136 1,970,081 1,606,263 1,789,871 1,792,915 1,924, , , , , , ,305 1,761,792 1,778,803 1,777,236 1,719,565 1,795,401 2,050,363 1,136,221 1,060,244 1,096,630 1,118,780 1,174,835 1,144,932 15,332,884 15,250,890 16,401,831 16,030,388 15,560,176 16,693,906 (248,747) (307,368) (1,990,600) (1,378,377) 2,103,950 1,528, ,933,097 2,141,402 2,235,270 2,114,130 1,029, ,000 (1,714,358) (1,927,570) (2,017,270) (1,884,274) (1,029,050) (999,000) 218, , , , $ (30,008) $ (93,536) $ (1,772,600) $ (1,148,521) $ 2,103,950 $ 1,528,438 0% 0% 0% 0% 0% 0% 113

176 SAGINAW CHARTER TOWNSHIP, MICHIGAN Assessed Value and Taxable Value of Property Last Ten Fiscal Years Fiscal Year Ended March 31, Agricultural Commercial Industrial Residential Developmental 2007 $ 369,000 $ 397,530,900 $ 6,918,400 $ 1,002,127,700 $ 8,362, , ,761,400 6,931,400 1,012,815,400 8,243, , ,770,000 7,033,300 1,001,359,800 8,254, , ,747,500 7,132, ,746,700 8,199, , ,094,600 7,170, ,396,800 7,882, , ,909,300 6,875, ,326,400 7,805, , ,302,100 6,905, ,471,200 7,696, ,877,000 (2) 349,310,600 6,895, ,783,000 2,481,300 (2) ,960, ,933,900 7,002, ,132,200 2,393, ,989, ,571,900 7,082, ,736,900 2,202,100 Source: Saginaw Charter Township Assessing Department (1) Assessed values as of 3/31. (2) A number of parcels were reclassified resulting in this change. 114

177 Table 6 Unaudited Estimated Taxable Total Total Actual Value as a Assessed Direct Taxable Percentage of Personal Value (1) Tax Rate Value Assessed Value $ 73,425,900 $ 1,488,734, $ 1,317,130, % 76,740,200 1,508,902, ,359,905, % 76,781,900 1,508,610, ,387,383, % 79,512,300 1,435,748, ,365,523, % 76,203,800 1,370,158, ,309,287, % 74,659,100 1,284,985, ,258,139, % 73,049,600 1,252,837, ,225,459, % 74,969,600 1,247,316, ,221,384, % 70,686,400 1,244,107, ,217,378, % 72,088,100 1,259,670, ,221,402, % 115

178 SAGINAW CHARTER TOWNSHIP, MICHIGAN Property Tax Rates Direct and Overlapping Governments Last Ten Fiscal Years Saginaw Charter Township Overlapping Rates Fire Total Saginaw Fiscal Operating Police Special Township County Year Millage (1) Millage (1) Assessment Millage Operating Source: Saginaw Charter Township Assessing Department (1) Rates reduced to comply with the Headlee Amendment, except for year 2015 for Police Millage, as voters approved a new levy that was not reduced by Headlee Non-homestead school operating millage The above millage rates apply only to non-homestead properties, and therefore are not included in the Total Direct and Overlapping Rates column above. Source: Saginaw Charter Township Assessing Department 116

179 Table 7 Unaudited Overlapping Rates Total Inter- Delta State Saginaw Twp Direct & mediate Community Education Schools Overlapping Schools College Tax Debt Rates

180 SAGINAW CHARTER TOWNSHIP, MICHIGAN Principal Property Taxpayers March 31, 2016 and Nine Years Ago 2016 Taxable Percentage of Assessed Total Taxable Taxpayer Value Rank Assessed Value JG Saginaw LLC/Fashion Square Mall $ 22,752, % Consumers Energy 18,454, % Bre DDR BR East Valley MI LLC 6,575, % LPC Partners LC/Morley Companies 4,695, % Wal-Mart Property 3,846, % Fox Glen Apartments 3,734, % Township Square Logan LLC Etal 3,621, % Sears Roebuck & Company 3,594, % Saginaw Lodging LLC 3,247, % New Plan Realty/Fashion Corners Mall 3,086, % Camelot Place Associates - N/A New Plan Realty/Green Acres Plaza - N/A Menard, Inc - N/A Totals $ 73,608, % Source: Saginaw Charter Township Assessing Department 118

181 Table 8 Unaudited 2007 Taxable Percentage of Assessed Total Taxable Value Rank Assessed Value $ 22,399, % 15,462, % 6,435, % - N/A 6,329, % 4,625, % - N/A 4,595, % - N/A 4,466, % 4,645, % 4,536, % 4,036, % $ 77,532, % 119

182 SAGINAW CHARTER TOWNSHIP, MICHIGAN Property Tax Levies and Collections Last Ten Fiscal Years Total Tax Delinquents Collections Levy for Percentage Purchased by in Subsequent Fiscal Year Ended March 31, Fiscal Year Amount of Levy County Treasurer Years Source: Saginaw Charter Township Treasurer Collected within the Fiscal Year of the Levy 2007 $ 7,022,673 $ 6,663, % $ 354,100 $ 4, ,251,430 6,839, % 404,764 5, ,397,353 7,035, % 350,265 9, ,272,678 6,907, % 350,142 14, ,990,027 6,632, % 339,798 16, ,694,063 6,412, % 273,621 4, ,524,397 6,254, % 262,562 3, ,494,644 6,248, % 235,556 7, ,520,062 9,150, % 361,137 5, ,780,292 9,355, % 404,255 (1) (1) This information is not yet available. Saginaw County reimburses the Township for all delinquent real property tax. Delinquent personal property tax, interest, and penalty is collected in subsequent years. 120

183 Table 9 Unaudited Total Collections to Date Amount Percentage of Levy $ 7,022, % 7,249, % 7,395, % 7,272, % 6,988, % 6,691, % 6,520, % 6,491, % 9,516, % (1) (1) 121

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185 SAGINAW CHARTER TOWNSHIP, MICHIGAN Table 10 Unaudited Direct and Overlapping Debt As of March 31, 2016 Governmental Unit Percentage Share of Debt Applicable to Overlapping Outstanding Saginaw Twp Debt Direct Township of Saginaw $ 8,316, % $ 8,316,029 Less debt payable from enterprise revenues (8,316,029) (8,316,029) Net tax supported debt - - Overlapping (1) Saginaw Township Schools 35,650, % 35,650,000 Saginaw County 80,388, % 19,944,408 Saginaw Intermediate School District 1,635, % 410,876 TOTAL $ 117,673,587 $ 56,005,284 (1) Sources: Debt outstanding and estimated share of overlapping debt provided by Municipal Advisory Council of Michigan. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Township. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of Saginaw Charter Township. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. 122

186 SAGINAW CHARTER TOWNSHIP, MICHIGAN Legal Debt Margin Information Last Ten Fiscal Years Fiscal Year Legal debt limit $ 148,873,480 $ 150,890,250 $ 150,861,080 $ 143,574,850 Total net debt applicable to limit Legal debt margin $ 148,873,480 $ 150,890,250 $ 150,861,080 $ 143,574,850 Total net debt applicable to the limit as a percentage of debt limit 0.00% 0.00% 0.00% 0.00% Note: Under state finance law Saginaw Charter Township's outstanding general obligation debt should not exceed 10 percent of total assessed property value. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds. 123

187 Table 11 Unaudited Fiscal Year $ 137,015,810 $ 128,498,530 $ 125,283,710 $ 124,731,670 $ 124,410,790 $ 125,967, $ 137,015,810 $ 128,498,530 $ 125,283,710 $ 124,731,670 $ 124,410,790 $ 125,967, % 0.00% 0.00% 0.00% 0.00% 0.00% Legal Debt Margin Calculation for Fiscal Year 2016 State equalized value of real property $ 1,187,582,200 State equalized value of personal property 72,088,100 Total state equalized value 1,259,670,300 Debt limit (10% of total state equalized value) 125,967,030 Debt applicable to limit - Legal debt margin $ 125,967,

188 SAGINAW CHARTER TOWNSHIP, MICHIGAN Table 12 Pledged-Revenue Coverage Last Ten Fiscal Years Unaudited Sewer Fund Revenue Bonds Fiscal Year Net Operating Operating Available Debt Service Revenue (1) Expenses (2) Revenue Principal Interest Total Coverage 2007 $ 5,106,048 $ 3,234,669 $ 1,871,379 $ 470,421 $ 116,792 $ 587, ,202,851 3,305,538 1,897, , , , ,468,212 3,421,194 2,047, , , , ,394,734 3,409,208 1,985, , , , ,680,026 3,524,506 1,155, , ,184 1,044, ,040,527 4,020,255 1,020, , ,691 1,147, ,807,393 3,977,324 1,830, , ,319 1,035, ,759,277 4,400,969 1,358, , , , ,101,671 4,407,527 1,694, , , , ,782,970 4,426,261 1,356, , , , (1) Total operating revenues including interest and excluding capital contributions (2) Total operating expenses exclusive of depreciation but including transfer to the general fund for administration. 125

189 SAGINAW CHARTER TOWNSHIP, MICHIGAN Table 13 Unaudited Ratios of Outstanding Debt by Type Last Ten Fiscal Years Business-type Activities Fiscal Year Special Debt as a Ended Revenue Assessment Installment Percentage of Debt Per March 31, Bonds Bonds Purchase Total Personal Income Capita 2007 $ 3,813,490 $ - $ - $ 3,813, % $ ,287, ,287, % ,528, ,528, % ,889, ,889, % ,135,790 1,135,000-11,270, % ,508,024 1,050, ,687 10,873, % ,916, , ,602 10,125, % ,523, , ,214 9,572, % ,087, ,000 92,450 8,975,415 (1) ,592, ,000 13,234 8,316,029 (1) See the schedule of Demographic and Economic Statistics on table 14 for personal income and population data. (1) This information is not yet available. 126

190 SAGINAW CHARTER TOWNSHIP, MICHIGAN Table 14 Demographic and Economic Statistics Last Ten Fiscal Years Unaudited Fiscal Personal Per Capita School Unemployment Year Population (1) Income (2) Personal Income (3) Enrollment (4) Rate (5) ,591 $ 5,893,864 $ 29,177 5, % ,744 6,054,484 30,143 5, % ,823 6,028,933 30,137 5, % ,886 6,135,019 30,681 5, % ,840 6,372,166 32,007 4, % ,840 6,561,225 33,079 4, % ,840 6,561,082 33,383 4, % ,840 6,640,133 34,050 4, % ,840 (6) (6) 4, % ,840 (6) (6) 4, % Data Sources: (1) Population is an estimate as of March 31, of fiscal year with the exception of which reflects the actual 2010 census. (2) Amounts expressed in thousands (3) Bureau of Economic Analysis, U.S. Department of Commerce - Saginaw - Saginaw Township North, MI (4) Local school district (5) U.S. Department of Labor Bureau of Labor Statistics Data - Unemployment rate information is a yearly average not seasonally adjusted. (6) This information is not yet available. 127

191 SAGINAW CHARTER TOWNSHIP, MICHIGAN Table 15 Principal Employers 2016 and Nine Years Ago Unaudited Employer Employees Rank Employees Rank Morley Companies 1, HealthSource Saginaw Saginaw Twp Community Schools Saginaw Intermediate School District Consumers Energy Wal-Mart Supercenter n/a n/a Saginaw Control & Engineering United Parcel Service Covenant Healthcare Kroger Co. of Michigan # n/a n/a Fashion Square Mall n/a n/a Romano Sales Co. Inc. n/a n/a Totals 5,417 3,662 Source: Saginaw Future, Inc. Saginaw Township Clerk's Office 128

192 SAGINAW CHARTER TOWNSHIP, MICHIGAN Full-time Equivalent Township Employees by Function Last Ten Fiscal Years Full-time Equivalent Employees as of March 31, Function General government Public safety Public works Community development Recreation and culture Total Source: Saginaw Township Fiscal Services 129

193 Table 16 Unaudited Full-time Equivalent Employees as of March 31,

194 SAGINAW CHARTER TOWNSHIP, MICHIGAN Operating Indicators by Function Last Ten Fiscal Years Function Public safety Police Number of traffic accidents 1,032 1,104 1, Number of traffic offenses issued 3,776 4,776 5,901 6,146 Fire Number of alarms Completed inspections 1, ,313 Community development Permits issued Code enforcement complaints 2,934 2,654 2,915 3,789 General government Fiscal services Number of W-2's processed Number of accounts payable checks processed 4,579 4,633 4,665 4,415 Clerk's office Number of licensed businesses 1,768 1,752 1,705 1,689 Elections Number of registered voters 30,357 30,979 31,740 31,071 Treasurer's office Average number of sewer/water bills per month 4,799 4,804 4,823 4,833 Number of tax bills - two billings/year 15,957 15,904 15,947 15,960 Recreation and culture Number of programs Number of participants 9,575 10,316 10,235 10,295 Sewer Average daily sewage treatment -millions of gallons per day Water Number of active customers 14,516 14,490 14,520 14,523 Number of gallons sold (000 omitted) 1,472,038 1,517,900 1,367,924 1,323,455 Source: Applicable Township Departments Fiscal Year 131

195 Table 17 Unaudited Fiscal Year , ,751 4,157 4,352 3,167 2,324 2, ,761 1,256 1,159 1,489 1,569 1, ,464 5,887 5,701 5,607 5,929 4, ,255 4,255 4,396 3,984 3,999 3,992 1,758 1,732 1,732 1,679 1,638 1,633 31,735 31,748 31,988 31,768 31,193 31,443 4,821 4,833 4,867 4,890 4,895 4,878 15,812 15,898 16,059 15,656 15,425 15, ,350 9,885 9,460 9,620 9,520 9, ,578 14,645 14,672 14,744 14,744 14,814 1,375,565 1,313,516 1,411,236 1,289,933 1,181,309 1,161,

196 SAGINAW CHARTER TOWNSHIP, MICHIGAN Capital Asset Statistics by Function Last Ten Fiscal Years Fiscal Year Function Public safety Police Station Patrol vehicles Fire Admin. office/stations 1/3 1/3 1/3 1/3 Fire fighting vehicles Recreation and culture Parks Recreation center Library Source: Saginaw Township Fiscal Services 133

197 Table 18 Unaudited Fiscal Year /3 1/3 1/3 1/3 1/3 1/

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199 APPENDIX D GENERAL FUND STATEMENTS OF THE CHARTER TOWNSHIP OF SAGINAW FOR FISCAL YEARS ENDED MARCH 31, 2016, 2015 AND 2014 D-1

200 FINANCIAL INFORMATION The following financial information has been compiled from information provided in the Charter Township of Saginaw audited Comprehensive Annual Financial Reports for the fiscal years ended March 31, 2016, 2015 and These audited Comprehensive Annual Financial Reports were prepared in accordance with the Generally Accepted Accounting Principles. The Township s auditors have not been asked to consent to the use of information from such audited Comprehensive Annual Financial Reports in the Preliminary Official Statement nor the final Official Statement and have not conducted any subsequent review of such audited Financial Statements or of the information presented in this Appendix. Copies of audited Comprehensive Annual Financial Reports of the Township may be obtained from the State of Michigan - Department of Treasury. Michigan Department of Treasury Local Audit and Finance Division Lansing, MI Telephone: (517) Website: Beginning July 1, 2009, municipal bond issuers, obligors or their designated agents must provide continuing disclosure documents and related information to the MSRB for posting on the EMMA website. These continuing disclosure documents, which include annual financial statements and events notices, will be posted on the EMMA website generally within an hour of receipt. By Mail: MSRB By Phone: (703) Duke St., Suite 600 By Fax: (703) Alexandria, VA Professional Qualifications: (703) Accounting: (703) Municipal Securities Information Library: (703) Transaction Report: (703) D-2

201 CHARTER TOWNSHIP OF SAGINAW GENERAL FUND - BALANCE SHEET FOR YEARS ENDED MARCH 31 Assets: ASSETS Cash and cash equivalents $ 4,583,579 $ 4,785,337 $ 4,608,196 Investments - 20,230 24,052 Receivables Current and delinquent property taxes 91,277 89,977 79,812 Special assessments 73,134 73,204 73,277 Accounts 23, ,313 57,650 Due from other funds 240, , ,085 Due from other governmental units 490, , ,877 Prepaid items 69,297 16,072 12,999 Inventories 25,811 39,627 32,710 Advance to Soccer Association 138, , ,130 TOTAL ASSETS $ 5,736,287 $ 6,059,339 $ 5,765,788 Liabilities LIABILITIES AND FUND EQUITY Accounts payable $ 84,403 $ 64,618 $ 63,114 Accrued liabilities 125, , ,408 Deposits payable 2,045 9,767 15,262 Due to other funds - 2,080 13,691 Unearned revenue - 5,000 6,250 TOTAL LIABILITIES 211, , ,725 Deferred inflows of resoureces Special assessments 73,134 73,204 73,277 Fund Balances Nonspendable 233, , ,839 Assigned 112, , ,941 Unassigned 5,106,154 5,333,621 5,089,006 TOTAL FUND BALANCES 5,451,367 5,661,313 5,417,786 TOTAL LIABILITIES AND FUND BALANCES $ 5,736,287 $ 6,059,339 $ 5,765,788 The notes included in the Financial Statements and Supplementary Information are an integral part of these financial statements. Source: Charter Township of Saginaw audited Comprehensive Annual Financial Reports D-3

202 CHARTER TOWNSHIP OF SAGINAW GENERAL FUND STATEMENT OF REVENUES AND EXPENDITURES AS OF MARCH 31 REVENUES Property taxes $ 1,568,274 $ 1,545,756 $ 1,534,011 Licenses and permits 819, , ,203 Intergovernmental: Federal sources ,100 State sources 3,182,971 3,219,867 3,019,935 Charges for services 350, , ,016 Special assessments 490, , ,819 Fines and forfeitures 109, , ,829 Interest and rent 5,386 7,542 9,801 Other revenue 278, , ,985 Total Revenues 6,804,554 6,802,079 6,842,699 EXPENDITURES Current General government 910,717 1,000,725 1,571,946 Public safety 434, , ,703 Highway and streets 1,361,756 1,043,195 1,488,464 Public works 123,660 92,711 90,160 Recreation and culture 2,039,766 1,788,600 1,709,813 Other 1,144,932 1,174,835 1,118,780 TOTAL EXPENDITURES 6,015,500 5,529,502 6,354,866 REVENUES OVER (UNDER) EXPENDITURES 789,054 1,272, ,833 OTHER FINANCING SOURCES (USES) Transfers in ,209 Transfers out (999,000) (1,029,050) (1,349,921) TOTAL OTHER FINANCING SOURCES (USES) (999,000) (1,029,050) (585,712) NET CHANGE IN FUND BALANCES (209,946) 243,527 (97,879) FUND BALANCES - Beginning of Year 5,661,313 5,417,786 5,515,665 FUND BALANCES - End of Year $ 5,451,368 $ 5,661,313 $ 5,417,786 The notes included in the Financial Statements and Supplementary Information are an integral part of these financial statements. Source: Charter Township of Saginaw audited Comprehensive Annual Financial Reports D-4

203 APPENDIX E FORM OF APPROVING OPINION OF BOND COUNSEL E-1

204 Miller, Canfield, Paddock and Stone, P.L.C. 150 West Jefferson, Suite 2500 Detroit, Michigan TEL (313) FAX (313) MICHIGAN: Ann Arbor Detroit Grand Rapids Kalamazoo Lansing Troy FLORIDA: Tampa ILLINOIS: Chicago NEW YORK: New York CANADA: Windsor CHINA: Shanghai MEXICO: Monterrey POLAND: Gdynia Warsaw Wrocław September 6, 2017 Charter Township of Saginaw County of Saginaw State of Michigan We have acted as bond counsel to the Charter Township of Saginaw, County of Saginaw, State of Michigan (the Issuer ), in connection with the issuance by the Issuer of bonds in the aggregate principal sum of $3,630,000, designated 2017 Refunding Bonds (Limited Tax General Obligation) (the Bonds ). In such capacity, we have examined such law and the transcript of proceedings relating to the issuance of the Bonds and such other proceedings, certifications and documents as we have deemed necessary to render this opinion. The Bonds are in fully-registered form in the denomination of $5,000 each or multiples thereof, numbered in order of registration, bearing original issue date of September 6, 2017, payable as to principal and interest as provided in the Bonds, with the option of redemption prior to maturity in the manner, at the times and at the prices specified in the Bonds. The Issuer has designated the Bonds as qualified tax-exempt obligations for purposes of deduction of interest expense by financial institutions. As to questions of fact material to our opinion, we have relied on the certified proceedings and other certifications of public officials and others furnished to us. Based upon the foregoing, we are of the opinion that, under existing law: 1. The Bonds have been duly authorized and executed by the Issuer and are valid and binding obligations of the Issuer. 2. The Issuer has pledged its limited tax full faith and credit for the payment of the Bonds and, in order to make such payment, the Issuer is obligated to provide, as a first budget obligation, sufficient general fund moneys in its annual budget and, if necessary, to levy sufficient ad valorem taxes upon all taxable property within its boundaries, subject to applicable constitutional, statutory, and charter tax rate limitations. 3. The interest on the Bonds (a) is excludable from gross income for federal income tax purposes and (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. It should be noted, however, that with respect to corporations (as defined for federal income tax purposes), the interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on such corporations. Further, the Bonds and the interest thereon are exempt from all taxation by the State of Michigan or by any taxing authority within the State of Michigan except inheritance and estate taxes and taxes on gains realized from the sale, payment or other disposition thereof. The opinions set forth in this paragraph are subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be (or continue to be) excludable from gross income for federal and Michigan income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such requirements could cause the interest on the Bonds to be included in gross income retroactively to the date of issuance of the Bonds. Except as stated in paragraph 3 above, we express no opinion regarding other federal or state tax consequences arising with respect to the Bonds and the interest thereon. E-2

205 MILLER, CANFIELD, PADDOCK AND STONE, P.L.C. Charter Township of Saginaw -2- September 6, 2017 The rights or remedies of bondholders may be affected by bankruptcy, insolvency, fraudulent conveyance or other laws affecting creditors rights generally, now existing or hereafter enacted, and by the application of general principles of equity, including those relating to equitable subordination. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Very truly yours, MILLER, CANFIELD, PADDOCK AND STONE, P.L.C. By Patrick F. McGow \ E-3

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207 APPENDIX F FORM OF CONTINUING DISCLOSURE UNDERTAKING F-1

208 CONTINUING DISCLOSURE UNDERTAKING This Continuing Disclosure Undertaking (the Undertaking ) is executed and delivered by the Charter Township of Saginaw, County of Saginaw, State of Michigan (the Issuer ), in connection with the issuance of its 2017 Refunding Bonds (Limited Tax General Obligation) (the Bonds ). The Issuer covenants and agrees for the benefit of the Bondholders, as hereinafter defined, as follows: (a) Definitions. The following terms used herein shall have the following meanings: Audited Financial Statements means the annual audited financial statement pertaining to the Issuer prepared by an individual or firm of independent certified public accountants as required by Act 2, Public Acts of Michigan, 1968, as amended, which presently requires preparation in accordance with generally accepted accounting principles. Bondholders shall mean the registered owner of any Bond or any person (a) with the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bond (including any person holding a Bond through a nominee, depository or other intermediary) or (b) treated as the owner of any Bond for federal income tax purposes. EMMA shall mean the MSRB s Electronic Municipal Market Access District, or such other District, Internet Web site, or repository hereafter prescribed by the MSRB for the submission of electronic filings pursuant to the Rule. MSRB means the Municipal Securities Rulemaking Board. Rule means Rule 15c2-12 promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as amended. SEC means the United States Securities and Exchange Commission. (b) Continuing Disclosure. The Issuer hereby agrees, in accordance with the provisions of the Rule, to provide or cause to be provided to the MSRB through EMMA, on or before the last day of the 6th month after the end of the fiscal year of the Issuer, the following annual financial information and operating data, commencing with the fiscal year ended March 31, 2017, in an electronic format as prescribed by the MSRB: (1) Updates of the numerical financial information and operating data included in the official statement of the Issuer relating to the Bonds (the Official Statement ) appearing in the Tables in the Official Statement as described below: a. History of Property Valuations; b. Analysis of State Equalized Valuation By Class and By Use; c. Analysis of Taxable Value By Class and By Use; d. Major Taxpayers; e. Tax Rates; f. Tax Rate Limitations; g. Tax Levies and Collections; h. Revenues from the State of Michigan; i. Retirement Plans; j. Other Post Employment Benefits; k. General Fund-Fund Balance; l. Debt Statement Direct Debt; and m. Statement of Legal Debt Margin. (2) The Audited Financial Statements. Provided, however, that if the Audited Financial Statements are not available by the date specified above, they shall be provided when available, and unaudited financial statements will be filed by such date. (3) Such additional financial information or operating data as may be determined by the Issuer and its advisors as desirable or necessary to comply with the Rule. Such annual financial information and operating data described above are expected to be F-2

209 provided directly by the Issuer or by specific reference to documents available to the public through EMMA or filed with the SEC. If the fiscal year of the Issuer is changed, the Issuer shall send a notice of such change to the MSRB through EMMA, prior to the earlier of the ending date of the fiscal year prior to such change or the ending date of the fiscal year as changed. (c) Notice of Failure to Disclose. The Issuer agrees to provide or cause to be provided, in a timely manner, to the MSRB through EMMA, in an electronic format as prescribed by the MSRB, notice of a failure by the Issuer to provide the annual financial information with respect to the Issuer described in subsection (b) above on or prior to the dates set forth in subsection (b) above. (d) Occurrence of Events. The Issuer agrees to provide or cause to be provided to the MSRB through EMMA, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of ten business days after the occurrence of the event, notice of the occurrence of any of the following events listed in (b)(5)(i)(c) of the Rule with respect to the Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of holders of the Bonds, if material; (8) bond calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the Issuer, which is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Issuer in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Issuer; (13) the consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; or (14) appointment of a successor or additional trustee or the change of name of a trustee, if material. (e) Materiality Determined Under Federal Securities Laws. The Issuer agrees that its determination of whether any event listed in subsection (d) is material shall be made in accordance with federal securities laws. (f) Identifying Information. All documents provided to the MSRB through EMMA shall be accompanied by the identifying information prescribed by the MSRB. F-3

210 (g) Termination of Reporting Obligation. The obligation of the Issuer to provide annual financial information and notices of material events, as set forth above, shall be terminated if and when the Issuer no longer remains an obligated person with respect to the Bonds within the meaning of the Rule, including upon legal defeasance of all Bonds. (h) Benefit of Bondholders. The Issuer agrees that its undertaking pursuant to the Rule set forth in this Undertaking is intended to be for the benefit of the Bondholders and shall be enforceable by any Bondholder; provided that, the right to enforce the provisions of this Undertaking shall be limited to a right to obtain specific enforcement of the Issuer s obligations hereunder and any failure by the Issuer to comply with the provisions of this Undertaking shall not constitute a default or an event of default with respect to the Bonds. (i) Amendments to the Undertaking. Amendments may be made in the specific types of information provided or the format of the presentation of such information to the extent deemed necessary or appropriate in the judgment of the Issuer, provided that the Issuer agrees that any such amendment will be adopted procedurally and substantively in a manner consistent with the Rule, including any interpretations thereof by the SEC, which, to the extent applicable, are incorporated herein by reference. Such interpretations currently include the requirements that (a) the amendment may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of the Issuer or the type of activities conducted thereby, (b) the undertaking, as amended, would have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, and (c) the amendment does not materially impair the interests of Bondholders, as determined by parties unaffiliated with the Issuer (such as independent legal counsel), but such interpretations may be changed in the future. If the accounting principles to be followed by the Issuer in the preparing of the Audited Financial Statements are modified, the annual financial information for the year in which the change is made shall present a comparison between the financial statements as prepared on the prior basis and the statements as prepared on the new basis, and otherwise shall comply with the requirements of the Rule, in order to provide information to investors to enable them to evaluate the ability of the Issuer to meet its obligations. A notice of the change in accounting principles shall be sent to the MSRB through EMMA. (j) Municipal Advisory Council of the State of Michigan. The Issuer shall also file by electronic or other means any information or notice required to be filed with the MSRB through EMMA pursuant to this Undertaking in a timely manner with the Municipal Advisory Council of the State of Michigan. IN WITNESS WHEREOF, the Issuer has caused this Undertaking to be executed by its authorized officer. CHARTER TOWNSHIP OF SAGINAW County of Saginaw State of Michigan Dated: September 6, 2017 By Robert Grose, Township Manager F-4

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212 The following have participated in the planning and development of this Bond issue: CHARTER TOWNSHIP OF SAGINAW ADMINISTRATION ROBERT GROSE Manager MICHELE GADD Director of Fiscal Services BOARD OF TRUSTEES SHIRLEY M. WAZNY TIMOTHY J. BRAUN STEVEN G. GERHART Clerk Supervisor Treasurer FLORENCE P. CONNOLLY JON R. HOWELL PROFESSIONAL SERVICES LORI L. GORNEY JAMES KELLY REGISTRAR/PAYING/ESCROW AGENT BOND COUNSEL UNDERWRITER S COUNSEL VERIFICATION AGENT THE HUNTINGTON NATIONAL BANK Grand Rapids, Michigan MILLER, CANFIELD, PADDOCK AND STONE, P.L.C. Detroit, Michigan DICKINSON WRIGHT PLLC. Troy and Detroit, Michigan ROBERT THOMAS CPA, LLC Shawnee Mission, Kansas REGISTERED MUNICIPAL ADVISOR 615 Griswold St. w Suite 1225 w Detroit, Michigan Printed By