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Troy School District

Comprehensive Annual Financial Report

For the Fiscal Year Ended

June 30, 2002

TROY SCHOOL DISTRICT 4400 LIVERNOIS ROAD

TROY, MICHIGAN 48098

PREPARED BY: DIVISION OF BUSINESS SERVICES

MICHAEL M. ADAMCZYK ASSISTANT SUPERINTENDENT - BUSINESS SERVICES


Contents

Introductory Section

Client Transmittal Letter i-xii

List of Officials xiii

Organization Chart xiv

Certificate of Excellence xv Financial Section Report Letter 1-2

Management’s Discussion and Analysis 3-11

Basic Financial Statements

District-wide Financial Statements: Statement of Net Assets 12 Statement of Activities 13

Fund Financial Statements: Governmental Funds: Balance Sheet 14 Reconciliation of Governmental Fund Balances to Governmental Net Assets 15 Statement of Revenue, Expenditures, and Changes in Fund Balances 16 Reconciliation of the Statement of Revenue, Expenditures, and

Changes in Fund Balances of Governmental Funds to the Statement of Activities 17

Fiduciary Fund - Trust and Agency - Statement of Fiduciary Net Assets 18

Notes to Financial Statements 19-32

Required Supplemental Information

Budgetary Comparison Schedule - General Fund 33

Budgetary Comparison Schedule - Special Revenue Durant Fund 34


Contents (Continued)

Other Supplemental Information

Combining Balance Sheet - Nonmajor Governmental Funds 35-36

Combining Statement of Revenue, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds 37-38

Schedule of Bonded Indebtedness 39

Statistical Section (Unaudited)

Property Tax Information: Ten-year Summary of Property Tax Data 40-41 Ten-year Summary of Assessed and Actual Value of Taxable Property 42-43 Ten-year Summary of Property Tax Rates Levied on Property within the

District - Direct and Overlapping Governments 44

Debt Information: Ten-year Summary of Ratio of Bonded Debt to Taxable Assessed Valuation

and Debt per Capita 45 Computation of Legal Debt Margin 46 Schedule of Direct and Overlapping Debt 47 Ten-year Summary of Ratio of Annual Debt Service for General Bonded Debt

to Total Expenditures 48

Other Ten-year Summaries: Ten-year Summary of Governmental Expenditures by Function 49-50 Ten-year Summary of Governmental Revenue by Source 51-52 Ten-year Summary of Taxable Assessed Value, State and Local Share of

Revenue Sources, Foundation Allowance, and Retirement Rate History 53

General Information: Ten-year Summary of Demographic Data 54 Ten-year Summary of Construction and Property Values - City of Troy 55 Principal Taxpayers 56

Statistical Summary of School Buildings and Sites 57

Federal Awards Supplemental Information Issued Under Separate Cover


Janet H. Jopke, Ed.D. Superintendent Michael M. Adamczyk

Assistant Superintendent Business Services/Treasurer

4400 Livernois Troy, Michigan 48098 Phone: 248/823-4000 • Fax: 248/823-4013

Board of Education Troy School District 4400 Livernois Troy, MI 48098 To the Citizens of Troy and the Board Members of Troy Schools: The Comprehensive Annual Financial Report of the Troy School District for the fiscal year ended June 30, 2002 is submitted herewith. The report was prepared by the School District’s Department of Business Services. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the School District. We believe the data, as presented, is accurate in all material respects. The information is presented in a manner designed to fairly set forth the financial position and the results of operations of the School District as measured by the financial activity of its various funds. All disclosures necessary to enable the reader to gain the maximum understanding of the School District’s financial affairs have been included. The Comprehensive Annual Financial Report is presented in three sections: introductory, financial, and statistical. The introductory section includes this transmittal letter, the organizational chart, a listing of the elected and top administrative officials of the School District, and the Certificate of Excellence. The financial section includes the management’s discussion and analysis, district-wide financial statements, the fund financial statements, notes to financial statements, required, and other supplemental information, as well as the auditor’s report on the financial statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multiple-year basis. The School District’s financial statements include all funds, account groups, and departments over which the Board of Education is financially accountable. The Board of Education is responsible for the selection and appointment of the Superintendent of Schools, as well as setting policy, developing long-range educational goals, adopting and amending operating budgets, and evaluating school programs. It is the mission of the Troy School District, in partnership with parents and the community, to prepare students of all ages and abilities to be knowledgeable, caring, productive, and contributing members of a democratic society. The Troy School District, with a commitment to excellence, will teach the skills, content, and reasoning needed to be successful in life; promote understanding and respect in a culturally diverse society; and inspire all to become lifelong learners and meet the challenges of an ever-changing world.

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Overview The Troy School District is a fiscally independent school district established under the laws of the State of Michigan and governed by an elected, seven-member Board of Education. It is somewhat unique in the Detroit metropolitan area in that its 27.4 square miles are totally within the City of Troy. It is a suburban district located in Oakland County, Michigan with continuing growth and development provided by upscale office and research facilities, light industry, and housing expansion. The School District has twelve elementary schools, grades K-5; four middle schools, grades 6-8; two traditional high schools, grades 9-12, and is in consortium in a grades 9-12 International Academy, which offers an International Baccalaureate diploma. The School District also has a Board of Education office, a transportation facility, an adult/alternative/continuing education building, a central stores/maintenance facility, and a building housing special education services, as well as offices for media, technology, food services, athletics, research and evaluation, fine arts, reading and writing, science, social studies, and math. The School District has a comprehensive educational program for students of all ages. This includes a Title I Early Intervention Program, Michigan School Readiness Programs, as well as a Reading Recovery Program in each elementary building. The School District provides K-12 services for English as a Second Language students in all buildings, as well as Head Start and gifted and talented programs. In addition to the exploratory courses, students in the middle schools are provided with an extensive curriculum, including health, fine arts, and physical education. School District high schools offer comprehensive programming, which includes extensive core curriculum, fine arts, vocational education, advanced placement classes, and many other electives. Niles Community High School services Troy School District students who require a nontraditional educational environment. This year, 126 students participated in the program. Sixty-two students graduated and 39 earned college scholarships. Business partnerships, human resources activities, job placement, enrichment classes, and assistance to non-English speaking students are areas of emphasis in the continuing education program. The School District’s Division of Continuing Education consists of five departments directed at meeting the comprehensive needs of the community. These departments include Adult Education, Enrichment, Youth Services, Troy Career Center, and the Niles Community High School. Programs and services are offered in the following areas: child care, adult education, enrichment classes, community swim, cultural arts, college extension, community/business partnerships, employment and training programs for youth and adults, and a community career services center. These community programs and services start with preschool-aged children and continue through senior citizen participation with over 25,000 registrations processed each year.

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Economic Profile and Outlook Major employers include Target Corporation, Standard Federal Bank, Flagstar Bank, General Motors, Syntel Inc., Magna International, and William Beaumont Hospital. Troy’s business district of corporate world headquarters includes Kmart, Kelly Services, Ameritech, Delphi, and Meritor Automotive, Inc. The prestigious Somerset Collection includes specialty shops such as Neiman Marcus, Gucci, Laura Ashley, Louis Vuitton, Mark Cross, Burberry, Saks, Nordstrom, and Marshall Field’s. The City’s Master Plan relegates light- and heavy-industrial property to the southernmost sector of the School District, which is easily served by a major interstate highway that intersects the community. Many fine residential subdivisions are currently under construction. Home prices range from $70,000-$500,000. The City of Troy issued 2,019 building permits for the 12-month period ended December 31, 2001, the value of which was $156,638,310. These residential and business areas continue to develop with a high return on investment and a desirable quality of life condition while at the same time providing a good mix of residential, commercial, and industrial development.

Major Initiatives and Achievements The Troy School District offers a comprehensive curriculum for all students. Goals and objectives define the skills, knowledge, and understanding expected of all learners for each subject at each grade level. The curriculum has been developed by School District staff, incorporating elements of the State’s Model Core Curriculum. It meets or exceeds all standards required for school accreditation by the Michigan Department of Education.

Curriculum Development Core Curriculum

Teachers and administrators in the Troy School District continue to implement a comprehensive curriculum for all students in kindergarten through twelfth grade. The curriculum is based on the teachers’ knowledge of their subject and their students, the Michigan Curriculum Framework, national education goals, and recommendations from national and State professional organizations. The curriculum meets or exceeds all standards required for school accreditation by the Michigan Department of Education. The written curriculum functions as a guide. It identifies what our teachers teach and what students should learn. For each subject at each grade level, goals and objectives define the skills, knowledge, and understandings expected of the students. These guide teachers as they prepare lessons. These goals and objectives have been matched with State and national standards to ensure that we are preparing our students for today, as well as tomorrow. Throughout the School District, high standards infuse the curriculum.

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The curriculum in the Troy School District continually evolves. New students, analysis of student assessments on MEAP tests, national standardized tests, and new material create opportunities for teachers to continually review the curriculum. This continual review helps focus teaching strategies, identifies new approaches to teaching the benchmarks and standards, and allows for examination of assessment approaches. The goal is to continue to improve the curriculum to ensure that Troy’s students are successful. During the 2001-2002 school year, many enhancements were made to the Troy School District curriculum. At the elementary level, a comprehensive Social Studies review was undertaken; a Science review analyzed current practice and made recommendations for changes; Spanish was expanded into the fifth grade; and new music software was purchased to complement the curriculum. Providing teacher training in the Michigan Literacy Progress Profile, Michigan Numeracy for Oakland Pupils, and balanced and guided reading strengthened the curriculum. Curriculum work continued at the secondary level throughout the 2001-2002 school year. New courses were begun at the high school in CISCO Networking Systems, A+ Computer Certification, Fundamentals of Algebra 2, Honors Pre-Calculus, and Pre-calculus/Discrete. New instructional material was adopted for middle and high school Spanish, middle school language arts, Algebra 1, Fundamentals of Algebra 2, Trigonometry/College Algebra, Pre-calculus/Discrete, Honors Pre-calculus, Psychology 1 and 2, Mental Health, and middle school science supplements. Successful “Portfolio Days” continued at Larson, Smith, and Boulan Park middle schools. A career exploration night was held in conjunction with the Troy Chamber of Commerce/Troy Business and Education Roundtable and hosted by Delphi. A high school job fair was held to help students find meaningful summer employment. In Special Education, a new program to support reading and writing was introduced throughout the School District. The LANGUAGE! Program provides a comprehensive, intensive, focused language experience for students. Special education teachers began their training during the summer of 2001 and continued throughout the 2001-2002 school year. Program implementation began in fall 2001. Each school in the School District participates in the school improvement process. The multiyear initiative is led by the staff at each building and focuses on the students’ cognitive and affective outcomes. Each school improvement team, comprised of staff, parents, and students, was trained in the process, which includes development of the school’s mission statement, identification of goals, development of strategies to achieve the goals, and monitoring progress toward meeting the goals. The School District continues to support the school improvement process through ongoing training, resources, and coordination of School District-level and building-level activities.

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An exceptional number of Troy School District students attend institutions of higher learning upon graduation. The University of Michigan grants additional points for admission consideration to students who have graduated from Troy School District.

Students’ results on standardized achievement measures such as the SAT, the ACT, the Iowa Test of Basic Skills, Form A (ITBS) and the tests of the Michigan Educational Assessment Program (MEAP), and High School Proficiency Test (HSPT) are among the highest in the tri-county area (see graphs and charts following).

578

505

614

511 56

650

561

2

514 57

450

662

3

514

589

504

632

516

200

300

400

500

600

700

800

1999 2000 2001 2002

SAT I Reasoning TestDistrict vs. National Averages

Troy Verbal National Verbal Troy Math National Math

Years Ended June 30

Percent of Students Graduating

Percent of Students Attending College

2002 99 92 2001 99 92 2000 99 95 1999 98 94 1998 97 95 1997 97 95 1996 97 95

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23.4

21.3

21.0

23.3

21.3

21.0

23.2

21.3

21.0

23.6

21.3

20.8

1919.5

2020.5

2121.5

2222.5

2323.5

24

1999 2000 2001 2002

ACT CompositeDistrict vs. State and National Averages

District State National

Median Percentile Rank of ITBS District Reading and Math

2001-02 2000-01 1999-00 Reading Math Reading Math Reading Math Grade 3 73 81 74 79 81 86 Grade 5 82 85 73 84 78 92 Grade 7 78 79 74 76 76 87 Troy School District Advanced Placement Testing Years Ended Number Percent June 30 Taken Qualifying

2001-02 1,204 77 2000-01 1,116 77 1999-00 937 81 1998-99 923 79 1997-98 663 77 1996-97 665 79

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Percent Passing

MEAP/HSPT Writing

Percent Passing MEAP/HSPT

Reading


Science

01-02 00-01 99-00 01-02 00-01 99-00 01-02 00-01 99-00

Grade 5 66.4 80.4 88.9 Grade 4 84.5 88.8 90.3 Grade 5 95.6 74.6 78.5 Grade 8/7 81.5 86.6 85.0 Grade 7 68.7 72.7 66.1 Grade 8 88.3 42.4 41.7 Class of: * 79.6 50.0 Class of: * 88.4 51.0 Class of: * 79.6 52.0


Math

Percent Passing MEAP/HSPT Social Studies

01-02 00-01 99-00 01-02 00-01 99-00

Grade 4 95.3 97.9 98.0 Grade 5 61.3 54.7 57.0 Grade 7/8 80.6 Not

tested 87.6 Grade 8 58.3 52.6 47.1

Class of: * 88.0 71.0 Class of: * 40.9 71.0

* Results not returned by State at time of the report All schools are accredited by the North Central Association of Colleges and Schools (NCA). Troy schools have 13 buildings that have achieved State recognition as Exemplary Schools: Athens High School, Troy High School, Boulan Park Middle School, Larson Middle School, Smith Middle School, Barnard Elementary School, Bemis Elementary School, Costello Elementary School, Hill Elementary School, Martell Elementary School, Morse Elementary School, Schroeder Elementary School, and Troy Union Elementary School. Six Troy Schools have also achieved recognition as a National Blue Ribbon School: Athens High School, Troy High School, Larson Middle School, Bemis Elementary School, Schroeder Elementary School, and Troy Union Elementary School. Troy parents value and support education. The Troy School District enjoys the active support and participation of parents in PTO/PTA groups, booster clubs, and building and School District-level committees. Parent attendance at parent/teacher conferences is high as is the level of parent volunteerism for activities and programs. The high level and quality of parent involvement contribute greatly to the overall quality of the schools’ programs. The percentage of parents attending fall conferences for the past three years is as follows:

2001 2000 1999 K-5 99% 99% 99% 6-8 80% 80% 74% 9-12 80% 80% 77%

In addition to high student achievement, Troy Schools has one of the lowest dropout rates for districts of its size. In 2000, the official dropout rate (determined by the State) was .5 percent.

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In 2001, the rate was .5 percent, and in 2002, it was .5 percent. The low dropout rate is a reflection of family and community values, as well as the clear expectations of Troy educators that students will successfully complete their education. In consortia with nine other Oakland County school districts, Troy School District participates in an International Academy, which is based on an International Baccalaureate program. Eighty-eight Troy School District students have been selected by lottery to attend the International Academy. This is a very unique school of choice. Troy School District also has students participating in the General Motors Technical Academy, where the curriculum focuses on drafting. There are options to meet the needs of special education students at 21 different programs at out-of-School District sites. Twenty-nine students attended the Oakland Technical Education Center to study curriculum ranging from food services to automotive programs.

Financial Information Management staff is responsible for establishing and maintaining an internal control structure. This structure is designed to ensure that the assets of the School District are protected from loss, theft, or misuse. It also ensures that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure 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. All expenditure requests require proper administrative approval before any transactions and orders for goods can be processed. Individual budget managers are responsible for complying with the School District’s purchasing policy and are prohibited from over-expending their legally adopted budget allocations.

Budgetary Controls The School District maintains budgetary controls to ensure that budgets are in compliance with legal provisions in the annual appropriation budget adopted by the Board of Education. Formal budgetary integration is employed as a management control device throughout the year for the General Fund, Special Revenue Funds, Capital Projects Funds, and Debt Service Funds. Under the guidelines of Bulletin 1022 (Revised), the State of Michigan’s School Accounting Manual, detailed budget information is provided, and appropriate administrators are delegated the responsibility for monitoring and controlling their respective budget allocations. Controls are in place that will not allow individuals to spend more than the amount appropriated to them. The controls are integrated into the School District’s computerized accounting system. Expenditures are prohibited from exceeding appropriations at the area level. An encumbrance system is utilized to measure the uncommitted budget amount available at any given point in time during the year. The budget is amended during the year to appropriately address variances that occur as a result of enrollment changes and revenue and expenditure allocations.

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The administration believes that the existing system of budgetary and accounting controls provides a reasonable level of assurance that errors or irregularities that could be material to the financial statements are prevented or that they would be detected within a timely manner. As demonstrated by the statements and schedules included in the financial section of this report, the School District continues to meet its responsibility for sound financial management. A sum of $965,600 currently is budgeted in the General Fund for capital outlay, which includes the purchase of equipment and preventative maintenance of buildings to comply with the School District’s intent to allocate annually for that purpose. Building principals annually review and compile a list of needs for their facilities. This list is submitted to central administration for review and if approved, are incorporated into the annual budget. The following table provides a comparison of 2001-2002 General Fund revenues with that of the prior year, showing both dollar and percentage changes by source: General Government Functions

General Fund Revenue Fiscal Year 2001-2002

Fiscal Year 2000-2001

Increase

Percent Increase

Local sources $ 48,746,273 $ 48,037,749 $ 708,524 1.47

State sources 63,544,728 60,985,944 2,558,784 4.20

Federal sources 3,185,753 2,987,219 198,534 6.65

Interdistrict and other 6,684,936 3,098,539 3,586,397 115.74

Total revenue $ 122,161,690 $ 115,109,451 $ 7,052,239 6.13

The increase in local sources of revenue is attributed to an increase in the School District’s tax base. The increase in State sources is the result of an increase in the State foundation allowance from $8,535 to $8,835 per pupil. The increase in the federal sources is attributed to an increase in the federal grant awards. The increase in interdistrict and other revenue is primarily from the increase in the Oakland County millage for special education funds. A comparison of the 2001-2002 General Fund expenditures to those of the prior year, including both dollar and percentage change by function, is as follows:

General Fund Expenditures Fiscal Year 2001-2002

Fiscal Year 2000-2001

Increase

Percent Increase

Instruction $ 72,129,573 $ 69,549,262 $ 2,580,311 3.71

Support services 42,068,438 39,862,395 2,206,043 5.53

Central services 409,224 387,258 21,966 5.67

Interdistrict transfers and other 2,478,909 1,928,847 550,062 28.52

Total expenditures $ 117,086,144 $ 111,727,762 $ 5,358,382 4.80

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The total increase of $2,580,311 in instruction can be attributed to an increase in salary and benefit costs for staff in addition to purchases of textbooks and other teaching supplies. Increases in support services can be attributed to increase in salary and benefit costs for staff, increased purchased services, and capital outlay. The increase in interdistrict transfers and other is primarily a result of increased tuition for special education.

General Fund Balance The School District’s unreserved, undesignated General Fund balance at June 30, 2002 was $28,882,512, representing a positive financial position and the concerted efforts of the Board of Education and administrators to demonstrate fiscal accountability.

Debt Administration On June 30, 1997, the Troy School District voters passed a $71,475,000 bond issue by a 62 percent margin. Approximately 50 percent of the issue is devoted to technology; the other portion will be spent on building improvements. The 1997 Bond issue has been developed not to impact the operational budget of the Troy School District but to work in harmony with the budget. This issue will continue the excellent maintenance program of the Troy School District, as well as enhance instruction to prepare its students to become lifelong learners and meet the challenges of an ever-changing world. Under current State statutes, the School District’s general obligation bonded debt issuances are subject to a legal limitation based on 15 percent of total assessed value of real and personal property. As of June 30, 2002, the School District’s net general obligation bonded debt of $96,645,000 was well below the statutory bonding limit of $562,541,778. Per capita debt totaled only $1,146 at June 30, 2002.

Cash Management In accordance with Michigan statutes, the School District’s cash management guidelines are established to maximize its interest earnings while attempting to minimize the risk of loss of invested principal. Interest-bearing checking accounts, cash management accounts, certificates of deposit in state or national banks, approved savings and loan associations, and commercial paper are all instruments used to achieve this goal. In 2001-2002, the School District’s General Fund earned $696,430 in investment income. Funds are invested in accordance with Section 380.1223 of the Michigan School Code, Act 451 of 1976, as amended, and are approved by the Board of Education annually. An aggressive but prudent review and analysis of the investment portfolio and cash flow needs provide additional revenues not only to the General Fund but all other funds of the School District that have cash resources available.

Risk Management

The School District carries a comprehensive insurance package to protect the School District and its employees. Coverage includes commercial general liability, property damage, garage liability, automobile coverage, school leaders errors and omissions, and various crime and liability coverage. The School District also carries a $10,000,000 commercial umbrella policy.

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The blanket building limit coverage for the 2001-2002 school year was $156,788,469 and $19,488,917 for personal property. Insurance coverage is reviewed annually with the School District’s insurance agent, Emerson-Prew, to assure that the School District is properly protected. Extra expense and other coverages of $11,725,866 provided the School District with a blanket limit of insurance of $188,003,252.

Independent Audit State of Michigan statutes require an annual audit by independent certified public accountants. The accounting firm of Plante & Moran, PLLC was appointed by the Troy Board of Education to perform this service for the 2001-2002 fiscal year. In addition, the OMB Circular A-133 requires governmental recipients of federal assistance to have organizational-wide financial and compliance audits on an annual basis.

Single Audit As a recipient of federal, State, and county financial assistance, the School District is responsible for ensuring that an adequate internal administrative control structure is in place to document compliance with applicable laws and regulations related to those programs. Tests are made by the School District’s auditors to determine the adequacy of the internal and administrative control structure. This control structure is also subject to periodic evaluation by management. The results of the School District’s Single Audit for the fiscal year ended June 30, 2002 indicated no instances of material weaknesses in the internal control structure or significant violations of applicable laws and regulations. Both of these requirements have been met, and the auditor’s report on the general purpose financial statements is included herein.

Other Information Enrollment Enrollment projections are performed annually, and, if necessary, adjustments are made. A five-year projection of enrollment is done utilizing data from the county, City, and School District. Information such as live births, cohort survival ratios, residential building permits, and work force/economic statistics are used in the enrollment projections. Historically, this method has proven to be accurate, within a reasonable variance, for planning future facility needs. Awards This report has been prepared following the guidelines recommended by the Association of School Business Officials (ASBO). The ASBO awarded a Certificate of Excellence in Financial Reporting to the Troy School District for its Comprehensive Annual Financial Report for the fiscal years ended June 30, 1989-2001. In order to be awarded a Certificate of Excellence, the School District 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.

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A Certificate of Excellence is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report continues to meet the Certificate of Excellence Program’s requirements, and we are submitting it to ASBO to determine its eligibility for another certificate. Acknowledgments The preparation of this report was accomplished through the commitment and dedication of the Business Office, especially Director of Finance, Lisa Levesque, and Accountant, Amy Dagenhardt. The Comprehensive Annual Financial Report (CAFR) was prepared by the Troy School District’s Business Services Department. Continued diligence in fiscal management and timely communication between the administration and Board of Education will facilitate efforts to exceed the present high level of excellence expected by the School District’s constituents. In order for the community to know the content of this report, copies will be made available in each school building, at the City of Troy Library, and at the offices of the City Manager and Chamber of Commerce. Respectfully submitted, Michael M. Adamczyk Treasurer/Assistant Superintendent - Business Services Janet H. Jopke, Ed.D. Superintendent of Schools

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TROY SCHOOL DISTRICT

DISTRICT OFFICIALS ADMINISTRATION BOARD OF EDUCATION Janet H. Jopke, Ed.D. Gary N. Hauff Superintendent President Barbara A. Fowler, Ph.D. Anthony J. Spagnola Deputy Superintendent Vice President Michael M. Adamczyk Lee Gillett Assistant Superintendent - Business Services Secretary Maureen E. Kelly Ida Edmunds Assistant Superintendent - Human Resources Trustee Michael J. Williams Paula Fleming Assistant Superintendent - Elementary Education Trustee Robert Stromayer Mary Kerwin Director, Continuing Education Trustee Tim McAvoy Rebecca J. Rader Supervisor, Information Services Trustee

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.

Superintendent

Deputy Superintendent

Board of Education

Legend: Direct Supervision - - - - - - - - - Shared Supervision

Troy School District Organizational Chart Dated: January 2002

Supervisor: - Transportation

Supervisor: - Data Processing - Purchasing & Budgeting

Director: - Food Services

Director: - Maintenance - Operations - Finance

High SchoolAssistant Principals

Middle School Assistant Principals

Assistant Superintendent: - Elementary Education

Elementary Principals

Director: - Athletics & Phys Education - Eval & Research - Fine Arts - Curriculum & Staff Development - Career Education Services

Director: - Technology

Assistant Superintendent: - Business Services

Assistant Superintendent: - Human Resources

Director: - Continuing Education

Supervisor: - Information Services

Director: - Media

Director: - Special Education

Supervisor:- Special Education

Supervisor:- Cable

Middle School Principals

High School Principals

Independent Auditor’s Report

To the Board of Education Troy School District We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Troy School District as of and for the year ended June 30, 2002, which collectively comprise the School District’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Troy School District’s management. Our responsibility is to express opinions on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Troy School District, as of June 30, 2002 and the respective changes in financial position, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

As described in Note 1, the School District has implemented a new financial reporting model, as required in the provisions of the GASB Statement No. 34, Basic Financial Statements - and Management’s Discussion and Analysis - for State and Local Governments, as of July 1, 2001. In adopting this statement, the financial statements now include a Management’s Discussion and Analysis, government-wide full accrual financial statements, and reorganized fund statements. In addition, the governmental funds now accrue a liability for compensated absences only to the extent that they come due for payment prior to year end.

The management’s discussion and analysis and budgetary comparison information on pages 3 through 11 and 33 to 34 are not required parts of the basic financial statements but are supplemental information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplemental information. However, we did not audit the information and express no opinion on it.

To the Board of Education Troy School District

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Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Troy School District’s basic financial statements. The accompanying other supplemental information, as identified in the table of contents, is presented for the purpose of additional analysis and is not a required part of the basic financial statements. The other supplemental information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

The accompanying introductory section and statistical tables, as identified in the table of contents, are presented for the purpose of additional analysis and are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.

In accordance with Government Auditing Standards, we have also issued a report under separate cover dated August 28, 2002 on our consideration of the School District’s internal control over financial reporting and our tests of compliance with certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.

August 28, 2002

Troy School District Management’s Discussion and Analysis

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This section of the 2002 annual financial report presents our discussion and analysis of the School District’s financial performance during the year ended 2002. Please read it in conjunction with the School District’s financial statements, which immediately follow this section.

Using this Annual Report

This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand Troy School District financially as a whole. The District-wide Financial Statements provide information about the activities of the whole School District, presenting both an aggregate view of the School District’s finances and a long-term view of those finances. The fund financial statements provide the next level of detail. For governmental activities, these statements tell how services were financed in the short-term as well as what remains for future spending. The fund financial statements look at the School District’s operations in more detail than the government-wide financial statements by providing information about the School District’s most significant funds, the General Fund, Durant Fund, and 1997 Capital Project Fund with all other funds presented in one column as nonmajor funds. The remaining statement, the statement of fiduciary net assets, presents financial information about activities for which the School District acts solely as an agent for the benefit of students and parents.

Financial Section

• Basic Financial Statements o District-wide Financial Statements o Fund Financial Statements o Fiduciary Fund o Notes to Financial Statements

• Required Supplemental Information

o Budgetary Comparison Schedules

• Other Supplemental Information o Combining Balance Sheet Nonmajor Governmental

Funds o Combining Statement of Revenue, Expenditures and

Changes in Fund Balances - Nonmajor Governmental Funds

o Schedule of Bonded Indebtedness

Troy School District Management’s Discussion and Analysis (Continued)

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Reporting the School District as a Whole - District-wide Financial Statements

One of the most important questions asked about the School District is, “As a whole, what is the School District’s financial condition as a result of the year’s activities?” The statement of net assets and the statement of activities, which appear first in the School District’s financial statements, report information on the School District as a whole and its activities in a way that helps answer this question. These statements include all assets and liabilities, using the accrual basis of accounting, which is similar to the accounting used by most private sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid.

These two statements report the Troy School District’s net assets - the difference between assets and liabilities, as reported in the statement of net assets - as one way to measure the School District’s financial health or financial position. Over time, increases or decreases in the School District’s net assets, as reported in the statement of activities, are indicators of whether its financial health is improving or deteriorating. The relationship between revenues and expenses is the School District’s operating results. However, the School District’s goal is to provide services to our students, not to generate profits as commercial entities do. Many other nonfinancial factors, such as the quality of the education provided and the safety of the schools, must be considered to assess the overall health of the School District.

The statement of net assets and the statement of activities report the governmental activities for the School District, which encompass all of the School District’s services, including instruction, support services, community services, athletics, and food services. Property taxes, unrestricted state aid (foundation allowance revenue), and State and federal grants finance most of these activities.

Reporting the School District’s Most Significant Funds - Fund Financial Statements

The School District’s fund financial statements provide detailed information about the most significant funds, not the School District as a whole. Some funds are required to be established by State law and by bond covenants. However, the School District establishes many other funds to help it control and manage money for particular purposes, such as the Food Services and Athletics Funds. Funds are also established to show that it’s meeting legal responsibilities for using certain taxes, grants, and other money, including the 1997 Bond Issue, which funded construction for voter-approved capital projects. The governmental funds of the School District use the following accounting approach:


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Governmental funds - All of the School District’s services are reported in governmental funds. Governmental fund reporting focuses on showing how money flows into and out of funds and the balances left at year end that are available for spending. They are reported using the modified accrual method of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the operations of the School District and the services it provides. Governmental fund information helps to determine whether there are more or less financial resources that can be spent in the near future to finance the School District’s programs. We describe the relationship between governmental activities and governmental funds in a reconciliation format in the financial section on pages 15 and 17.

The School District as Trustee - Reporting the School District’s Fiduciary Responsibilities

The School District acts as the trustee for its student activity funds. All of the School District’s fiduciary activities are reported in separate statements of fiduciary net assets. These activities are excluded from the School District’s other financial statements because the School District cannot use these assets to finance its operations. The School District is responsible for ensuring that the assets reported in these funds are used for their intended purposes.


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The School District as a Whole

The statement of net assets provides the perspective of the School District as a whole. Table 1 provides a summary of the School District’s net assets as of June 30, 2002.

TABLE 1

Governmental Activities(in millions)

AssetsCurrent and other assets 58.1$ Capital assets 119.7

Total assets 177.8

LiabilitiesCurrent liabilities 11 Long-term liabilities 108.9

Total liabilities 120.1

Net AssetsInvested in property and equipment - Net of related debt 22 Restricted 5.2Unrestricted 30.2

Total net assets 57.8$

The above analysis focuses on the net assets (see Table 1). The change in net assets (see Table 2) of the School District’s governmental activities is discussed below. The School District’s net assets were $57.8 million at June 30, 2002. Capital assets, net of related debt, totaled $22.4 million. This compares the original cost, less depreciation of the School District’s capital assets, to long-term debt used to finance the acquisition of those assets. Most of the debt will be repaid from voter-approved property taxes collected as the debt service comes due. Restricted net assets of $5.2 million are reported separately to show legal constraints from debt covenants and enabling legislation that limit the School District’s ability to use those net assets for day-to-day operations. The remaining amount of net assets, $30.2 million, was unrestricted.

The $30.2 million in unrestricted net assets of governmental activities represents the accumulated results of all past years’ operations. The unrestricted net asset balance is used for working capital and cash flow needs as well as to provide for future uncertainties. The operating results of the General Fund will have a significant impact on the change in unrestricted net assets from year to year.


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The results of this year’s operations for the Troy School District as a whole are reported in the statement of activities (see Table 2), which shows the changes in net assets for fiscal year 2002. Since this is the first year the Troy School District has prepared financial statements following GASB Statement No. 34, revenue and expense comparison to fiscal year 2001 is not available.

As reported in the statement of activities, the cost of all governmental activities this year was $135 million. Certain activities were partially funded from those who benefited from the programs ($6.3 million) or by other governments and organizations that subsidized certain programs with grants and contributions ($9.5 million). The remaining “public benefit” portion of governmental activities was funded with $58.3 million in taxes, $64.3 million in State foundation allowance, and with other revenues, such as interest and general entitlements.

The Troy School District experienced an increase in net assets of $5 million. The assets increased primarily as a result of ongoing operations in the School District. In addition, long-term debt decreased by $7 million in 2002, and net capital assets increased by $1.4 million.

TABLE 2

Governmental Activities(in millions)

RevenueProgram revenue:

Charges for services 6.3$ Operating grants 9.5

General revenue:Property taxes 58.3 State foundation allowance 64.3 Other 1.6

Total revenue 140.0

Functions/Program ExpensesInstruction 77.9 Support services 45.3 Community services 2.3 Food services 2.8 Athletics 1.8 Interest on long-term debt 4.9

Total expenses 135.0

Increase in Net Assets 5.0$


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As discussed above, the net cost shows the financial burden that was placed on the State and the Troy School District’s taxpayers by each of these functions. Since property taxes for operations and unrestricted State aid constitute the vast majority of School District operating revenue sources, the Board of Education and Administration must annually evaluate the needs of the School District and balance those needs with State-prescribed available unrestricted revenues.

The School District’s Funds

As noted earlier, the Troy School District uses funds to help it control and manage money for particular purposes. Looking at funds helps the reader consider whether the Troy School District is being held accountable for the resources taxpayers and others provide to it and may give more insight into the School District’s overall financial health.

As the School District completed this year, the governmental funds reported a combined fund balance of $47.6 million, a decrease of $4.4 million from the prior year. The changes are by major and nonmajor funds are as follows:

GeneralFunds

CapitalProjects

FundDurantFund

OtherNonmajor

Funds Total

Fund balances - Beginning of year 30,089,330$ 12,142,921$ 5,939,818$ 3,860,797$ 52,032,866$

Increase (decrease) 3,534,527 (6,744,942) (62,174) (1,132,234) (4,404,823)

Fund balances - End of year 33,623,857$ 5,397,979$ 5,877,644$ 2,728,563$ 47,628,043$ In the General Fund, our principal operating fund, the fund balance increased by $3.5 million from last year. Revenues increased by $7 million from the prior year and expenditures increased by approximately $5.4 million for a net increase of $1.6 million. By comparison, the General Fund balance increased by $1.9 million for the year ended June 30, 2001. Revenues increased primarily as a result of increase in the State foundation allowance of $300 per student and an increase in the funds received from the special education millage in Oakland County. The School District also received approximately $312,000 in the current year from the sale of capital assets. Expenditure increases are a normal part of operations as a result of salary and benefit increases, increased costs for utilities, and other operating expenses. The fund balance of the General Fund is available to fund costs related to allowable school operating purposes. The Durant Fund decreased slightly as funds were used to partially pay for major projects within the School District, including middle school tracks, storage units, and athletic fields.


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The other nonmajor funds decreased by $1.1 million. The Adult and Community Education Fund decreased by approximately $500,000 due to major renovations at the Niles Continuing Education Center. Combined, the Debt Service Funds showed a fund balance decrease of approximately $670,000. Millage rates were decreased in order to adjust the Debt Service Funds balance as the 1976 debt fund was paid in full in 2002. Millage rates are determined annually to ensure that the School District accumulates sufficient resources to pay annual bond issue related debt service. The 1997 Capital Project Fund balance decreased by $6.7 million as the School District continued renovation projects and technology upgrades. The expenditures for the bond issue are estimated to be about 94.5 percent complete at June 30, 2002. General Fund Budgetary Highlights

Over the course of the year, the School District revises its budget as it attempts to deal with unexpected changes in revenues and expenditures. State law requires that the budget be amended to ensure that expenditures do not exceed appropriations. The final amendment to the budget was actually adopted just before year end. A schedule showing the School District’s original and final budget amounts compared with amounts actually paid and received is provided in required supplemental information of these financial statements.

There were revisions made to the 2001-2002 General Fund original budget. Budgeted revenues increased by $5.3 million primarily for increases in the special education millage in Oakland County and for increases in State aid as enrollment was slightly higher than anticipated. The amount budgeted for the sale of fixed assets decreased by $1.5 million to reflect a change in the sale of property in the School District. The net change in revenue and other financing sources was an increase of $3.8 million. Budgeted expenditures also had an increase of $1.3 million to account for the changes in the general operating plan of the School District, including increased tuition for special education and increases in capital outlay expenditures. The budget for operating transfers out was increased by approximately $300,000 to account for changes in transfers to other funds within the School District. There were no significant variances between the final budget amounts and actual.


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Capital Asset and Debt Administration

Capital Assets

At June 30, 2002, the School District had $119.7 million invested in a broad range of capital assets, including land, buildings, and furniture and equipment. This amount represents a net increase (including additions, deductions, and depreciation) of approximately $1.4 million, or 1 percent, from last year.

2002 2001

Land 2,797,861$ 2,801,596$ Buildings and construction in progress 84,261,670 83,974,623 Furniture and equipment 32,675,196 31,543,114

Total capital assets 119,734,727$ 118,319,333$

This year’s additions of $9.9 million included building renovations, technology, school buses and other vehicles, food service equipment, and sports apparatus. No new debt was issued for these additions. There are capital projects planned for the 2002-2003 fiscal year. We anticipate capital additions will be less than the 2001-2002 fiscal year. We present more detailed information about our capital assets in the notes to financial statements. Debt

At the end of this year, the School District had $96.6 million in bonds outstanding versus $104.4 million in the previous year - a change of 7.5 percent. Those bonds consisted of the following:

2002 2001

General Obligation Bonds 96,645,000$ 104,410,000$

The School District’s general obligation bond rating continues to be AAA. The State limits the amount of general obligation debt that schools can issue to 15 percent of the assessed value of all taxable property within the School District’s boundaries. The School District’s outstanding unqualified general obligation debt of $96.6 million is significantly below this $562.5 million statutorily imposed limit.

Other obligations include accrued vacation pay, sick leave, and “incurred but not yet reported” health care claims. We present more detailed information about our long-term liabilities in the notes to financial statements.


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Economic Factors and Next Year’s Budgets and Rates

Our elected officials and administration consider many factors when setting the School District’s 2003 fiscal year budget. One of the most important factors affecting the budget is our student count. The State foundation revenue is determined by multiplying the blended student count by the foundation allowance per pupil. The blended count for the 2003 fiscal year is 20 percent of the February 2002 and 80 percent of the September 2002 student counts. The 2002-2003 budget was adopted in June 2002, based on an estimate of students that will be enrolled in September 2002. Approximately 88.7 percent of total General Fund revenue is from the foundation allowance. Under State law, the School District cannot assess additional property tax revenue for general operations. As a result, School District funding is heavily dependent on the State’s ability to fund local school operations. Based on early enrollment data at the start of the 2002-2003 school year, we anticipate that the fall student count will be close to the estimates used in creating the 2002-2003 budget. Once the final student count and related per pupil funding is validated, State law requires the School District to amend the budget if actual School District resources are not sufficient to fund original appropriations.

Since the School District’s revenue is heavily dependent on State funding and the health of the State’s School Aid Fund, the actual revenue received depends on the State’s ability to collect revenues to fund its appropriation to school districts. The State periodically holds a revenue-estimating conference to estimate revenues. If actual State revenues are less than their estimates, reduction to the per pupil funding allowance may be necessary. Of particular concern is the estimated $1 billion shortfall in the State’s general budget for the fiscal year beginning October 1, 2002 and what effect this may have on the School Aid Fund. The School District undesignated General Fund balance of $33,623,857 is sufficient to meet any unanticipated shortfalls the State may experience in the School Aid Fund.


See Notes to Financial Statements. 12

Statement of Net Assets June 30, 2002

Governmental Activities

AssetsCash and investments (Note 3) 37,094,366$ Restricted cash and investments (Notes 3 and 10) 7,336,765 Receivables:

Accounts receivable - Net of allowable for uncollectibles 652,999 Due from other governmental units 12,374,619

Inventories 362,733 Prepaids 242,699 Capital assets - Less accumulated depreciation of $65,634,506 (Note 5) 119,734,727

Total assets 177,798,908

Liabilities

Accounts payable 4,013,436 Accrued payroll and other liabilities 6,472,130 Deferred revenue (Note 4) 668,481 Long-term liabilities (Note 7):

Bonds and contracts payable, due within one year 8,110,000 Bonds and contracts payable, due in more than one year 88,535,000 Compensated absences and other liabilities, due in more than one year 12,236,014

Total liabilities 120,035,061

Net Assets

Investment in capital assets - Net of related debt 22,371,818

Restricted for: Debt service 831,593 Capital projects 4,328,026

Unrestricted 30,232,410

Total net assets 57,763,847$



Statement of Activities Year Ended June 30, 2002

Program Revenue

Governmental

Activities

Expenses

Charges for

Services

Operating Grants/

Contributions

Net (Expense)

Revenue and

Changes in Net

Assets

Functions/Programs

Primary government - Governmental activities:Instruction 77,948,704$ 1,068,854$ 5,856,656$ (71,023,194)$ Support services 45,276,940 211,659 2,781,048 (42,284,233) Food services 2,756,344 2,354,748 355,122 (46,474) Athletics 1,787,558 117,806 - (1,669,752) Community services 2,287,575 2,546,849 505,250 764,524 Interest on long-term debt 4,975,874 - - (4,975,874)

Total primary government - Governmental activities 135,032,995$ 6,299,916$ 9,498,076$ (119,235,003)$

General revenue:Taxes:

Property taxes, levied for general purposes 46,516,312$ Property taxes, levied for debt services 11,762,578

State aid not restricted to specific purposes 64,340,336 Interest and investment earnings 1,180,674 Other 128,690

Special item - Gain on sale of capital assets 325,100

Total general revenue and special item 124,253,690

Change in Net Assets 5,018,687

Net Assets - Beginning of year 52,745,160

Net Assets - End of year 57,763,847$



Governmental Funds Balance Sheet June 30, 2002

General Fund

Special Revenue

Durant Fund1997 CapitalProject Fund

Other Nonmajor Governmental

Funds Total

Assets

Cash and investments (Note 3) 28,854,159$ 5,948,932$ 6,504,501$ 3,123,539$ 44,431,131$ Receivables:

Accounts receivable 476,595 - - 176,404 652,999 Due from other funds (Note 6) 36,283 315,155 - 101,265 452,703 Due from other governmental units 12,374,619 - - - 12,374,619

Inventories 318,933 - - 43,800 362,733 Prepaids 234,069 - - 8,630 242,699

Total assets 42,294,658$ 6,264,087$ 6,504,501$ 3,453,638$ 58,516,884$

Liabilities and Fund Balances

LiabilitiesAccounts payable 2,275,920$ 386,443$ 1,106,522$ 244,551$ 4,013,436$ Accrued payroll and other liabilities 5,665,250 - - 88,971 5,754,221 Due to other funds (Note 6) 262,761 - - 189,942 452,703 Deferred revenue (Note 4) 466,870 - - 201,611 668,481

Total liabilities 8,670,801 386,443 1,106,522 725,075 10,888,841

Fund BalancesReserved:

Inventory and prepaid items 553,002 - - 52,430 605,432 Purchase commitments 2,142,252 2,428,900 673,444 114,544 5,359,140 2002-03 budget deficit 2,046,091 - - - 2,046,091

Unreserved:Designated for Durant projects - 3,448,744 - - 3,448,744 Designated for Capital Projects Funds - - 4,724,535 - 4,724,535 Designated for debt service - - - 831,593 831,593 Undesignated 28,882,512 - - 1,729,996 30,612,508

Total fund balances 33,623,857 5,877,644 5,397,979 2,728,563 47,628,043

Total liabilities and fundbalances 42,294,658$ 6,264,087$ 6,504,501$ 3,453,638$ 58,516,884$



Reconciliation of Governmental Fund Balances to Governmental Net Assets Year Ended June 30, 2002

Fund balances - Total Governmental Funds 47,628,043$ Amounts reported for governmental activities in the statement of net assets are different because:

Capital assets used in governmental activities are not financial resources and are not reportedin the funds.

The cost of the capital assets is 185,369,233 Accumulated depreciation is (65,634,506)

Total 119,734,727

Long-term liabilities are not due and payable in the current period and are not reportedin the funds:

Bonds payable (96,645,000) Compensated absences (9,013,560) Other long-term liabilities (3,222,454)

Accrued interest payable is not included as a liability in governmental activities (717,909)

Net assets of governmental activities 57,763,847$



Governmental Funds Statement of Revenue, Expenditures, and

Changes in Fund Balances Year Ended June 30, 2002

General Fund

Special

Revenue

Durant Fund

1997 Capital

Project Fund

Other Nonmajor

Governmental

Funds Total

RevenueLocal sources 48,746,273$ 137,767$ 244,602$ 16,827,401$ 65,956,043$ State sources 63,544,728 - - 89,209 63,633,937 Federal sources 3,185,753 - - 265,913 3,451,666

Interdistrict and other sources 6,684,936 - - - 6,684,936

Total revenue 122,161,690 137,767 244,602 17,182,523 139,726,582

ExpendituresCurrent:

Instruction 72,129,557 - - 493,244 72,622,801 Support services 42,068,454 515,096 - 81,195 42,664,745 Community services 409,224 - - 2,369,310 2,778,534 Food services - - - 2,750,326 2,750,326 Athletics - - - 1,655,818 1,655,818

Debt service principal - - - 7,765,000 7,765,000 Debt service interest - - - 5,014,248 5,014,248 Other bond expenditures - - - 31,254 31,254 Capital outlay - - 6,989,544 - 6,989,544

Intergovernmental transfers 2,478,909 - - - 2,478,909

Total expenditures 117,086,144 515,096 6,989,544 20,160,395 144,751,179

Excess of Revenue Over (Under) Expenditures 5,075,546 (377,329) (6,744,942) (2,977,872) (5,024,597)

Other Financing Sources (Uses)Proceeds from sale of capital assets 311,490 - - 308,284 619,774

Operating transfers in - 315,155 - 1,537,354 1,852,509

Operating transfers out (1,852,509) - - - (1,852,509)

Total other financing sources (uses) (1,541,019) 315,155 - 1,845,638 619,774

Net Change in Fund Balances 3,534,527 (62,174) (6,744,942) (1,132,234) (4,404,823)

Fund Balances - Beginning of year - As adjusted(Note 1) 30,089,330 5,939,818 12,142,921 3,860,797 52,032,866

Fund Balances - End of year 33,623,857$ 5,877,644$ 5,397,979$ 2,728,563$ 47,628,043$



Governmental Funds Reconciliation of the Statement of Revenue, Expenditures,

and Changes in Fund Balances of Governmental Funds to the Statement of Activities

Year Ended June 30, 2002

Net Change in Fund Balances - Total Governmental Funds (4,404,823)$

Amounts reported for governmental activities in the statement of activities are different because:Governmental funds report capital outlays as expenditures; in the statement of activities, these costs are allocated over their estimated useful lives as depreciation.

Depreciation expense (8,490,564) Capital outlay, including $2,930,895 reported as instructional and support services

expenditures 9,920,439

Total 1,429,875

The net effect of other transactions involving capital assets that increased (decreased)net assets:

Proceeds from the sale of land (339,581) Proceeds from installment land contract (280,193) Gain on sale of fixed assets 325,100

Accrued interest is recorded in the statement of activities when incurred; it is not reported ingovernmental funds until paid 38,374

Repayment of bond principal is an expenditure in the governmental funds, but not in the statement of activities (where it reduces long-term debt) 7,765,000

Decreases in compensated absences are reported as expenditures when financial resources are used in the governmental funds 484,935

Change in Net Assets of Governmental Activities 5,018,687$



Fiduciary Fund - Trust and Agency Statement of Fiduciary Net Assets

June 30, 2002

Student Activities

Agency Fund

Assets - Cash and investments 1,239,743$

LiabilitiesAccounts payable 47,632$ Due to student groups 1,192,111

Total liabilities 1,239,743$

Troy School District Notes to Financial Statements

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Note 1 - Summary of Significant Accounting Policies

The accounting policies of the Troy School District (the “School District”) conform to accounting principles generally accepted in the United States of America (GAAP) as applicable to governmental units. The following is a summary of the significant accounting policies used by the School District:

Reporting Entity

The School District is governed by an elected seven-member Board of Education. The accompanying financial statements have been prepared in accordance with criteria established by the Governmental Accounting Standards Board for determining the various governmental organizations to be included in the reporting entity. These criteria include significant operational and financial relationships that determine which of the governmental organizations are a part of the School District’s reporting entity, and which organizations are legally separate, component units of the School District. Based on application of the criteria, the entity does not contain any component units.

District-wide and Fund Financial Statements

The district-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the nonfiduciary activities of the primary government. Substantially all interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenue, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. All the School District’s government-wide activities are considered governmental activities.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenue. Direct expenses are those that are clearly identifiable with a specific function. Program revenue includes (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes, intergovernmental payments, and other items not properly included among program revenue are reported instead as general revenue.

Separate financial statements are provided for governmental funds and fiduciary funds, although the fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.


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Note 1 - Summary of Significant Accounting Policies (Continued)

Measurement Focus, Basis of Accounting, and Financial Statement Presentation

District-wide Statements - The district-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenue is recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenue in the year for which they are levied. Grants, categorical aid, and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

The effect of interfund activity has been substantially eliminated from the government-wide financial statements.

Amounts reported as program revenue include (1) charges to customers or applicants for goods, services, or privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions. Internally dedicated resources are reported as general revenue rather than as program revenue. Likewise, general revenue includes all taxes and unrestricted State aid.

Fund-based Statements - Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenue is recognized as soon as it is both measurable and available. Revenue is considered to be available if it is collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenue to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, unrestricted State aid, intergovernmental grants, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenue of the current fiscal period. All other revenue items are considered to be available only when cash is received by the government.

Fiduciary fund statements also are reported using the economic resources measurement focus and the accrual basis of accounting. Fiduciary funds are custodial in nature (assets equal liabilities) and do not report the measurement of results of operations.


June 30, 2002

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The School District reports the following major governmental funds:

The General Fund is the School District’s primary operating fund. It accounts for all financial resources of the School District, except those required to be accounted for in another fund.

The Special Revenue Durant Fund is used to account for the proceeds of the revenue received from the Durant litigation, which is internally restricted to expenditure for specified purposes.

The 1997 Capital Project Fund is used to record the bond proceeds and other revenue and the disbursement of money specifically designated for acquiring new school sites, buildings, equipment, and for major remodeling and repairs. The fund is retained until the purpose for which it was created has been accomplished.

The School District’s only fiduciary fund is the Trust and Agency - Student Activities Fund, which accounts for assets held by the School District in a trustee capacity or as an agent.

Additionally, the School District reports the following nonmajor governmental fund types:

The School District maintains four governmental Debt Service Funds, which are used to account for property tax and other revenue legally restricted for payment of long-term debt.

The School District maintains three nonmajor governmental Special Revenue Funds, which account for the School District’s food services, athletics, and adult and community education activities.

Assets, Liabilities, and Net Assets or Equity

Deposits and Investments - Cash and cash equivalents include cash on hand, demand deposits, and short-term investments with a maturity of nine months or less when acquired. Investments are stated at fair value. Pooled investment income from the General Fund and various Debt Service Funds is allocated to each fund using a weighted average of balance for the principal invested.


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Receivables and Payables - In general, outstanding balances between funds are reported as “due to/from other funds.”

Property tax and other trade receivables are shown net of an allowance for uncollectible amounts. Property taxes are levied on July 1 for approximately 50 percent of the taxes due September 1 and December 1 for the remainder of the property taxes that are due on February 14. The properties are assessed on the taxable valuation of property as of the preceding December 31. Taxes are considered delinquent on March 1 of the following year. At this time, penalties and interest are assessed and the total obligation is added to the county tax rolls.

Inventories and Prepaid Items - Inventories are valued at cost, on a first-in, first-out basis. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future fiscal years and are recorded as prepaid items in both government-wide and fund financial statements.

Restricted Assets - The unspent bond proceeds of the Capital Projects Fund requires amounts to be set aside for construction and fixed asset acquisition. The property taxes levied in the Debt Service Funds are required to be set aside for future principal and interest payments on bonded debt. These amounts have been classified as restricted assets.

Capital Assets - Capital assets, which include land, buildings, equipment, and vehicles, are reported in the applicable governmental column in the government-wide financial statements. Capital assets are defined by the government as assets with an initial individual cost of more than $1,000 and an estimated useful life in excess of five years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Costs of normal repair and maintenance that do not add to the value or materially extended asset life are not capitalized. The School District does not have infrastructure-type assets.

Buildings, equipment, and vehicles are depreciated using the straight-line method over the following useful lives:

Buildings and additions 20-50 yearsBuses and other vehicles 5-10 yearsFurniture and other equipment 5-20 years


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Compensated Absences - The liability for compensated absences reported in the government-wide statements consists of unpaid, accumulated annual and sick leave balances. The liability has been calculated using the vesting method, in which leave amounts for both employees who are currently eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included.

Long-term Obligations - In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the statement of net assets. In the fund financial statements, governmental fund types recognize bond proceeds, premiums and discounts, as well as bond issuance costs, during the current period.

Fund Equity - In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. Comparative Data - Comparative data is not included in the School District’s financial statements. Accounting Change - Effective July 1, 2001, the School District implemented the provisions of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management’s Discussion and Analysis - for State and Local Governments (GASB No. 34). Changes to the School District’s financial statements as a result of GASB No. 34 are as follows:

A Management’s Discussion and Analysis (MD&A) section providing analysis of the School District’s overall financial position and results of operations has been included.

District-wide financial statements (statement of net assets and statement of activities) prepared using full accrual accounting for all of the School District’s activities have been provided.


June 30, 2002

24


In the June 30, 2001 financial statements, capital assets of $181,269,293, including land, buildings, computers, and furniture and fixtures were reported in the General Fixed Assets Account Group. These previously reported assets have been adjusted by $4,931,189 to reflect the accurate historical cost at that date and the adoption of new accounting policies that adjusted capitalization thresholds for various classes of assets. Capital assets of $119,734,727 (net of depreciation of $65,634,506) are currently recorded in the governmental activities column of the statement of net assets. In addition, the governmental activities column includes bonds and other long-term obligations totaling $108,881,014 previously reported in the General Long-term Debt Account Group.

The fund financial statements focus on major funds rather than fund types.

The governmental funds now accrue a liability for compensated absences only to the extent they come due for payment prior to year end.

As a result of adoption of GASB No. 34, the following change has been made as of July 1, 2001:

GovernmentalFunds

Fund balance - As previously reported 50,780,692$

Increase to fund balance resulting from adoption ofGASB No. 34 related to prior recognition ofcompensated absence liabilities in thegovernmental funds 1,252,174

Fund balance - As adjusted 52,032,866$

Note 2 - Stewardship, Compliance, and Accountability

Budgetary Information - Annual budgets are adopted on a basis consistent with generally accepted accounting principles and State law for the General Special Revenue, Debt Service, and Capital Projects Funds. All annual appropriations lapse at fiscal year end. The budget document presents information by General and major Special Revenue Fund by function. The legal level of budgetary control adopted by the governing body (i.e., the level at which expenditures may not legally exceed appropriations) is the function level. State law requires the School District to have its budget in place by July 1. Expenditures in excess of amounts budgeted are a violation of Michigan law. State law permits districts to amend their budgets during the year.


June 30, 2002

25

Note 2 - Stewardship, Compliance, and Accountability (Continued)

The School District increased/decreased budgeted amounts during the year in response to changes in anticipated spending for salaries, benefits, and other expenditures.

Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders and contracts) outstanding at year end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the goods or services have not been received as of year end. The commitments will be reappropriated and honored during the subsequent year.

Excess of Expenditures Over Appropriations in Budgeted Funds - The School District did not have significant General Fund expenditure budget variances. Significant budget variances existed in the Durant Special Revenue Fund due to the timing of expenditure for approved purchases differing from anticipated when the budget was established.

Capital Projects Fund Compliance - The Capital Projects Fund includes capital project activities funded with bonds issued after May 1, 1994. For this capital project, the School District has complied with the applicable provisions of §1351a of the State of Michigan’s School Code.

Note 3 - Deposits and Investments

State statutes and the School District’s investment policy authorize the School District to make deposits in the accounts of federally insured banks, credit unions, and savings and loan associations that have offices in Michigan; the School District is allowed to invest in U.S. Treasury or Agency obligations, U.S. government repurchase agreements, bankers’ acceptances, commercial paper rated prime at the time of purchase that mature not more than 270 days after the date of purchase, mutual funds, and investment pools that are composed of authorized investment vehicles. The School District’s deposits are in accordance with statutory authority.

At year end, the School District’s deposits and investments include the following categories:

Governmental Activities Fiduciary Funds

Cash deposits 28,615,811$ 1,239,743$ Cash equivalent investments 8,478,555 - Restricted cash and investments 7,336,765 -

Total 44,431,131$ 1,239,743$


June 30, 2002

26

Note 3 - Deposits and Investments (Continued)

The breakdown between deposits and investments for the School District is as follows:

Deposits (checking and savings accounts, certificates of deposit) 37,191,377$ Investments in short-term commercial paper 8,478,555 Petty cash and cash on hand 942

Total 45,670,874$

The deposits of the School District were reflected in the accounts of the financial institution at $35,865,076, of which $200,000 is covered by federal depository insurance.

Investments are categorized into these three categories of credit risk:

Category 1 - Insured or registered, or securities held by the School District or its agent in the School District’s name

Category 2 - Uninsured and unregistered, with securities held by the counterparty’s trust department or agent in the School District’s name

Category 3 - Uninsured and unregistered, with securities held by the counterparty or by its trust department or agent but not in the School District’s name

At year end, the School District’s investment balances were categorized as follows:

Category

1 2 3 Carrying Amount

Commercial paper 8,478,555$ - $ - $ 8,478,555$

Note 4 - Deferred Revenue

Governmental funds report deferred revenue in connection with receivables for revenue that is 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 yet earned. At the end of the current fiscal year, deferred revenue consists of grant and categorical aid payments and fees for services received prior to meeting spending restrictions or providing the related services.


June 30, 2002

27

Note 5 - Capital Assets

Capital asset activity of the School District’s governmental activities was as follows:

Balance

July 1, 2001 Additions

Disposals and

Adjustments

Balance

June 30, 2002

Assets not being depreciated:Land 2,801,596$ - $ (3,735)$ 2,797,861$ Construction in progress - 458,996 - 458,996

Capital assets being depreciated:Buildings and building improvements 123,256,719 2,867,300 - 126,124,019 Furniture and equipment 50,279,789 6,594,143 (885,575) 55,988,357

Subtotal 176,338,104 9,920,439 (889,310) 185,369,233

Accumulated depreciation:Buildings and building improvements 39,282,096 3,039,249 - 42,321,345 Furniture and equipment 18,736,675 5,451,315 (874,829) 23,313,161

Subtotal 58,018,771 8,490,564 (874,829) 65,634,506

Net capital assets being depreciated 115,517,737 970,879 (10,746) 116,477,870

Net capital assets 118,319,333$ 1,429,875$ (14,481)$ 119,734,727$

Depreciation expense was charged to specific activities of the School District as follows:

Governmental activities:Instruction 3,332,529$ Support services 4,961,015 Food services 53,931 Athletics 143,051 Community services 38

Total governmental activities 8,490,564$

Construction Commitments - The School District has active construction projects at year end. The projects include the 1997 Bond issue and various projects. At year end, the School District’s commitments with contractors are as follows:

Spent to Date Remaining

Commitment

1997 Bond issue 74,914,516$ 134,495$ High school athletics fields project 386,442 1,924,158

Total 75,300,958$ 2,058,653$


June 30, 2002

28

Note 6 - Interfund Receivables, Payables, and Transfers

The composition of interfund balances is as follows:

Fund Due To General Fund

NonmajorGovernmental

Funds Total

Special Revenue Durant 262,761$ 52,394$ 315,155$ General Fund - 36,283 36,283 Nonmajor governmental funds - 101,265 101,265

Total 262,761$ 189,942$ 452,703$

Fund Due From

The composition of interfund transfers is as follows:

Transfers Out General Fund

Transfers in:Special Revenue Durant Fund 315,155$ Nonmajor governmental funds 1,537,354

Total 1,852,509$

Note 7 - Long-term Debt

The School District issues bonds, notes, and other contractual commitments to provide for the acquisition and construction of major capital facilities and the acquisition of certain equipment. General Obligation Bonds are direct obligations and pledge the full faith and credit of the School District. Other long-term obligations include compensated absences, termination benefits, arbitrage rebates, and certain risk liabilities.

Long-term obligation activity can be summarized as follows:

Beginning

Balance Reductions

Ending

Balance

Due Within

One Year

Governmental ActivitiesBonds 104,410,000$ 7,765,000$ 96,645,000$ 8,110,000$ Other obligations - As adjusted 12,720,949 484,935 12,236,014 -

Total governmental activities 117,130,949$ 8,249,935$ 108,881,014$ 8,110,000$


June 30, 2002

29

Note 7 - Long-term Debt (Continued)

Adjustments to the beginning balance of other obligations of $1,252,174 have been made to reflect obligations previously recorded in governmental funds at July 1, 2001, which were moved to long-term debt as a result of the adoption of GASB Statement No. 34.

Annual debt service requirements to maturity for the above (governmental) bond obligations are as follows:

Principal Interest Total

2003 8,110,000$ 4,669,842$ 12,779,842$ 2004 8,475,000 4,304,848 12,779,848 2005 8,865,000 3,915,377 12,780,377 2006 9,280,000 3,500,853 12,780,853 2007 9,720,000 3,061,597 12,781,597 Thereafter 52,195,000 8,659,048 60,854,048

Total 96,645,000$ 28,111,565$ 124,756,565$



General Obligation Bonds consist of the following:

$19,435,000 General Obligation Bonds due in annual installments of$635,000 to $620,000 through May 1, 2004; interest at 4.60% to 4.70% 1,255,000$

$24,160,000 General Obligation Bonds due in annual installments of$2,295,000 to $2,075,000 through May 1, 2010; interest at 4.70% to5.25% 17,520,000

$86,405,000 General Obligation Bonds due in annual installments of$5,180,000 to $7,650,000 through May 1, 2013; interest at 4.40% to5.05% 77,870,000

Total bonded debt 96,645,000$


June 30, 2002

30

Note 7 - Long-term Debt (Continued)

Other governmental activities long-term obligations include the following:

Employee-compensated absences 9,756,726$ Early retirement incentive 1,284,335 Bond arbitrage 1,069,953 Self-insurance 125,000

Total 12,236,014$ In prior years, the School District defeased certain bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust accounts assets and liabilities for the defeased bonds are not included in the basic financial statements. At June 30, 2002, $30,800,000 of bonds outstanding are considered defeased.

Note 8 - Risk Management

The School District is exposed to various risks of loss related to property loss, torts, errors and omissions, and employee injuries (workers’ compensation), as well as medical benefits provided to employees. The School District has purchased commercial insurance for property loss, torts, errors and omissions, and medical claims for certain employee groups. The School District is only partially insured for medical claims for certain other employee groups and for all workers’ compensation claims. Settled claims relating to the commercial insurance have not exceeded the amount of insurance coverage in any of the past three fiscal years.

Workers’ Compensation - The School District is partially uninsured for workers’ compensation claims. Under the plan, the School District’s maximum loss is limited to an amount equal to a percentage of the normal workers’ compensation premiums. Losses in excess of this limitation are insured up to an aggregate limit of $5,000,000. At June 30, 2002, the School District has recorded a liability of approximately $240,000 in the General Fund for claims filed but not yet paid. An estimate of $125,000 for claims incurred but not yet reported based on occurrence date has been recorded in the government-wide statement.


June 30, 2002

31

Note 8 - Risk Management (Continued)

Health Insurance - The School District is partially uninsured for health claims for certain employee groups. The School District’s maximum loss is limited to an aggregate loss fund amount ($3,548,742 for calendar 2002). All claims filed on a calendar year basis in excess of the loss fund are paid by an excess insurer. At June 30, 2002, the School District has recorded a liability of approximately $180,000 in the General Fund for claims filed but not paid. An estimate of $690,000 for claims incurred but not yet reported based on the date medical services are rendered has been recorded in the government-wide statement. From January 1 to June 30, 2002, claims of approximately $1,134,206 have been paid under the plan.

Changes in the estimated liability for uninsured health and workers’ compensation claims (both current and long-term) for the past two fiscal years are as follows:

2002 2001

Estimated liability - Beginning of year 989,000$ 998,000$

Estimated claims incurred, including changes inestimates 3,001,000 2,461,691

Claim payments (2,755,000) (2,470,691)

Estimated liability - End of year 1,235,000$ 989,000$

Note 9 - Defined Benefit Pension Plan and Postemployment Benefits

Plan Description - The School District participates in the Michigan Public School Employees’ Retirement System (MPSERS), a statewide, cost-sharing, multiple-employer defined benefit public employee retirement system governed by the State of Michigan that covers substantially all employees of the School District. The system provides retirement, survivor, and disability benefits to plan members and their beneficiaries. The Michigan Public School Employees’ Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for the system. That report may be obtained by writing to the system at 7150 Harris Drive, P.O. Box 30673, Lansing, MI 48909-8103.

Funding Policy - Employer contributions to the system result from the implementing effects of the School Finance Reform Act. Under these procedures, each school district is required to contribute the full actuarial funding contribution amount to fund pension benefits, plus an additional amount to fund retiree health care benefit amounts on a cash disbursement basis.


June 30, 2002

32

Note 9 - Defined Benefit Pension Plan and Postemployment Benefits (Continued)

The pension benefit rate totals 12.16 percent for the period from July 1, 2001 through September 30, 2001 and 12.17 percent for the period from October 1, 2001 through June 30, 2002 of the covered payroll to the plan. Basic plan members make no contributions, but Member Investment Plan members contribute at rates ranging from 3 percent to 4.3 percent of gross wages. The School District’s contributions to the MPSERS plan for the years ended June 30, 2002, 2001, and 2000 were $9,261,162, $8,805,293, and $8,127,436, respectively.

Postemployment Benefits - Under the MPSERS Act, all eligible retirees participating in the MPSERS pension plan have the option of continuing health, dental, and vision coverages. Retirees having these coverages contribute an amount equivalent to the monthly cost for Part B Medicare and 10 percent of the monthly premium amount for the health, dental, and vision coverages. Required contributions for postemployment health care benefits are included as part of the School District’s total contribution to the MPSERS plan discussed above.

Note 10 - Restricted Assets

The balances of governmental activities restricted asset accounts are as follows: Unspent bond proceeds and related interest 6,504,501$

Property tax collections for repayment of bondedindebtedness 832,264

Total restricted assets 7,336,765$

Note 11 - Contingent Liabilities

Certain lawsuits have been filed against the School District, primarily related to employment matters. The final outcomes of these cases is not presently determinable, and the School District does not believe any potential loss would be material to the general purpose financial statements.

Required Supplemental Information


33

Required Supplemental Information Budgetary Comparison Schedule - General Fund


OriginalBudget

FinalBudget Actual

Over (Under) Final Budget

Revenue Local sources 48,345,880$ 50,230,975$ 48,746,273$ (1,484,702)$ State sources 62,603,776 61,849,075 63,544,728 1,695,653 Federal sources 2,492,940 3,452,952 3,185,753 (267,199) Interdistrict and other sources 3,225,268 6,485,272 6,684,936 199,664

Total revenue 116,667,864 122,018,274 122,161,690 143,416


Instruction:Basic programs 62,776,846 61,587,620 60,978,509 (609,111) Added needs 9,943,596 10,075,682 10,044,658 (31,024) Adult and continuing education 1,100,269 1,153,443 1,106,390 (47,053)

Support services:Pupil 8,454,148 8,933,769 8,595,629 (338,140) Instructional staff 5,981,540 6,695,134 6,696,385 1,251 General administration 1,764,965 1,780,015 1,867,276 87,261 School administration 6,469,822 6,322,921 6,312,572 (10,349) Business services 1,383,121 1,415,712 1,267,477 (148,235) Operations and maintenance 11,929,824 12,402,586 11,940,948 (461,638) Transportation 3,467,834 3,567,831 3,631,168 63,337 Central support services 1,882,528 1,878,766 1,756,999 (121,767)

Community services 383,338 406,204 409,224 3,020

Total expenditures 115,537,831 116,219,683 114,607,235 (1,612,448)

Other Financing Sources (Uses)Transfers in - - - - Transfers out (1,544,546) (1,853,904) (1,852,509) 1,395 Interdistrict transfers and other (1,882,878) (2,481,089) (2,478,909) 2,180 Proceeds from sale of fixed assets 1,846,100 315,355 311,490 (3,865)

Total other financingsources (uses) (1,581,324) (4,019,638) (4,019,928) (290)

Net Change in Fund Balance (451,291) 1,778,953 3,534,527 1,755,574

Fund Balance - July 1, 2001 - As adjusted 27,079,581 30,089,330 30,089,330 -

Fund Balance - June 30, 2002 26,628,290$ 31,868,283$ 33,623,857$ 1,755,574$


34

Required Supplemental Information Budgetary Comparison Schedule - Special Revenue Durant Fund


OriginalBudget

FinalBudget Actual

Over(Under)

Final Budget

Revenue Local sources 300,000$ 135,416$ 137,767$ 2,351$ State sources - - - - Federal sources - - - - Interdistrict sources - - - -

Total revenue 300,000 135,416 137,767 2,351


Instruction:Basic programs - - - - Added needs - - - - Adult and continuing education - - - - Employee benefits - - - -

Support services:Pupil - - - - Instructional staff - - - - General administration - - - - School administration - - - - Business services - - - - Operations and maintenance 300,000 39,654 515,096 475,442 Transportation - - - - Technology - - - - Central support services - - - -

Community services - - - - Debt service:

Principal - - - - Interest and other - - - -

Capital outlay - - - -

Total expenditures 300,000 39,654 515,096 475,442

Other Financing Sources (Uses)Transfers in - 315,155 315,155 - Transfers out - - - - Interdistrict transfers and other - - - - Proceeds from debt issurance - - - -

Total other financingsources (uses) - 315,155 315,155 -

Net Change in Fund Balance - 410,917 (62,174) (473,091)

Fund Balance - July 1, 2001 - As adjusted 5,615,641 5,939,818 5,939,818 -

Fund Balance - June 30, 2002 5,615,641$ 6,350,735$ 5,877,644$ (473,091)$

Other Supplemental Information


35

Special Revenue Funds

FoodServices Athletics

Adult and Community Education

AssetsCash and investments 450,604$ 240$ 1,840,431$ Accounts receivable 57,806 - 118,598 Due from other funds 14,729 86,536 - Inventories 43,800 - - Prepaids - 1,755 6,875

Total assets 566,939$ 88,531$ 1,965,904$

Liabilities and Fund Balances

Liabilities

Accounts payable 12,281$ 73,935$ 157,664$ Salaries and other accrued liabilities 23,980 5,465 59,526 Due to other funds - - 189,942 Deferred revenue 57,804 - 143,807

Total liabilities 94,065 79,400 550,939

Fund BalancesReserved:

Inventories and prepaids 43,800 1,755 6,875 Purchase commitments 34,727 6,190 73,627

Unreserved:Designated for debt service - - - Undesignated 394,347 1,186 1,334,463

Total fund balances 472,874 9,131 1,414,965

Total liabilities and fund balances 566,939$ 88,531$ 1,965,904$

36

Other Supplemental Information Combining Balance Sheet

Nonmajor Governmental Funds June 30, 2002

Debt Service Funds

1976 1993A 1993B 1997 Total

65,174$ 9,664$ 226,913$ 530,513$ 3,123,539$ - - - - 176,404 - - - - 101,265 - - - - 43,800 - - - - 8,630

65,174$ 9,664$ 226,913$ 530,513$ 3,453,638$

59$ 375$ 237$ - $ 244,551$ - - - - 88,971 - - - - 189,942 - - - - 201,611

59 375 237 - 725,075

- - - - 52,430 - - - - 114,544

65,115 9,289 226,676 530,513 831,593 - - - - 1,729,996

65,115 9,289 226,676 530,513 2,728,563

65,174$ 9,664$ 226,913$ 530,513$ 3,453,638$


37

Special Revenue Funds

FoodServices Athletics

Adult and Community Education

RevenueLocal sources 2,384,748$ 118,464$ 2,490,404$ State sources 89,209 - - Federal sources 265,913 - -

Total revenue 2,739,870 118,464 2,490,404


Instruction - - 493,244 Support services - - 81,195 Community services - - 2,369,310 Food services 2,750,326 - - Athletics - 1,655,818 -

Debt service:Principal - - - Interest and other - - - Other bond expenditures - - -

Total expenditures 2,750,326 1,655,818 2,943,749

Excess of Expenditures Over Revenue (10,456) (1,537,354) (453,345)

Other Financing Sources (Uses)Transfers in - 1,537,354 - Proceeds from sale of fixed assets - - -

Total other financing sources (uses) - 1,537,354 -

Net Change in Fund Balances (10,456) - (453,345)

Fund Balances - Beginning of year - As adjusted 483,330 9,131 1,868,310

Fund Balances - End of year 472,874$ 9,131$ 1,414,965$

38

Other Supplemental Information Combining Statement of Revenue, Expenditures, and

Changes in Fund Balances Nonmajor Governmental Funds


1976 1991 1993A 1993B 1997 Total

89,629$ - $ 568,965$ 3,150,317$ 8,024,874$ 16,827,401$ - - - - - 89,209 - - - - - 265,913

89,629 - 568,965 3,150,317 8,024,874 17,182,523

- - - - - 493,244 - - - - - 81,195 - - - - - 2,369,310 - - - - - 2,750,326 - - - - - 1,655,818

650,000 - 650,000 2,330,000 4,135,000 7,765,000 32,500 - 87,600 986,208 3,907,940 5,014,248 1,637 28,092 750 475 300 31,254

684,137 28,092 738,350 3,316,683 8,043,240 20,160,395

(594,508) (28,092) (169,385) (166,366) (18,366) (2,977,872)

- - - - - 1,537,354 162,886 - 145,398 - - 308,284

162,886 - 145,398 - - 1,845,638

(431,622) (28,092) (23,987) (166,366) (18,366) (1,132,234)

496,737 28,092 33,276 393,042 548,879 3,860,797

65,115$ - $ 9,289$ 226,676$ 530,513$ 2,728,563$

Debt Service Fund


39

Other Supplemental Information Schedule of Bonded Indebtedness


1997 Debt 1993B Debt 1993A Debt June 30 Principal Principal Principal

2003 5,180,000$ 2,295,000$ 635,000$ 2004 5,570,000 2,285,000 620,000 2005 6,620,000 2,245,000 - 2006 7,070,000 2,210,000 - 2007 7,550,000 2,170,000 - 2008 7,640,000 2,140,000 - 2009 7,640,000 2,100,000 - 2010 7,650,000 2,075,000 - 2011 7,650,000 - - 2012 7,650,000 - - 2013 7,650,000 - -

77,870,000$ 17,520,000$ 1,255,000$

Principal payments due May 1 May 1 May 1

Interest payments dueMay 1 and

November 1May 1 and

November 1May 1 and

November 1

Interest rate 4.30% to 5.05% 4.5% to 5.25% 4.60% to 4.70%

Original issue 86,405,000$ 24,160,000$ 19,435,000$

Statistical Section (Unaudited)


40

1993 1994 1995 1996

Total tax levy 87,180,238$ 89,510,219$ 47,212,972$ 46,699,688$

Current tax collections 86,234,342$ 89,030,114$ 46,695,314$ 46,387,599$

Percent of current taxes collected 98.92% 99.46% 98.90% 99.33%

Delinquent tax collections 437,484$ 621,713$ 474,113$ 308,642$

Total tax collections 86,671,826$ 89,651,827$ 47,169,427$ 46,696,241$

Ratio of total tax collections to total tax levy 99.42% 100.16% 99.91% 99.99%

Taxes receivable 81,651$ - $ 2,902$ 3,447$

Ratio of taxes receivable to total tax levy 0.09% - % 0.01% 0.01%

41

Ten-year Summary of Property Tax Data (Unaudited)

1997 1998 1999 2000 2001 2002

47,938,773$ 52,487,897$ 54,134,990$ 56,333,764$ 57,178,094$ 59,193,467$

47,654,776$ 52,075,338$ 53,890,396$ 55,804,070$ 56,494,058$ 58,328,985$

99.41% 99.21% 99.55% 99.06% 98.80% 98.54%

326,993$ 208,445$ 164,404$ 137,735$ 212,605$ 123,866$

47,981,769$ 52,283,783$ 54,054,800$ 55,941,805$ 56,706,663$ 58,452,851$

100.08% 99.61% 99.85% 99.30% 99.18% 98.75%

- $ 204,114$ 80,190$ 391,959$ 471,431$ 740,616$

- % 0.39% 0.15% 0.01% 0.82% 1.25%


42

Tax YearTaxable Assessed

Value*Assessment Percentage

Total Estimated Actual Value

1992 2,524,379,150$ 50 5,048,758,300$

1993 2,591,619,230 50 5,183,238,460

1994 2,655,799,950 50 5,311,599,900

1995 2,741,020,095 ** 5,482,040,190

1996 2,856,187,913 ** 5,712,375,826

1997 3,023,886,888 ** 6,047,773,776

1998 3,220,244,899 ** 6,440,489,798

1999 3,373,647,493 ** 6,747,294,986

2000 3,539,085,040 ** 7,078,170,080

2001 3,790,595,220 ** 7,581,190,440 * Source: City of Troy, Assessing Department ** On March 15, 1994, voters of the State of Michigan approved Proposal A. One of the

changes perpetuated by Proposal A is that beginning in the 1995 school year, taxes are levied against taxable value, not State equalized value. Accordingly, the exact assessment percentage is not available after tax year 1994. For 1995 through 2001, it is estimated that the assessment percentage will be approximately 50 percent.

43

Ten-year Summary of Assessed and Actual Value of Taxable Property (Unaudited)

Composition of Estimated Actual Value

Commercial Industrial ResidentialPersonal Property

1,450,503,600$ 540,704,200$ 2,330,450,000$ 727,100,500$

1,420,720,600 534,424,400 2,514,847,700 713,245,760

1,404,617,400 532,315,400 2,630,248,200 744,418,900

1,384,403,140 524,047,060 2,744,371,710 829,218,280

1,467,623,540 540,410,960 2,874,885,686 829,455,640

1,548,188,380 547,164,120 3,028,558,696 923,862,580

1,676,499,380 553,804,640 3,200,674,398 1,009,511,380

1,761,376,706 556,652,488 3,344,337,066 1,084,928,726

1,949,463,100 574,790,300 3,512,614,900 1,041,301,780

2,183,713,320 621,421,860 3,725,145,180 1,050,910,080


44

Ten-year Summary of Property Tax Rates Levied on Property within the District

Direct and Overlapping Governments (Rates per $1,000 of Assessed Value)

(Unaudited)

Fiscal Year


Oakland County

Intermediate School District

Oakland County

Operating Levy

Oakland County

Community College

Oakland County Public Transportation

ActCity of Troy

Administration Fee

Total Property Tax Rate Levied

1993 34.564 2.1836 4.8220 1.0735 - 9.27 .4278 52.3409

1994 34.5674 2.1294 4.9480 1.0522 - 9.25 .4267 52.3737

1995-H 19.6534* 2.1294 4.9480 .8522 - 9.25 .2759 37.1089

1995-N-H 27.5000* 2.1294 4.9480 .8522 - 9.25 .2759 44.9555

1996-H 18.3611* 2.1294 4.9480 1.6522 - 9.18 .2742 36.5449

1996-N-H 27.5000* 2.1294 4.9480 1.6522 - 9.18 .2742 45.6838

1997-H 18.1111* 2.1294 4.8480 1.6522 - 9.81 .3621 36.9128

1997-N-H 27.2500* 2.1294 4.8480 1.6522 - 9.81 .3621 46.0517

1998-H 18.4064* 2.1294 4.8180 1.6522 - 9.81 .3624 37.1784

1998-N-H 27.6400* 2.1294 4.8180 1.6522 - 9.81 .3624 46.4120

1999-H 17.7095* 2.1208 4.6564 1.6456 - 9.81 .2645 36.2068

1999-N-H 27.6200* 2.1208 4.6564 1.6456 - 9.81 .3636 46.2164

2000-H 17.3618* 2.0998 4.6522 1.6295 .3270 9.48 .2606 35.8109

2000-N-H 27.6101* 2.0998 4.6522 1.6295 .3270 9.48 .3630 46.1616

2001-H 16.7031* 2.0752 4.6478 1.6109 .3236 9.48 .2535 35.0941

2001-N-H 27.3155* 2.0752 4.6478 1.6109 .3236 9.48 .3596 45.8126

2002-H 16.0637* 3.4526 4.6438 1.5952 .3207 9.48 .2607 35.8167

2002-N-H 27.140* 3.4526 4.6438 1.5952 .3207 9.48 .3715 47.0038 Beginning with the 1994-1995 school year, different rates were assessed depending on whether the property was classified as homestead (H) or nonhomestead (N-H). * Includes 6.00 mills for the State Education Tax


45

Ten-year Summary of Ratio of Bonded Debt to Taxable Assessed Valuation and Debt per Capita

(Unaudited)

Fiscal Year

Bonded Debt Outstanding

Tax Year

State Equalized/Taxable Valuation*

Percent of Bonded Debt to

StateEqualized/Taxable

Valuation*Estimated

Population**Per Capita

Debt

1993 75,215,000$ 1992 2,504,098,480$ 3.0037 80,000 940$

1994 74,590,000 1993 2,570,099,290 2.9023 78,990 944

1995 69,715,000 1994 2,632,557,920 2.6482 81,500 855

1996 64,610,000 1995 2,717,159,085 2.3779 81,770 790

1997 59,220,000 1996 2,830,943,833 2.0919 82,000 722

1998 125,640,000 1997 2,997,276,908 4.1919 83,390 1,506

1999 118,735,000 1998 3,190,628,369 3.7214 84,102 1,412

2000 111,475,000 1999 3,342,102,803 3.3355 84,825 1,314

2001 104,410,000 2000 3,506,037,730 2.9780 85,821 1,217

2002 96,645,000 2001 3,750,278,520 2.5770 84,345 1,146 * Taxable and State Equalized Valuations for a tax year are valuations as of December 31 of the previous

year. See explanation of taxable values on the ten-year summary of assessed and actual value page. ** Source: City of Troy, Department of Planning


46

Computation of Legal Debt Margin Year Ended June 30, 2002

(Unaudited)

Taxable value - December 31, 2000* 3,750,278,520$

Statutory bonding limit, 15 percent of Taxable Value 562,541,778$

June 30, 2002 - General Obligation Bonds outstanding 96,645,000

Legal debt margin 465,896,778$

* Taxable valuations as of December 31, 2000. This valuation is for the 2001 tax year, which is the 2002 fiscal year tax base for the Troy School District.


47

Schedule of Direct and Overlapping Debt Year Ended June 30, 2002

(Unaudited)

Direct debt:General Obligation Bonds 96,645,000$ Less funds for general obligation principal (831,593)

Net direct debt 95,813,407$

Overlapping debt:*80.89 percent of City of Troy 59,055,105 7.97 percent of Oakland County at large 5,405,401 8.03 percent of Oakland Community College 1,115,769 8.00 percent of Oakland Intermediate School District 34,000

Total overlapping debt 65,610,275

Total direct and overlapping debt 161,423,682$

Per Capita Debt

Percent of Debt to Taxable Value**

Net direct debt 1,136$ 2.53

Net direct and overlapping debt 1,914 4.26

* Overlapping debt amounts provided by the Municipal Advisory Council of Michigan

** Taxable valuations as of December 31, 2000. The valuation is for the 2001 tax year, which is the 2002 fiscal year tax base for the Troy School District.


48

Ten-year Summary of Ratio of Annual Debt Service for General Bonded Debt to Total Expenditures

(Unaudited)

Debt Service Funds Expenditures

PrincipalInterest and

FeesTotal Debt

Total Expenditures*

1993 3,700,000$ 5,404,416$ 9,104,416$ 97,860,210$ 9.30

1994 4,395,000 3,945,304 8,340,304 102,274,500 8.15

1995 4,875,000 4,056,363 8,931,363 104,191,612 8.57

1996 5,105,000 3,822,266 8,927,266 108,256,532 8.25

1997 5,390,000 3,543,363 8,933,363 111,285,018 8.03

1998 6,110,000 5,239,856 11,349,856 120,720,335 9.40

1999 6,905,000 6,144,694 13,049,694 157,201,844 8.30

2000 7,260,000 5,766,770 13,026,770 143,035,468 9.11

2001 7,065,000 5,397,669 12,462,669 137,517,046 9.06

2002 7,765,000 5,014,248 12,779,248 144,751,179 8.82

Year Ended

Percent of Debt

Service to Total

* Includes General Fund, Special Revenue Funds, Capital Projects Funds, and Debt Service Fundsexpenditures.


49

1993 1994 1995 1996

Current:Instruction:

Elementary education 18,212,906$ 19,183,025$ 21,523,807$ 22,386,302$ Secondary education 23,305,636 24,219,245 26,820,362 28,019,936 Special education 5,162,819 5,289,119 4,815,165 5,052,077 Compensatory education 497,493 473,299 443,836 459,687 Vocational education 633,031 687,241 777,341 847,749 Other needs 1,301,099 1,127,695 1,039,947 972,376 Adult and community education/

alternative education* 703,307 715,102 - 1,091,056

Total instruction 49,816,291 51,694,726 55,420,458 58,829,183

Support services:Pupil services 4,400,330 4,546,722 6,024,854 6,459,640 Instructional staff 3,617,146 3,247,308 4,322,466 4,155,868 General administration 1,203,215 1,387,727 1,608,853 1,370,626 School administration 5,211,623 4,750,521 5,041,427 5,046,074 Pupil transportation 2,550,312 2,155,870 2,971,096 3,282,006

16,982,626 16,088,148 19,968,696 20,314,214

Business services:Fiscal services 1,294,459 1,077,430 1,175,871 1,491,665 Operations and maintenance 9,770,538 9,170,886 10,485,672 10,484,988 Community services 1,039,445 982,016 315,845 390,732 Central services 829,085 1,820,028 2,203,334 2,192,350

Total business services 12,933,527 13,050,360 14,180,722 14,559,735

Auxiliary services:Athletics 1,080,185 1,054,117 1,166,070 1,281,511 Food services 1,659,470 1,522,992 1,693,360 1,839,507 Durant - - - - Adult and community education* - - 1,780,218 2,182,790

Total auxiliary services 2,739,655 2,577,109 4,639,648 5,303,808

Noncurrent:Capital outlay 6,283,695 10,523,853 1,050,725 322,326 Debt service 9,104,416 8,340,304 8,931,363 8,927,266

Total noncurrent 15,388,111 18,864,157 9,982,088 9,249,592

Total expenditures** 97,860,210$ 102,274,500$ 104,191,612$ 108,256,532$

* For school years 1993 through 1994, adult and community education was classified for general operating purposes.

Beginning in 1996, adult and community education was reclassified to auxiliary services. An alternative education program was started in the 1997 school year and classified for general operating purposes.

** Total expenditures exclude intergovernmental transfers, which were classified as other financing uses rather than as expenditures prior to 2002.

50

Ten-year Summary of Governmental Expenditures by Function (Unaudited)

1997 1998 1999 2000 2001 2002

23,326,464$ 23,364,633$ 23,665,406$ 25,393,188$ 25,198,857$ 26,093,161$ 29,877,087 29,569,992 31,343,675 32,725,545 33,336,996 34,885,348

5,160,350 5,013,008 5,056,984 5,144,275 5,190,005 5,415,716 515,190 727,074 907,551 1,186,568 1,673,092 1,633,781 895,805 878,450 911,977 1,388,224 1,397,749 1,520,279 823,215 1,063,594 1,272,349 1,180,702 1,691,553 1,474,882

1,061,010 1,106,390 1,073,138 1,213,535 1,760,710 1,039,045 - -

61,671,249 61,830,286 64,918,652 68,057,547 69,549,262 72,129,557

6,831,204 6,963,361 6,992,673 7,574,964 8,137,019 8,595,629 5,146,809 4,265,154 5,345,968 5,408,219 5,509,595 6,696,385 1,299,113 1,449,232 1,526,750 1,731,966 1,774,312 1,867,276 5,059,807 5,368,886 5,416,611 5,751,433 6,142,028 6,312,572 3,282,466 2,919,434 2,971,960 3,092,345 3,250,205 3,631,168

21,619,399 20,966,067 22,253,962 23,558,927 24,813,159 27,103,030

1,276,313 1,259,287 1,673,514 1,512,067 1,398,077 1,267,477 10,426,577 9,688,669 10,753,585 11,241,615 11,984,745 11,940,948

447,823 378,339 382,618 322,083 387,258 409,224 1,583,914 1,387,103 1,690,343 2,344,671 1,666,414 1,756,999

13,734,627 12,713,398 14,500,060 15,420,436 15,436,494 15,374,648

1,336,454 1,350,085 1,371,499 1,490,883 1,611,032 1,655,818 1,937,913 1,895,968 2,081,635 2,256,290 2,539,691 2,750,326

- - - 321,373 362,612 515,096 2,042,125 1,957,893 2,074,060 2,303,020 3,493,712 2,943,749

5,316,492 5,203,946 5,527,194 6,371,566 8,007,047 7,864,989

9,888 8,656,782 36,950,842 16,600,222 7,248,415 6,989,544 8,933,363 11,349,856 13,049,694 13,026,770 12,462,669 12,810,502

8,943,251 20,006,638 50,000,536 29,626,992 19,711,084 19,800,046

111,285,018$ 120,720,335$ 157,200,404$ 143,035,468$ 137,517,046$ 142,272,270$


51

1993 1994 1995 1996 1997

General Fund:Property taxes 75,982,545$ 79,026,915$ 35,850,477$ 38,157,439$ 38,709,022$ Tuition 455,090 811,079 9,885 2,895 8,707 Interest on investments 344,258 438,809 924,833 1,258,085 1,412,666 Intermediate sources - - - - - State sources 62,678 1,150,687 51,325,184 56,185,683 57,541,532 Federal sources 2,478,142 2,094,401 2,186,727 2,241,311 2,593,197 Other sources 1,533,493 1,761,083 791,140 953,312 857,026

Total General Fund 80,856,206 85,282,974 91,088,246 98,798,725 101,122,150

Special Revenue Funds:Adult and community

education** - - 1,671,235 1,854,809 2,267,707 Athletics 75,212 83,560 91,322 97,042 91,356 Food services 1,604,453 1,521,135 1,688,451 1,830,391 1,954,117

Durant - - - - -

Total Special Revenue Funds 1,679,665 1,604,695 3,451,008 3,782,242 4,313,180

Capital Projects Funds - Interest and other 555,463 221,763 107,581 75,692 69,642

Debt Service Funds:Property taxes 8,753,315 8,826,975 9,105,334 9,571,088 9,251,942 Interest and other 93,172 83,000 184,709 194,626 222,909

Total Debt Service Funds 8,846,487 8,909,975 9,290,043 9,765,714 9,474,851

Total revenue 91,937,821$ 96,019,407$ 103,936,878$ 112,422,373$ 114,979,823$

* Includes General, Special Revenue, Capital Projects, and Debt Service Funds

** Adult and community education was reclassified to Special Revenue Funds beginning in 1996.

52

Ten-year Summary of Governmental Revenue by Source* (Unaudited)

1998 1999 2000 2001 2002

41,150,179$ 41,725,520$ 43,326,406$ 44,866,203$ 46,516,312$ 14,252 238,147 720,543 773,202 911,909

1,647,345 1,809,262 1,762,487 1,838,219 696,430 - - - - -

63,999,262 57,693,800 57,783,032 60,985,944 63,544,728 2,712,825 2,910,394 2,357,600 2,987,219 3,185,753 1,057,582 1,186,195 638,508 3,658,664 7,618,048

110,581,445 105,563,318 106,588,576 115,109,451 122,473,180

1,859,274 2,442,317 2,433,824 2,645,656 2,490,404 96,586 109,713 108,581 99,406 118,464

2,045,041 2,283,057 2,471,359 2,627,033 2,739,870 - - 331,063 341,809 137,767

4,000,901 4,835,087 5,344,827 5,713,904 5,486,505

2,253,474 3,286,676 1,514,453 1,667,588 244,602

11,004,872 11,637,332 12,223,839 11,706,940 11,762,578 266,904 216,508 253,177 266,467 379,491

11,271,776 11,853,840 12,477,016 11,973,407 12,142,069

128,107,596$ 125,538,921$ 125,924,872$ 134,464,350$ 140,346,356$


53

Ten-year Summary of Taxable Assessed Value, State and Local Share of Revenue Sources, Foundation Allowance, and Retirement Rate History

(Unaudited)

Share of Revenue

Taxable Assessed Value

State (Percent)

Local (Percent)

Foundation Allowance

Retirement Rate (Percent)

1992-93 2,524,379,150$ 0.08 94.96 - $ -

1993-94 2,591,619,230 1.35 94.13 7,374.02 13.06

1994-95 2,655,799,950 56.35 40.38 7,534.18 14.21

1995-96 2,741,020,095 56.87 39.90 7,687.18 14.56

1996-97 2,856,187,913 56.55 40.69 7,842.18 15.17

1997-98 3,023,886,888 49.93 36.92 7,996.18 11.12

1998-99 3,220,244,899 51.49 40.10 7,996.18 10.77

1999-00 3,373,647,493 51.96 41.42 8,234.00 11.66

2000-01 3,539,085,040 50.08 39.45 8,535.00 12.16

2001-02 3,790,595,220 48.34 38.82 8,835.00 12.17 Beginning with the 1994-95 school year, the State of Michigan began funding schools under a new funding system. School districts also became responsible for funding the entire retirement obligation. Prior to that time, school districts paid only 5 percent of wages into the retirement system, with the State of Michigan funding the remaining obligation. The 1994-95 foundation allowance and retirement rate are calculated using 1993-94 as the base year.


54

Ten-year Summary of Demographic Data (Unaudited)

YearEstimated Population

PupilEnrollment

Certified Teacher

1993 80,000 11,356 698.50

1994 78,990 11,488 694.10

1995 81,500 11,636 685.04

1996 81,770 11,853 696.00

1997 82,000 12,019 723.95

1998 83,390 12,050 725.49

1999 84,102 12,066 730.40

2000 84825 12087 755.12

2001 85,821 12,076 764.80

2002 84,345 12,083 766.5 * Source: City of Troy, Department of Planning


55

Ten-year Summary of Construction and Property Values - City of Troy (Unaudited)

Annual Construction by Category*

Residential

Commercial and Industrial Multifamily Single Family

Calendar Year

Number of Permits

Estimated** Value

Number of Permits

Estimated** Value

Number of Permits

Estimated** Value

1992 381 41,281,898$ 99 1,289,647$ 1,163 55,151,604$

1993 362 22,355,568 80 1,851,267 1,210 59,842,445

1994 462 119,371,543 96 1,738,842 1,265 53,807,406

1995 496 89,086,761 105 1,633,027 1,046 43,922,985

1996 540 96,073,900 24 350,326 1,002 52,142,117

1997 477 129,224,652 33 1,281,200 882 48,553,486

1998 475 158,238,622 39 5,865,831 960 51,301,730

1999 425 203,897,591 28 26,428,432 990 55,188,742

2000 480 176,092,691 15 6,279,063 854 42,286,261

2001 421 110,552,103 201 14,679,744 750 31,067,044 * Source: City of Troy, Building Department

** Represents completed project costs through December 31


56

Principal Taxpayers (Unaudited)

Principal TaxpayersTaxable Value

Total

Percent of Taxable

Value Total

Gale & Wentworth LLC 57,725,930$ 1.52 Nykel Management Co. 52,240,590 1.38 Kmart Corporation 49,508,100 1.31 WRC Properties Inc. 46,584,120 1.23 Liberty Property LTD PTN 39,720,320 1.05 Flagstar Bank, FSB 39,365,160 1.04 Somerset Collection North 38,756,590 1.02 Detroit Edison 35,917,830 0.95 Sheffield Office LP 28,250,000 0.75 Standard Federal 26,460,230 0.70 Top of Troy 24,271,630 0.64 Meritor Heavy Vehicle Systems Inc. 23,688,500 0.62 Nemer Troy Place Realty LLC 23,644,150 0.62 Troy Corporate Center Assoc. 22,972,300 0.61 Delphi Automotive Systems LLC 21,753,290 0.57 BDR-20 Associates 19,755,730 0.52 Frankel Forbes Cohen Associates 18,596,530 0.49 El Dupont Denemoure & Co. 17,517,290 0.46 Electronic Data Systems Corp. 16,601,920 0.44 Nordstrom Inc. 15,215,890 0.40 All others 3,172,049,120 83.68

Total 3,790,595,220$ 100.00

Taxable valuations do not reflect adjustments from Board of Review appeals and Michigan Tax Tribunal decisions. The December 31, 2000 valuations, used for the 2001 tax year levy, are the basis of the School District’s 2002 fiscal year tax revenue. Source: City of Troy, Assessing Department


57

Statistical Summary of School Buildings and Sites Year Ended June 30, 2002

(Unaudited)

Building Enrollment*Pupil

CapacityTeaching Stations

Building Square Footage

Site Acreage

Elementary schools:Barnard 449 550 20 60,000 18.00 Bemis 432 550 20 60,000 15.20 Costello 354 500 18 46,438 23.00 Hamilton 479 550 20 60,000 15.00 Hill 365 550 20 45,000 12.90 Leonard 400 500 20 45,000 16.05 Martel 408 500 18 46,438 14.20 Morse 426 500 20 45,000 9.80 Schroeder 501 550 20 60,000 10.00 Troy Union 491 550 22 62,091 21.80 Wass 459 550 20 60,000 21.40 Wattles 339 550 20 64,000 19.00

Middle schools:Baker 619 700 37 82,423 40.00 Boulan Park 803 800 44 110,828 16.00 Larson 842 800 44 110,828 32.00 Smith 710 700 37 93,500 20.10

High schools:Athens 1,870 1,600 84 320,247 50.00 Troy High 1,980 1,800 90 300,000 72.00 Niles Community High 134 496 18 35,000 13.60 I.A. 88 - - - -

Total 12,149 13,296 592 1,706,793 440.05

* For State reporting purposes, the official enrollment is 12,083.20.

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