NAME OF THE MEDICINAL PRODUCT Rebif 44 micrograms solution for injection in pre-filled pen

deposits in the accounts of federally insured banks, credit unions, and savings and loan associations that have an office in Michigan; the School District is allowed to invest in U.S. Treasury or Agency obligations, U.S. District repurchase agreements, bankers’

acceptances, commercial paper rated prime at the time of purchase that matures 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 has no investment policy that would further limit its investment choices.

Concentration of credit risk – The School District has no policy that would limit the amount that may be invested with any one issuer.

Custodial credit risk – deposits – In the case of deposits, this is the risk that in the event of a bank failure, the School District’s deposits may not be returned to it. The School District does not have a deposit policy for custodial credit risk. As of year end, $25,976,240 of the School District’s bank balance of $26,981,238 was exposed to custodial credit risk because it was uninsured and uncollateralized.

Custodial credit risk – investments – For an investment, this is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. As of year end, none of the district’s investments were exposed to custodial credit risk.

Certain investments were donated to the School District to be used to generate income to award scholarships to worthy students. Individual scholarship provisions specify how the investments and related income may be used.

Certain endowments and funds raised for scholarships are directly deposited with the Saginaw Community Foundation and the school district has no rights to the principal investments.

NOTE 4 - Fair Value Measurements

The School District categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

The School District has the following recurring fair value measurements as of June 30, 2020:

• Equity and fixed income securities of $97,600 are valued using quoted market prices (Level 1 inputs)

NOTE 5 - Due From Other Governmental Units

Due from other governmental units consists of the following:

Federal grants $ 2,374,514

State aid 6,996,066

Other 1,003,305

10,373,885

$

All balances are deemed current and expect to be received in the following year.

School District of the City of Saginaw Notes to the Financial Statements

June 30, 2020

NOTE 6 - Capital Assets

A summary of the changes in governmental capital assets is as follows:

Beginning Ending

Balance Increases Decreases Balance Governmental activities

Capital assets not being depreciated

Land $ 5,607,492 $ - $ 2,686,920 $ 2,920,572 Construction in progress 64,184 64,184- -Total capital assets not being depreciated 5,671,676 2,751,104- 2,920,572 Capital assets being depreciated

Buildings and additions 97,603,389 436,225 - 98,039,614 Equipment and furniture 4,866,097 203,033 1,211,502 3,857,628 Buses and other vehicles 61,3111,093,829 282,000 873,140 Total capital assets being depreciated 700,569103,563,315 1,493,502 102,770,382

Less accumulated depreciation for

Buildings and additions 45,009,847 1,685,798 - 46,695,645 Equipment and furniture 3,861,412 122,661 1,193,642 2,790,431 Buses and other vehicles 6,8351,017,521 267,900 756,456 Total accumulated depreciation 1,815,29449,888,780 1,461,542 50,242,532 Net capital assets being depreciated (1,114,725)53,674,535 31,960 52,527,850 Net capital assets $ (1,114,725)59,346,211 $ 2,783,064$ 55,448,422$

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

Governmental activities Depreciation expense

Instruction $ 1,562,835

Support services 235,057 Community services 2,268

Food services 15,134

Total governmental activities $ 1,815,294 During the fiscal year, the School District completed real estate valuations to determine the value of the land owned by the School District. The valuation resulted in a $2,686,920 impairment adjustment to bring the land value down to $2,920,572. The decrease was primarily caused by declining property tax values and was allocated to expenses in the same manner as depreciation expense is in the Statement of Activities.

School District of the City of Saginaw Notes to the Financial Statements

June 30, 2020

NOTE 7 - Interfund Receivable and Payable Transfers Interfund transfers consist of the following:

A General Fund transfer of $518,668 was made to the Capital Project Fund to help fund future capital projects. A Nonmajor Governmental Fund transfer was made out of the 2014 Refunding Bond Fund to the General Fund to pay for debt service obligations.

NOTE 8 - Unearned Revenue

Governmental funds also report unearned revenue in connection with resources that have been received but not yet earned. At the end of the current fiscal year, the components of unearned revenue are as follows:

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, claims and judgments, termination benefits, compensated absences and certain risk liabilities.

Long term obligation activity is summarized as follows:

Amount Due

General obligation bonds payable at year end, consist of the following:

$14,525,000 Series 2014 refunding bond due in annual installments of $450,000 to $1,200,000 through

May 1, 2034, interest at 350% to 5.00% $ 11,880,000

$18,865,000 Series 2016 refunding bond due in annual installments of $515,000 to $1,395,000 through

May 1, 2036, interest at 4.00% to 5.00% 16,355,000

$15,735,000 Series 2017 refunding bond due in annual installments of $310,000 to $2,120,000 through

May 1, 2038, interest at 4.00% to 5.00% 15,090,000 Total general obligation bonded debt $ 43,325,000

School District of the City of Saginaw Notes to the Financial Statements

June 30, 2020