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2010 CAFRVillage of Buffalo Grove, Illinois Comprehensive Annual Financial Report For the Year Ended December 31,2010 Prepared by Department of Finance and General Services Scott Anderson Director of Finance and General Services Katie Skibbe Assistant Director of Finance Wolf & Company LLP Certified Public Accountants VILLAGE OF BUFFALO GROVE, ILLINOIS Table of Contents INTRODUCTORY SECTION Officers and Officials Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting Organization Chart INDEPENDENT AUDITOR'S REPORT FINANCIAL SECTION MANAGEMENT'S DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS Govermnent-Wide Financial Statements Statement of Net Assets Statement of Activities Fund Financial Statements Balance Sheet-Govermnental Funds Reconciliation of the Balance Sheet ofGovermnental Funds to the Statement ofNet Assets Statement of Revenues, Expenditures and Changes in Fund Balances -Govermnental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Govermnental Funds to the Statement of Activities Statement of Net Assets -Proprietary Funds Statement of Revenues, Expenses and Changes in Net Assets- Proprietary Funds Statement of Cash Flows -Proprietary Funds Statement of Fiduciary Net Assets Statement of Changes in Fiduciary Net Assets Notes to the Financial Statements PAGE ii-v VI vii 2-14 15-16 17-18 19 20 21 22 23 24 25-26 27 28 29-62 VILLAGE OF BUFFALO GROVE, ILLINOIS Table of Contents FINANCIAL SECTION REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis)-General Fund Analysis of Funding Progress Illinois Municipal Retirement Fund Police Pension Fund Firefighters' Pension Fund Employer Contributions Illinois Municipal Retirement Fund Police Pension Fund Firefighters' Pension Fund Other Post-Employment Benefits Analysis of Funding Progress Employer Contributions Note to Required Supplementary Information COMBINING. INDIVIDUAL FUND, AND CAPITAL ASSET FINANCIAL STATEMENTS AND SCHEDULES GOVERNMENTAL FUND TYPES NONMAJOR GOVERNMENTAL FUNDS-COMBINING STATEMENTS Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances NONMAJOR SPECIAL REVENUE FUNDS Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances Illinois Municipal Retirement Fund Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual PAGE 63 64 64 64 65 65 65 66 66 67 68 69 70 71 72 VILLAGE OF BUFFALO GROVE, ILLINOIS Table of Contents FINANCIAL SECTION COMBINING, INDIVIDUAL FUND, AND CAPITAL ASSET FINANCIAL STATEMENTS AND SCHEDULES (CONT.) GOVERNMENTAL FUND TYPES (CONT.) NONMAJOR SPECIAL REVENUE FUNDS (CONT.) Motor Fuel Tax Fund Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual Parking Lot Fund Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual NONMAJOR DEBT SERVICE FUNDS Facilities Development Fund Schedule of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual NONMAJOR CAPITAL PROJECTS FUNDS Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances Street Maintenance Fund Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual Facilities Development Fund Schedule ofRevenues, Expenditures and Changes in Fund Balances -Budget and Actual PAGE 73 74 75 76 77 78 79 VILLAGE OF BUFFALO GROVE, ILLINOIS Table of Contents FINANCIAL SECTION COMBINING. INDIVIDUAL FUND, AND CAPITAL ASSET FINANCIAL STATEMENTS AND SCHEDULES (CONT.) GOVERNMENTAL FUND TYPES (CONT.) ENTERPRISE FUNDS Waterworks and Sewerage Fund Schedule of Operating and Nonoperating Revenues, Operating and Nonoperating Expenses and Transfers- Budget and Actual (Budgetary Basis) Arboretum Golf Course Fund Schedule of Operating and Nonoperating Revenues, Operating and Nonoperating Expenses and Transfers - Budget and Actual (Budgetary Basis) NONMAJOR ENTERPRISE FUNDS Combining Statement of Net Assets Combining Statement of Revenues, Expenses and Changes in Net Assets Combining Statement of Cash Flows Buffalo Grove Golf Course Fund Schedule of Operating and Nonoperating Revenues, Operating and Nonoperating Expenses and Transfers- Budget and Actual (Budgetary Basis) Refuse Service Fund Schedule of Operating and Nonoperating Revenues, Operating and Nonoperating Expenses and Transfers - Budget and Actual (Budgetary Basis) PAGE 80 81 82 83 84 85 86 VILLAGE OF BUFFALO GROVE, ILLINOIS Table of Contents FINANCIAL SECTION COMBINING. INDIVIDUAL FUND. AND CAPITAL ASSET FINANCIAL STATEMENTS AND SCHEDULES (CONT.) GOVER,'JMENTAL FUND TYPES (CONT.) FIDUCIARY FUNDS Combining Statement of Fiduciary Net Assets-Pension Trust Funds Combining Statement of Changes in Fiduciary Net Assets-Pension Trust Funds Police Pension Fund Schedule of Changes in Fiduciary Net Assets-Budget and Actual Firefighters' Pension Fund Schedule of Changes in Fiduciary Net Assets-Budget and Actual School and Park Donations --Agency Fund Schedule of Changes in Fiduciary Net Assets CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS Schedule of Capital Assets by Source Schedule by Function and Activity Schedule of Changes by Function and Activity STA TIS-fiCAL SECTION (UNAUDITED) Financial Trends Net Assets by Component Changes in Net Assets Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds PAGE 87 88 89 90 91 92 93-94 95 96-97 98-101 102-103 104-105 VILLAGE OF BUFFALO GROVE, ILLINOIS Table of Contents STATISTICAL SECTION (UNAUDITED) Revenue Capacity Assessed and Actual Value of Taxable Property Property Tax Rates -Direct and Overlapping Governments Principal Property Taxpayers Property Tax Levies and Collections Sales Tax Revenue and Number of Principal Payers-Revenue by Category Direct and Overlapping Sales Tax Rates Debt Capacity Ratio Outstanding Debt by Type Ratio of General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Schedule of Legal Debt Margin Demographic and Economic Information Demographic and Economic Statistics Principal Village Employers Operating Information Full-Time Equivalent Employees Operating Indicators Capital Asset Statistics PAGE 106-107 108-109 110 111-112 113-114 115 116 117 118 119 120 121 122-123 124-125 126-127 INTRODUCTORY SECTION VILLAGE OF BUFFALO GROVE, ILLINOIS Officers and Officials December 31, 20 I 0 Elliott Hartstein Village President Jeffrey Berman DeAnn Glover Beverly Sussman Scott Anderson Director of Finance and General Services Steve Balinski Chief of Police Carol Berman Deputy Building Commissioner Robert Giddens Director of Management Information Systems Richard Kunekler, P.E. Village Engineer Arthur Malinowski, Esq Director of Human Resources Village Trustees Joseph Tenerelli Treasurer * * * * * * * Dane Bragg Village Manager Janet M. Sirabian Village Clerk Jeffrey Braiman Eric Smith Steve Trilling Carmen Molinaro Director of Golf Operations Ghida Neukirch Deputy Village Manager Robert Pfeil Village Planner Brian Scheehan Deputy Building Commissioner Katie Skibbe Assistant Finance Director Terrence Vavra Fire Chief VILLAGE OF -----····· VIllAGE OF BUFFALO GROVE Fifty Raupp Blvd. Buffalo Grove, IL 60089-2100 Phone 84 7-459-2500 Fax 847-459-0332 June 15, 2011 The Honorable Jeffrey Braiman Members of the Village Board Citizens of the Village of Buffalo Grove As required by both local ordinances and state statutes, the Comprehensive Annual Financial Report is hereby issued for the Village of Buffalo Grove (Village) for the year ended December 31, 2010. These ordinances and statutes require that the Village issue an annual report on its financial position and activity presented in conformance with accounting principles generally accepted in the United States of America (GAAP) and audited in accordance with generally accepted auditing standards by an independent fmn of certified public accountants. Management assumes full responsibility for the completeness and reliability of all of the information presented in the report based upon a comprehensive internal control framework. Because the cost of internal controls should not outweigh their benefits, the Village's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. The Village's financial statements have been audited by Wolf & Company LLP, a firm of licensed certified public accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the Village of Buffalo Grove for the fiscal year ended December 31, 2010, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the Village's financial statements for the fiscal year ended December 31, 2010, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section ofthis report. Management's discussion and analysis (MD&A) immediately follows the independent auditor's report and provides a narrative introduction, overview, and analysis of the basic fmancial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. Profile of the Village of Buffalo Grove The Village of Buffalo Grove was incorporated March 7, 1958, and is located approximately 29 miles northwest of the downtown of the City of Chicago. The Village resides in both Cook and Lake Counties and spans 9.20 square miles and, based on the 2010 U.S. Census, serves a population of 41,496. The Village of Buffalo Grove is empowered to levy a property tax on real property located within its boundaries. It is also empowered by state statute to extend its corporate limits by annexation, which it has done from time to time. The Village became a home rule unit by referendum on July 1, 1980, giving it additional powers to tax and regulate in ways not specifically granted, or prohibited, by the Illinois Constitution. The Village operates under a Council/Manager form of government. Policy making and legislative authority are vested with the Village Board, which consists of a President and a six member Board of Trustees. The Village Board is responsible for passing ordinances and resolutions, adopting the annual budget, appointing committees, and hiring the Village's Manager and Attorney. The Village Manager is responsible for carrying out the 11 policies, ordinances and resolutions of the Village Board, for overseeing the day-to-day operations of the Village, and for appointing department directors. The Board is elected on a non-partisan basis. Board members are elected to four-year staggered terms with three board members elected every two years. The President and Clerk are elected to four-year terms. All elections are at large. The Village provides a number of general government services including police and fire protection, water and sewer utilities including sewerage treatment, street construction and maintenance, code enforcement, planning and zoning and general administrative services. The Village of Buffalo Grove is considered a desirable residential community due to the highly rated school systems, award winning park district facilities and programs, two libraries in close proximity to the Village, and more than 400 acres of parks and open space. Approximately 80.1% of the taxable valuation is categorized as residential. Regional transportation can be accessed through the Tri-State Tollway (I-294) that provides a direct connection to Chicago or Milwaukee, Route 53 just two miles to the west provides access to I-290 and I-355, the METRA North Central Service commuter line, or PACE, the suburban bus division of the Regional Transportation Authority. Air transportation is available through O'Hare International Airport, located just twenty miles from the Village, and Chicago Executive Airport located in the neighboring community of Wheeling. Financial Planning & Control The annual budget serves as the foundation for the Village's financial planning and as a management control document. Legal spending thresholds are established through an Appropriation Ordinance. The Village Board is required to hold a public hearing on the Appropriation Ordinance and must adopt a fmal budget no later than December 31st of each year. The appropriated budget is prepared by fund and department (e.g., police). Department directors may make transfers of appropriations within a department. Transfers of appropriations between departments and fund/account groups, however, require the special approval of the Village Board. The accounts of the Village are organized on the basis of funds, each of which is considered a separate and distinct accounting entity. The operations of each fund are accounted for with a separate set of self- balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures. Revenues are allocated to and accounted for in individual funds based upon the purpose for which they are to be expended and the means by which spending activities are controlled. The accounting records for general governmental operations are maintained on the modified accrual basis, with revenues being recorded when available and measurable and expenditures being recorded when the material or services are received and the liability is incurred. Accounting records for the Village's enterprise funds, internal service funds, agency funds and pension trust funds are maintained on the accrual basis of accounting. Factors Affecting Financial Condition Economic Outlook Although the Village strives to maintain a diverse revenue base, the current economic downturn has impacted all sectors of the economy rather than specific revenue sources. The second largest source of revenue for the Village is sales taxes (both base and home rule). Although there was a slight uptick in collections of about 1.6% over 2009, total collections remain 15% less that the peaks established several years ago. As state shared sales tax combined with the home rule sales tax represents a significant portion of the Corporate Fund revenue profile, the Village is proactive in protecting and promoting its retail tax base. The Village has implemented a business retention program and is diligent about attracting new business to the area and will work with property owners to market their sites to brokers, retailers, developers, and others in the real estate field. 111 Employment levels in the Village have traditionally exceeded that of Lake and Cook Counties and the State of Illinois as a whole. As of December 31, 2010 the Village's unemployment rate was estimated to be 8.0%, compared to 10.5% for Lake County, 10.3% for the State of Illinois and 9.6% for the United States. New commercial and residential construction activity continue to slow compared to the prior year. In 2010, a total of I ,811 permits were issued with a new or improvement construction value of $29.2 million. Long-term Financial Planning The Village assesses its capital needs by publishing a five year Capital Improvement Plan (CIP) annually. This document is a planning tool to identify, in the short and medium term, what the capital needs (facilities and roadways) and measure those demands against the Village's ability to pay. For a project to be incorporated into the CIP, it must involve either the creation, improvement, or acquisition of a tangible asset with an original cost of at least $25,000. Within the next five years it is anticipated that the Village will require nearly $30.6 million in capital improvements. Traditionally those improvement have been fmanced under a "pay-as-you go" strategy. Transportation-related projects represent a large percentage of the improvements at $12.5 million. Routine maintenance of existing streets accounts for $11 million of those projects. Approximately $6.7 million is allocated to improving and maintaining the water utility system. Two significant facility projects are contemplated in the next five years including expansions of the Public Service Center and Fire Station #26. Both improvements will address functional issues related to space constraints and will work within the existing facilities. Major Initiatives The Village issued $2.6 million in general obligation bonds to fund storm water drainage improvements at various locations. Improvements include utilizing strategic placement of box culverts, additions or improvements to wet/dry detention basins, and the re-grading of swales. This improvement will remedy a long time problem associated with storm water mitigation and/or detention. Leica Microsystems established their North American headquarters in Buffalo Grove in 2010. The company is a world leader in microscopes and scientific instruments. The business occupies 63,601 sq. ft. and employs 185 people. Awards and acknowledgments. The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Village of Buffalo Grove for its comprehensive annual financial report (CAFR) for the fiscal year ended December 31, 2009. This was the twenty-ninth consecutive year that the government has received this prestigious award. In order to be awarded a Certificate of Achievement, the government published an easily readable and efficiently organized CAFR. This report satisfies both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. lV The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance Department especially Assistant Finance Director Katie Skibbe. Credit also must be given to the Village President and Board of Trustees for their unfailing support for maintaining the highest standards of professionalism in the management of the Village of Buffalo Grove. Respectfully submitted, ~~~on _a_ __ Director of Finance and General Services v Certificate of Achievement for Excellence in Financial Reporting Presented to Village of Buffalo Grove Illinois For its Comprehensive Annual Financial Report for the Fiscal Y car Ended December 31,2009 A Certificate of Achievement for Excenence in Financial Reporting is preseated by the Government Finaoce Officers Association of the United States aad Canada to covernment units mel public employee retirement systems whose comprehensive annua16nancial ~ (CAFRs) achieve the highest standards in gOVCI'DIDellt accounting aDd financial reporting. President ~/.~ Executive Director vi ··--[ Deputy VilJage Manager ~ [ Fire Dept. I I [ Patrol l Em«. Mgm<. s,~;,;;l I -----------=--~ G cneral Services j Buftalo Gro~)-~dministration l Invest 1 Youth Srvcs. <~ Admn. Services 1-'• 1-'• I T••m•S"pp 'R~""] c:~;;;-;-,;;;;;-·~ Information Tech I Arboret~n ~...J i r·-·-· Engineering H Village Treasurer Police Records I Plannino L L " _ _j f PWC . u' ~--· lperatJOns .J ' --.... ---1 llluman Resources _j- L ____ ·-----·-·- Mgmt. Agency -h Eococ<;y J 1-f-··-] L Wat:__ Central Ga1·age Slreets!Drain<lge !Sewer VILLAGE OF BUFfALO 6ROV£ ORGANIZATION CHART FL~Ai~CIAL SECTION INDEPENDENT AUDITOR'S REPORT Wolf(\' Company LLP To the Honorable Village President Members ofthe Board of Trustees Village of Buffalo Grove, Illinois A Wolf Financial Group Member INDEPENDENT AUDITOR'S REPORT We have audited the accompanying financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information for the Village of Buffalo Grove, Illinois, as of and for the year ended December 31, 2010, which collectively comprise the Village's basic financial statements as listed in the table of contents. These fmancial statements are the responsibility of the management of the Village of Buffalo Grove, Illinois. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 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, the business-type activities, each major fund, and the aggregate remaining fund information ofthe Village of Buffalo Grove, Illinois, as of December 31,2010, and the respective changes in financial position and cash flows, where applicable thereof, for the year then ended in conformity with accounting principles generally accepted in the United States of America. The required supplementary information which includes management's discussion and analysis (pages 2 through 14), budgetary comparison information, and pension and other post-employment related information (pages 63 to 67) is not a required part of the basic financial statements but is supplementary 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 supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the financial statements of the Village of Buffalo Grove, Illinois. The combining, and individual nonmajor fund financial statements and other schedules listed in the table of contents as supplementary information (pages 68 to 95), are presented for purposes of additional analysis, and are not a required part of the basic financial statements. Such 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 section listed in the table of contents are presented for additional analysis and are not a required part of the basic financial statements. This 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. Oakbrook Terrace, Illinois June 15, 2011 PKF A PKF International Member Firm 1901 S. Meyers Road, Suite 500 ' Oakbrook Terrace, Illinois 60181-5209 630.545.4500 main 630.574.7818/;z."l: ' www.wolfcpa.com MANAGEMENT'S DISCUSSION A~'D ANALYSIS VILLAGE OF BUFFALO GROVE, ILLINOIS MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2010 The Management's Discussion and Analysis (MD&A) offers the readers of the Village of Buffalo Grove's financial statements this narrative overview and analysis of the financial activities of the Village of Buffalo Grove for the fiscal year ended December 31, 20 I 0. This information presented here should be considered in conjunction with additional information provided in the letter of transmittal, which is found on pages ii-v. Financial Highlights • The assets ofthe Village exceeded its liabilities at December 31, 2010 by $123.5 million (net assets). Net assets for governmental activities account for $70.4 million or 57% of the total and business-type activities account for $53.1 million. Of this amount, $30.4 million is umestricted and may be used to meet the Village's ongoing obligations to residents and creditors. • The Village's net assets decreased by $2.6 million (or 2%) during the fiscal year ending December 31, 2010. The governmental net assets decreased by $.9 million and the business-type activities net assets decreased by $1.7 million. • As of December 31, 2010, the Village of Buffalo Grove's General Fund reported combined ending fund balances of$18.9 million, a decrease of$.7 million from the prior year. Of this amount, $9.6 million was umeserved and undesignated. • The Village added an electricity and natural gas use tax increasing revenue by approximately $2.4 million. • The Village issued $2.6 million in General Obligation Bonds during the year to fund drainage improvements at various locations within the municipality. An additional $5.16 million in general obligation bonds were issued to refund existing debt. During the debt issuance process, Standard and Poor's and Moody's Investor Services assigned a credit rating of AAA to the Village, lowering the borrowing costs on both the new and refunding bonds. Overview of the Financial Statements This discussion is meant as an introduction to the Village's basic financial statements. The Village of Buffalo Grove's basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the fmancial statements. Also included in the report is required supplementary information. The financial statement's focus is on both the Village as a whole (government-wide) and on the major individual funds. The purpose of presenting both perspectives is to provide the user of the document an expanded basis for comparison (year-to-year or government-to-government) and enhance the accountability ofthe Village. Government-wide Financial Statements The government-wide financial statements (found on pages 15 to 18) are designed to provide readers with a broad overview of the Village's finances, in a manner similar to private-sector business. The focus of the Statement ofNet Assets is designed to be similar in bottom line results for the Village and its governmental and business-type activities. This statement combines and consolidates governmental funds current financial resources (short-term spendable resources) with capital assets and long-term obligations. It uses the accrual basis of accounting and economic resources measurement focus. The Statement of Activities is focused on both the gross and net cost of various activities (including governmental and business-type), that are supported by the government's general taxes and other resources. This is intended to summarize and simplify the user's analysis of the cost of various governmental services and/or subsidy to various business-type activities. 2 VILLAGE OF BUFFALO GROVE, ILLINOIS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT.) December 31, 2010 The Statement of Net Assets reports information on all of the Village's assets and liabilities, with the difference being reported as net assets. Changing of the net asset total over time can be one useful indicator in assessing the financial position of the Village. The Statement of Activities demonstrates how the net assets changed during the most recent fiscal period. The Village's governmental activities reflect the Village's basic services, including police, frre, public works, building and zoning, and administration. Property taxes, shared state and home rule sales tax, shared state income tax, real estate transfer tax, prepared food and beverage tax, and telecommunication tax finance the majority of these services. The Business-type Activities reflect private sector type operations and include Water and Sewer Funds, Refuse Fund, Buffalo Grove Golf Course and Arboretum Golf Course. The intent is for the fees to cover the costs of operations and debt service expenses. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Village uses fund accounting to insure and demonstrate fiscal accountability and legal compliance. All of the funds of the Village can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds (see pages 19 to 22) are used to account for primarily the same functions reported as governmental activities in the government-wide financial statements. The focus, unlike the government-wide financial statement, is on the sources and uses of available resources (cash and cash equivalents), in order to provide a near, or short-term view of the Village's operations. This information is useful in the evaluation of short-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide fmancial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Village of Buffalo Grove maintains eight individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, which is classified as a major fund. Data on the other seven governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in the report. Proprietary Funds (see pages 23 to 26, 80 to 86) are used to report the same functions presented as business-type activities in the government-wide financial statements. The Village uses Proprietary Funds to account for its water and sewer utility, refuse service, and activities at the Buffalo Grove and Arboretum Golf Courses. Proprietary Funds provide the same type of information as the government-wide financial statements, only in more detail. The Proprietary Fund fmancial statements provide separate information for the Water and Sewerage Fund and the Arboretum Golf Fund as they are considered to be major funds. The basic Proprietary Fund financial statements can be found on pages 23 to 26 of this report. Fiduciary Funds (see pages 27 and 28, 87 to 91) are used to account for resources held for the benefit of parties outside the government. Fiduciary Funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the Village's own programs. The accounting used for Fiduciary Funds is much like that used for Enterprise Funds. The basic Fiduciary Fund financial statements can be found on pages 27 and 28 of this report. 3 VILLAGE OF BUFFALO GROVE, ILLINOIS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT.) December 31, 2010 Infrastructure Assets The Village's infrastructure including streets, land (including right-of-way), and storm sewers are reported within the Governmental column in the government-wide statements. The Village has chosen to depreciate assets over their estimated useful lives. If a road project is considered maintenance-a recurring cost that does not extend the road's original useful life or expand its capacity-the cost of the project will be expensed. An "overlay" of a road will be considered maintenance whereas a "rebuild" of a road will be capitalized. Government-wide Financial Analysis As previously reported, the assets of the Village of Buffalo Grove exceeded liabilities by $123.5 million as of December 31, 2010. The largest portion of the Village's net assets reflects its investment in capital assets ($92.2 million or 75%) including land, buildings, infrastructure, and equipment, less any outstanding debt related to the original acquisition. The Village uses these capital assets to help facilitate service delivery to its residents, consequently, these assets are not available for future spending. Although the Village's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay the debt must be provided from other sources, since the capital assets themselves cannot be used to reduce these liabilities. An additional portion of the Village's net assets ($1 million) would represent resources that are subject to external restrictions on how they may be used. This amount is restricted for construction obligations. The remaining balance of unrestricted net assets ($30.5 million or 25%) may be used to meet the government's ongoing service obligations to residents and provide for payments to all creditors. At the end of the current fiscal period, the Village is able to report positive balances in all three categories of net assets for the government as a whole. There was one debt financed capital project initiated during the fiscal year. $2.6 million in general obligation bonds were issued to complete drainage improvements at targeted problematic locations within the Village. The Village's combined net assets decreased by $2.6 million as a result of governmental activities decreasing by $.9 million and business-type activities decreasing by $1.7 million. Net assets of the Village's governmental activities were $70.4 million. The Village's unrestricted net assets for governmental activities that are available for day-to- day fmancial operations were $15.7 million compared to $16.6 million at December 31, 2009. The net assets of business-type activities were $53.1 million. The business-type activities unrestricted net assets decreased by $1.7 million from the previous year. 4 VILLAGE OF BUFFALO GROVE, ILLINOIS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT.) December 31, 2010 Please refer to table below for condensed Statement of Net Assets: Statement of Net Assets As of December 31,2010 and December 31,2009 (in millions) Governmental Business-Type Activities Activities 2010 2009 2010 2009 Current and Other Assets $ 39.5 40.3 15.5 16.1 Capital Assets 61.9 61.2 38.4 39.8 Total Assets 101.4 101.5 53.9 55.9 Long-Term Liabilities 8.9 7.1 Other Liabilities 22.1 23.1 0.8 1.1 Total Liabilities 31.0 30.2 0.8 1.1 Net Assets Invested in Capital Assets, Net of Debt 53.6 54.6 38.4 39.8 Restricted 1.0 0.1 Unrestricted 15.8 16.6 14.7 15.0 Total Net Assets $ 70.4 71.3 53.1 54.8 Total 2010 2009 55.0 56.4 100.3 101.0 155.3 157.4 8.9 7.1 22.9 24.2 31.8 31.3 92.0 94.4 1.0 0.1 30.5 31.6 123.5 126.1 There are six basic (normal) transactions that will affect the comparability of the Statement ofNet Assets summary presentation. • Net Results of Activities-which will impact (increase/decrease) current assets and unrestricted net assets. • Borrowing of Capital-which will increase current assets and long-term debt. • Spending Borrowed Proceeds on New Capital -which will reduce current assets and increase capital assets. There is a second impact, an increase in invested in capital assets and an increase in related net debt which will not change the invested in capital assets, net of debt. • Spending of Non-borrowed Current Assets on New Capital-which will (a) reduce current assets and increase capital assets and (b) will reduce unrestricted net assets and increase invested in capital assets, net of debt. • Principal Payment on Debt-which will (a) reduce current assets and reduce long-term debt and (b) reduce unrestricted net assets and increase invested in capital assets, net of debt. • Reduction of Capital Assets through Depreciation -which will reduce capital assets and invested in capital assets, net of debt. 5 VILLAGE OF BUFFALO GROVE, ILLINOIS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT.) December 31, 2010 Changes in Net Assets. The Village's total revenues and expenses for governmental and business-type activities are reflected in the following chart: Statement of Changes in Net Assets For the Years Ended December 31,2010 and 2009 (in millions) Governmental Business-Type Activities Activities Total 2010 2009 2010 2009 2010 2009 REVENUES Program Revenues Charges for Services $ 2.7 2.6 12.2 11.3 14.9 13.9 Grants and Contributions Operating 1.3 1.3 1.3 1.3 Capital General Revenues Property 13.7 12.5 13.7 12.5 Sales and Use Taxes 7.3 7.2 7.3 7.2 Income Tax 4.2 3.6 4.2 3.6 Telecommunications Tax 2.2 2.3 2.2 2.3 Utility Tax 2.4 2.4 Property Transfer Tax 0.5 0.7 0.5 0.7 Other 3.0 3.0 0.1 {0.4} 3.1 2.6 Total Revenues 37.3 33.2 12.3 10.9 49.6 44.1 EXPENSES Governmental Activities General Government 4.8 6.2 4.8 6.2 Public Safety 22.3 22.8 22.3 22.8 Public Works 11.1 10.4 11.1 10.4 Interest 0.2 0.3 0.2 0.3 Business-type Activities Water and Sewer 9.9 9.5 9.9 9.5 Refuse Services 0.9 1.0 0.9 1.0 Golf 3.0 3.1 3.0 3.1 Total Expenses 38.4 39.7 13.8 13.6 52.2 53.3 Deficiency before Transfers (1.1) (6.5) (1.5) (2.7) (2.6) (9.2) Transfer In (Out) 0.2 0.9 {0.22 {0.92 Change in Net Assets (0.9) (5.6) (1.7) (3.6) (2.6) (9.2) Net Assets, Beginning 71.3 76.9 54.8 58.4 126.1 135.3 Net Assets, Ending $ 70.4 71.3 53.1 54.8 123.5 126.1 6 VILLAGE OF BUFFALO GROVE, ILLINOIS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT.) December 31, 2010 Revenues for the Village's governmental activities for the year ended December 31, 2010 were $37.3 million, an increase of $4.1 million. In fiscal year 2010, an electricity and natural gas use tax was adopted adding approximately $2.4 million in new revenue. The economy continues to impact retail sales taxes, telecommunications tax, real estate transfer tax, and interest income. Expenditures for the fiscal year exceeded revenues, resulting in a decrease in net assets, before transfers, of $1.1 million. There are four basic impacts on revenues as listed below: • Economic Condition -which can reflect a declining, stable or growing economic environment and has a substantial impact on state income and sales tax revenue as well as public spending habits for housing construction, home improvements, recreation, and water consumption. • Increase/Decrease in Village Approved Rates -while certain tax rates are set by statute, the Village Board has significant authority to impose and periodically increase/decrease rates (water, licensing and fees, home rule sales tax, property tax, etc.) • Changing Patterns in Intergovernmental and Grant Revenue (both recurring and non-recurring) -certain recurring revenues (state-shared revenues, etc.) may experience significant changes periodically while non- recurring (or one-time) grants are less predictable and often distorting in their impact on year-to-year comparisons. • Market Impacts on Investment Income -the Village's investment portfolio is structured to meet certain liabilities as they become due and the income generated is subject to market conditions that may cause the investment income to fluctuate. Revenue by Source -Governmental Activities B Charges for Services B Grants and Contributions DProperty OSales and Use Taxes Blncome Tax BTelecommunications Tax B Utility Use tax II Property Transfer Tax BOther The cost of all governmental activities this year was $38.4 million. The Statement of Activities on pages 17 and 18 shows that $2.7 million was financed by those who use the services, $1.3 million was fmanced by operating and capital grants and contributions, with the Village's general revenues financing $33.3 million. 7 VILLAGE OF BUFFALO GROVE, ILLINOIS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT.) December 31, 2010 The Village's four largest programs are public safety, public works, general government, and interest and fiscal charges. The graph below shows the expenses and programs revenues generated by governmental activities: Expenses and Program Revenues -Governmental Activities 25 20 ! 15 ~ ·e 10 .E 5 0 General Government A.Jblic Safety A.Jblic Works Interest I• Expenses • Program Revenue I The primary reasons for increases in expenses are: Increase in Authorized Personnel-changes in service demand may cause the Village Board to increase/decrease authorized staffing. Personnel costs (salary and related benefits) represent approximately 50% of the Village's operating cost. Salary Increases (general wage increase and merit)-market adjustments to salary to ensure the Village is able to attract and retain high level employees. Inflation -although recent inflation has been fairly muted, the Village is a significant consumer of certain commodities such as supplies, fuel, and parts. Some purchasing including construction pricing is very sensitive to commodity-specific increases (e.g., fuel prices). Business-type Activities. Revenues for the Village's business-type activities was $12.3 million for the year ended December 31, 2010, an increase of $1.4 million. The revenue generated by the water and sewer utility was up nearly $1 million due primarily to rate changes. The water and sewer system continues to see significant reductions in capital contribution as the build-out of the community is nearly completed. The Buffalo Grove and Arboretum Golf Courses saw revenue decline by $0.2 million compared to last year. The economy continues to weigh on the availability of discretionary spending on recreation. The costs of these activities were $13.8 million. The Statement of Activities is on pages 17 and 18. 8 VILLAGE OF BUFFALO GROVE, ILLINOIS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT.) December 31, 2010 Financial Analysis of the Village's Funds Governmental Funds The Village's governmental funds for the year ended December 31, 2010 reflect a combined fund balance of $22 million in its balance sheet on page I 9. This represents a $.3 million dollar increase over the balance posted last year. Of the total fund balance of $22 million, $I I. 7 million is unreserved and undesignated indicating availability for continuing Village services, $1. I million is reserved for prepaid insurance and inventory, $1 million is designated for the Retiree Health Savings Program, and $8.2 million is designated for capital replacement. The General Fund is the Village's main operating fund and accounts for core municipal services including public safety (police and fire), public works, building and zoning, and general administration. As such, it is useful to review the liquidity of the fund by comparing the unreserved and undesignated fund balance against the operating General Fund budget. As of December 3 I, 2010, the unreserved and undesignated fund balance represents 32.2% of the operating budget. The Fund Balance of the General Fund decreased by $0.7 million or 4% from December 31, 2009 (from $19.6 million to $18.9 million). The decrease in fund balance was primarily due to additional capital spending and transfers to both golf courses to support operations. General Revenue-Taxes 15 12 .... s::: 9 .2 e 6 :§. 3 0 • E • ... ... ~ In -•J! • • E 0 In 8 ::> ., -In • "ii 0 (.) •! s::: 0.. (/) (.) • ~ 0 .. 0::: w !! ... ..E a.. ...... :Q ...... ::> The General Fund's revenues increased by $3.3 million (11.2%). Approximately $1.9 million of that increase was due to the addition of the utility use taxes, including electricity and natural gas, to the revenue profile. Property taxes increased by 4.1% because of increases in the general corporate portion and pension requirements. Sales taxes net of rebates were up $0.1 million or 1.4%. Telecommunications taxes are down $0.1 million or 4.4% as a result of a continued weak economy and a reduction in the number of service lines and/or migration to VOIP service. Real estate transfer taxes were down $0.2 million (28.6%) as available sales property inventories continue to grow. Interest income also declines as investments continued to mature and are reinvested at much lower rates as most investments are limited to a duration of less than 36 months. The historically low Federal Funds Rate has a significant impact on much of the General Fund's investment portfolio. Of the total fund balance, $8.2 million is unreserved but designated for capital equipment replacement. The Village maintains a funding schedule for each major piece of capital equipment to ensure funds are available for replacement upon the end ofthe equipment's effective useful life. Reserved fund balance of$1.1 million includes $1.0 million in reserves for prepaid casualty and liability insurance and $0.1 million for central garage inventory. 9 VILLAGE OF BUFFALO GROVE, ILLINOIS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT.) December 31, 2010 General Fund expenditures increased by $. 7 million (2.I% ). As noted earlier, wages and benefits drive much of the departmental costs. In 20 I 0 a wage and hiring freeze was instituted. Several vacant positions were not filled resulting in year over year cost savings. The surplus of revenues over expenditures was $0.5 million. Adding in the net other financing uses, the net change to fund balance resulted in a decrease of $0.7 million. The deficit is due to anticipated and budgeted contributions of $1.2 million to pay-as-you-go fmancing of capital projects in fiscal year 2010, $0.7 million for transfers to the golf courses (unanticipated), and $0.8 million for spending on capital equipment. General Government Expencltures General Government Public Safety Public Works Interest Special Revenue Funds have a combined fund balance of $2.I million as of December 31, 20 I 0 up $0.87 million from December 3I, 2009. The largest increase was in the Motor Fuel Tax Fund. The Fund accounts for the state- shared motor fuel tax revenue as well as the corresponding annual street maintenance program that is funded partially by this state revenue. The Village also contributes .20% of home rule sales tax revenue to the MFT Fund to offset program variances. Revenues received from the state share of the motor fuel tax were $1.I million. The cost of the 2010 street maintenance program was $1.5 million. The scope of each year's identified maintenance, as determined through pavement analysis studies, has surpassed the relatively inelastic source of funding (more specifically the Motor Fuel Tax allotments). Given both the rise in the cost of maintenance and the declining revenue, the amount of street surface area repaired each year will decline. The available fund balance for the Motor Fuel Tax Fund stands at $1 million. The next largest increase ($.9 million) in fund balance was in the Illinois Municipal Retirement Fund. The increase was due primarily to a reduction in pension eligible earnings as several employees retired during the year. The Debt Service Fund has a fund balance of$.02 million as of the end ofFY 2010, an increase of$.03 million from the previous year. Two bond issues occurred in 2010. Series 2010A general obligation bonds refunded $5.16 million in existing debt taking advantage of a bond rating upgrade (AAA) by both Standard and Poor's and Moody's Investor Services rating houses. $2.6 million in new debt (Series 20IB general obligation bonds) was issued to address various drainage issues throughout the Village. Total debt outstanding is $8.3 million and consists of general obligation bonds. 10 VILLAGE OF BUFFALO GROVE, ILLINOIS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT.) December 31, 2010 The Village's Capital Improvement Funds (Facilities and Streets) have a total fund balance of $.9 million, which is unchanged from December 31, 2009. Significant projects completed were the White Pines Drainage Ditch, Old Checker Road Culvert Improvement, and engineering on the Village-wide Drainage Improvement Project, and the engineering study on the Weiland Road Corridor project. The Village-wide Drainage Improvement Project will ultimately be debt financed. Proprietary Funds The Village of Buffalo Grove's proprietary funds provide the same type of information found in the government- wide fmancial statements, but in more detail. The Village reports the Water and Sewer Fund as a major proprietary fund. The Water and Sewer Fund accounts for all of the operations of the municipal water system. Water is purchased wholesale from the City of Evanston through the Northwest Water Commission of which the Village is one of four members. Sanitary sewer service is provided by the Lake County Public Works Department for those property owners in Lake County. The Village acts as a billing partner to reduce administrative costs. The Metropolitan Water Reclamation District of Greater Chicago handles all the sanitary sewer treatment for Cook County residents and recovers its expenses through a property tax levy. The water and sewer utility experienced a net loss before contributions and transfers of $0.7 million for FY20 10 as compared to a net loss of $1.9 million in the prior year. Operating income increased $1.1 million due to a 24% increase in water rates effective January 1, 2010. Total water consumption was 4.2% less than the previous year. Assets decreased $1.5 million due to reduced developer contributions and the impact of depreciation. Purchased water expense and sanitary sewer fees collected on behalf of Lake County Public Works for FY2010 accounted for 47% of the total operating expense of the fund. Purchased water expense was unchanged from the prior year. Other operating expense decreased $0.1 million (or 1%) during 2010 primarily due to inflation and the change in presentation of the Village's equity position within the Northwest Water Commission. Non-operating revenue (expense) increased $0.5 million compared to the prior year due to changes in the presentation of the Village's equity position within the Northwest Water Commission. Unrestricted net assets of the Water and Sewer Fund at the end of the current fiscal year were $14.5 million. Of this amount, $7.7 million is available to cash finance any major infrastructure improvements or enhancements to the water system. • The Village also reported the Arboretum Golf Course Fund as a major proprietary fund. This fund accounts for all operations of the Arboretum Golf Course. The course reported a year-end unrestricted net asset deficit balance of $.02 million. Total revenues were approximately $.2 million less than the previous year due to an 18.7% decrease in play. Economic factors combined with a significant amount of poor weather continue to weigh heavily upon the daily play total. The Village of Buffalo Grove owns and operates two municipal golf courses. Golf play levels continue to be stagnant given both the economy and the state of the industry. A total of 52,740 paid rounds were played between the two courses representing an 11.7% decline year over year. General Fund Budgetary Highlights The budget is formally presented to the Village Board in late November or early December. As the Village operates under the Appropriations Act, a public hearing is conducted after the budget is adopted for public comment on the Appropriations Ordinance. The Ordinance sets the legal spending ceiling for each fund. The budget is the day-to- day management tool to ensure fiscal accountability. II VILLAGE OF BUFFALO GROVE, ILLINOIS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT.) December 31, 2010 Capital Assets At the end of December 31, 2010, the Village had a combined total of capital assets of $100.2 million invested in a broad range of capital assets including, buildings, streets, storm sewers, and equipment. This amount represents a net decrease (including additions and deductions) of$1.8 million. Capital Assets at Year End Net of Depreciation As of December 31,2010 and 2009 (in millions) Governmental Business-Type Land Construction in Progress Land Improvements Buildings Equipment and Vehicles Streets and Storm Sewers Water and Sewer Infrastructure Activities 2010 2009 $ 35.96 36.00 2.51 0.50 0.58 5.00 4.27 4.40 4.48 4.40 14.00 15.20 $ 61.80 65.50 Activities 2010 2009 6.20 6.20 0.30 0.07 4.70 5.30 27.20 28.30 38.40 39.87 Major additions to capital assets during the year included the following (in millions): Governmental Activities Building Improvements Construction in Progress Vehicles and Equipment Business-type Activities Water and Sewer Systems Construction in Progress Total 2010 42.16 2.81 0.58 8.97 4.48 14.00 27.20 100.20 $ 0.5 2.2 0.8 0.1 0.2 2009 42.20 0.57 5.00 9.70 4.40 15.20 28.30 105.37 The Governmental Activities net capital assets increased from last year by $.7 million (.1%). For the Business-type Activities, the net capital assets decreased by $1.4 million or (3.5%). The most significant capital activity was the Village-wide drainage improvement project, rehabilitation of the Cambridge on the Lake lift station, progress towards the construction of a deep well at reservoir #7, and the scheduled vehicle replacements made during the year as part of a systematic funding and replacement program for all Village-owned vehicles. Detailed information on the Village's capital assets is included in Note 5 on pages 38 and 39. 12 VILLAGE OF BUFFALO GROVE, ILLINOIS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT.) December 31, 2010 Long-Term Debt At year end, the Village had total bonded debt outstanding of$8.255 million as shown in the next table: General Obligation Bonds General Obligation Bonds As of December 31,2010 and 2009 (in millions) Governmental Activities 2010 2009 $ 8.3 6.6 Business-Type Activities 2010 2009 Total 2010 2009 8.3 6.6 The Village maintains assigned "AAA" ratings on its general obligation bonds from both Moody's Investor Service and Standard and Poor's Corporation. The total per capita general obligation (GO) debt for the community stands at $191.11 and represents .43% of the percentage of equalized assessed valuation of the Village. The Village, under its home rule authority, does not have a legal debt limit. Detailed information on the Village's long-term debt can be found in Note 6 on pages 40 to 42. Economic Factors and Next Year's Budgets and Rates The Village of Buffalo Grove continues to see revenues impacted by the recessionary economy. Despite stagnant revenues, the Village did enter 2011 with a balanced operating budget. The budget for the fiscal year beginning January I, 2011, is $59,501,913, a 4.6% decrease from the previous year. The operating budget totals $33,020,540, a 0.2% decrease. Total capital spending during the year is estimated to be $7.7 million. The Village's share of the state sales and income tax plus the property tax continue to represent the largest portion of the General Corporate Fund Revenue. While the State of Illinois raised the individual income tax rate to 5% and the Corporate Income Tax Rate to 7%, the local government share of the distribution was lowered from 10% to 6%. While the net impact is zero, local governmental will watch closely a future attempt to reduce amounts distributed to the local government. The taxable value of property in the Village dropped by 5% for the 2010 tax levy extended in 2011. The 2010 Corporate Fund Levy increased by 2.9% from the previous year, pension funds grew by 2.8%, and the debt service levy grew by 39.18% reflecting smaller tax abatement in 2011. In fiscal year 2011, the Village will continue to look for additional funding to supplement the motor fuel tax. The Village will continue to transfer 20% of home rule sales tax proceeds to the Motor Fuel Tax Fund to partially offset the variance in annual street maintenance costs versus the revenue generated by the Motor Fuel Tax Fund. The estimated Motor Fuel Tax allotment budgeted for next year will only cover 50% of the estimated expenditures. This source of revenue will continue to be a challenge as collections are based upon units of gas sold and not as a percentage of sales. As driving and commuting patterns change to offset some of the high oil costs so will the demand for fuel. Water and sewer rates will not be increased in FY2011 but will be reviewed for FY2012. The consumption trends have dropped significantly over the last few years due to inclement weather, a weak economy, and conservation efforts. 13 VILLAGE OF BUFFALO GROVE, ILLINOIS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT.) December 31,2010 The Village continues to suffer from the resale housing market which in the past has generated consistent revenue from the assessment of a local real estate transfer tax. It is anticipated the FY 20 ll will be as challenging as FY 20 I 0. For FY20 ll. it is estimated that the tax generated from the Real Estate Transfer Tax will be $439,000, a 67"l'o drop from revenue collected in 2005. CONTACTING THE VILLAGE'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, customers, investors, and creditors with a general overview of the Village's finances and to demonstrate the Village's accountability for the money it receives. Questions concerning this report or requests for additional financial information should be directed to Scott Anderson, Director of Finance and General Services, Village of Buffalo Grove, 50 Raupp Boulevard, Buffalo Grove, IL 60089. 14 BASIC FINANCIAL STATEMENTS VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Net Assets December 31, 20 l 0 (See Following Page) VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Net Assets December 31, 20 1 0 Governmental Business-Type Activities Activities Total Assets Current Assets Cash and Equivalents $ 9,055,750 3,900,276 12,956,026 Investments 9,752,564 2,393,110 12,145,674 Receivables Property Taxes 14,211,796 14,211,796 Accounts -Water 1,488,606 1,488,606 Municipal Sales Tax 2,063,945 2,063,945 Illinois Income Tax 1,717,342 1,717,342 Motor Fuel Tax 93,025 93,025 Telecommunications Tax 500,195 500,195 Food and Beverage Tax 68,161 68,161 Utility Tax 467,465 467,465 Interest 29,284 3,633 32,917 Other 27,675 86,175 113,850 Inventory 95,512 37,558 133,070 Total Current Assets 38,082,714 7,909,358 45,992,072 Noncurrent Assets Prepaid Items 1,042,761 366,375 1,409,136 Investment in Joint Venture 7,204,512 7,204,512 Net Pension Asset 390,648 390,648 Capital Assets, Net of Accumulated Depreciation Land 35,963,844 6,198,514 42,162,358 Construction in Process 2,517,931 282,343 2,800,274 Buildings 4,274,757 4,746,765 9,021,522 Land Improvements 582,035 582,035 Equipment and Vehicles 4,480,721 4,480,721 Streets and Storm Sewers 14,014,827 14,014,827 Water and Sewer System Infrastructure 27,183,344 27,183,344 Bond Issuance Costs, Net of Accumulated Amortization 117,579 117,579 Total Noncurrent Assets 63,385,103 45,981,853 109,366,956 Total Assets 101,467,817 53,891,211 155,359,028 See accompanying Notes to the Financial Statements. (Cont.) 15 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Net Assets (Cont.) December 31, 20 10 Governmental Business-Type Activities Activities Total Liabilities Current Liabilities Accounts Payable and Accrued Liabilities 1,989,294 787,478 2,776,772 Accumulated Unpaid Sick Leave 241,555 241,555 Claims Payable 334,173 334,173 Deposits Payable 1,128,169 48,426 1,176,595 Unearned Property Taxes 13,832,161 13,832,161 Unearned Taxes -Other 296,624 296,624 Other Liabilities -Pension Funds 3,288,918 3,288,918 General Obligation Bonds Payable 1,055,000 1,055,000 Total Current Liabilities 22,165,894 8352904 23,0012798 Noncurrent Liabilities Net Other Post-Employment Obligation 262,328 262,328 Accumulated Unpaid Sick Leave 1,347,994 1,347,994 General Obligation Bonds Payable 7 254,007 7,254,007 Total Noncurrent Liabilities 8,864,329 8,864,329 Total Liabilities 31,030,223 835,904 31,866,127 Net Assets Invested in Capital Assets, Net of Related Debt 53,742,519 38,410,966 92,153,485 Restricted for Road Construction 956,803 956,803 Unrestricted 15,738,272 14,644,341 30,382,613 Total Net Assets $ 702437,594 53,055,307 123,492,901 See accompanying Notes to the Financial Statements. 16 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Activities Year Ended December 31, 20 I 0 Functions/Programs Governmental Activities General Government Public Safety Public Works Interest and Fiscal Charges Total Governmental Activities Business-Type Activities \Vaterworks and Sewerage Refuse Service Golf Courses Total Business-Type Activities Expenses $ 4.769,874 22,312,910 11,081,374 194.655 38.358,813 9,865.981 942.757 3,043.367 13,852.105 $ 52,210,918 See accompanying Notes to the Financial Statements. 17 Program Revenues Charges tor Services Operating Grants and Contributions Ll95.928 L419.76l 71.606 2,687,295 9.091,520 1,041,661 2,088,106 12.221.287 14.908.582 156,309 1,096,794 1,253.103 1,253,] 03 General Revenues and Transfers Taxes Property Sales and Home Rule Income and Use Telecommunications Ctility Property Transfer Other Investment Income Miscellaneous Gain on Sale of Assets Transfers In (Out) Total General Revenues and Transfers Change in Net Assets Net Assets Beginning Ending Capital Grants Contributions Net (Expense), Revenue and Changes in Net Assets Governmental Business-Type Activities Activities Total (3,573,946) (3,573,946) (20, 736,840) (20, 736,840) (9.912,974) (9,912,974) (194,655) (194.655) (34,418.415) (34,418.415) (774,461) (774,461) 98,904 98,904 (955.261) (955,26]\ (1,630,818) (L630,818) (34.418,415) (L630,818) {)6,049,233) 13,657,589 13,657,589 7,309,800 7,309,800 4,165,248 4,165,248 2,183,190 2.183.190 2.393.340 2.393,340 545,515 545.515 1,017,612 1.017,6!2 250.290 80.894 33U84 1.720,640 2.133 1,722,773 101.636 I 0 I ,636 217.000 (217.000) 33.561,860 ( !33,973) 33,427.887 (856,555) (1,764,791) (2,621 ,346) 71,294.149 54,820,098 126.114.247 70.437.594 53.055,307 !23,492,901 18 VILLAGE OF BUFFALO GROVE, ILLINOIS Balance Sheet -Governmental Funds December 31,2010 Nonmajor Total General Governmental Governmental Fund Funds Funds Assets Cash and Equivalents $ 5,857,055 2,950,936 8,807,991 Investment 9,752,564 9,752,564 Receivables Property Taxes 11,563,991 2,647,805 14,211,796 Municipal Sales Tax 2,063,945 2,063,945 Illinois Income Tax 1,717,342 1,717,342 Motor Fuel Tax 93,025 93,025 Telecommunications Tax 500,195 500,195 Food and Beverage Tax 68,161 68,161 Utility Tax 467,465 467,465 Interest 29,284 29,284 Other 27,675 27,675 Due from Other Funds 324,810 324,810 Inventory 95,512 95,512 Prepaid Items 1,042,761 1,042,761 Total Assets $ 33,185,950 6,0162576 39,202,526 Liabilities Accounts Payable and Accrued Liabilities $ 1,560,389 359,647 1,920,036 Deposits Payable 1,128,169 1,128,169 Deferred Property Taxes 11,250,221 2,581,940 13,832,161 Deferred Taxes -Other 296,624 296,624 Due to Other Funds 48,425 2,155 50,580 Total Liabilities 14,283,828 2,943,742 17,227,570 Fund Balances Reserved for Inventory 95,512 95,512 Reserved for Prepaid Items 1,042,761 1,042,761 Reserved for Debt Service 20,271 20,271 Unreserved -Designated General Fund 8,200,194 8,200,194 Special Revenue Funds 931,345 931,345 Unreserved -Undesignated General Fund 9,563,655 9,563,655 Special Revenue Funds 1,193,592 1,193,592 Capital Projects Funds 927 626 927,626 Total Fund Balances 18,9022122 3,072,834 21,974,956 Total Liabilities and Fund Balances $ 33,185,950 6,016,576 39,202,526 See accompanying Notes to the Financial Statements. 19 VILLAGE OF BUFFALO GROVE, ILLINOIS Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets December 31, 20 1 0 Total Fund Balances -Governmental Funds 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, therefore, are not reported in the funds. An internal service fund is used to charge the cost of health insurance to the Village's various departments. The assets and liabilities of the internal service funds are included in the governmental activities in the Statement of Net Assets. Some assets (liabilities) reported in the Statement of Net Assets do not provide or require the use of current financial resources and, therefore, are not reported as assets (liabilities) in the governmental funds. These assets (liabilities) consist of: Net Pension Asset Net Other Post-Employment Obligation Other Liabilities to Pension Funds General Obligation Bonds Payable Accumulated Unpaid Sick Leave Deferred charges are amortized on the Statement of Activities, but are expensed in the year in which they were incurred in the governmental funds. Net Assets of Governmental Activities See accompanying Notes to the Financial Statements. 20 $ 21,974,956 61,834,115 (429,902) 390,648 (262,328) (3,288,918) (8,309,007) (1,589,549) 117,579 $ 70,437,594 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Year Ended December 31, 20 I 0 Nonmajor Total General Governmental Governmental Fund Funds Funds Revenues Charges for Services $ 993,779 151,900 1,145,679 Licenses and Permits 278,164 278,164 Intergovernmental 1,096,794 1,096,794 Fines and Fees 1,419,761 1,419,761 Property Taxes 11,243,627 2,413,962 13,657,589 Other Taxes 17,614,705 17,614,705 Investment Income 246,897 2,499 249,396 Miscellaneous 968,859 751,781 1,720,640 Total Revenues 32,765,792 4,416,936 37,182,728 Expenditures Current General Government 4,365,468 614,436 4,979,904 Public Safety 21,374,986 427,746 21,802,732 Public Works 6,551,289 2,152,716 8,704,005 Capital Outlay 3,157,156 3,157,156 Debt Service Principal 980,000 980,000 Interest and Fiscal Charges 194,655 194,655 Bond Issuance Costs 127,930 127,930 Total Expenditures 32,291,743 7,6541639 39,946,382 Excess (Deficiency) of Revenues over Expenditures 474,049 {3,2371703~ {2,763,654~ Other Financing Sources (Uses) Proceeds from Sale of Assets 103,565 103,565 Proceeds from Issuance of Debt 7,760,000 7,760,000 Premium on Issuance of Debt 178,229 178,229 Transfer to Escrow Agent (5,218,242) (5,218,242) Transfers In 705,000 1,448,190 2,153,190 Transfers Out {1,936,1902 {1,936,1902 Total Other Financing Sources (Uses) (1,127,6252 4,168,177 3,040,552 Net Change in Fund Balances (653,576) 930,474 276,898 Fund Balances Beginning 19,555,698 2,142,360 21,698,058 Ending $ 18,902,122 3,072,834 21,974,956 See accompanying Notes to the Financial Statements. 21 VILLAGE OF BUFFALO GROVE, ILLINOIS Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended December 31,2010 Net Change in Fund Balances -Total Governmental Funds Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets. This is the amount by which capital outlays exceeded depreciation in the current period ($3,341,861 current additions less $2,644,202 depreciation). Repayment of principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. Issuance of long-term debt provides current financial resources to governmental funds, while the refunding and repayment of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Issuance of long-term debt Refunding of long-term debt Premiums and other items from bond issuance are reported currently in the fund statements, but amortized over the bond life in the Statement of Activities. Premium on issuance of debt, net of current amortization Bond issuance costs, net of current amortization Loss on bond refunding, net of current amortization An internal service fund is used to charge the cost of health insurance to Village departments. The net revenue (expenses) of the internal service fund is reported within governmental activities. Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. These activities consist of: Depreciated Value on Disposal of Capital Assets Change in Pension (Obligation) Asset Increase in Net Other Post-Employment Obligation Increase in Accumulated Unpaid Sick Leave Change in Net Assets of Governmental Activities See accompanying Notes to the Financial Statements. 22 $ 276,898 697,659 980,000 (7,760,000) 5,100,000 (161,500) 117,579 107,493 (613,691) (1,930) 720,498 (139,263) (180,298) $ (856,555) VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Net Assets-Proprietary' Funds December 3L 2010 Assers Current Assets Cash and Equivalents Investments Receivables Accounts-Water Interest Other Due from Other Funds Inventory Total Current Assets Noncurrent Assets Prepaid Items Investments in Joint Venture Capital Assets, Net of Accumulated Depreciation Land Construction in Progress Buildings Water and Sewer System Total Noncurrent Assets Total Assets Liabilities Current Liabilities Accounts Payable and Accrued Liabilities Claims Payable Deposits Payable Due to Other Funds Total Liabilities Net Assets Invested in Capital Assets Unrestricted Total Net Assets See accompanying Notes io the Financial Statements. Business-Type Activities-Enterprise Funds Waterworks Arboretum Nonmajor and Sewerage Golf Course Enterprise Fund Fund Funds Total $ 3,807,222 $ 2,393,110 l ,488.606 3.633 L374 7.693,945 366375 7.204.512 282.343 27,183,344 35.()36,574 42,730,519 701.399 48.426 749,825 27.465.687 14,515,007 41,980,694 850 14.145 !4,995 5,2!9,738 4,432,661 9,652,399 9.667,394 38,900 1,605 40,505 9,652,399 (25.51 01 9,626,889 92,204 86,175 231 23,413 202,023 978,776 314,104 1,292,880 1,494,903 47.l79 47,179 1,292.880 !54,844 1,447.724 3,900,276 2,393,110 l ,488.606 3,633 86,175 1,605 37,558 7.910.963 366.375 7,204,512 6. !98,514 282.343 4,746,765 27.183.344 45,981,853 53,892,816 787.478 48,426 1,605 837,509 38.410.966 14.644.341 53,055,307 Governmental Activities Internal Service Fund 247,759 247,759 247.759 69,258 334.173 274.230 677,661 {429,902) (429.9022 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Revenues, Expenses, and Changes in Net Assets -Proprietary Funds Year Ended December 31. 2010 Operating Revenues Water and Sewerage Charges Daily Greens Fees and Memberships Merchandise Sales Connection and Recapture Fees Cart. Club and Other Rentals Driving Range Fees SWANCC User Fees Health Premiums Miscellaneous Total Operating Revenues Operating Expenses Water Operations Sewer Operations Water Purchases Golf Operations Cost of Sales -Pro Shop Refuse Operations Health Services Loss from Joint Venture Depreciation Total Operating Expenses Operating Loss Nonoperating Revenues (Expense) Investment Income Other Loss before Transfers Transfers In Transfers Out Transfers. Net Change in Net Assets Net Assets Beginning Ending Business-Type Activities -Enterprise Funds Waterworks Arboretum Nonmajor and Sewerage Golf Course Enterprise Fund Fund Funds Total $ 8,947,843 143,677 9,09L520 1,562,045 5,282.132 !.697.969 127,560 1,196.275 9,865,981 (774.461) 81.208 2,133 83.341 (691,120) ( 885,000) ( 885,()00) (1.576,120) 43,556,814 $ 41,980,694 664,510 38,931 212.829 11,292 927,562 1,176.290 58.187 488,656 1.723.133 (795,571) (795,571) 453.000 453,000 (342,571) 9,969,460 9,626,889 8,947,843 798,625 L463,!35 74.931 113,862 143,677 215.667 428.496 64.948 64,948 1,041,661 1,041.661 6,373 17,665 2,202,205 12,221,287 1,562,045 5,282,132 1,697.969 1.239,600 2,415,890 47,850 106.037 942,757 942,757 127,560 32,784 1,717,715 2,262,991 13,852,105 (60,786) (1 ,630,818) (314) 80.894 2.l33 (314) 83.027 (61,100) ( 1.547. 791) 215.000 668,000 (885,000) 2!5,000 (217,000) J 53,900 (1,764,791) 1,293,824 54,820,098 1.447.724 53,055,307 Sec accompanying Notes to the Financial Statements. 24 Governmental Activities Internal Service Fund 3.967,603 3,967,603 4,582,188 4.582.188 (6!4.585} 894 894 (613,691) (613.691) 183.789 (429,902) VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Cash Flows-Proprietary Funds Y car Ended December 3 l, 201 0 Business-Type Activities-Enterprise Funds Watervvorks Arboretum Nonmajor and Sewerage Golf Course t:nterprise Cash Flmvs Ji·om Operating Activities Cash Received !rom Residents fix Water/Sewer Services Cash Received from Residents f(lf Connections Cash Received tor Golf Activities Cash Received lor Refuse Services Cash Received from Other Funds for Services Payments to Employees Payments to Suppliers Cash Flows from Noncapital Financing Activities Change in Due to/from Other Funds. Net Transfers In T ransters Out Cash Flows from Capital and Related Financing Activities Capital Assets Purchased Cash Flows from Investing Activities Interest Received Sale of Investments Net Increase (Decrease; in Cash and Equivalents Cash and Equivalents Beginning Ending $ $ See accompanying Notes to the Financial Statements. Fund Fund Funds Total 8,758,472 8,758,472 143,677 143,677 978,342 Ll60.544 2,138,886 1,042,555 1.042.555 ( 1 ,348,904) {707.70 I) (780.189) (2,836,794) ( 7 .062,687) (525,838) ( 1,45 L30]) (9,039.826) 490,558 (255,197) (28,39]) 206.970 355,687 (197,653) (163263) (5,229) 453,000 215,000 668,000 (885,000) (885,000) (529,313) 255.347 51,737 (222,229) (319.792 (3 J 9, 792) 76.379 (314) 76.065 802,000 802.000 878,379 (314) 878,065 519.832 150 23,032 543.014 3.287,390 700 69,172 3.357.262 3,807.222 850 92.204 3,900,276 25 Governmental Activities Internal Service Fund 3.967.603 ( 4,567 ,927) (600,324) 274,230 274.230 894 894 (325,200) 572,959 247.759 (Cont.l VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Cash Flows-Proprietary Funds (Cont.) Year Ended December 31, 2010 Business-Type Activities -Enterprise Funds Waterworks Arboretum Nonmajor and Sewerage Golf Course Enterprise Reconciliation of Operating Loss to Net Cash Provided (Used) by Operating Activities: Operating Loss Adjustments to Reconcile Operating Loss to Net Cash Provided (Used) by Operating Activities Depreciation Investment in Joint Venture Changes in Assets and Liabilities Receivables Inventory Prepaids Accounts Payable and Accrued Liabilities Deposits Payable Total Adjustments Net Cash Provided (Used) by Operating Activities Summary of Noncash Investing Activities Net Appreciation of Investments $ $ $ See accompanying Notes to the Financial Statements. Fund Fund Funds Total (774,461) (795,571) (60,786) (1,630,818) 1,196,275 488,656 32,784 1,717,715 127,560 127,560 (189,371) 50,780 894 (137,697) 600 (658) (58) 38,835 38,835 94,020 338 (625) 93,733 {2,3001 ~2,3002 1,265,019 540,374 32,395 1,837,788 490,558 (255,1971 (28,3912 206,970 8,085 8,085 26 Governmental Activities Internal Service Fund (614,585) 14,261 14,261 (600,3242 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Fiduciary Net Assets December 31,2010 Assets Cash and Equivalents Investments Certificates of Deposit U.S. Government and Agency Obligations Open-end Mutual Funds Receivables Pension Contributions Interest Total Assets Liabilities Accounts Payable Due to Other Governments Total Liabilities Net Assets Restricted for Pension Benefits See accompanying Notes to the Financial Statements. 27 Pension Trust Funds $ 6,705,044 15,389,360 18,408,888 31,055,201 3,288,918 96,354 74,943,765 17,727 17,727 $ 74,926,038 Agency Fund 735,628 735,628 735,628 735 628 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Changes in Fiduciary Net Assets Year Ended December 31, 20 I 0 Additions Contributions Employer Participants Investment Income Net Appreciation in Fair Value oflnvestments Interest Income Less Investment Expense Total Additions Deductions Administration Pension Benefits and Refunds Total Deductions Change in Net Assets Net Assets Beginning Ending See accompanying Notes to the Financial Statements. 28 $ 3,981,495 1,154,905 5,136,400 5,421,493 654,813 (107,503) 5,968,803 11,105,203 81,343 2,144,251 2,225,594 8,879,609 66,046,429 $ 74,926,038 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 I. Summary of Significant Accounting Policies The Village of Buffalo Grove, Illinois (Village) was incorporated March 7, 1958. The Village operates under a Council-Manager form of govermnent and provides the following services as authorized by its articles of incorporation: public safety, waterworks, sewerage, building and zoning, engineering, recreation, civil defense and overall administration. A Financial Reporting Entity The Village is a municipal corporation governed by an elected board. As required by accounting principles generally accepted in the United States of America, these fmancial statements present the Village (the primary govermnent) and its component units. In evaluating how to defme the reporting entity, management has considered all potential component units. The decision to include a potential component unit in the reporting entity was made based upon the significance of their operational or financial relationships with the primary govermnent. Financial accountability is defined as: (1) Appointment of a voting majority of the component unit's board and either (a) the ability to impose will by the primary govermnent, or (b) the possibility that the component unit will provide a financial benefit to, or impose a financial burden on, the primary govermnent; or (2) Fiscal dependency on the primary govermnent. The accompanying fmancial statements present the Village of Buffalo Grove. The Village has determined that no other entity meets the above criteria and, therefore, no other entity has been included as a component unit in the Village's financial statements. B. Govermnent-wide and Fund Financial Statements Government-wide Financial Statements The govermnent-wide Statement of Net Assets and Statement of Activities report the overall financial activity of the Village. Eliminations generally have been made to minimize the double-counting of internal activities of the Village; however, interfund services provided and used are not eliminated in the process of consolidation. The fmancial activities of the Village consist of govermnental activities, which are primarily supported by taxes and intergovermnental revenues, and business-type activities, which rely to a significant extent on fees and charges for services. The Statement of Net Assets presents the Village's non-fiduciary assets and liabilities with the difference reported in three categories: Invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciation and reduced by outstanding balances for bonds and other debt that are attributable to the acquisition, construction, or improvement of those assets. Restricted net assets result when constraints placed on net asset use are either externally imposed by creditors, grantors, contributors, and the like, or imposed by law through constitutional provisions or enabling legislation. Unrestricted net assets consist of net assets that do not meet the criteria of the two preceding categories. 29 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31,2010 1. Summary of Significant Accounting Policies (Cont.) B. Government-wide and Fund Financial Statements (Cont.) Government-wide Financial Statements (Cont.) The Statement of Activities demonstrates the degree to which the direct expenses of a given function (i.e. general government, public safety, etc.) are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs (including fines and fees), and (b) grants and contributions that are restricted to meeting the operational requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fiduciary funds are excluded from the government-wide fmancial statements. Fund Financial Statements: Separate financial statements are provided for governmental funds, proprietary funds and fiduciary (agency) funds, even though the latter are excluded from the government-wide financial statements. The fund fmancial statements provide information about the Village's funds. The emphasis of fund fmancial statements is on major governmental funds, each displayed in a separate column. The Village has the following major governmental fund -General Fund. All remaining governmental funds are aggregated and reported as nonmajor governmental funds. The Village has the following major proprietary funds - Waterworks and Sewerage Fund and Arboretum Golf Course Fund. All remaining proprietary funds are aggregated and reported as nonmajor proprietary funds. The Village administers the following major governmental funds: General Fund -This is the Village's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The services which are administered by the Village and accounted for in the General Fund include general government, public safety and public works. The Village administers the following major proprietary funds: Waterworks and Sewerage Fund-This fund accounts for the provision of water and sewer services to the residents of the Village. All activities necessary to provide such services are accounted for in this fund, including but not limited to, administration, operations, maintenance, financing and related debt service and billing and collection. Arboretum Golf Course Fund-This fund accounts for the operation of the Arboretum golf course. All activities necessary to provide the service are accounted for in this fund including, but not limited to, administration, operations, maintenance and related debt service. The Village also administers one internal service fund, the Health Insurance Reserve Fund, to account for the activities of its self-insured health benefits program. Additionally, the Village administers fiduciary funds (pension trust and agency) for assets held by the Village in a fiduciary capacity. Included are the Village's Police Pension Fund and Firefighters' Pension Fund which accumulate resources for the retirement annuity payments to sworn officers and firefighters. The Village's agency fund, the School and Parks Donation Fund, accounts for monies deposited by developers for local schools and park districts. 30 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 3I, 20 I 0 I. Summary of Significant Accounting Policies (Cont.) C. Measurement Focus and Basis of Accounting and Financial Statement Presentation The government-wide fmancial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund fmancial statements. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flow takes place. Nonexchange transactions, in which the Village gives (or receives) value without directly receiving (or giving) equal value in exchange, include various taxes, State shared revenues and various State, Federal and local grants. On an accrual basis, revenues from taxes are recognized when the Village has a legal claim to the resources. Grants, entitlements, State-shared revenues and similar items are recognized in the fiscal year in which all eligibility requirements imposed by the provider have been met. Governmental funds are reported using the current fmancial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Village considers revenues to be available if they are collected within 90 days of the end of the current fiscal year (60 days for property taxes). Significant revenue sources which are susceptible to accrual include property taxes, other taxes including sales, telecommunications, income, and prepared food and beverage taxes, grants, charges for services, and interest. All other revenue sources are considered to be measurable and available only when cash is received. Expenditures generally are recorded when the liability is incurred, as under accrual accounting. However, compensated absences are recorded only when payment is due (upon employee retirement or termination). General capital asset acquisitions are reported as expenditures in governmental funds. Private-sector standards of accounting and financial reporting issued prior to December l, I989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services in connection with the proprietary fund's principal ongoing operations. When both restricted and unrestricted resources are available for use, it is the Village's policy to use the restricted resources first, then unrestricted resources as they are needed. ' D. Cash Equivalents For purposes of the statement of cash flows, the Village considers all highly liquid investments (including restricted assets) with maturity of three months or less when purchased to be cash equivalents. 3I VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 1. Summary of Significant Accounting Policies (Cont.) E. Cash and Investments The investments which the Village may purchase are limited by Illinois law to the following: ( 1) securities which are guaranteed by the full faith and credit of the U.S. Government as to principal and interest; (2) bonds, notes, debentures or other similar obligations of the United States of America or its agencies; (3) certificates of deposit or time deposits of any bank, as defined by the Illinois Banking Act, or savings and loan association incorporated under the laws of Illinois which are insured by a Federal corporation; (4) short-term discount obligations of the Federal National Mortgage Association; (5) certain short-term obligations of corporations (commercial paper) organized in the United States with assets exceeding $500 million that are rated at the time of purchase in the three highest classifications by at least two of the major rating services and which mature not later than 180 days from purchase, and such purchases do not exceed 10% of the corporation's outstanding obligations; (6) the State Treasurer's Illinois Funds; (7) the Illinois Metropolitan Investment Fund; and (8) money market mutual funds which invest only in securities authorized above. In addition, Pension Trust Funds are also permitted to invest in the following instruments: (1) general accounts of Illinois-licensed life insurance companies; (2) separate accounts of Illinois-licensed companies invested in stocks, bonds, and real estate, limited to 10.00% of the funds' investments; (3) certain equities (subject to limitations). F. Investments Investments are stated at fair value. G. Inventory and Prepaid Items Inventories, consisting of golf pro shop merchandise and central garage fuel reserves and parts, are stated at lower of cost (first-in, first-out) or market (net realizable value). The costs of governmental fund-type inventories are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items/expenses. H. Interfund Receivables/Payables The Village has the following types of transactions between funds: Loans and Advances -amounts provided with a requirement for repayment. In the fund financial statements, interfund loans are reported as due from other funds in lender funds and due to other funds in borrower funds. Any residual balances outstanding between the governmental activities and business-type activities are reported as internal balances in the government-wide statement of net assets. Services Provided and Used -sales and purchases of goods and services between funds for a price approximating their external exchange value. Interfund services provided and used are reported as revenues in seller funds and expenditures or expenses in purchaser funds. Unpaid amounts are reported as due to/from other funds in the fund balance sheets or fund statements of net assets. 32 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 1. Summary of Significant Accounting Policies (Cont.) H. Interfund Receivables/Payables (Cont.) Reimbursements -repayments from the funds responsible for particular expenditures or expenses to the funds that initially paid for them. Reimbursements are reported as expenditures in the reimbursing fund and as a reduction of expenditures in the reimbursed fund. Transfers-flows of assets (such as cash or goods) without equivalent flows of assets in return and without a requirement for repayment. In governmental funds, transfers are reported as other financing uses in the funds making transfers and as other financing sources in the funds receiving transfers. In proprietary funds, transfers in/out are reported as a separate category after nonoperating revenues and expenses. I. Capital Assets Capital assets which include land, land improvements, streets, buildings, storm sewers, sanitary sewers, water mains, vehicles and equipment are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defmed as assets with an initial, individual cost of more than $10,000, and an estimated useful life of greater than one year. Additions or improvements that significantly extend the useful life of an asset, or that significantly increase the capacity of an asset, are capitalized. Expenditures for asset acquisitions and improvements are stated as capital outlay expenditures in the governmental funds. Interest incurred during the construction phase of capital assets is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend the assets' lives are not capitalized. Depreciation of capital assets is recorded in the Statement of Activities with accumulated depreciation reflected in the Statement of Net Assets and is provided on the straight-line basis over the following estimated useful lives: Buildings Well and System Improvements Furniture and Equipment Vehicles 20 years 5-50 years 2-10 years 2-12 years Gains or losses from sales or retirements of capital assets are included in the operations on the Statement of Activities. J. Deferred and Unearned Revenue The Village defers revenue recognition in connection with resources that have been received, but not yet earned. Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. 33 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 20 I 0 I. Summary of Significant Accounting Policies (Cont.) K. Sick Leave, Vacation Pay and Postretirement Benefits Vacation pay does vest; employees may carry over vacation time equivalent of one full year's allowance. All vacation hours carried over from the previous year must be used in the current year or be subject to forfeit. Terminees are reimbursed for any accumulated and earned vacation pay. The amounts of such accumulated vacation benefits are not material. In the event of termination, any vested amounts due to Village employees for accumulated unused sick leave will be paid to ICMA Retirement Corporation based on the formula set forth in the Village's personnel manual. Except for those amounts for known retirements in the upcoming year, accrued amounts are generally considered to be noncurrent. Amounts are reported as liabilities in the Government-wide Statement of Net Assets. No liability is recorded for nonvesting accumulating rights to receive sick pay benefits. L. Long-Term Obligations In the government-wide financial statements and proprietary fund fmancial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental or business-type activities and proprietary fund statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund fmancial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other fmancing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Debt service funds are specifically established to account for and service the long-term obligations for the governmental funds debt. Proprietary funds individually account for and service the applicable debt that benefits those funds. Long-term debt is recognized as a liability in a governmental fund when due, or when resources have been accumulated for payment early in the following year. For other long-term obligations, only that portion expected to be financed with available fmancial resources is reported as a fund liability of a governmental fund. M. Fund Equity In the fund fmancial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally segregated for a specific purpose. Designated fund balances represent tentative plans for future use of financial resources. As of December 31, the Village reported the following designated amounts: General Fund-The Village has designated $8,200,194 for the replacement of capital equipment. Retiree Health Savings Fund-The Village has designated $931,345 for employee benefits. 34 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 1. Summary of Significant Accounting Policies (Cont.) N. Accounting Estimates The preparation of the fmancial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenditures/expenses during the period. Actual results could differ from these estimates. 0. Eliminations and Reclassification In the process of aggregating data for the government-wide Statement of Activities, some amounts reported as interfund activity and interfund balances in the funds are eliminated or reclassified. 2. Legal Compliance The budget data included in the fmancial statements represent the Village's program budget and the appropriations represent the Village's legal expenditure limit. Budgets are adopted for General, Special Revenue (except the Retiree Health Savings Fund), Debt Service, Capital Projects, Proprietary, and Pension Trust Funds. The Internal Service Fund did not adopt a budget. All governmental fund-type budgets and pension trust fund-type budgets are adopted on a basis consistent with GAAP. Proprietary funds are adopted on a basis other than GAAP in that depreciation expense, income from the joint venture, and contributions from developers are not budgeted, and principal payments on long-term debt (if any) are budgeted. The Village Board of Trustees follows these procedures in establishing the budgetary and appropriations data reflected in the fmancial statements: (1) The Village Manager submits to the Board a proposed program budget for the fiscal year commencing January 1. The program budget includes proposed expenditures and the means of financing them. (2) Appropriation ordinance public hearings are conducted by the Village to obtain taxpayer comments, and the ordinance is subsequently adopted by the Board. (3) The program budget is legally enacted through a resolution adopted by the Board. (4) Any expenditures that exceed the total appropriations at the fund level must be approved by the Board of Trustees. The Village Manager is authorized to transfer budgeted amounts between departments within any fund. However, any modifications to the legally adopted appropriation ordinance may not exceed expenditure limits, at the fund level, mandated by the appropriation ordinance without approval by the Board. Appropriations, which are not expended by year-end, lapse and must be reappropriated in the following year for the expenditure to be made. The Village does not employ the encumbrance method of accounting to reserve fund balance for subsequent year expenditures. General Fund actual expenditures for 2010 exceeded final budget by $62,872. 35 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 20 I 0 3. Deposits and Investments Custodial Credit Risk-Deposits. Custodial credit risk is the risk that in the event of a bank failure, the Village's deposits may not be returned to it. The Village's policy requires collateralization of all deposits in excess of FDIC insured limits. A. Investments The following schedule reports the fair values and maturities (using the segmented time distribution method) for the Village's investments in debt securities at December 31,2010: Maturities ~in Years l Fair Less Than 1 to 5 6 to 10 More Than Value One Year Years Years 10 Years U.S. Treasuries-Zero Coupon $11,144,220 2,417,311 5,006,737 3,720,172 U.S. Treasuries-TIPS 4,592,580 1,169,920 3,422,660 U.S. Treasuries 565,000 205,000 360,000 GNMAs 2,041 2,041 U.S. Agencies 886,226 315,000 471,226 100,000 Illinois Funds* 6,357,552 6,357,552 Illinois Metropolitan Investment Fund* 6,321,210 6,321,210 Money Market Funds* 1 626,568 1,626,568 $31,495,397 10,401,431 13,017,867 7,976,099 100,000 *Based on the weighted average maturity of the respective fund. The Illinois Metropolitan Investment Fund (IMET) and The Illinois Funds Investment Pool (IFIP) are not registered with the SEC. Oversight for IMET is provided by the IMET Board. The Board is responsible for policy formulation, as well as policy and administration oversight. Oversight for IFIP is provided by the Auditor General's Office of the State of Illinois. For both pools, the fair value of the positions in the pool is the same as the value of the pool shares. B. Interest Rate Risk The Village's investment policy protects against fair value losses resulting from rising interest rates by diversifYing its investment portfolio to prevent over-concentration of assets in a specific maturity, a specific issuer, or a specific class of securities. The Village does not have a formal policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. C. Credit Risk The Village's investment policy applies the "prudent person" standard in managing its investment portfolio. As such, all investments are made with such judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. The Village's investment policy also limits investments in commercial paper to the highest rating classifications, as established by at least two of the four major rating services, and which mature not later than 180 days from the purchase date. Such purchases may not exceed 10% of the issuer corporation's outstanding obligations. 36 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 3. Deposits and Investments (Cont.) C. Credit Risk (Cont.) Credit ratings for the Village's investments in debt securities as described bv Standard & Poor's and Moody's, respectively, at December 3 L 2010 (excluding investments in U.S. Treasuries and GNMA's which are not considered to have credit risk) are as follows: Investment Type U.S. Agencies Illinois Funds Illinois Metropolitan Investment Fund Money Market Funds NR-Not Rated D. Concentration of Credit Risk Ratings AAA/Aaa AAA/NR AAA/NR AAA;NR %of Investment Type 100% 100% 100% 100% The Village limits the amount that can be invested in commercial paper to one-third of the Village's total investments. As of December 31, 20 l 0, the Village's investments were not exposed to concentration of credit risk. E. Custodial Credit Risk The Village's investment policy requires all investments and investment collateral to be held in safekeeping by a third party custodial institution as designated by the Treasurer, or his designee, in the Village's name. Custodial credit risk is the risk that, in the event of the failure of the counterparty, the Village will not be able to recover the value of its investments or collateral securities which are in the possession of the outside party. At year end the carrying amount of the Village's deposits totaled $21,322,814 and the bank balances totaled $21,652,129. As of December 31, 2010, $52,185 of the Village's investments was exposed to custodial credit risk. 4. Receivables-Property Taxes The Village is a home-rule community under the 1970 Illinois Constitution and, accordingly, does not have a statutory rate limit. The Village's property tax is levied each calendar year on all taxable property located in the Village. For governmental funds only, property taxes collected within the fiscal year, or within 60 days after fiscal year-end, are recognized as revenue. Amounts not received within 60 days after year-end are reflected as deferred revenue. Propelty taxes in the proprietary funds and government-wide financial statements are recorded on the accrual basis. The County Assessors of Cook and Lake Counties are responsible for assessment of the taxable real property of the Village lying within their respective counties, One quarter of Lake County is reassessed each year on a repeating quadrennial schedule established by the Assessor. One-third of Cook County is reassessed each year on a repeating triennial schedule established by the Assessor. 37 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31,2010 4. Receivables-Property Taxes (Cont.) The County Clerks compute the annual tax for each parcel of real property and prepare tax books used by the County Collectors as the basis for issuing tax bills to all taxpayers in each County. Property taxes are collected by the County Collectors and are submitted to the County Treasurers, who remit to the units their respective shares of the collections. Taxes levied in one year become due and payable in two installments on March I and August 1 during the following year in Cook County and on July 1 and September l in Lake County. The frrst installment is an estimated bill and is one-half of the prior year's tax bill while the second installment is based on the current levy, assessment and equalization, and any changes from the prior year less what was paid as part of the first installment. Taxes must be levied by the third Tuesday in December for the current levy year. The levy becomes an enforceable lien against the property as of January I of the levy year. The 20IO property tax levy is recorded as a receivable and deferred (unearned) revenue as it is intended to finance fiscal year 2011. Based upon collection histories, the Village has not provided an allowance for uncollectible real property taxes. All uncollected taxes relating to prior years' levies have been written off. 5. Capital Assets A Governmental Activities A sunrrnary of changes in capital assets for governmental activities of the Village is as follows: Balances Balances January 1 Additions Deletions December 31 Capital Assets Not Being Depreciated Land $ 35,963,844 35,963,844 Construction in Progress 535,876 2,153,418 171,363 2,517,931 36,499,720 2,153,418 171,363 38,481,775 Capital Assets Being Depreciated Buildings 21,383,611 516,738 21,900,349 Equipment and Vehicles 11,966,849 843,068 409,421 12,400,496 Land Improvements 606,285 606,285 Streets 19,040,719 19,040,719 Storm Sewers 37,665,289 37,665,289 90,662,753 1,359,806 409,421 91,613,138 Less Accumulated Depreciation For Buildings 16,976,407 649,185 17,625,592 Equipment and Vehicles 7,554,184 773,082 407,491 7,919,775 Land Improvements 12,126 12,124 24,250 Streets 10,261,145 372,643 10,633,788 Storm Sewers 31,220,225 837,168 32,057,393 66,024,087 2,644,202 407,491 68,260,798 Total Capital Assets Being Depreciated, Net 24,638,666 {1,284,396! 1,930 23,352,340 Governmental Activities Capital Assets, Net $ 61,138,386 869,022 173,293 61,834,115 38 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 5. Capital Assets (Cont.) B. Business-Type Activities A summary of changes in capital assets for business-type activities of the Village is as follows: Capital Assets Not Being Depreciated Land Construction in Progress Capital Assets Being Depreciated Buildings Land Improvements Equipment Water/Sewer System Infrastructure Less Accumulated Depreciation For Buildings Land Improvements Equipment Water/Sewer System Infrastructure Total Capital Assets Being Depreciated, Net Business-type Activities Capital Assets, Net Balances January I $ 6,198,514 73,344 6,271,858 10,284,359 1,966,488 94,510 56,284,590 68,629,947 5,016,154 1,966,488 94,510 28,015,764 35,092,916 33,537,031 $ 39,808,889 C. Depreciation Charged to Functions/ Activities Depreciation was charged to functions/activities as follows: General Government Public Safety Public Works Waterworks and Sewerage Golf Courses 39 Additions Deletions 237,018 28,019 237,018 28,019 110,793 110,793 521,440 1,196,275 1,717,715 (1,606,922) (1,369,904) 28,019 Governmental Activities $ 339,657 793,766 1,510,779 $ 2,644,202 Balances December 31 6,198,514 282,343 6,480,857 10,284,359 1,966,488 94,510 56,395,383 68,740,740 5,537,594 1,966,488 94,510 29,212,039 36,810,631 31,930,109 38,410,966 Business-Type Activities 1,196,275 521,440 I ,717,715 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 20 l 0 6. Long-Term Obligations General Obligation Bonds The Village issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Accumulated Sick Leave Upon retirement after 20 years of service or attaining age 55, employees are paid for eligible accumulated unused sick leave based on the Village's policy (see Note l). The General Fund is typically used to liquidate these liabilities. Changes in long-term debt were as follows: Due Balances Balances Within Janu~ I Additions Reductions December 31 One Year Governmental Activities General Obligation Bonds $4,500,000, 4.5%-4.9% General Corporate Purpose Bond Series of 200 1A; payable in annual installments of$25,000 to $425,000. Refunded with proceeds of 20 lOA Bonds. $ 3,645,000 3,645,000 $5,485,000, 4.1 o/o-4.4% General Corporate Purpose Refunding Bond Series of2001B; payable in annual installments of$215,000 to $645,000. Refunded with proceeds of2010A Bonds. 1,455,000 1,455,000 $1,000,000, 2.65o/o-4.1% General Corporate Purpose Bond Series of 2002B; payable n annual installments of$110,000 to $140,000 through December 31, 2011. 275,000 135,000 140,000 140,000 $2,600,000, 2.25%-3.25% General Corporate Purpose Bond Series of 2003; payable in annual installments of$150,000 to $320,000 through December 31, 2013. 1,200,000 280,000 920,000 295,000 $5,160,000, 2.0o/o-4.0% General Corporate Purpose Refunding Bond Series of2010A; payable in annual installments of$325,000 to $620,000 through December 31, 2020. 5,160,000 565,000 4,595,000 620,000 40 VILLA(;E OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31 , 20 I 0 6. Long-Tenn Obligations (Cont.) Changes in long-term debt were as follows (cont): Governmental Activities (Cont.) General Obligation Bonds (Cont.) $2,600,000, 2.50o/o-3.85% General Corporate Purpose Bond Series of 20 JOB; payable in annual installements of $180,000 to $260,000 through December 31, 2025. Loss on refunding Unamortized bond premium Total General Obligation Bonds Accumulated Unpaid Sick Leave* Total Governmental Activities Balances Januarv l 6,575,000 1,409,250 $ 7.984,250 Additions 2.600,000 (J 18.242) 178.229 7.819.987 320.047 8,140,034 *Liability will be liquidated by the Retiree Health Savings Fund. Balances Reductions December 31 2,600,000 (10.749) (107,493) 16,729 !61,500 6.085.980 8.309.007 !39.748 1,589,549 6,225.728 9,898.556 Due Within One Year 1,055,000 24!.555 1,296,555 On April 19,2010, the Village issued $5,160,000 in General Obligation Refunding Bonds, Series 2010A, with interest rates of 2%-4% to advance refund $3,645,000 of outstanding 200 IA Series bonds with interest rates of 4.5%-4.9%, and $1,455,000 of outstanding 20018 Series bonds with interest rates of 4.35%-4.4%. The net proceeds of $5,218,242 (after payment of underwriting fees, insurance, and other issuance costs) were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide all future debt service payments on the 2001A and B Series bonds. As a result the 2001 A and 8 Series bonds are considered to be defeased and the liability tor those bonds has been removed from the Village's financial statements. Although the advanced refunding resulted in the recognition of an accounting loss of $118,242 tor the year ended December 31,2010, the Village in effect reduced its aggregate debt service payments by $495,796 over the next ll years and obtained an economic gain (difference between the present values of the old and new debt service payments) of$436,120. 41 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 6. Long-Term Obligations (Cont.) Annual Debt Service Requirements to Maturity The annual requirements to amortize all debt outstanding as of December 31, 20 I 0, for governmental activities are as follows: Governmental Activities Year Ending General Obligation Bonds December 31, Principal Interest 2011 $ 1,055,000 245,833 2012 920,000 218,695 2013 940,000 196,788 2014 790,000 173,988 2015 510,000 157,288 2016-2020 2,830,000 543,838 2021-2025 I 210,000 139 095 $ 8,255,000 1,675,525 7. Employee Retirement Systems A. Illinois Municipal Retirement Plan Description The Village's defmed benefit pension plan for regular employees provides retirement and disability benefits, post-retirement increases, and death benefits to plan members and beneficiaries. The Village plan is affiliated with the Illinois Municipal Retirement Fund (IMRF), an agent multiple-employer plan. Benefit provisions are established by statute and may only be changed by the General Assembly of the State of Illinois. IMRF issues a publicly available financial report that includes fmancial statements and required supplementary information. That report may be obtained on-line at www.imif.org. Funding Policy As set by statute, employer regular plan members are required to contribute 4.50% of their annual covered salary. The statutes require employers to contribute the amount necessary, in addition to member contributions, to finance the retirement coverage of its own employees. The employer contribution rate for calendar year 2010 was 12.62% of annual covered payroll. The Village also contributes for disability benefits, death benefits and supplemental retirement benefits, all of which are pooled at the IMRF level. Contribution rates for disability and death benefits are set by the IMRF Board of Trustees, while the supplemental retirement benefits rate is set by statute. Annual Pension Cost The Villages annual pension cost of $1,064,445 for the regular plan was equal to the Village's required and actual contributions. 42 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31. 20 I 0 7. Employee Retirement Systems (Cont) A. Illinois Municipal Retirement (Cont) Three-Year Trend lnfhrmationfhr the Regular Plan Fiscal Year 12/31/2010 12/31/2009 12/3112008 Annual Pension Cost (APC) $ 1,064,445 967,012 907,890 Percentage ofAPC Contributed 100% 100% 100% Net Pension Obligation 0 0 0 The required contribution was determined as part of the December 3 1, 2008 actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions at December 31, 2007 included (a) 7.5% investment rate of return (net of administrative and direct investment expenses); (b) projected salary increases of 4.00% a year, attributable to inflation; (c) additional projected salary increases ranging from OA% to 10% per year depending on age and service, attributable to seniority/merit; and (d) post-retirement benefit increases of 3% annually. The actuarial value of the Village's regular plan assets was determined using techniques that spread the effects of short-term volatility in the market value of investments over a five-year period with a 20% corridor between the actuarial and market value of assets. The Village's regular plan's unfunded actuarial accrued liability at December 31, 2008 is being amortized as a level percentage of payroll on an open 30 year basis. Funded Status and Funding Progress As of December 31 2010, the regular plan was 73.23~~ funded. The actuarial liability tor benefits was $27,438,537 and the actuarial value of assets was $20,093,313. resulting in an underfunded actuarial accrued liability (UAAL) of$7,354,224. The covered payroll (annual payroll of active employees covered by the plan) was $8,434,588 and the ratio of the UAAL to the covered payroll was 87%. The Schedule of Funding Progress, presented as Required Supplementary Information following the Notes to the Financial Statements, presents multi-year trend information about whether the actuarial value of plan assets in increasing or decreasing overtime relative to the actuarial accrued liability for benefits. Defined Benefit Pension Plans for Public Safety Employees The information included in sections 8 through F pertaining to the Village's Police and Firefighters' pension funds is based on actuarial valuations perfonned December 31, 2009. Those actuarial valuations were performed to determine the Village's required contributions and annual pension costs for those plans for its fiscal year ended December 31, 2010. 43 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 7. Employee Retirement Systems (Cont.) B. Police Pension Plan Description Police sworn personnel are covered by the Police Pension Plan, which is a defined benefit single-employer pension plan. Although this is a single-employer pension plan, the defined benefits and employee and employer contributions levels are governed by Illinois Compiled Statutes and may be amended only by the Illinois legislature. The Village accounts for the plan as a pension trust fund. The plan does not issue a stand-alone fmancial report. The Police Pension Plan membership consisted of: Retirees and Beneficiaries Currently Receiving Benefits and Terminated Employees Entitled to Benefits but Not Yet Receiving Them Current Employees Vested Nonvested Total 30 55 __12. The Police Pension Plan provides retirement benefits as well as death and disability benefits. Employees attaining the age of 50 or more with 20 or more years of creditable service are entitled to receive an annual retirement benefit of2.5% offmal salary for each year of service up to 30 years, to a maximum of75% of such salary. Employees with at least 8 years but less than 20 years of credited service may retire at or after age 60 and receive a reduced benefit. Effective for police employees hired after January 1, 2011, the normal retirement age will be 55. Employees will be eligible to retire at age 50 with a 6% reduction for each year prior to age 55. The annual pensionable salary shall not exceed $106,800; however, effective January I, 2011, that amount shall annually thereafter be increased by the lesser of (I) 3% of that amount, including all previous adjustments, or (2) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index for the I2 months ending with the September preceding each November I, including all previous adjustments. Surviving spouses receive I 00% of fmal salary for fatalities resulting from an act of duty, or otherwise the greater of 50% of final salary or the employee's retirement benefit. Employees disabled in the line of duty receive 65% of final salary. The monthly pension of a police officer who retired with 20 or more years of service after January I, 1977 is increased annually, following the first anniversary date of retirement and paid upon reaching the age of at least 55 years, by 3% of the original pension and 3% annually thereafter. 44 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 7. Employee Retirement Systems (Cont.) B. Police Pension (Cont.) Funding Policy Covered employees are required to contribute 9.91% of their base salary to the Police Pension Plan. If an employee leaves covered employment with less than 20 years of service, accumulated employee contributions may be refunded without accumulated interest. The Village is required to contribute the remaining amounts necessary to finance the plan as actuarially determined by an enrolled actuary. By the year 2033 the Village's contributions must accumulate to the point where the past service cost for the Police Pension Plan is fully funded. Actuarial valuations are performed annually. Annual Pension Cost and Net Pension Asset At December 31, 2010, the Village's annual pension cost was $2,035,302. The Village's actual contribution was $2,063,130. For a description of the significant actuarial assumptions, see "Significant Actuarial Assumptions." The net pension asset at December 31,2010 was $194,812, comprised of the following components: Annual Required Contribution (ARC) Interest on the Net Pension Asset Adjustment on the ARC Annual Pension Cost Contributions Made Increase in Pension Asset Pension Asset at January I, 2010* Pension Asset at December 31, 20 I 0 *Adjusted to reflect 20 I 0 actuarial valuation. $ 2,038,612 (12,524) 9 214 2,035,302 2,063,130 27,828 166,984 $ 194,812 The net pension asset of $194,812 is reported by the Village in the governrnent-wide Statement of Net Assets at December 31 , 20 I 0. Three-Year Trend !riformationfor the Police Pension Plan Annual Percentage Fiscal Pension ofAPC Net Pension Year Cost(APC) Contributed Asset 12/3112010 $ 2,035,302 101.40% 194,812 12/31/2009 1,750,490 98.40% 166,984 12/31/2008 1,752,254 106.66% 194,488 45 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31,2010 7. Employee Retirement Systems (Cont.) B. Police Pension (Cont.) Reserves and Concentration of Investments There are no assets legally reserved for purposes other than the payment of plan member benefits. There are no long-term contracts for contributions. There are no investments (other than those issued or guaranteed by the U.S. government) that represent 5% or more of net assets available for benefits. C. Firefighters' Pension Plan Description Fire sworn personnel are covered by the Firefighters' Pension Plan, which is a defmed benefit single- employer pension plan. Although this is a single-employer pension plan, the defmed benefits as well as the employee and employer contributions levels are mandated by Illinois Compiled Statutes and may be amended only by the Illinois legislature. The Village accounts for the plan as a pension trust fund. The plan does not issue a stand-alone financial report. The Firefighters' Pension Plan membership consisted of: Retirees and Beneficiaries Currently Receiving Benefits and Terminated Employees Entitled to Benefits but Not Yet Receiving Them Current Employees Vested Nonvested Total I2 49 _11 The Firefighters' Pension Plan provides retirement benefits as well as death and disability benefits. Employees attaining the age of 50 or more with 20 or more years of creditable service are entitled to receive an annual retirement benefit of one-half of the salary attached to the rank held in the fire service on the last day of service. The pension is increased by 2.5% of such salary for each additional year of service over 20 years up to 30 years, to a maximum of75% of such salary. Employees with at least IO years but less than 20 years of credited service may retire at or after age 60 and receive a reduced retirement benefit. Effective for firefighters' hired after January I, 2011, the normal retirement age will be 55. Employees will be eligible to retire at age 50 with a 6% reduction for each year prior to age 55. The annual pensionable salary shall not exceed $106,800; however, effective January I, 20II, that amount shall annually thereafter be increased by the lesser of (I) 3% of that amount, including all previous adjustments, or (2) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index for the 12 months ending with the September preceding each November I, including all previous adjustments. Surviving spouses receive 100% of fmal salary for fatalities resulting from an act of duty, or otherwise the greater of 54% of the fmal salary or the monthly retirement pension that the deceased firefighter was receiving at the time of death. Surviving children receive I2% of the fmal salary. The maximum family survivor benefit is 75% of fmal salary. Employees disabled in the line of duty receive 65% of final salary. 46 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31,2010 7. Employee Retirement Systems (Cont.) C. Firefighters' Pension (Cont.) Plan Description (Cont.) The monthly pension of a firefighter who retired with 20 or more years of service after January 1, 1977 is increased annually, following the first anniversary date of retirement and paid upon reaching at least the age 55, by 3% of the original pension and 3% annually thereafter. Funding Policy Covered employees are required to contribute 9.455% of their salary to the Firefighters' Pension Plan. If an employee leaves covered employment with less than 20 years of service, accumulated employee contributions may be refunded without accumulated interest. The Village is required to contribute the remaining amounts necessary to finance the plan as actuarially determined by an enrolled actuary. By the year 2033 the Village's contributions must accumulate to the point where the past service cost for the Firefighters' Pension Plan is fully funded. Actuarial valuations are performed annually. Annual Pension Cost and Net Pension Asset At December 31, 2010, the Village's annual pension cost was $1,902,270. The Village's actual contribution was $1,918,365. For a description of the significant actuarial assumptions, see "Significant Actuarial Assumptions." The net pension asset at December 31, 2010 was $195,836, comprised of the following components: Annual Required Contribution (ARC) $ 1,905,833 Interest on the Net Pension Asset (13,481) Adjustment on the ARC 9 918 Annual Pension Cost 1,902,270 Contributions Made 12918,365 Increase in Pension Asset 16,095 Pension Asset at January 1, 2010* 179 741 Pension Asset at December 31, 2010 $ 195,836 *Adjusted to reflect 2010 actuarial valuation. The net pension asset of $195,836 is reported by the Village in the government-wide Statement of Net Assets at December 31, 2010. Three-Year Trend Information for the Firefighters' Police Pension Plan Annual Percentage Net Pension Fiscal Pension ofAPC Asset Year Cost (APC) Contributed (Obligation) 12/3112010 $ 1,902,270 100.80% 195,836 12/3112009 1,502,215 99.20% 179,741 12/3112008 1,503,692 105.10% 192,345 47 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 20 I 0 7. Employee Retirement Systems (Cont.) C. Firefighters' Pension (Cont.) Reserves and Concentration of Investments There are no assets legally reserved for purposes other than the payment of plan member benefits. There are no long-term contracts for contributions. There are no investments (other than those issued or guaranteed by the U.S. government) that represent 5% or more of net assets available for benefits. D. Summary of Significant Accounting Policies and Plan Asset Matters The fmancial statements for the Police and Firefighters' Pension Trust Funds are prepared using the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Administrative costs for the Police and Firefighters' Pension Plans are fmanced primarily through investment earnings. Investments are reported at fair value. Short-term investments are reported at cost, which approximates fair value. E. Funded Status and Funding Progress -Pension Trust Funds The funded status ofthe Police and Firefighters' Pension Plans as of December 31,2009, the most recent actuarial valuation date, is as follows: Actuarial Unfunded UAALasa Actuarial Accrued (Overfunded) Percentage Value of Liability (AAL) AAL Funded Covered of Covered Assets Entry Age (UAAL) Ratio Payroll Payroll Plan ~al ~bl ~b-a1 ~albl !cl !b-a1/c Police Pension $ 36,896,831 61,278,367 24,381,536 60.21% 5,998,088 406.49% Firefighters' Pension 29,149,597 46,895,213 17,745,616 62.16% 5,429,462 326.84% The Schedules of Funding Progress, presented as Required Supplementary Information (RSI) following the Notes to the fmancial Statements, present multi-year trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 48 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 20 I 0 7. Employee Retirement Systems (Cont.) F. Significant Actuarial Assumption The information presented in the notes and the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation follows: Illinois Municipal Police Firefighters' Retirement Pension Pension Actuarial Valuation Date December 31, December 31, December 31, 2009 2010 2010 Actuarial Cost Method Entry Age Entry Age Entry Age Normal Normal Normal Asset Valuation Method Five-Year Three-Year Three-Year Smoothed Smoothed Smoothed Market Value Market Value Market Value Amortization Method Level Percentage Level Precentage Level Precentage of Projected of Projected of Projected Payroll -Open 30 Payroll -Closed Payroll -Closed Year Basis Basis Basis Significant Actuarial Assumptions (a) Remaining Amortization Period (Years) 23 25 25 (b) Rate of Return on Investment of 7.50% 7.50% 7.50% Present and Future Assets Compounded Compounded Compounded Annually Annually Annually (c) Projected Salary Increases -4.00% 5.00% 5.00% Attributable to Inflation Compounded Compounded Compounded Annually Annually Annually (d) Additional Projected Salary 0.4% to 10.0% (Note: Separate Information Increases -Attributable to for (b) and (c) not available) Seniority/Merit (e) Postretirement Benefit Increases 3.00% 3.00% 3.00% Compounded Compounded Annually Annually 49 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 20 I 0 7. Employee Retirement Systems (Cont.) G. Individual Plan Financial Statements (Cont.) Statement of Fiduciary Net Assets-Pension Trust Funds Assets Cash and Cash Equivalents Investments Certificates of Deposit U.S. Govermnent and Agency Obligations Open-end Mutual Funds Receivables Pension Contributions Interest Total Assets Liabilities Accounts Payable Net Assets Held in Trust for Pension Benefits Police Firefighters' Pension Pension $ 5,693,199 I,Oll,845 15,389,360 17,060,995 1,347,893 16,885,481 14,169,720 1,769,840 1,519,078 33 224 63 130 41,442,739 33,501,026 15 556 2 171 $ 41,427,183 33,498,855 Schedules of Funding Progress for the Plans are presented in the Required Supplemental Information Section. 50 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 7. Employee Retirement Systems (Cont.) G. Individual Plan Financial Statements (Cont.) H. Statement of Changes in Fiduciary Net Assets-Pension Trust Funds Police Firefighters' Pension Pension Additions Contributions Employer $ 2,063,130 1,918,365 Participants 636 117 518 788 2:699:247 2:437:153 Investment Income Net Appreciation in Fair Value of Investments 3,447,268 1,974,225 Interest Income 75,600 579,213 Less: Investment Expense {96:7892 {10:7142 3A26:079 2:542:724 Total Additions 6:125:326 4,979:877 Deductions Administration 34,895 46,448 Pension Benefits and Refunds 1:560:080 584)71 Total Deductions 1 594 975 630 619 Change in Net Assets 4,530,351 4,349,258 Net Assets Beginning 36:896:832 29)49:597 Ending $ 41,427,183 33,498,855 Other Post-Employment Benefits (OPEB) Plan Description In addition to providing the pension benefits described above, the Village provides post-employment health care benefits (OPEB) for retired employees. The Village of Buffalo Grove Group Health Plan (the Plan) is a single-employer defmed benefit healthcare plan administered by the Village. The Plan provides medical and dental insurance benefits to eligible retirees and their dependents. The benefits, benefit levels, employee contributions and employer contributions are governed by the Village Board and can only be amended by the Village Board. The Plan is not accounted for as a trust fund as an irrevocable trust has not been established. The Village does not issue a Plan financial report. 51 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 7. Employee Retirement Systems (Cont.) H. Other Post-Employment Benefits (OPEB) (Cont.) Funding Policy The contribution requirements of plan members and the Village are established and may be amended by the Village Board and are detailed in the "Plan Document and Summary Plan Description." The required contribution is based on projected pay-as-you-go financing requirements. For fiscal year 2010, the Village contributed $68,239 to the plan, including $68,239 for current premiums (approximately 20% of total premiums). Plan members receiving benefits contributed $274,341, or approximately 80% of the total premiums, through their required contribution of$586.04 per month for retiree-only coverage, $1,168.91 per month for retiree and dependent coverage, and $2,059.12 per month for family coverage. Annual OPEB Cost and Net OPEB Obligation The Village's annual other post-employment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the Village's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the Village's net OPEB obligation to the Plan: Annual Required Contribution (ARC) $ 122,505 Interest on the Net OPEB Obligation 10,233 Adjustment to Annual Required Contribution (6,822) Annual OPEB cost 125,916 Village Contributions Made 68z239 Increase in OPEB Liability 57,677 Net OPEB Liability at January 1, 2010* 204z651 Net OPEB Liability at December 31, 2010 $ 262,328 *Adjusted to reflect 2010 actuarial valuation. The Village's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2010 was as follows: Percentage Annual of Annual Fiscal OPEB OPEB cost NetOPEB Year Cost Contributed Obligation 12/31/2010 $ 125,916 54.20% 262,328 12/31/2009 126,135 54.10% 204,651 12/31/2008 129,324 35.80% 146,755 52 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 7. Employee Retirement Systems (Cont.) H. Other Post-Employment Benefits (OPEB) (Cont.) Funding Status and Funding Progress As of December 31, 2010, the plan was 100% unfunded. The actuarial accrued liability for benefits was $2,108,079, and the actuarial value of assets was $0 (zero), resulting in an unfunded actuarial accrued liability (VAAL) of $2,108,079. The covered payroll (annual payroll of active employees covered by the plan) was $21,307,066, and the ratio of the UAAL to the covered payroll was 9.89%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as Required Supplementary Information following the Notes to the Financial Statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for fmancial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the December 31, 2009 actuarial valuation, the entry age actuarial cost method was used. The actuarial assumptions included a 5.0% investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the plan at the valuation date, and an annual healthcare cost trend rate of 8% initially, reduced by decrements to an ultimate rate of 6% ultimately. Both rates included a 3.0% inflation assumption. The actuarial value of assets was determined using market value. The UAAL is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period at December 31, 2009 was 30 years. 8. Contingent Liabilities Litigation The Village is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the Village's attorney, the resolution of these matters will not have a material adverse effect on the fmancial condition of the Village. Northwest Water Commission (NWWC) The Village's water purchase contract with the Northwest Water Commission (Note ll.B) provides that each member is liable for its proportionate share of any costs arising from defaults in payment obligations by other members. 53 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 20 I 0 8. Contingent Liabilities (Cont.) Solid Waste Agency of Northern Cook County (SW ANCC) The Village's contract with the Solid Waste Agency of Northern Cook County (Note ll.A) provides that each member is liable for its proportionate share of any costs arising from defaults in payment obligations by other members. 9. Interfund Activities A. To/From Other Funds Individual interfund balances for the Village at December 31, 2010, are shown as follows: Receivable Fund Due to/from Other Funds Motor Fuel Tax Fund Facilities Development Capital Projects Street Maintenance Fund Water and Sewerage Fund Buffalo Grove Golf Course Fund Payable Fund General Fund Facilities Development Debt Service Health Insurance Fund Arboretum Golf Course Fund Arboretum Golf Course Fund Amount $ 48,425 2,155 274,230 1,374 231 lnterfund balances arise during the normal course of business and are generally closed by routine transfers of cash between funds. B. Transfers In/Out Interfund transfers during the year ended December 31, 2010 consisted of the following: Receiving Fund General Fund Facilities Development Debt Service Facilities Development Debt Service Motor Fuel Tax Fund Facilities Development Capital Projects Arboretum Golf Course Fund Buffalo Grove Golf Course Fund Transferring Fund Waterworks and Sewerage Fund Waterworks and Sewerage Fund General Fund General Fund General Fund General Fund General Fund The purpose of the significant transfers is as follows: Amount $ 705,000 180,000 200,000 556,030 512,160 453,000 215,000 The General Fund transferred $200,000 for debt service to the Facilities Development Debt Service Fund, $512,160 for capital projects to the Facilities Development Capital Projects Fund, $556,030 for street maintenance to the Motor Fuel Tax Fund, $453,000 to the Arboretum Golf Course Fund for operations, and $215,000 to the Buffalo Grove Golf Course Fund for operations. The Waterworks and Sewerage Fund transferred $705,000 for administrative expenses to the General Fund and $180,000 for debt service to the Facilities Development Debt Service Fund. 54 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 10. Risk Management The Village is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; natural disasters; and injuries to the Village's employees. The Village currently reports all its risk management activities related to its participation in the Intergovernmental Risk Management Agency in its General Fund and Waterworks and Sewerage Fund. Beginning in fiscal year 2006, the Village elected to self-insure its health claims program. The Village accounts for this activity in an internal service fund -the Health Insurance Reserve Fund. The Village participates in the Intergovernmental Risk Management Agency {IRMA). IRMA is an organization of municipalities and special districts in Northeastern Illinois, which have formed an association under the Illinois Intergovernmental Cooperation Statute to pool its risk management needs. The agency administers a mix of self-insurance and commercial insurance coverages; property/casualty and workers' compensation claim administration/litigation management services; unemployment claim administration; extensive risk management/loss control consulting and training programs; and a risk information system and financial reporting service for its members. The Village's payments to IRMA are displayed on the financial statements as expenditures/expenses in appropriate funds. Each member assumes the first $1,000 of each occurrence for years prior to 2004, and $2,500 for each occurrence in 2004 and subsequent years. Beginning in 2005, members were given the option to assume higher deductibles. IRMA has a mix of self-insurance and commercial insurance at various amounts above that level. Each member appoints one delegate, along with an alternate delegate, to represent the member on the Board of Directors. The Village does not exercise any control over the activities of the Agency beyond its representation on the Board of Directors. Initial contributions are determined each year based on the individual member's eligible revenue as defined in the by-laws of IRMA, experience modification factors based on past member loss experience, and optional deductible credits. Members have a contractual obligation to fund any deficit of IRMA attributable to a membership year during which they were a member. Supplemental contributions may be required to fund these deficits. There has be((n no reduction in the Village's insurance coverage for any of its programs since the prior fiscal year. Settlements have not exceeded insurance coverage for the current year or prior three fiscal years. The Village reports its risks of loss for health claims in the Health Insurance Reserve Fund, which is reported as an internal service fund. The self-insurance liability includes an estimate of incurred but not reported claims. A reconciliation of the total claims liability for 2008 through 2010 is below: 2010 2009 2008 Unpaid Claims Liability -Beginning of Year $ 268,746 226,252 486,816 Claims Incurred 3,885,636 3,407,284 4,051,848 Claims Paid {3z820z2092 {3z364z7902 ~4!312,4122 Unpaid Claims Liability-End of Year $ 334,173 268,746 226,252 55 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 11. Joint Ventures A. Solid Waste Agency ofNorthern Cook County (SWANCC) Description of Joint Venture The Village is a member of the Solid Waste Agency of Northern Cook County (the Agency), which consists of 23 municipalities. The Agency is a municipal corporation and public body politic and corporate established pursuant to the Constitution of the State of Illinois and the Intergovernmental Cooperation Act of the State of Illinois, as amended (the Act). The Agency is empowered under the Act to plan, construct, fmance, operate and maintain a solid waste disposal system to serve its members. The members of the Agency and their percentage shares based on a formula contained in the Agency agreement are: %Share %Share Arlington Heights 11.13 Mount Prospect 8.05 Barrington 1.65 Niles 3.44 Buffalo Grove 6.37 Palatine 9.14 Elk Grove Village 5.77 Park Ridge 5.08 Evanston 7.91 Prospect Heights 1.38 Glencoe 1.53 Rolling Meadows 2.90 Glenview 4.77 Skokie 8.15 Hoffman Estates 3.71 South Barrington 0.70 Inverness 1.15 Wheeling 4.06 Kenilworth 0.81 Wilmette 4.23 Lincolnwood 1.84 Winnetka 3.09 Morton Grove 3.14 100.00 These percentage shares are subject to change in future years based on the population of the municipalities. The members form a contiguous geographic service area which is located northwest of downtown Chicago. Under the Agency Agreement, additional members may join the Agency upon the approval of each member. The Agency is governed by a Board of Directors, which consists of one appointed Mayor or President from each member municipality. Each Director has an equal vote. The officers of the Agency are appointed by the Board of Directors. The Board of Directors determines the general policy of the Agency, makes all appropriations, approves contracts, adopts resolutions providing for the issuance of bonds or notes by the Agency, adopts by-laws, rules and regulations, and exercises such powers and performs such duties as may be prescribed in the Agency Agreement or the by-laws. The Executive Committee of the Agency consists of seven members elected by the Board of Directors. Each member is entitled to one vote on the Executive Committee. The Executive Committee may take any action not specifically reserved to the Board of Directors by the Act, the Agency Agreement or the Bylaws. 56 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31,2010 11. Joint Ventures (Cont.) A. Solid Waste Agency ofNorthem Cook County (SWANCC) (Cont.) Summary Financial Information of Joint Venture Summary of Financial Position as of April30, 2010: Current Assets Capital Assets Other Assets $ 5,277,771 11,704,309 100 676 $ 17,082,756 Liabilities and Net Assets Current Liabilities Long-term Liabilities Total Liabilities Net Assets $ 4,162,145 4,822,573 8,984,718 8,098,038 $ 17,082,756 Summary of Revenue, Expenses and Changes in Net Assets for the year ended April30, 2010: Operating Revenues Operating Expenses Operating Income Nonoperating Expenses Change in Net Assets Net Assets May 1 April30 $ 14,357,619 13,555,320 802,299 (269,156) 533,143 7,564,895 $ 8,098,038 Complete financial statements for SW ANCC can be obtained from the Agency's administrative office at 2700 Patriot Boulevard, Suite 110, Glenview, Illinois 60026. The Agency's bonds are revenue obligations. They are limited obligations of the Agency with a claim for payment solely from and secured by a pledge of the revenues of the System and amounts in various funds and accounts established by Agency resolutions. The bonds are not a debt of any member. The Agency has no power to levy taxes. Revenues of the System consist of (a) all receipts derived from Solid Waste Disposal Contracts or any other contracts for the disposal of waste; (b) all income derived from the investment of monies; and (c) all income, fees, service charges and all grants, rents and receipts derived by the Agency from the ownership and operation of the system. The minimum annual cost includes operation and maintenance of the System as well as project costs. 57 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 11. Joint Ventures (Cont.) A. Solid Waste Agency ofNorthem Cook County (SWANCC) (Cont.) Summary Financial Information of Joint Venture (Cont.) The Agency covenants to establish fees and charges sufficient to provide revenues to meet all its · requirements. The Agency has entered into Solid Waste Disposal Contracts with the member municipalities. The Contracts are irrevocable and may not be terminated or amended except as provided in the Contract. Each member is obligated, on a "take or pay" basis, to purchase or in any event to pay for a minimum annual cost of the System. The minimum annual cost includes operation and maintenance of the System as well as project costs. The obligation of the Village to make all payments as required by this Contract is unconditional and irrevocable, without regard to performance or nonperformance by the Agency of its obligations under this Contract. The payments required to be made by the Village under this Contract shall be required to be made solely from revenues to be derived by the Village from the operation of the Village's System. The Village is not prohibited by the Contract from using any other available funds to make the payments required by the Contract. The Contract shall not constitute an indebtedness of the Village within the meaning of any statutory or constitutional limitation. In accordance with the joint venture agreement, the Village remitted $936,197 to SW ANCC for the year ended December 31, 2010. The Village has committed to make payments to the Solid Waste Agency of Northern Cook County. The Village has committed to pay approximately $1,000,000 annually. This amount has been calculated using the Village's current allocation percentage of 6.37%. In future years, this allocation percentage will be subject to change. B. Northwest Water Commission (NWWC) Description of Joint Venture The Village is a member ofthe Northwest Water Commission (the Commission), which consists of four municipalities. The Commission is a municipal corporation and public body politic and corporate established pursuant to the Constitution of the State of Illinois and the Intergovernmental Cooperation Act of the State of Illinois, as amended (the Act). The Commission is empowered under the Act to plan, construct, improve, extend, acquire, finance, operate and maintain a water supply system to serve its members and other potential water purchasers. 58 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 II. Joint Ventures (Cont.) B. Northwest Water Commission (NWWC) (Cont.) Description of Joint Venture (Cont.) The four members of the Commission and their percentage shares as of the date of this report are as follows: Village of Arlington Heights Village of Buffalo Grove Village of Palatine Village of Wheeling %Share 35.29 18.52 27.97 18.22 100.00 These percentage shares are based on formulae contained in the water supply agreement and are subject to change in future years based on the consumption by the municipalities. The members form a contiguous geographic service area which is located northwest of downtown Chicago. Under the Commission Agreement, additional members may join the Commission upon the approval of each member. The Commission is governed by a Board of Commissioners, which consists of one Village Manager from each member municipality. Each Commissioner has an equal vote. The officers of the Commission are appointed by the Board of Commissioners. The Board of Commissioners determines the general policy of the Commission, makes all appropriations, approves contracts for sale or purchase of water, adopts resolutions providing for the issuance of bonds or notes by the Commission, adopts by-laws, rules and regulations, and exercises such powers and performs such duties as may be prescribed in the Commission Agreement or the by-laws. Summary Financial Information of Joint Venture for the fiscal year ended April 30, 2010: Current Assets Restricted Assets Capital Assets Other Assets $ 3,671,091 11,167,469 35,003,412 105,066 $ 49,947,038 59 Liabilities and Net Assets Current Liabilities Long-term Liabilities Total Liabilities Net Assets $ 4,220,637 6,184,625 10,405,262 39,541,776 $ 49,947,038 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31,2010 11. Joint Ventures (Cont.) B. Northwest Water Commission (NWWC) (Cont.) Description of Joint Venture (Cont.) Operating Revenues Operating Expenses Change in Net Assets Net Assets May 1 April30 $ 9,197,021 9,245,268 (48,247) 39,590,023 $ 39,541,776 Complete financial statements for NWWC can be obtained from the Commission's administrative office at 1525 North WolfRoad, Des Plaines, Illinois 60016. The Commission's bonds are revenue obligations. They are limited obligations of the Commission with a claim for payment solely from and secured by a pledge of the revenues of the System and amounts in various funds and accounts established by Commission resolutions. The bonds are not a debt of any member. The Commission has no power to levy taxes. Revenues of the System consist of (I) all receipts derived from Water Supply Contract of any other contract for the supply of water; (2) all income derived from the investment of monies; and (3) all income, fees, water service charges and all grants, rents and receipts derived by the Commission from the ownership and operation of the System and the sale of water. The Commission covenants to establish fees and charges sufficient to provide revenues to meet all its requirements. The Commission has entered into Water Supply Contracts with the four member municipalities for a term of 40 years, extending to 2025. The Contracts are irrevocable and may not be terminated or amended except as provided in the Contract. Each member is obligated, on a "take or pay" basis, to purchase or in any event to pay for a minimum annual quantity of water. The Commission has entered into an agreement with the City of Evanston under which the City has agreed to sell quantities of lake water sufficient to supply the projected water needs of the Commission through the year 2025. The obligation of the Village to make all payments as required by this Contract is unconditional and irrevocable, without regard to performance or nonperformance by the Commission of its obligations under this Contract. The payments required to be made by the Village under this Contract shall be required to be made solely from revenues to be derived by the Village from the operation of the Village's System. The Village is not prohibited by the Contract from using any other available funds to make the payments required by the Contract. The Contract shall not constitute an indebtedness of the Village within the meaning of any statutory or constitutional limitation. 60 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2010 11. Joint Ventures (Cont.) B. Northwest Water Commission (NWWC) (Cont.) Description of Joint Venture (Cont.) The obligation of the Village to make payments required by this Contract from revenues of the Village's System shall be payable from the operation and maintenance account of the Village's System Fund and from all other accounts of the Village's System Fund in which there are available funds. In accordance with the joint venture agreement, the Village remitted $1,697,969 to NWWC for the year ended December 31, 2010. The Village's equity interest in NWWC was $7,204,512 at December 31, 2010. The Village's net investment and its share of the operating results of NWWC are recorded in the Village's Waterworks and Sewerage Fund. Commitments to the Northwest Water Commission (NWWC) The Village has committed to retire a portion of the outstanding debt of the Northwest Water Commission of approximately $3 million. These amounts have been calculated using the Village's current allocation percentage of 18.22%. In future years, this allocation percentage will be subject to change. 12. Retiree Health Savings Plan The Village determined that the establishment of a retiree health savings plan, to be administered by the ICMA Retirement Corporation, serves the interests of the Village by enabling it to provide reasonable security regarding such employees' health needs during retirement, by providing increased flexibility in its personnel management systems, and by assisting in the attraction and retention of competent personnel. The Village adopted the plan in the form of the ICMA Retirement Corporation's VantageCare Retiree Health Savings Plan. The assets of the plan will be held in a trust, with the Village serving as trustee, for the exclusive benefit of the plan participants and their beneficiaries. 13. Pledged Revenues The Village has pledged a portion of future sales tax revenues to a local retailer. In order to increase its competitiveness in the marketplace by establishing a single-order acceptance point for all its credit sales, the local retailer entered into a municipal sales tax incentive agreement with the Village, where the Village will pay to the retailer, a portion of the municipal component of the sales tax revenue generated by the retailer from credit sales as provided in the agreement. The agreement commenced November 2000 (first sales tax year), was amended in August 2009, and terminates in calendar year 2020. The terms of the agreement indicate that beginning in November 2000, the Village and the retailer shall distribute on a monthly basis, the municipal sales taxes resulting from taxable credit sales with single-order acceptance at the retailer's property and received by the Village in the following amounts: • for the first sales tax year through July 2009, 80% to the retailer and 20% to the Village, in addition to any interest accrued on such amounts; and • for August 2009 through 2020, 60% to the retailer and 40% to the Village. 61 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 20 1 0 13. Pledged Revenues (Cont.) Not withstanding the terms stated above, the minimum municipal sales taxes to be retained by the Village shall be as follows: • • no less than $450,000 annually effective as of the third sales tax year (2002) through calendar year 2008;and effective July 2009, there is no minimum municipal sales tax revenue guaranteed to the Village . In the event that the municipal sales taxes retained by the Village fell below the minimum amount noted above, the Village was to document the difference and invoice the retailer for the said amount, which shall be paid within 30 days of receipt. The total municipal sales taxes collected by the Village during the year ended December 31, 2010, amounted to $1,183,583, of which $182,170 (or 16%) was remitted to the local retailer. Municipal sales taxes totaling $66,957 was due to the local retailer as of December 31, 2010, and is included in accounts payable on the statement of net assets and governmental funds balance sheet. 14. Operating Lease Commitments 15. The Village has commitments with non-Village entities to lease certain property. Future minimum rental commitments as ofDecember 30,2010 are as follows: Year Ending December 31, Amount 2011 $ 110,265 2012 112,470 2013 114,720 2014 117,014 2015 119,354 2016-2020 633,547 2021-2025 650,349 $ 1,857,719 New Governmental Accounting Standards The Governmental Accounting Standards Board (GASB) has issued the following statement: Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, will be effective for the Village beginning with its year ending December 31, 2011. This Statement was issued to enhance the usefulness of fund balance information by providing clearer fund balance classifications and by clarifying the existing fund type definitions. This Statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed on the use of the resources reported in governmental funds. Management has not currently determined what impact, if any, this Statement may have on its financial statements. 62 REQURIED SUPPLEMENTARY INFORMATION (UNAUDITED) VILLAGE OF BUFFALO GROVE, ILLINOIS Required Supplementary Information Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual -General Fund Year Ended December 31 20 1 0 Revenues Charges for Services Licenses and Permits Fines and Fees Property Taxes Other Taxes Investment Income Miscellaneous Total Revenues Expenditures Current General Government Public Safety Public Works Total Expenditures Excess (Deficiency) of Revenues over Expenditures Other Financing Sources (Uses) Proceeds from Sale of Assets Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balance Fund Balance Beginning Ending See Note to Required Supplementary Information. Original/Final Appropriations $ 11,181,725 11,181,725 4,788,483 22,622,979 7,415,376 34,826,838 (23,645,113) {2, 150:0001 {2, 150,0001 $ {25,795,1131 63 Variance from Final Final Budget Budget Actual Over (Under) 838,108 993,779 155,671 273,200 278,164 4,964 1,524,200 1,419,761 (104,439) 11,367,864 11,243,627 (124,237) 17,285,176 17,614,705 329,529 446,897 246,897 (200,000) 786,250 968,859 182,609 32,521:695 32,765,792 244,097 4,259,059 4,365,468 106,409 21,783,589 21,374,986 (408,603) 6,186,223 6,551,289 365,066 32,228,871 32,291,743 62,872 292,824 474,049 181,225 103,565 103,565 705,000 705,000 {1,199,7951 { 1 ,936,1901 {736,3951 {494,7951 {1,127,6251 {632,8301 {201,9711 (653,576) (451,6051 19,555,698 18,902,122 VILLAGE OF BUFFALO GROVE, ILLINOIS Required Supplementary Information Analysis of Funding Progress December 31, 20 1 0 Illinois Municipal Retirement Fund (b) ((b-a)/c) (a) Actuarial (b)-(a) UAALasa Actuarial Actuarial Accrued Unfunded (a)/(b) (c) Percentage Valuation Value of Liability (AAL) AAL Funded Covered of Covered Date Assets Ent!):: Age {UAAL} Ratio Pa,l!oll Pa,l!oll 2010 $ 20,093,313 27,438,537 7,345,224 73.23 % 8,434,588 87.08 % 2009 19,976,965 27,343,323 7,366,358 73.06 8,610,969 85.55 2008 19,002,171 25,777,985 6,775,814 73.71 8,663,075 78.21 2007 20,472,503 24,448,341 3,975,838 83.74 8,150,673 48.78 2006 18,857,833 21,509,448 2,651,615 87.67 7,354,350 36.06 2005 19,165,236 21,249,065 2,083,829 90.19 7,219,323 28.86 Police Pension Fund (b) ((b-a)/c) (a) Actuarial (b)-(a) UAALasa Actuarial Actuarial Accrued Unfunded (a)/(b) (c) Percentage Valuation Value of Liability (AAL) AAL Funded Covered of Covered Date Assets Ent!)::Age {UAAL} Ratio Pa,l!oll Pa,l!Oll 2009 $ 36,896,831 61,278,367 24,381,536 60.21 % 5,998,088 406.49 % 2008 33,736,413 57,812,420 24,076,007 58.35 5,831,457 412.86 2007 34,503,602 54,297,346 19,793,744 63.55 5,580,751 354.68 2006 29,227,995 47,531,537 18,303,542 61.49 5,054,280 362.14 2005 27,639,953 43,348,257 15,708,304 63.76 4,996,214 314.40 2004 26,227,214 36,676,875 10,449,661 71.51 4,852,494 215.35 Firefighters' Pension Fund (b) ((b-a)/c) (a) Actuarial (b)-(a) UAALasa Actuarial Actuarial Accrued Unfunded (a)/(b) (c) Percentage Valuation Value of Liability (AAL) AAL Funded Covered of Covered Date Assets Ent!)::Age {UAAL} Ratio Pa,l!oll Pa~roll 2009 $ 29,149,597 46,895,213 17,745,616 62.16 % 5,429,462 326.84 % 2008 24,553,284 42,711,057 18,157,773 57.49 5,208,552 348.61 2007 26,549,471 39,224,368 12,674,897 67.69 4,859,001 260.85 2006 21,406,226 32,252,477 10,846,251 66.37 4,585,548 236.53 2005 18,764,563 29,359,761 10,595,198 63.91 4,372,047 242.34 2004 16,695,162 22,101,873 5,406,7ll 75.54 4,179,633 129.36 See Note to Required Supplementary Information. 64 VILLAGE OF BUFFALO GROVE, ILLINOIS Required Supplementary Information Employer Contributions Year Ended December 31, 2010 Illinois Municipal Retirement Fund Actuarial Annual Valuation Required Percentage Date Contribution Contributed 2010 $ 1,064,445 100.0 % 2009 967,012 100.0 2008 907,890 100.0 2007 819,958 100.0 2006 800,153 100.0 2005 704,606 100.0 Police Pension Fund Actuarial Annual Valuation Required Percentage Date Contribution Contributed 2010 $ 2,038,612 101.2 % 2009 1,754,664 98.2 2008 1,754,664 106.5 2007 1,594,227 98.6 2006 1,429,749 98.1 2005 1,075,170 95.8 Firefighters' Pension Fund Actuarial Annual Valuation Required Percentage Date Contribution Contributed 2010 $ 1,905,833 100.7 % 2009 1,506,343 98.9 2008 1,506,343 104.9 2007 1,334,734 100.6 2006 1,297,773 88.3 2005 984,799 103.6 See Note to Required Supplementary Information. 65 VILLAGE OF BUFFALO GROVE, ILLINOIS Required Supplementary Information Other Post-Employment Benefits December 31,2010 Analysis of Funding Progress Actuarial Valuation Date 12/3112010 12/3112009 12/3112007 $ (a) Actuarial Value of Assets Employer Contributions Fiscal Year Ending 12/3112010 12/3112009 12/3112008 (b) Actuarial Accrued Liability (AAL) Entry Age 2,108,079 2,108,079 1,718,898 See Note to Required Supplementary Information. $ (b)-(a) Unfunded AAL (UAAL) 2,108,079 2,108,079 1,718,898 Required Contribution 122,505 123,689 123,689 66 ((b-a)/c) UAALasa (a)/(b) (c) Percentage Funded Covered of Covered Ratio Payroll Payroll % 21,307,066 9.89 % 19,764,651 10.67 18,725,417 9.18 Percentage Contributed 55.70 % 55.17 40.57 VILLAGE OF BUFFALO GROVE, ILLINOIS Note to Required Supplementary Information December 3I, 20 I 0 I. Budgetary Basis of Accounting The General Fund Budget is adopted on a basis of accounting consistent with accounting principles generally accepted in the United States of America. 67 COMBINING, INDIVIDUAL FUND, AND CAPITAL ASSET FINANCIAL STATEMENTS A~'D SCHEDULES GOVERNMENTAL FUND TYPES NONMAJOR GOVERNMENT FUNDS- COMBH«NGSTATEMENTS VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Governmental Funds Combining Balance Sheet December 3 L 20 l 0 Special Debt Capital Revenue Service Projects Total Assets Cash and Equivalents $ 2,039,024 911,912 2,950,936 Receivables Property Taxes 1,546,972 Ll00,833 2,647,805 tvlotor Fuel Tax 93,025 93,025 Due from Other Funds 48,425 276,385 324,810 Total Assets $ 3,727,446 1,100,833 1,188,297 6,016,576 Liabilities Accounts Payable and Accrued Liabilities $ 98,601 "'7<; .);~ 260,671 359.647 Deferred Property Taxes 1,503,908 1,078,032 2,581,940 Due to Other Funds 2,155 2,155 Total Liabilities 1,602,509 1,080,562 260,671 2,943,742 Fund Balances Reserved for Debt Service 20,271 20,271 Unreserved Designated for Employee Benefits 931,345 931,345 Undesignated 1,193,592 927.626 2,121,2 I 8 Total Fund Balances 2,124,937 20,271 927,626 3,072,834 Total Liabilities and Fund Balances $ 3,727,446 !, 100,833 l '188,297 6,016,576 68 VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year Ended December 31, 2010 Special Debt Capital Revenue Service Projects Total Revenues Charges for Services $ 151,900 151,900 Intergovernmental 1,096,794 1,096,794 Property Taxes 1,586,066 827,896 2,413,962 Investment Income 1,434 1,065 2,499 Miscellaneous 675,596 76,185 751,781 Total Revenues 3,511,790 827,896 77,250 4,416,936 Expenditures Current General Government 614,436 614,436 Public Safety 427,746 427,746 Public Works 2,152,716 2,152,716 Capital Projects 3,157,156 3,157,156 Debt Service Principal 980,000 980,000 Interest and Fiscal Charges 194,655 194,655 Bond Issuance Costs 94,536 33,394 127,930 Total Expenditures 3,194,898 1,269,191 3,190,550 7,654,639 Excess (Deficiency) of Revenues over Expenditures 316,892 (441,295) (3,113,300) (3,237, 703) Other Financing Sources (Uses) Proceeds from Issuance of Debt 5,160,000 2,600,000 7,760,000 Premium on Issuance of Debt 152,778 25,451 178,229 Transfer to Escrow Agent (5,218,242) (5,218,242) Transfers In 5562030 380,000 512,160 124482190 Total Financing Sources (Uses) 556,030 474,536 3,137,611 4,168,177 Net Change in Fund Balances 872,922 33,241 24,311 930,474 Fund Balances Beginning 1,252,015 (12,970) 903,315 2,142,360 Ending $ 2,124,937 202271 927,626 3,072,834 69 NONMAJOR SPECIAL REVENUE FUNDS lllinois Municipal Retirement Fund -to account for revenues derived from a separate property tax levy and employee contributions which are subsequently paid to the State-sponsored Illinois Municipal Retirement Fund. Motor Fuel Tax Fund -to account for allotment of motor fuel taxes. These allotments are received from the State of Illinois. Parking Lot Fund -to account for revenues derived from daily parking fees along with the sale of bimonthly parking passes, less expenditures required to maintain the lots at the Village's mass transit train station site. Retiree Health Savings Fund -to account for the accumulation of resources to be used for health care premiums and costs to eligible personnel at appropriate amounts and times in the future. Resources are contributed by the Village along with interest income. VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Special Revenue Funds Combining Balance Sheet December 3I, 20 I 0 Illinois Motor Retiree Municipal Fuel Parking Health Retirement Tax Lot Savings Total Assets Cash and Equivalents $ I27,036 828,659 I5I,984 93I,345 2,039,024 Receivables Property Taxes I,546,972 I,546,972 Motor Fuel Tax 93,025 93,025 Due from Other Funds 48,425 48,425 Total Assets $ I,674,008 970,I09 I5I,984 93I,345 3,727,446 Liabilities Accounts Payable and Accrued Liabilities $ 78,634 13,306 6,66I 98,60I Deferred Property Taxes I 503,908 I,503 908 Total Liabilities I,582,542 13,306 6,66I I,602,509 Fund Balances Unreserved Designated for Employee Benefits 93I,345 93I,345 Undesignated 9I,466 956,803 I45,323 I,I93,592 Total Fund Balances 9I,466 956,803 I45,323 93I,345 2,I24 937 Total Liabilities and Fund Balances $ I,674,008 970,I09 I5I,984 93I,345 3,727,446 70 VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year Ended December 31, 2010 Illinois Motor Retiree Municipal Fuel Parking Health Retirement Tax Lot Savings Total Revenues Charges for Services $ 151,900 151,900 Intergovernmental 1,096,794 1,096,794 Property Taxes 1,586,066 1,586,066 Investment Income 50 1,384 1,434 Miscellaneous 675,596 675,596 Total Revenues 1,586,066 1,772,440 151,900 1,384 3,511,790 Expenditures General Government 461,493 137,910 15,033 614,436 Public Safety 414,252 13,494 427,746 Public Works 620,137 1,512,379 20,200 2,152,716 Total Expenditures 1,495,882 1,512,379 137,910 48,727 3,194,898 Excess (Deficiency) of Revenues over Expenditures 90,184 260,061 13,990 (47,343) 316,892 Other Financing Sources Transfers In 556,030 556,030 Net Change in Fund Balances 90,184 816,091 13,990 (47,343) 872,922 Fund Balances Beginning 1,282 140,712 131,333 978,688 1,252,015 Ending $ 91,466 956,803 145,323 931,345 2,124,937 71 VILLAGE OF BUFFALO GROVE, ILLINOIS Illinois Municipal Retirement Fund Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual Year Ended December 31, 20 10 Revenues Property Taxes Other Taxes Investment Income Total Revenues Expenditures General Government Public Safety Public Works Total Expenditures Net Change in Fund Balance Fund Balance Beginning Ending 72 Original/Final Final Appropriations Budget Actual $ 1,564,110 1,590,147 1,586,066 250 1,564,110 I,590,397 1,586,066 507,497 479,183 461,493 455,547 430,131 414,252 681,956 643,908 620,137 1,645,000 12553,221 1,4952882 $ {80,8902 37,176 90,184 1,282 91,466 VILLAGE OF BUFFALO GROVE, ILLINOIS Motor Fuel Tax Fund Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual Year Ended December 31, 20 I 0 Revenues Intergovernmental Investment Income Miscellaneous Total Revenues Expenditures Public Works Excess (Deficiency) of Revenues over Expenditures Other Financing Sources Transfers In Net Change in Fund Balance Fund Balance Beginning Ending 73 OriginaVFinal Final Appropriations Budget Actual $ 1,140,350 1,096,794 200 50 945,700 675,596 2,086,250 1,772,440 3,500,000 2,679,045 1,512,379 (3,500,000) (592,795) 260,061 592,795 556,030 $ (3,500,000) 816,091 140,712 ~ 956,803 VILLAGE OF BUFFALO GROVE, ILLINOIS Parking Lot Fund Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual Year Ended December 31, 20 1 0 Revenues Charges for Services Expenditures General Government Net Change in Fund Balance Fund Balance Beginning Ending 74 Original/Final Final Appropriations Budget Actual $ 150,700 151,900 174,850 150,700 137,910 $ {174,850~ 13,990 131,333 145,323 NONMAJOR DEBT SERVICE FUND Facilities Development Fund -to accumulate monies for payment of the $1,000,000, 2.65%-4.1% General Corporate Purpose Bond Series 2002B; $2,600,000, 2.25%-3.25% General Corporate Purpose Bond Series of 2003; $5,160,000, 2.0%-4.0% General Corporate Purpose Refunding Bond Series of 2010A; and $2,600,000, 2.5%-3.85% General Corporate Purpose Bond Series of 2010B. Amounts being accumulated are financed by a specific annual property tax levy and by transfers from the General Fund. VILLAGE OF BUFFALO GROVE, ILLINOIS Facilities Development Fund Schedule of Revenues, Expenditures and Changes in Fund Balances-Budget and Actual Year Ended December 31, 2010 Revenues Property Taxes Investment Income Total Revenues Expenditures Principal Interest and Fiscal Charges Bond Issuance Costs Total Expenditures Deficiency of Revenues over Expenditures Other Financing Sources Proceeds from Issuance of Debt Premium on Issuance of Debt Transfer to Escrow Agent Transfers In Total Other Financing Sources (Uses) Net Change in Fund Balance Fund Balance Beginning Ending Original/Final Appropriations $ 1,170,950 1,170,950 950,000 328,000 1,278,000 (107,050) $ (107,050) 75 Final Budget Actual 804,117 827,896 300 804,417 827,896 885,000 980,000 288,750 194,655 94,536 1,173,750 1,269,191 (369,333) (441,295) 5,160,000 152,778 (5,218,242) 380 000 380 000 380,000 474,536 10,667 33,241 {12,970~ 20,271 NOI'I'MAJOR CAPITAL PROJECTS FUNDS Street Maintenance Fund -to account for the costs of design, construction and constmction engineering for various street maintenance and construction projects. Financing is provided by bonded debt proceeds. Facilities Development Fund -to account for the costs of constructing various Village faciiities as defined and approved in the Village's annual capital improvement plan which is a five-year program adopted annually by the Village. Financing was provided tor the most part by operating transfers from the General Fund along with bonded debt proceeds. VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Capital Projects Funds Combining Balance Sheet December 31, 20 10 Street Facilities Maintenance Develo2ment Total Assets Cash and Equivalents $ 570,244 341,668 911,912 Due from Other Funds 274,230 2,155 276,385 Total Assets $ 844,474 343,823 1,188,297 Liabilities Accounts Payable and Accrued Liabilities $ 102,789 157,882 260,671 Fund Balances Unreserved Undesignated 741,685 185,941 927,626 Total Liabilities and Fund Balances $ 844,474 343 823 1,188,297 76 VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year Ended December 31, 20 1 0 Street Facilities Maintenance DeveloEment Total Revenues Investment Income $ 765 300 1,065 Miscellaneous 42 576 33,609 76,185 Total Revenues 43,341 33,909 77,250 Expenditures Capital Projects 566,304 2,590,852 3,157,156 Bond Issuance Costs 33,394 33,394 Total Expenditures 566:304 2:624,246 3,190,550 Deficiency of Revenues over Expenditures (522,963) (2,590,337) (3,113,300) Other Financing Sources Proceeds from Issuance of Debt 2,600,000 2,600,000 Premium on Issuance of Debt 25,451 25,451 Transfers In 512 160 512,160 Total Other Financing Sources 3,137,611 3,137,611 Net Change in Fund Balances (522,963) 547,274 24,311 Fund Balances Beginning 1,264,648 {361,3332 903,315 Ending $ 741,685 185,941 927,626 77 VILLAGE OF BUFFALO GROVE, ILLINOIS Street Maintenance Fund Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual Year Ended December 31, 20 I 0 Revenues Investment Income Miscellaneous Total Revenues Expenditures Capital Projects Net Change in Fund Balance Fund Balance Beginning Ending 78 Original/Final Final Appropriations Budget Actual $ 4,020 765 221,810 42,576 225,830 43,341 2,225,000 1,470,277 566,304 $ (2,225,000) ~1,244,4472 (522,963) 1,264,648 741,685 VILLAGE OF BUFFALO GROVE, ILLINOIS Facilities Development Fund Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual Year Ended December 31, 20 1 0 Revenues Investment Income Miscellaneous Total Revenues Expenditures Capital Projects Bond Issuance Costs Total Expenditures Excess (Deficiency) of Revenues over Expenditures Other Financing Sources Proceeds from Issuance of Debt Premium on Issuance of Debt Transfers In Total Other Financing Sources Net Change in Fund Balance Fund Balance Beginning Ending 79 Original/Final Final Appropriations Budget Actual $ 300 3,850,170 33,609 3,850,170 33,909 4,950,000 3,728,251 2,590,852 33,394 42950,000 3,728,251 2,624,246 {4,950,0002 121,919 {2,590,3372 2,600,000 25,451 407,000 512,160 407,000 3,137,611 $ {4,950,0002 528,919 547,274 {361,3332 185,941 ENTERPRISE FUNDS Major Funds Waterworks and Sewerage Fund -to account for the provision of water and sewer services to all residential and commerciaVindustrial customers of the Village. All activities necessary to provide such services are accounted for in this fund including, but not limited to, administration, operations, maintenance, related debt service and billing and collection. Arboretum Golf Course Fund -to account for the operation of the Arboretum Golf Course. All activities necessary to provide the service are accounted for in this fund including but not limited to, administration, operations, maintenance and related debt service. Nonmajor Funds Buffalo Grove Golf Course Fund -to account for the operation of the Buffalo Grove Golf Course. All activities necessary to provide the service are accounted for in this fund including, but not limited to, administration, operations, maintenance and related debt service. Refuse Service Fund -to account for the provision of refuse disposal services to all customers of the Village. All activities necessary to provide such services are accounted for in this fund. VILLAGE Of BtFFALO GROVE, ILLINOIS Waterworks and Sewerage Fund (fvfajor Fund) Schedule of Operating and Nonoperating Revenues, Operating and Nonoperating Expenses and Transfers-Budget and Actual (Budgetary Basis) Year Ended December 31, 20 I 0 Operating Revenues Water and Sewerage Charges Connection and Recapture Fees Total Operating Revenues Operating Expenses Excluding Depreciation Less Capital Assets Capitalized Total Operating Expenses Operating lncome (Loss) (Budgetary Basis) Nonoperating Revenues Investment Income Transfers Out '\let Loss (Budgetary Basis) 80 Original/Final Appropriations $ 16,368,428 (3,462,429) 12,905,999 ( 12,905,999) (885,000) $ ( 13,790,999) Final Budget Actual 9,735,085 8,947,843 68,150 143,677 9,803,235 9,091,520 14,166,116 9.017,516 (2,787,729) (347,810) 11,378,387 8,669,706 (1,575,152) 421,814 118,900 8!,208 (885,000) (885,000) (2,341 ,252) (381,978) VILLAGE OF BUFFALO GROVE, ILLINOIS Arboretum Golf Course Fund (Major Fund) Schedule of Operating and Nonoperating Revenues, Operating and Nonoperating Expenses and Transfers-Budget and Actual (Budgetary Basis) Year Ended December 31, 20 I 0 Operating Revenues Daily Greens Fees and Memberships Merchandise Sales Cart, Club and Other Rentals Miscellaneous Total Operating Revenues Operating Expenses Excluding Depreciation Golf Operations Cost of Sales -Pro Shop Total Operating Expenses Excluding Depreciation Operating Loss Nonoperating Revenues Interest Income Transfers Transfers In Transfers Out Net Loss 81 Original/Final Appropriations $ 1,366,075 60,000 1,426,075 1,426,075 (1,426,075) (50,000) (50,000) $ (1,476,075) Final Budget 840,000 65,000 271,000 55,700 1,231,700 1,218,200 50,000 1,268,200 1,268,200 (36,500) 250 36,250 36,250 Actual 664,510 38,931 212,829 11,292 927,562 1,176,290 58,187 1,234,477 1,234,477 (306,915) 453,000 453,000 (306,915) VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Enterprise funds Combining Statement of Net Assets December 31, 20 I 0 Buffalo Grove Refuse Golf Course Service Total Assets Current Cash and Equivalents $ 321 91,883 92,204 Receivables 86,175 86,175 Pro Shop Inventory 23,413 23.413 Due from Other Funds 231 231 Total Current Assets 23.965 178.058 202.023 Noncurrent Capital Assets, net of Accumulated Depreciation Land 978,776 978,776 Buildings 314,104 314,104 Total Noncurrent Assets 1,292.880 1,292,880 Total Assets 1,316.845 178,058 l ,494,903 Liabilities Current Accounts Payable and Accrued Liabilities 47,179 47,179 Net Assets Investment in Capital Assets I ,292,880 1,292,880 Unrestricted (23,214) 178,058 154,844 Total Net Assets $ 1,269,666 178.058 1.447,724 82 VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Enterprise Funds Combining Statement of Revenues, Expenses and Changes in Net Assets Year Ended December 31, 20 1 0 Buffalo Grove Refuse Golf Course Service Total Operating Revenues Daily Greens Fees and Memberships $ 798,625 798,625 Merchandise Sales 74,931 74,931 Cart, Club and Other Rentals 215,667 215,667 Driving Range Fees 64,948 64,948 SWANCC User Fees 1,041,661 1,041,661 Miscellaneous 6,373 6,373 Total Operating Revenues 1,160,544 1,041,661 2,202,205 Operating Expenses Excluding Depreciation Golf Operations 1,239,600 1,239,600 Cost of Sales -Pro Shop 47,850 47,850 Refuse Operations 942 757 942,757 Total Operating Expenses Excluding Depreciation 1,287,450 942,757 2,230,207 Operating Income (Loss) before Depreciation (126,906) 98,904 (28,002) Depreciation 32,784 32,784 Operating Income (Loss) (159,690) 98,904 (60,786) Nonoperating Revenues Interest Income, Net of Related Expenses {314} {314} Income (Loss) before Transfers (160,004) 98,904 (61,100) Transfers Transfers In 215,000 215,000 Change in Net Assets 54,996 98,904 153,900 Net Assets Beginning 1,214,670 79,154 1,293,824 Ending $ 1,269,666 178,058 1,447,724 83 VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Enterprise Funds Combining Statement of Cash Flows Year Ended December 3 J, 20 l 0 Buffalo Grove Refuse Golf Course Service Total Cash Flows from Operating Activities Cash Received for Golf Activities $ 1,160544 1,160,544 Cash Received for Refuse Services 1,042,555 l ,042,555 Payments to Employees (780,189) (780,189) Payments to Suppliers ~508,544} (942,757} (1,451,3012 (128, I 89) 99,798 (28,391) Cash Flows from Noncapital Financing Activities Transfers In 215,000 215.000 Change in Due to/from Other Funds. Net (90,3482 (72,915) ~ 163,263) 124,652 (72,915) 51,737 Cash Flows from Investing Activities Interest Received (3 J 4l (314) Net Increase (Decrease) in Cash and Cash Equivalents (3,85!) 26,883 23,032 Cash and Cash Equivalents Beginning of Year 4,172 65,000 69,172 End ofYear $ 321 91,883 92,204 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating Income (Loss) $ (159,690) 98,904 (60,786) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Depreciation 32,784 32,784 Change in Assets and Liabilities Inventory (658) (658) Receivables 894 894 Accounts Payable and Accrued Liabilities 1625) (625) Total Adjustments 31,50 I 894 32,395 Net Cash Provided (Used) by Operating Activities $ (128,189) 99,798 (28,391) 84 VILLAGE OF BUFFALO GROVE, ILLINOIS Buffalo Grove Golf Course (Nonmajor Fund) Schedule of Operating and Nonoperating Revenues, Operating and Nonoperating Expenses and Transfers-Budget and Actual (Budgetary Basis) Year Ended December 31, 2010 Operating Revenues Daily Greens Fees and Memberships Merchandise Sales Cart, Club and Other Rentals Driving Range Fees Miscellaneous Total Operating Revenues Operating Expenses Excluding Depreciation Golf Operations Cost of Sales -Pro Shop Total Operating Expenses Excluding Depreciation Operating Income (Loss) Nonoperating Revenues Interest Income, net of related expenses Transfers Transfers In Transfers Out Net Income (Loss) 85 Original/Final Appropriations $ 1,410,693 70,000 1,480,693 1,480,693 (1,480,693) (100,000) $ (1,580,693) Final Budget 925,000 88,000 258,100 72,000 21,400 1,364,500 1,268,750 60,000 1,328,750 1,328,750 35,750 500 (36,250) Actual 798,625 74,931 215,667 64,948 6,373 1,160,544 1,239,600 47,850 1,287,450 1,287,450 (126,906) (314) 215,000 87,780 VILLAGE OF BUFFALO GROVE, ILLINOIS Refuse Service Fund (Nonmajor Fund) Schedule of Operating and Nonoperating Revenues, Operating and Nonoperating Expenses and Transfers-Budget and Actual (Budgetary Basis) Year Ended December 31, 20 I 0 Original/Final Appropriations Operating Revenues SW ANCC User Fees $ Operating Expenses Refuse Operations I 250,000 Net Income (Loss) $ (1,250,000) 86 Final Budget Actual 1,046,730 1,041,661 967,755 942,757 78,975 98,904 TRUST AND AGENCY FUNDS Pension Trust Police Pension Fund -to account for the accumulation of resources to be used for disability and retirement annuity payments to uniformed police department personnel at appropriate amounts and times in the future. Resources are contributed by employees along with interest income and by property tax levies. Firefighters' Pension Fund -to account for the accumulation of resources to be used for disability and retirement annuity payments to uniformed fire department personnel at appropriate amounts and times in the future. Resources are contributed by employees along with interest income and by property tax levies. Agency School and Park District Donations Fund -to account for monies deposited by developers for local schools and park districts. These funds are deposited with the Village and later remitted to the applicable school or park district. VILLAGE OF BUFFALO GROVE, ILLINOIS Fiduciary Funds Combining Statement of Fiduciary Net Assets -Pension Trust Funds December 31, 20 1 0 Assets Cash and Equivalents Investments Certificates of Deposit U.S. Government and Agency Obligations Open-end Mutual Funds Receivables Pension Contributions Interest Total Assets Liabilities Accounts Payable Net Assets Held in Trust for Pension Benefits 87 Police Pension $ 5,693,199 17,060,995 16,885,481 1,769,840 33,224 41,442,739 15,556 $ 41,427,183 Firefighters' Pension Total 1,011,845 6,705,044 15,389,360 15,389,360 1,347,893 18,408,888 14,169,720 31,055,201 1,519,078 3,288,918 63,130 96,354 33,501,026 74,943,765 2,171 17,727 33,498,855 74,926,038 VILLAGE OF BUFFALO GROVE, ILLINOIS Fiduciary Funds Combining Statement of Changes in Fiduciary Net Assets -Pension Trust Funds Year Ended December 31, 20 1 0 Additions Contributions Employer Participants Investment Income Net Appreciation in Fair Value of Investments Interest Income Less Investment Expense Total Additions Deductions Administration Pension Benefits and Refunds Total Deductions Change in Net Assets Net Assets Beginning Ending 88 Police Pension $ 2,063,130 636,117 2,699,247 3,447,268 75,600 {96,7892 3,4262079 6,125,326 34,895 1,560,080 1,594,975 4,530,351 36,896,832 $ 41,427,183 Firefighters Pension Total 1,918,365 3,981,495 518,788 1,154,905 2,437,153 5,136,400 1,974,225 5,421,493 579,213 654,813 {10,7142 {107,5032 2,542,724 5,968,803 4,979,877 11,105,203 46,448 81,343 584,171 2,144,251 630,619 2,225,594 4,349,258 8,879,609 29,149,597 66,046,429 33,498,855 74,926,038 VILLAGE OF BUFFALO GROVE, ILLINOIS Police Pension Fund Schedule of Changes in Fiduciary Net Assets -Budget and Actual Year Ended December 31, 20 I 0 Additions Contributions Employer Participants Investment Income (Loss) Net Appreciation in Fair Value of Investments Interest Income Less Investment Expense Total Additions Deductions Administration Pension Benefits and Refunds Total Deductions Change in Net Assets Net Assets Beginning Ending 89 Original/Final Appropriations $ 110,000 165,000 275,000 $ (275,000) Final Budget Actual 2,072,548 2,063,130 607,179 636,117 2,679,727 2,699,247 1,200,942 3,447,268 72,729 75,600 {82,000} {96,789} 1,191,671 3,426,079 3,871,398 6,125,326 12,500 34,895 1,537,460 1,560,080 1,549,960 1,594,975 2,321,438 4,530,351 36,896,832 41,427,183 VILLAGE OF BUFFALO GROVE, ILLINOIS Firefighters' Pension Fund Schedule of Changes in Fiduciary Net Assets -Budget and Actual Year Ended December 31, 2010 Additions Contributions Employer Participants Investment Income (Loss) Net Appreciation in Fair Value of Investments Interest Income Less Investment Expense Total Additions Deductions Administration Pension Benefits and Refunds Total Deductions Change in Net Assets Net Assets Beginning Ending 90 Original/Final Appropriations $ 100,000 675,000 775 000 $ (775,000) Final Budget Actual 1,937,559 1,918,365 515,942 518,788 2,453,501 2,437,153 700,140 1,974,225 386,346 579,213 {50,000~ {10,714~ 1,036,486 2 542,724 3,489,987 4,979,877 40,000 46,448 583,453 584,171 623,453 630,619 2,866,534 4,349,258 29,149,597 33,498,855 VILLAGE OF BUFFALO GROVE, ILLINOIS Agency Fund School and Park Donations Schedule of Changes in Fiduciary Net Assets Year Ended December 31, 2010 Assets Cash and Cash Equivalents Liabilities Due to Other Governments Balances Janua!l: 1 $ 422,993 $ 422,993 91 Balances Additions Deductions December 31 352,554 39,919 735,628 352,554 39,919 735,628 CAPITAL ASSETS USED IN THE OPERATIONS OF GOVERNMENTAL FUNDS VILLAGE OF BLFFALO GROVE, ILLINOIS Capital Assets Used in the Operation of Government Funds Schedule of Capital Assets by Source Year Ended December 31, 2010 Assets Governmental Funds Capital Assets Land Construction in Progress Buildings Land Improvements Equipment and Vehicles Streets Storm Sewers Total Governmental Funds Capital Assets Investment in Governmental Funds Capital Assets by Source Capital Projects Current Revenues Debt Issuance Contributions Total Governmental Funds Capitai Assets $ 35,963,844 2,517,931 21,900,349 606,285 12,400,496 19,040,719 37,665,289 $ 130,094,913 $ 6,385,585 7,111,757 22,949,238 93,648,333 $ 130,094,913 92 VILLAGE OF BUFFALO GROVE, ILLINOIS Capital Assets Used in the Operation of Government Funds Schedule by Function and Activity Year Ended December 31,2010 Construction Equipment Land in Pro~ess Buildin~s and Vehicles General Government $ 6,254,297 54,170 7,251,692 1,236,744 Public Safety 9,878,870 6,821,842 Public Works 29,709,547 2,463,761 4,769,787 4,341,910 $ 35,963,844 2,517,931 21,900,349 12,400,496 93 Land Storm Streets Improvements Sewers Total 14,796,903 16,700,712 19,040,719 606,285 37,665,289 98,597,298 19,040,719 606,285 37,665,289 130,094,913 94 VILLAGE OF BUFFALO GROVE, ILLINOIS Capital Assets Used in the Operation of Government Funds Schedule of Changes by Function and Activity Year Ended December 31, 20 l 0 General Government Public Safety Public Works Balances January 1, 2010 $ 14,729,170 16,460,561 95,972,741 $ 127,162,472 95 Balances December 31, Additions Deductions 2010 112,728 44,995 14,796,903 364,467 124,316 16,700,712 2,864,667 240,110 98,597,298 3:341,862 409,421 130,094,913 STATISTICAL SECTION (UNAUDITED) The information in this section differs from financial statements in that it usually covers a period of time more than two fiscal years and may contain data not related to accounting. The purpose of the financial statements is, among other things, to show that legal provisions have been complied with and that all funds have been properly accounted for. Statistical tables reflect social and economic data, financial trends and the fiscal capacity of the Village. VILLAGE OF BUFFALO GROVE, ILLINOIS Statistical Section This portion of the Village of Buffalo Grove's Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the Village's overall economic condition. Contents Financial Trends These schedules contain trend information to help the reader understand how the Village's fmancial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the factors affecting the Village's ability to generate its property and sales taxes. Debt Capacity These schedules present information to help the reader assess the affordability of the Village's current levels of outstanding debt and the Village's ability to issue additional debt. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the Village's fmancial activities take place and to help make comparisons over time and other governments. Operating Information These schedules contain information about the Village's operations and resources to help the reader understand how the Village's financial information relates to the services the Village provides and the activities it performs. Sources: 96-105 106-115 116-119 120-121 122-127 Unless otherwise noted, the information in these schedules is derived from the Village's Comprehensive Annual Financial Reports for the relevant year. The Village implemented GASB Statement 34 in 2004; schedules presenting government-wide information include information beginning in that year. FINANCIAL TRENDS VILLAGE OF BUFFALO GROVE, ILLINOIS Net Assets by Component Last Eight Fiscal Years (See Following Page) VILLAGE OF BUFFALO GROVE, ILLINOIS Net Assets by Component Last Eight Fiscal Years Fiscal Year Governmental Activities Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Governmental Activities Net Assets Business-type Activities Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Business-type Activities Net Assets Primary Government Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Primary Government Net Assets *Transitional fiscal year May I, 2007 through December 31, 2007. Data Source Audited Financial Statements 2010 $ 53,742,519 956,803 15,738,272 $ 70,437,594 $ 38,410,966 14,644,341 $ 53,055,307 $ 92,153,485 956,803 30,382,613 $ 123,492,901 96 2009 2008 2007* 54,563,385 53,551,265 53,702,484 140,712 80,438 33,167 16,590,052 23,259,339 27,184,985 71,294,149 76,891,042 80,920,636 39,808,889 41,374,269 42,667,740 15,011,209 17,003,316 17,509,194 54,820,098 58,377,585 60,176,934 94,372,274 94,925,534 96,370,224 140,712 80,438 33,167 31,601,261 40,262,655 44,694,179 126,l14l247 135l268l627 141,097,570 2007 2006 2005 2004 53,726,929 53,188,591 49,264,115 48,009,890 1,294,897 1,425,988 4,955,378 4,368,460 35,512,486 37,786,827 34,551,091 34:708,597 90,534,312 92,401,406 88,770,584 87,086,947 42,667,526 43,646,133 44,123,414 45,491,776 18,553,703 18,300,838 18,375,098 17,690,967 61,221,229 61,946,971 62,498,512 63,182,743 96,394,455 96,834,724 93,387,529 93,501,666 1,294,897 1,425,988 4,955,378 4,368,460 54,066,189 56,087,665 52,926,189 52,399,564 151,755,541 154,348,377 151,269,096 150,269,690 97 VILLAGE OF BUFFALO GROVE, ILLrNOIS Changes in Net Assets Last Ei ht Fiscal Years Fiscal Year Expenses Governmental Activities General Government Public Safety Public Works Interest Total Governmental Activities Expenses Business-type Activities Water and Sewer Refuse Service Golf Courses Total Business-type Activities Expenses Total Primary Government Expenses Program Revenues Governmental Activities Charges for Services General Government Public Safety Public Works Operating Grants and Contributions Capital Grants and Contributions Total Governmental Activities Program Revenues Business-type Activities Charges for Services Water and Sewer Refuse Service Golf Courses Operating Grants and Contributions Capital Grants and Contributions Total Business-type Activities Program Revenues Total Primary Government Program Revenues Net (Expense) Revenue Governmental Activities Business-type Activities Total Primary Government Net Expense *Transitional fiscal year May I, 2007 through December 31, 2007. 98 2010 $ 4.769.874 22,312,910 11,081,374 194.655 38,358,813 9.865,981 942,757 3,043,367 13,852,105 $ 52,210,918 $ 1,195,928 1,419,761 71,606 1,253,103 3,940,398 9.09 J .520 I ,04!.661 2,088,106 12,221,287 $ 16,161,685 $(34,418,415} (l ,630,8181 $(36,049,233) 2009 2008 2007* 6,182,475 5.705,497 4,019,032 22.753,590 21,115,737 15,324,061 10,421,659 13,222,026 8,232,685 334,142 379,501 216,379 39,691,866 40,422,761 27,792,157 9,519,169 8,684,651 5.165.701 944,392 1,017,!64 777,716 3,1 18,647 3,423,903 2,637,072 13,582,208 13,125,718 8,580,489 53,274,074 53,548,479 36,372,646 977,464 1,211,188 1,139.242 1,563,236 1,514,666 l ,050,920 50.709 94,670 94,670 1,349,044 1307,895 950.383 3,940,453 4,128,419 3,235,215 8,008,360 7,538,534 4,799,193 1,004,431 923,207 704.841 2,320,247 2.356,962 2,141,860 133,599 497,875 ll ,333,038 10,952,302 8,143,769 15,273,491 15,080,721 11,378,984 (35,751,413) (36,294,342) (24,556,942) (2,249, 170) (2,173,416) ~436,720) (38,000,583) (38,467,758) (24,993,662) 2007 2006 2005 2004 4,686,330 4,582,741 4,70!,408 4,749,920 18,951,546 18,137,721 16,822,265 ! 6.396.186 12,479,424 11,441,440 9,523,240 9.550,018 529,858 1,217,883 994,708 877,924 36,647,158 35,379,785 32,041,62 I 31,574,048 7.256,639 7,168,405 6,780,153 6,843,943 1,024,248 956,915 971,980 936,573 3,102,770 3.333,644 3,101,134 3,236,932 ll ,383,657 11,458,964 10,853,267 J L017,448 48,030,815 46,838,749 42,894,888 42,591,496 1,880.714 2,048,850 1 ,683,585 1,802,120 l ,525,943 1,553,949 1,476,845 I ,358,439 192,193 1.532.557 1,218,020 4,939,214 3,602,799 3,160,430 4,570,772 6,694,051 7,688,143 6.279,172 6,322,045 991,140 990,113 975,290 957,435 2.323,919 2,567,759 2,637,717 2,592,370 1,444,395 L915,746 l ,106,103 450,000 1,867,859 760,726 2,361,256 10,459.1 J 0 14,558,269 12,568,651 13,339,209 15,398.324 J 8, !61,068 15,729,081 17,909,981 (31, 707,944) (31,776,986) (28,881,191) (27,003,276) (924,547) 3.099.305 1,715,384 2,321,761 (32,632,491) (28,677,681) (27,165,807) (24,681,515) (Cont.) 99 VILLAGE OF BUFFALO GROVE, ILLINOIS Changes in Net Assets (Cont.) Last Eight Fiscal Years Fiscal Year 2010 2009 2008 2007* General Revenues and Other Changes in Net Assets Governmental Activities Taxes Property $ 13,657,589 12,504,508 12,058,815 706,749 Sales and Home Rule 7,309,800 7,196,969 8,436,647 5,741,981 Income and Use 4,165,248 3,601,619 4,646,776 2,725,204 Telecommunications 2,183,190 2,345,249 2,417,496 1,967,348 Utility 2,393,340 Property Transfer 545,515 670,762 590,596 600,379 Other 1,017,612 1,006,249 1,076,929 247,827 Investment Income 250,290 490,881 810,982 958,715 Miscellaneous 1,822,276 1,403,283 2,081,112 1,254,948 Transfers 217,000 935,000 80,230 899,950 Proceeds from Insurance Pool Total Governmental Activities 33,561,860 30,154,520 32,199,583 15,103,101 Business-type Activities Property Investment Earnings 80,894 (374,632) 267,263 292,375 Miscellaneous 2,133 1,315 187,034 Transfers {217,0002 {93520002 {80,2302 {899,9502 Total Business-type Activities {133,9732 { 1,308,3172 374,067 {607,5752 Total Primary Government $ 332427,887 28,8462203 32,5732650 14,495,526 Change in Net Assets Governmental Activities $ (856,555) (5,596,893) (4,094,759) (9,453,841) Business-type Activities {1,764,7912 {3,557,4872 {12799,3492 {1,044,2952 Total Primary Government Change in Net Assets $ {2,621,3462 {9, 154,3802 {5,894,1082 { 10,498,1362 Data Source Audited Financial Statements 100 2007 2006 2005 2004 10,214,926 11,622,088 10,868,824 1 1,788,975 8,619,267 8,800,04! 7,960,163 6,349,520 4,280,237 3,855,616 3,433,471 3,001,889 2,436,233 2,230,092 2,442,641 2.624.965 980,213 1.346,946 1,212,292 L253,906 273,335 293,990 291,839 253,516 l ,636,589 l, 109.664 599,072 430,943 855,100 U26,625 I ,058,732 751,134 544,950 784,625 414,760 (203, 740) 925,867 29,840,850 32,095,554 28,281,794 26,251,108 166,007 82.989 122,832 114,998 445,766 363,044 175,347 122,106 131,982 (544,950) (784,625) (414,760) 203,740 198,805 (338,592) (116,581) 440,844 30,039,655 31,756,962 28,165,213 26,691,952 ( 1 ,867,094) 318,568 (599,397) (752, 168) (725,742) 2,760,713 I ,598,803 2,762,605 (2,592,836) 3,079,281 999,406 2,010.437 101 VILLAGE OF BUFFALO GROVE, ILLINOIS Fund Balances of Governmental Funds Last Ten Fiscal Years Fiscal Year 2010 2009 2008 2007* 2007 General Fund Reserved $ 1,138,273 1,248,428 1,536,571 1,846,137 1,846,137 Unreserved 17,763,849 18,307:270 22,444,819 27,556,199 27,556,199 Total General Fund 18,902,122 19,555,698 23,981,390 29,402,336 29,402,336 All Other Governmental Funds Reserved 20,271 (12,970) 33,167 486,946 486,946 Unreserved, Reported In Special Revenue Funds 2,124,937 1,252,015 1,239,501 1,942,258 1,942,258 Capital Projects Funds 927,626 903,315 1,911,178 2,436,815 2,436,815 Total All Other Governmental Funds 3,072,834 2,142,360 3,183,846 4:866,019 4,866,019 Total Governmental Funds $ 21,974,956 21,698,058 27,165,236 34,268,355 34,268,355 *Transitional fiscal year May I, 2007 through December 31, 2007. Data Source Audited Financial Statements 102 2006 2005 2004 2003 2002 1,787,884 1,524,130 1,339,393 1,155,677 1,623,983 27,252,660 23,935,055 23,556,556 22,975,100 26,232,523 29,040,544 25,459,185 24,895,949 24,130,777 27,856,506 499,743 4,543,605 4,311,770 4,238,926 4,560,473 1,813,406 1,496,628 953,672 988,142 239,505 3,888,047 3,928,552 3,618,540 3,732,973 5,303,373 6,201,196 9,968,785 8,883,982 8,960,041 10,103,351 35,241,740 35,427,970 33,779,931 33,090:818 37,959,857 103 VILLAGE OF BUFFALO GROVE, ILLINOIS Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years Fiscal Year 2010 2009 2008 2007* 2007 Revenues Property Taxes $ 13,657,589 12,504,508 12.058,815 5.797,846 10.402,764 Other Taxes 17.614,705 14.806,744 l7J68A44 11,282.739 16,589,285 Licenses and Permits 278,164 276.857 278.965 245,!48 825,691 Intergovernmental L096,794 U06,234 1,134.407 815.669 1.253.319 Fines and Forfeitures 1,4!9.761 1.559,190 1,514,666 l ,050,918 1525,943 Charges for Services U45,679 970.537 1,200,381 1,028,81 () 1,334.260 Investment Income 249.396 490,881 790.244 911,444 1.562,291 Miscellaneous 1,720,640 1,444,610 2,08Lil2 1,254.948 855,101 Total Revenues 37J 82,728 33.159,561 36.227,034 22.387.522 34,348,654 Expenditures Current General Government 4,979,904 5,596,822 5,458,962 3.455.2 I 3 4,955,659 Public Safety 21,802,732 20,882,745 20,499,004 14.211.380 18.!85.545 Public Works 8,704,005 10,337.090 10,792,931 7,225,387 9,319,231 Capital Outlays 3J 57J 56 1,245,940 l ,286,175 502.701 J ,945,053 Debt Service Principal 980,000 1,165,000 l '150,000 lJ 12.381 1,234,765 lnterest 194.655 334.142 379.501 424.220 476,736 Other charges 127,930 Total Expenditures 39.946.382 39,56L739 39,566.573 27,131,282 36.116,989 Excess (Deficiency) of Revenues over Expenditures (2, 763,654) ( 6.402,178) (3,339,539) (4,743,760) (! ,768,335) Other Financing Sources (Uses) Transfers In 2,153.190 2,909.382 4,l2L451 3,064,166 3.453,845 Transfers Out (1.936.190) ( 1,974,382) (4,041.221) (2, 164.216) (2,658.895) Proceeds from Sales of Assets 103.565 Proceeds from Issuance of Debt 7,760.000 Premium on Issuance of Debt 178.229 Discount on Bonds Issued Transfer to Escrow Agent (5,218,242) Total Other Financing Sources (Uses) 3,040,552 935,000 80.230 899.950 794,950 Net Change in Fund Balance $ 276.898 (5,467,178) (3.259.3092 (3,843,81 0} (973,385) Debt Service as a Percentage of Noncapital Expenditures 3.56% 3.93% 4.00% 6.52% 5.01% "'Transitional fiscai year May 1, 2007 through December 31, 2007. Data Source Audited Financial Statements 104 2006 2005 2004 2003 2002 II,245,966 II ,7I5,601 I2,463,I70 9,874,68I 10,333,002 I6,526,685 I5,340,405 13,483,796 13,207,726 I5,I74,770 836,279 860,838 764,834 1,724,062 I,361,482 3,II0,490 2,283,034 1,2I8,020 1,222,699 I,I96,099 1,553,949 I,476,845 I,200,967 9I4,637 I,557,28I I,4I4,337 822,748 1,386,95I 693,936 358,808 I,094,843 599,072 430,943 622,866 1,176,088 1,126,625 1,058,732 902,824 208,422 704,610 36,909,174 34,157,275 31,851,505 28,469,029 31,862,140 4,276,374 4,326,708 4,044,058 6,431,336 7,064,048 17,52I,978 16,390,156 16,411,219 15,931,648 15,762,282 8,0ll,071 7,189,290 6,783,338 3,047,952 4,140,949 2,285,510 750,020 1,498,844 6,065,692 3,279,431 6,020,700 3,362,814 3,521,I60 3,167,250 2,967,264 I,440,436 905,008 998,046 1,220,546 1,075,663 90,148 39,556,069 32,923,996 33,256,665 35,864,424 34,379,785 (2,646,895) 1,233,279 (1,405,160) (7,395,395) (2,517 ,645) 3,586,075 2,770,109 9,503,218 2,978,357 2,079,470 (2,895,578) (2,355,349) (2,879,098) (2,468,213) (1,532,325) 2,600,000 2,376,284 ( 1 ,288, 720) 690,497 414,760 6,624,120 3,110,I44 1,634,709 (1,956,398) 1,648,039 5,218,960 {4:285:2512 {882:9362 20.02% 13.26% 14.23% 14.72% 13.00% 105 REVENUE CAPACITY VILLAGE OF BUFFALO GROVE, ILLINOIS Assessed Value and Actual Value of Taxable Property Last Ten Levy Years (See Following Page) VILLAGE OF BUFFALO GROVE, ILLINOIS Assessed Value and Actual Value of Taxable Property Last Ten Levy Years Tax Total Levy Residential Commercial Industrial Other Assessed Year Pro2erty Pro2erty Pro2erty Pro2erty Value 2010 $1,445,087,809 337,607,065 16,376,462 539,883 1,799,611,219 * 2009 1,504,629,708 351,499,013 17,047,821 646,171 1 ,896, 782,5I4 2008 1,483,527,804 364,403,255 5,048,950 804,975 1,881,094,419 2007 1,454,038,913 339,683,354 I6,474,758 624,450 1,810,821,475 2006 1,298,I56,901 365,502,946 12,732,486 830,074 I ,677,222,407 2005 1,244,784,253 350,475,595 I2,209,000 795,945 1 ,608,264, 793 2004 1,155,398,804 325,308,649 11,332,296 738,791 I ,492, 778,540 2003 1,078,494,828 303,655,927 10,578,013 689,616 1,393,418,384 2002 1,021,183,719 287,519,681 10,015,898 652,970 1,319,372,268 2001 937,809,471 268,320,644 9,875,235 661,025 1,216,666,375 *Cook County property class and assessed valuation is an estimate. Cook County information is not yet available. Note: Total Direct Tax Rate is weighted for both Cook and Lake Counties. Data Source Offices of the Cook and Lake County Clerks 106 Estimated Estimated Total Actual Actual Direct Taxable Taxable Tax Rate Value Value N/A 5,398,833,657 33.333% 0.736 5,690,347,542 33.333% 0.666 5,643,283,257 33.333% 0.0690 5,432,464,425 33.333% 0.6536 5,031,667,221 33.333% 0.6330 4,824, 794,3 79 33.333% 0.6421 4,478,335,620 33.333% 0.6539 4,180,255,152 33.333% 0.6448 3,958,116,804 33.333% 0.6643 3,649,999,125 33.333% 107 VILLAGE OF BUFFALO GROVE, ILLINOIS Property Tax Rates -Direct and Overlapping Governments Last Ten Levy Years Comparative Tax Rates (Per $100 Assessed and Equalized Valuation) Tax Levy Year 2010 2009 2008 2007 2006 Lake County (2) Village of Buffalo Grove County, including Forest Preserve District Combined School Districts (District #96, District #125 and District #532) Buffalo Grove Park District Indian Trails Public Library District All Other Percentage Change -Year-to-Year Cook County Village ofBuffa1o Grove County, including Forest Preserve District Metropolitan Water Reclamation District of Greater Chicago Combined School Districts (District #21, District #214 and District #512) Buffalo Grove Park District Indian Trails Public Library District All Other Percentage Change -Year-to-Year Notes: 0.797 0.750 0.703 0.664 5.610 5.301 0.425 0.351 0.315 0.301 0.102 0.094 7.952 7.461 6.58% 5.04% N/A 0.691 N/A 0.464 N/A 0.261 NIA 5.103 NIA 0.371 NIA 0.307 NIA 0.068 N/A 7.265 NIA 1.71% (1) Taxes levied on a calendar year basis for collection in the subsequent fiscal year. 0.665 0.649 0.652 0.645 5.102 5.066 0.370 0.380 0.222 0.219 0.092 0.092 7.103 7.051 0.74% -4.96% 0.670 0.729 0.466 0.499 0.252 0.263 5.004 5.035 0.376 0.416 0.308 0.297 0.067 0.079 7.143 7.318 -2.39% -8.98% (2) Overlapping tax rates for Lake County represented only District #102 and Indian Trail Library District as the majority of Buffalo Grove is within those districts. Overlapping rates for District #96 available upon request. NIA-not yet available. Data Source Cook County Tax Extension Office and Lake County Tax Extension Office 108 0.633 0.654 5.318 0.403 0.317 0.094 7.419 3.08% 0.731 0.557 0.284 5.613 0.455 0.320 0.080 8.040 1.71% Comparative Tax Rates (Per $100 Assessed and Equalized Valuation) 2005 2004 2003 2002 2001 0.608 0.603 0.615 0.626 0.647 0.664 0.684 0.715 0.734 0.799 5.234 5.300 5.144 5.077 5.026 0.375 0.349 0.387 0.365 0.355 0.223 0.325 0.265 0.267 0.316 0.093 0.120 0.101 0.105 0.043 7.197 7.381 7.227 7.174 7.186 -2.00% 2.13% 0.74% -0.17% -3.81% 0.726 0.785 0.807 0.714 0.728 0.607 0.662 0.728 0.751 0.820 0.315 0.347 0.361 0.371 0.401 5.434 5.359 5.867 5.449 5.183 0.435 0.457 0.498 0.407 0.422 0.312 0.323 0.335 0.304 0.281 0.076 0.064 0.074 0.075 0.103 7.905 7.997 8.670 8.071 7.938 -1.15% -7.76% 7.42% 1.68% -10.34% 109 VILLAGE OF BUFFALO GROVE, ILLINOIS Principal Property Taxpayers Current Fiscal Year and Eight Years Ago 2010 2002* Percentage Percentage of Total of Total Village Taxable Taxable Equalized Equalized Assessed Assessed Assessed Assessed TaxEa~er Value Rank Valuation Valuation Rank Valuation Amli at Chevy Chase, LP $ 22,307,549 I 1.19 % 13,8I0,599 2 1.05% Chevy Chase Business Park I8,960,235 2 l.OI I3,030, I88 3 0.99 Hamilton Partners (I) I2,986,13I 3 0.69 15,029,138 I 1.14 Millbrook II,978,786 4 0.64 Penobscot Management (3) 9,405,I58 5 0.50 8,264,390 6 0.63 Riverwalk South LLC (2) 9,241,55I 6 0.49 10,786,360 4 0.82 Rogers Center for Commerce ( 4) 9,0I2,393 7 0.48 8,340,994 5 0.63 Remax Consumer Plastics, Inc. 7,355,354 8 0.39 Inland Woodland LLC 6,895,030 9 0.37 NTL Shopping Plaza Inc. 6,587,600 10 0.35 Manufacturer's Life Insurance 5,988,I80 IO 0.45 Inland Real Estate Group 7,I93,965 7 0.55 American National Bank 6,332,947 8 0.48 Courtesy Corporation 6,013,044 9 0.46 $ 114:729:787 6.11 % 94:789:805 7.20 % *2002 is the most recent information available. Note: Every effort was made to seek out and report the largest taxpayers. However, many of the taxpayers contain multiple parcels, and it is possible that some parcels and their valuations have been overlooked. (I) Previously HP Riverwalk II, LLC (2) Previously Marack and Associates (3) Previously The Wheatlands LLC (4) Previously American National Bank and Trust of Chicago Data Source Offices of the County Clerk of Cook and Lake Counties 110 VILLAGE OF BUFFALO GROVE, ILLINOIS Property Tax Levies and Collections Last Ten Fiscal Years (See Following Page) VILLAGE OF BUFFALO GROVE, ILLINOIS Property Tax Levies and Collections Last Ten Fiscal Years Lake Coun~ CookCoun~ Collected Within the Collected Within the Fiscal Year After the Levy Fiscal Year After the Le~ Levy Tax Percentage Tax Percentage Year Levied Amount of Levy Levied Amount of Levy 2009 $ I 0,826,999 10,818,398 99.92% 3,131,059 2,992,768 95.58% 2008 9,648,296 9,639,444 99.91% 2,882,493 2,902,223 100.00% 2007 9,137,324 9,133,824 99.96% 2,937,238 2,871,428 97.76% 2006 8,389,127 8,383,359 99.93% 2,572,578 2,538,174 98.66% 2005 7,690,488 7,692,967 100.00% 2,492,952 2,454,868 98.47% 2004 7,068,040 7,063,323 99.93% 2,516,966 2,465,488 97.95% 2003 6,833,964 6,833,112 99.99% 2,277,392 2,259,270 99.20% 2002 6,496,642 6,493,138 99.95% 2,010,410 1,991,316 99.05% 2001 6,188,984 6,191,084 100.00% 1,893,528 1,881,113 99.34% 2000 5,676,190 5,671,695 99.92% 1,862,422 1,850,419 99.36% Notes: Property is assessed at 33 1/3% of actual value. Property is assessed on the following basis: Cook County-Triennial; Lake County-Quadrennial (minimum). Collections for prior tax years are immaterial. Data Source Office of the County Clerk 111 Villa~e Total Percentage Collected of Levy 13,811,167 98.95% 12,541,667 100.00% 12,005,252 99.43% 10,921,533 99.63% 10,147,835 99.65% 9,528,811 99.41% 9,092,382 99.79% 8,484,454 99.73% 8,072,197 99.87% 7,522,114 99.78% 112 VILLAGE OF BUFFALO GROVE, ILLINOIS Sales Tax Revenue and Number of Principal Payers Revenue by Category Last Ten Calendar Years 2010 General Merchandise $ 3,901 Food 1,362,170 Drinking and Eating Places 933,212 Apparel 128,663 Furniture, Households and Radio 415,396 Lumber, Building and Hardware 402,483 Automotive Filling Stations 1,361,376 Drugs and Miscellaneous Retail 1,431,121 Agriculture and All Other 1,062,978 Manufacturers 379,893 $ 7,481,194 Total Number of Payers 997 Village Direct Sales Tax Rate 1.00% Village Home Rule tax Rate 1.00% Note: 2009 4,637 1,357,378 941,804 112,951 223,008 716,935 1,222,500 1,432,484 1,257,806 399,141 7,668:644 975 1.00% 1.00% Calendar Year 2008 2007 2006 5,819 3,793 1,346 1,415,835 1,371,195 1,340,177 906,628 874,307 924,738 104,376 110,386 67,072 521,316 422,342 530,825 1,379,764 2,181,496 3,326,323 1,177,121 1,715,400 1,581,217 1,285,513 1,237,894 1,206,917 2,082,955 1,777,144 1,755,277 390,034 338,494 438,024 9,269,361 10,032,451 11,171,916 1,002 1,196 1,311 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Blank categories have less than four taxpayers; therefore, no data is shown to protect the confidentiality of individual taxpayers. Data Source Illinois Department of Revenue Offices of the Cook and Lake County Clerks 113 Calendar Year 2005 2004 2003 2002 2001 1,662 4,614 1,360,403 1,256,331 1,206,548 1,238,333 1,248,750 932,646 833,941 630,398 559,474 572,107 100,045 81,888 47,529 48,015 51,710 534,243 456,248 455,215 405,114 498,596 3,666,077 3,279,174 2,388,782 2,214,964 2,259,554 1,459,577 1,266,367 1,151,643 1,148,487 1,337,169 1,088,992 929,343 829,971 786,327 815,961 1,744,041 1,258,957 1,127,987 1,333,021 1,953,994 502,410 498,294 182,256 132,869 175,162 11,390,096 9,865,157 8,020,329 7,866,604 8,913,003 1,271 1,189 1,213 1,174 1,094 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 0.50% 0.50% 0.50% 0.50% 114 VILLAGE OF BUFFALO GROVE, ILLINOIS Direct and Overlapping Sales Tax Rates Last Ten Fiscal Years State of Village Illinois Fiscal Direct Sales Tax Year Rate Rate 2010 1.00% 6.50% 2009 1.00% 6.50% 2008 1.00% 6.50% 2007 * 1.00% 6.50% 2007 1.00% 6.50% 2006 1.00% 6.50% 2005 1.00% 6.50% 2004 1.00% 6.50% 2003 0.05% 6.50% 2002 0.05% 6.50% *Transitional fiscal year May I, 2007 through December 31, 2007. Data Source Illinois Department of Revenue 115 DEBT CAPACITY VILLAGE OF BUFFALO GROVE, ILLINOIS Ratio of Outstanding Debt by Type Last Ten Years Ratio of Business-Type Total Governmental Activities Activities Outstanding Tax Debt to Total General Increment Special General Total Equalized Outstanding Year Obligation Financing Service Area Obligation Revenue Primary Assessed Debt Ended Bonds Bonds Bonds Bonds Bonds Government Valuation I!er CaJ:!it~ 1} 12/31/2010 $ 8,255,000 8,255,000 0.46% 198.93 12/31/2009 6,575,000 6,575,000 0.35% 156.62 12/31/2008 7,740,000 7,740,000 0.41% 183.54 12/3112007* 8,890,000 8,890,000 0.49% 209.47 4/30/2007 10,202,381 174,768 10,377,149 0.62% 243.80 4/30/2006 11,437,146 345,003 11,782,149 0.73% 274.96 4/30/2005 12,597,846 3,400,000 1,460,000 689,303 18,147,149 1.22% 420.12 4/30/2004 13,530,660 4,150,000 3,140,000 1,034,647 21,855,307 1.57% 508.70 4/30/2003 14,201,820 5,505,000 4,635,000 1,367,443 25,709,263 1.95% 596.50 4/30/2002 12,374,070 6,490,000 6,045,000 1,710,930 26,620,000 2.19% 619.07 *Transitional fiscal year May 1, 2007 through December 31, 2007. December 31, 2007 represents an eight-month period. Notes: Details of the Village's outstanding debt can be found in the Notes to the Financial Statements. (1) See the Schedule of Demographic and Economic Statistics for equalized assessed valuation of property and population data. Personal income information is not available. 116 VILLAGE OF BUFFALO GROVE, ILLINOIS Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years Percentage Amounts of Estimated Available Actual General in Debt Taxable Fiscal Obligation Service Value of Year Bonds Fund Total Property (1) Per Capita 2010 $ 8,255,000 20,271 8,234,729 0.46% 198.45 2009 6,575,000 (12,970) 6,587,970 0.35% 156.93 2008 7,740,000 33,167 7,706,833 0.41% 182.76 2007 * 8,890,000 98,332 8,791,668 0.49% 207.16 2007 10,202,381 486,946 9,715,435 0.58% 228.25 2006 11,780,000 499,743 11,280,257 0.70% 263.24 2005 12,597,846 12,597,846 0.84% 291.65 2004 14,565,307 14,565,307 1.05% 339.02 2003 15,565,000 15,565,000 1.18% 361.14 2002 14,085,000 14,085,000 1.16% 327.56 *Transitional fiscal year May 1, 2007 through December 31, 2007. Notes: Details of the Village's outstanding debt can be found in the Notes to the Financial Statements. (1) See the Schedule of Assessed Value and estimated Actual Value of Taxable Property for property value data. 117 VILLAGE OF BUFFALO GROVE, ILLINOIS Direct and Overlapping Governmental Activities Debt As of December 31, 20 I 0 Percentage of Village of Debt Applicable Buffalo Grove Gross to the Village of Share Debt Buffalo Grove* of Debt Overlapping Debt School Districts Cook County School District #2 I $ 36,606,272 17.99% 6,585,468 Kildeer Countryside Community Consolidated #96 4,400,000 39.84% 1,752,960 Aptakisic-Tripp Community Consolidated #102 6,885,000 75.91% 5,226,404 Lincolnshire -Half Day District# 103 3,225,000 11.42% 368,295 Adlai E. Stevenson RS. District #125 26,595,000 37.53% 9,981,104 Wheeling Township H.S. District #214 30,020,000 4.00% 1,200,800 Harper Community College #512 192,420,000 1.82'% 3,502,044 College of Lake County #532 6.920,000 5.02% 347,384 Total School Districts 307,071,272 28,964,458 Other Than School Districts Lake County 86,515,000 4.77% 4,126,766 Lake County Forest Preserve 286,485.000 4.77% 13,665335 Cook County 3,499,615,000 0.25% 8,749,038 Cook County Forest Preserve 101,935,000 0.25% 254,838 Metropolitan Water Reclamation District 1,945,659.620 0.26%"· 5,058,715 Indian Trails Library District 390,000 46.46~o 181,194 Buffalo Grove Park District 16,575,000 95.03% 15,751,223 Wheeling Park District 10,990,000 5.97% 656,103 Total Other Than School Districts 5 ,948, 164,620 48,443,210 Total Overlapping Debt 6.255,235,892 77,407,668 Total Village of Buffalo Grove Direct Debt 8,255,000 100.00% 8,255,000 Total Direct and Overlapping Debt $ 6,263,490,892 85,662,668 *Determined by ratio of assessed valuation of property subject to taxation in the Village of Buffalo Grove to valuation of property subject to overlapping unit. Note. Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Village. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the Village of Buffalo Grove. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. 118 VILLAGE OF BUFFALO GROVE, ILLINOIS Schedule of Legal Debt Margin December 31 , 20 I 0 Under the 1970 Illinois Constitution, there is no legal limit for home rule municipalities except as set by the General Assembly. 119 DEMOGRAPHIC AND ECONOMIC INFORMATION VILLAGE OF BUFFALO GROVE, ILLINOIS Demographic and Economic Statistics Last Ten Years Fiscal Year 2010 2009 2008 2007 * 2007 2006 2005 2004 2003 2002 (A) Actual (E) Estimate Equalized Assessed Population Value (EAV) 41.496 (A) s L799.6ll.219 41.980 1.896. 782,514 42,170 (E) J ,881.094,419 42,440 (E) L8! 0.82 L4 75 42.564 fE) 1.677.222.407 42.851 (E) 1.608.264. 793 43.195 (A) I .492, 778,540 42,963 (A) 1.393,418.384 43.100 (E) 1 J 19,372,268 43.000 (E) 1.216,666,375 Per Capita Personal EAV 43.368 45.!83 44.607 42.668 39.405 37,532 34.559 32,433 30.612 28.295 *Transitional tiscal year May l. 2007 through December 31, 2007. (1) US Census (2) Northern lllinois University Estimate (3) ESRI Estimate Data Source U.S. Department of Labor, Bureau of Labor Statistic~ 120 Personal Income Per Capita Unemployment (in thousands) Income Rate 2.098,868 (E) 50.580 (E) 8.0% 2,102,316 (E) 50,079 (E) 7.8% 2.090.915 (E) 49.583 (E) 6.5'}0 2,083,464 (3) 49,092 (3) 3.7°/(J 2.017.321 (E) 47,395 (E) 3.2% 1.915,997 (E) 44.713 (E) 4.8'% l ,822.051 (E) 42.182 (E) 5.6% 1.709.670 (2) 39.794 (2) 5.2% !.703.226 (E) 39,518 (E) 4. 7o/0 L657.822 (E) 38.554 (E) 4.5%, VILLAGE OF BUFFALO GROVE, ILLINOIS Principal Village Employers Current Year and Eight Years Ago EmJ:!Io~er Siemens Building Technologies IPA North America Rexam (I) Crosscom National LLC GSF-USA, Inc Plexus Corporation RG Ray Corporation ASAP Software Amerisource Bergen Panasonic Factory Automation, Co Dominick's Finer Foods (three locations) Harris Trust & Savings Bank Federal Express Allstate Insurance Company Village of Buffalo Grove ASAP Software Data Source Village Records -earliest available records (I) prior to 2005 -Courtesy Corporation Em2Io~ees 2,000 I,800 800 450 450 370 350 225 200 200 2010 Rank I 2 3 4 5 6 7 8 9 IO I21 2002 Percent Percent of Total of Total Village Village Po2ulation Em2Io~ees Rank Po2ulation 4.82% I,OI5 2 2.36% 4.34% 1.93% 590 3 1.37% 1.08% 1.08% 0.89% 400 5 0.93% 0.84% 245 8 0.57% 0.54% 200 10 0.47% 0.48% 0.48% 480 4 l.l2% 345 6 0.80% 300 7 0.70% I,310 I 3.05% 239 9 0.56% 200 IO 0.47% OPERATING INFORMATION VILLAGE OF BUFFALO GROVE, ILLINOIS Full-Time Equivalent Employees Last Ten Years (See Following Page) VILLAGE OF BUFFALO GROVE, ILLINOIS Full-Time Equivalent Employees Last Ten Years Function/Program 2010 2009 2008 2007* 2007 General Government Administration Village Manager's Office 4.0 4.5 5.0 5.0 4.5 Planning 1.5 1.5 1.5 1.5 1.5 Information Technology 3.5 3.5 3.5 3.5 3.5 Finance 8.5 9.0 9.5 9.5 9.5 Building and Zoning 10.0 10.0 10.5 10.5 10.5 Public Safety Police Full-Time Police Officers 69.0 71.0 71.0 71.0 70.0 Community Service Officers 3.0 3.0 3.0 3.0 3.0 Civilians 17.5 20.5 21.5 21.5 22.5 Fire ~ Full-time Firefighter~/Paramedics 62.0 62.0 62.0 61.0 62.0 Civilians 6.0 6.0 6.0 6.0 6.0 Public Works Pubic Works Administration 12.0 12.0 14.5 14.5 14.5 Streets/Forestry 20.0 20.0 20.0 20.0 20.0 Water and Sewer 13.0 13.0 14.0 14.0 14.0 Central Garage 5.5 5.5 5.0 5.0 4.0 Building Maintenance 4.0 4.0 4.0 4.0 4.0 Recreation Administration 13.5 13.5 13.5 13.5 13.5 Grounds Maintenance 15.0 15.0 15.0 15.0 15.0 268.0 274.0 279.5 278.5 278.0 Recreation Seasonal 34.0 34.0 34.0 34.0 34.0 *Transitional fiscal year May 1, 2007 through December 31, 2007. Data Source Village Finance Department 122 2006 2005 2004 2003 2002 4.5 4.5 4.5 5.0 5.5 1.5 2.0 2.0 2.0 2.0 3.0 3.0 3.0 3.0 3.0 9.5 9.5 10.0 10.0 10.0 10.5 10.5 10.5 10.5 11.0 70.0 71.0 70.0 76.5 76.5 3.0 3.0 3.0 3.0 3.5 22.0 22.5 22.0 25.0 24.0 62.0 62.0 62.0 62.0 62.0 5.0 5.0 5.0 6.0 6.0 15.5 15.5 15.5 15.5 15.5 19.0 20.0 21.0 21.0 23.0 13.0 10.0 11.0 12.0 13.0 5.0 5.0 5.0 5.0 5.0 4.0 4.0 4.0 4.0 4.0 13.5 13.5 13.5 13.5 13.5 15.0 15.0 15.0 15.0 15.0 276.0 276.0 277.0 289.0 292.5 34.0 34.0 34.0 34.0 34.0 123 VILLAGE OF BUFFALO GROVE, ILLINOIS Operating Indicators Last Ten Fiscal Years Function/Program 2010 2009 2008 2007** 2007 General Government Building and Zoning Building Permits Issued 1,959 1,922 1,746 1,695 1,282 Building Inspections Conducted 7,088 6,633 5,054 21,383 13,416 Property Maintenance Inspections Conducted 3,158 2,348 2,159 2,962 3,448 Public Safety Police Physical Arrests 981 989 1,085 2,143 N/A Parking Violations 2,062 3,267 3,451 4,721 N/A Traffic Violations 11,999 11,373 15,795 12,010 N/A DUI Arrests 222 267 337 482 N/A Vehicle Crashes 1,391 1,414 1,786 1,555 NIA Fire Ambulance Calls/EMS 2,743 2,553 2,590 2,943 2,583 Service Call 610 718 751 678 684 Fire Call 735 774 881 858 788 Auto Aid/Mutual Aid 654 672 689 379 406 Public Works Streets Street Resurfacing (Miles) 3.00 4.94 4.94 8.23 8.30 Parks and Recreation Park Sites 46 46 46 46 46 Golf Courses -Combined Golf Rounds Played-Paid 52,740 59,723 58,097 60,258 61,005 Water New Connections (Tap-ons) 50 7 25 33 98 Average Daily Consumption* 4.30 4.21 4.089 4.347 4.613 Peak Daily Consumption* 7.30 7.29 7.027 8.393 8.882 *(millions of gallon) **Transitional fiscal year May l, 2007 through December 31, 2007. N/ A -not available Data Source Various Village Departments 124 2006 2,011 14,744 4,530 2,489 4,751 12,010 457 1,692 2,668 614 810 315 8.25 46 60,678 6 5.094 9.791 2005 1,843 12,058 3,260 2,609 5,598 12,312 440 1,719 2,610 645 810 360 8.59 46 61,937 16 4.668 8.577 2004 2,099 11,597 3,057 2,673 4,990 10,181 452 1,842 2,622 682 788 403 6.95 46 60,275 66 4.733 9.024 2003 2,618 16,429 1,343 2,878 4,539 10,686 575 1,792 2,474 754 735 544 5.53 46 62,241 II 4.915 10.733 125 2002 1,721 N/A N/A 3,076 5,704 10,240 504 1,805 2,454 713 689 547 3.42 46 63,317 48 4.729 10.238 VILLAGE OF BUFFALO GROVE, ILLINOIS Capital Asset Statistics Last Ten Fiscal Years Function!Prol[am 20IO 2009 2008 2007* 2007 Public Safety Police Stations I I I I I Patrol Units 36 36 36 36 35 Fire Stations 3 3 3 3 3 Fire Apparatus 2I 2I 20 20 20 Public Works Streets Streets (Miles) II7.70 II7.70 II7.50 II7.50 II7.50 Streetlights 2,745 2,743 2,7I4 2,6I4 2,374 Water Water Mains (Miles) I79.83 I79.82 I80.63 I79.57 I78.36 Fire Hydrants 2,475 2,474 2,474 2,468 2,449 Wastewater Sanitary Sewers (Miles) I39.27 139.27 139.24 139.I2 138.72 *Transitional fiscal year May I, 2007 through December 3I, 2007. Data Source Various Village Departments I26 2006 1 35 3 20 117.50 2,374 178.36 2,449 138.72 2005 I 35 3 20 ll7.50 2,374 178.36 2,449 138.72 2004 1 35 3 20 117.50 2,374 178.36 2,449 138.72 2003 1 35 3 20 117.50 2,374 178.36 2,449 138.72 127 2002 1 35 3 20 117.50 2,374 178.36 2,449 138.72