Loading...
2020 CAFR VILLAGE OF BUFFALO GROVE, ILLINOIS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 VILLAGE OF BUFFALO GROVE, ILLINOIS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 Prepared by: Finance Department and General Services Chris Black Director of Finance Director and General Services VILLAGE OF BUFFALO GROVE, ILLINOIS TABLE OF CONTENTS 1 2 Letter of Transmittal 3 -6 7 INDEPENDENT AUDITORS' REPORT 8 -10 MANAGEMENT’S DISCUSSION AND ANALYSIS 11 -26 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 27 -28 Statement of Activities 29 -30 Fund Financial Statements Balance Sheet – Governmental Funds 31 -32 Reconciliation of Total Governmental Fund Balance to the Statement of Net Position – Governmental Activities 33 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 34 -35 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities – Governmental Activities 36 Statement of Net Position – Proprietary Funds 37 -38 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds 39 -40 Statement of Cash Flows – Proprietary 41 -42 Statement of Fiduciary Net Position 43 Statement of Changes in Fiduciary Net Position 44 Notes to Financial Statements 45 -105 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Employer Contributions Illinois Municipal Retirement Fund 106 Police Pension Fund 107 Firefighters' Pension Fund 108 FINANCIAL SECTION PAGE INTRODUCTORY SECTION List of Principal Officials Organizational Chart Certificate of Achievement for Excellence in Financial Reporting VILLAGE OF BUFFALO GROVE, ILLINOIS TABLE OF CONTENTS REQUIRED SUPPLEMENTARY INFORMATION – Continued Schedule of Changes in the Employer's Net Pension Liability Illinois Municipal Retirement Fund 109 -110 Police Pension Fund 111 -112 Firefighters’ Pension Fund 113 -114 Schedule of Investment Returns Police Pension Fund 115 Firefighters’ Pension Fund 116 Schedule of Changes in the Employer's Total OPEB Liability Retiree Benefit Plan 117 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual General Fund 118 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Debt Service Fund 119 Facilities Development - Capital Projects Fund 120 Street Maintenance - Capital Projects Fund 121 Vehicle Equipment Replacement - Capital Projects Fund 122 Combining Balance Sheet - Nonmajor Governmental Funds 123 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds 124 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Motor Fuel Tax - Special Revenue Fund 125 Local Motor Fuel Tax - Special Revenue Fund 126 Lake Cook Road TIF - Special Revenue Fund 127 Metra Parking Lot - Special Revenue Fund 128 Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual Waterworks and Sewerage - Enterprise Fund 129 -130 Arboretum Golf - Enterprise Fund 131 -132 Combing Statement of Net Position - Nonmajor Enterprise Funds 133 -134 Combining Statement of Revenues, Expenses and Changes in Net Position Nonmajor Enterprise Funds 135 Combining Statement of Cash Flows - Nonmajor Enterprise Funds 136 Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual Buffalo Grove Golf - Enterprise Fund 137 -138 Refuse Service - Enterprise Fund 139 Combining Statement of Net Position - Internal Service Funds 140 PAGE FINANCIAL SECTION – Continued VILLAGE OF BUFFALO GROVE, ILLINOIS TABLE OF CONTENTS COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES – Continued Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds 141 Combining Statement of Cash Flows - Internal Service Funds 142 Schedule of Revenues, Expenses and Changes in Fund Balance - Budget and Actual Information Technology - Internal Service Fund 143 Central Garage - Internal Service Fund 144 Building Maintenance - Internal Service Fund 145 Combining Statement of Fiduciary Net Position - Pension Trust Funds 146 Combining Statement of Changes in Fiduciary Net Position - Pension Trust Funds 147 Schedule of Changes in Fiduciary Net Position - Budget and Actual Police Pension - Pension Trust Fund 148 Firefighter's Pension - Pension Trust Fund 149 Consolidated Year-End Financial Report 150 SUPPLEMENTAL SCHEDULES Long-Term Debt Requirements General Obligation Bonds of 2012 151 General Obligation Bonds of 2016 152 General Obligation Refunding Bonds of 2019 153 General Obligation Bonds of 2020 154 IEPA Loan Payable of 2013 - Pump Stations Improvements 155 Installment Note Payable of 2015 156 Net Position by Component – Last Ten Fiscal Years 157 -158 Changes in Net Position – Last Ten Fiscal Years 159 -160 Fund Balances of Governmental Funds – Last Ten Fiscal Years 161 -162 Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years 163 -164 Assessed Value and Actual Value of Taxable Property – Last Ten Tax Levy Years 165 -166 Direct and Overlapping Property Tax Rates – Last Ten Tax Levy Years 167 -168 STATISTICAL SECTION (Unaudited) PAGE FINANCIAL SECTION – Continued VILLAGE OF BUFFALO GROVE, ILLINOIS TABLE OF CONTENTS Principal Property Tax Payers – Current Tax Levy Year and Nine Fiscal Years Ago 169 Property Tax Levies and Collections – Last Ten Tax Levy Years 170 Taxable Sales by Category – Last Ten Calendar Years 171 -172 Direct and Overlapping Sales Tax Rates – Last Ten Fiscal Years 173 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years 174 -175 Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years 176 Schedule of Direct and Overlapping Governmental Activities Debt 177 Schedule of Legal Debt Margin 178 Demographic and Economic Statistics – Last Ten Fiscal Years 179 Principal Employers – Current Fiscal Year and Nine Fiscal Years Ago 180 Full-Time Equivalent Government Employees by Function/Program – Last Ten Fiscal Years 181 -182 Operating Indicators by Function/Program – Last Ten Fiscal Years 183 -184 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years 185 -186 STATISTICAL SECTION (Unaudited) - Continued PAGE INTRODUCTORY SECTION This section includes miscellaneous data regarding the Village of Buffalo Grove, including: • List of Principal Officials • Organizational Chart • Letter of Transmittal • GFOA Certificate of Achievement for Excellence in Financial Reporting VILLAGE OF BUFFALO GROVE, ILLINOIS List of Principal Officials December 31, 2020 Beverly Sussman Janet M. Sirabian Village President Village Clerk Board of Trustees Gregory S. Pike Andrew Stein Joanne Johnson Lester Ottenheimer Eric Smith David Weidenfield Appointed Officials Dane Bragg, Village Manager Jennifer Maltas Chris Black Deputy Village Manager Finance Director/Village Treasurer Steven Casstevens William Baker Chief of Police Fire Chief Michael Skibbe Arthur Malinowski Public Works Director Human Resource Director Darren Monico Christopher Stilling Village Engineer Director of Community Development Geoff Tollefson Brian Sheehan Golf Course Manager Building Commissioner Brett Robinson Administrative Services Director 1 ORGANIZATIONAL CHART Residents of Buffalo Grove Village Board Village Manager Community Development Building and Zoning Environmental Health Planning and Economic Development Police Department Patrol Investigations Youth Services Police Records Fire Department Emergency Medical Services Fire Suppression and Rescue Fire Prevention &Education Emergency Management Agency Office of the Village Manager Legal Human Resources Communications Information Technology Deputy Village Clerk Finance General Services Accounting Services Village Treasurer Golf Operations Public Works Engineering Building Maintenance Central Garage Streets Forestry & Grounds Water Sewer & Drainage Page 15 of 4242 VILLAGE OF BUFFALO GROVE August 5, 2021 The Honorable Beverly Sussman Members of the Village Board Citizens of the Village of Buffalo Grove The Comprehensive Annual Financial Report of the Village of Buffalo Grove for the year ended December 31, 2020 is submitted herewith. This report represents a comprehensive picture of the Village’s financial activities during Fiscal Year 2020 and the financial condition of its various funds at December 31, 2020. State law requires that all general- purpose local governments publish within six months of the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audit in accordance with generally accepted auditing standards by a firm of licensed 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. Lauterbach & Amen, Independent Certified Public Accountants, have issued an unmodified (clean) opinion on the Village’s financial statements for the fiscal year ended December 31, 2020. The independent auditors’ report is presented at the front of the financial section of this report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of a Management’s Discussion and Analysis (MD&A). The letter of transmittal is designated to complement the MD&A and should be read in conjunction with it. The Village of Buffalo Grove’s MD&A can be found immediately following the report of the independent auditors. 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 9.2 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. As a home rule entity, the Village has no tax rate or debt limits, nor is it required to conduct a referendum to authorize the issuance of debt or to increase property taxes. 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 policies, ordinances and resolutions of the Village Board, developing and presenting an annual budget, overseeing the day-to-day operations of the Village, and appointing department directors. Department of Finance & General Services Fifty Raupp Blvd. Buffalo Grove, IL. 60089-2100 Phone 847-459-2500 Fax 847-459-0332 3 The Village provides a full range of services including police and fire protection, construction and maintenance of streets and infrastructure, planning and zoning, water and sewer utilities, and general administrative services. The Village also operates two golf courses and a municipal commuter parking lot. To provide these services there were 217 full-time and 55 part-time/seasonal positions in the Fiscal Year 2020 annual budget. Budgetary Control and Accounting Systems The annual budget serves as the foundation for the Village’s financial planning and as a management spending control document. All departments of the Village of Buffalo Grove are required to submit budget requests by a specified date each year. These requests serve as the starting point for budget development. The proposed budget is presented to the Village Board in November and adopted by ordinance in December concurrently with the property tax levy. Legal spending thresholds are established through the annual budget under the budget officer method. The Village Board is required to hold a public hearing on the budget document and must adopt a final budget no later than December 31st of each year. The budget is prepared by fund, and department program. Department directors may make transfers of budget allocations within a department. Transfers of budget allocations between funds, however, require the approval of the Village Board. All budget adjustments must be approved by the Village Board to amend the legal spending thresholds. 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 Local Economy The Village of Buffalo Grove, like many other communities, suffered a major economic decline following the onset of the COVID-19 pandemic in March 2020. The Village was approximately $1 million under the FY 2020 budget amounts in state sales tax and home rule sales tax combined. However, a financial plan to reduce operating expenses to mitigate the use of financial reserves was implemented. The plan included a voluntary separation incentive program, maintaining staff vacancies, and reducing operating expenditures. The Village is primarily residential, with supporting commercial activity and limited industrial and manufacturing activity. There are approximately 820 licensed businesses operating in the Village. The majority of residents are employed in management, professional, sales and office occupations. The Village’s unemployment statistics have consistently been lower than the national and state averages, with an unemployment rate at the end of the year at 5.7 percent besting the state by 1.4 percent. External economic factors at the national and state level continue to impact the Village’s revenue profile and, subsequently its ability to manage operating and capital resources. • Property tax collections totaled $17,035,362 which is an increase from the previous year’s total of $16,321,876 an increase of 4.4 percent. • Water and Sewer collections increased from $10,938,035 in 2019 to $14,625,649 in 2020. A total increase of 33.7 percent. • Sales taxes [net of rebates], both state shared and home rule, generated $9,829,765 in 2020 versus $9,945,749 in 2019, a decrease of 1.1 percent. 4 The Village equalized assessed valuation increased by $127.8 million or 7.6 percent to $1.82 billion for the 2019 levy year. The increase is due primarily to the triennial and quadrennial assessments in Lake and Cook Counties respectively as well as new property and development experienced during the year. The unassigned fund balance of the General Fund will again exceed the 25 percent threshold of the subsequent year’s budgeted expenditures, less non -operating transfers, which is policy established by the Village Board. Unassigned Budgeted Fiscal Year Ended Fund Balance Expenditures Percent December 31, 2011 $ 9,872,594 $29,271,054 33.73% December 31, 2012 $10,302,515 $29,768,828 34.61% December 31, 2013 $12,395,113 $35,511,109* 34.90% December 31, 2014 $13,225,644 $37,083,251 35.67% December 31, 2015 $14,991,907 $38,165,617 39.29% December 31, 2016 $16,143,726 $39,177,439 41.21% December 31, 2017 $18,902,476 $39,477,439 47.88% December 31, 2018 $17,039,974 $39,717,331 42.90% December 31, 2020 $18,939,974 $43,948,348 43.10% December 31, 2020 $20,304,913 $44,657,330 45.47% * Budget number includes employer pension costs beginning in FY 2013. Long-Term Financial Planning The Village compiles a General Fund Five-Year Financial Forecast annually which provides an analysis of future revenue and expenditures. This report is completed in tandem with the start of the annual budget process. Other long-range financial plans include the five-year Capital Improvement Plan, Twenty-Year Water Fund Pro-Forma, and a Twenty-Year Storm Sewer Pro Forma. The Village assesses its capital needs through the Capital Improvement Plan (CIP) update. This document is a planning tool to identify short and medium term capital needs (facilities, infrastructure 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 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 wil l be involved with or managing over $175 million in capital projects. Transportation-related projects represent a large percentage of the improvements at $76 million. Routine maintenance of existing streets accounts for $63 million of those projects. Approximately $32 million and $7.5 million respectively, is allocated to improving and maintaining the water utility and sanitary sewer systems. The Twenty-Year Water Fund Pro-Forma provides an overview of the Water Fund and adequacy of the current water rate to fund operating expenses and infrastructure improvements as well as generating a reserve to continue with a pay-as-you-go approach to capital budgeting. The Reserve for Capital Replacement Funding Report lists all Village owned vehicles, the service life, and its respective reserve balance. Major Initiatives In 2020, the Village of Buffalo Grove issued nearly 2,700 commercial and residential building permits. These permits represent a total project valuation of $58 million invested into the Buffalo Grove community. In addition to building permit activity, the following major projects occurred in 2020: Plans continued into 2020 regarding the Lake Cook Road Corridor implementation strategy to stimulate redevelopment of land within the corridor consistent with the adopted plan. Northwest Community Healthcare (NCH) and their development partner, MedProperties Group, continued to redevelop the 7.5 acre site at 15 S McHenry Road and 125 E Lake Cook Road into new four -story, 70,000 square foot medical office building to accommodate NCH. The project also includes a 4,900 square foot retail building. 5 The Combined Area Fire Training (CAFT) Facility redevelopment was completed at 851 Krause Drive. Other developments in 2020 include the Woodman’s unattended gas station, which is owned and operated by Woodman’s Food Market on 1.5 acres of land just south of its grocery store at 1550 Deerfield Parkway. The Link Crossing subdivision on 50 acres at 16802 W. Aptakisic Road continued its development in 2020. The project by K. Hovnanian Homes will have a total of 187 units and include a mix of 68 clustered single - family detached homes and 119 two-story townhomes. Plans for future development include a Ricky Rockets gas station and retail space at 700 East Lake Cook and a new industrial and office headquarters at 1305 Busch Parkway. Other preliminary plans include a new townhome development and commercial redevelopment plans in the Village’s commercial corridors. In July 2020, the Village established a Tax Increment Financing (TIF) District in the Lake Cook Corridor to help spur private development and implement the Lake Cook Corridor Market Study and Plan. The Village also took major steps to complete a new Comprehensive Plan to establish a new l ong-term vision for the entire community. In 2020, 62 businesses opened, expanded and/or relocated in the Village of Buffalo Grove. 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 for the fiscal year ended December 31, 2019. This was the thirty-eighth consecutive year that the government has received this prestigious award. To be awarded a Certificate of Achievement, the government published an easily readable and efficiently organized Comprehensive Annual Financial Report. 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 Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. In addition, the Village also received the GFOA’s Distinguished Budget Presentation Award for its annual budget document for the fiscal year beginning January 1, 2020. In order to qualify for the Distinguished Budget Presentation Award, the Village’s budget document had to be judged proficient as a policy document, a financial plan, an operations guide, and a communications device. The preparation of this report would not have been possible without the dedicated services of the entire staff of the Finance Department especially Deputy Finance Director Cheryl Mosqueda, CPA, CGFM. Credit also must be given to the Village President and Board of Trustees, and the Village Manager Dane Bragg for their assistance in planning and conducting the fiscal affairs of the Village in a responsible m anner. Respectfully submitted, Chris Black Director of Finance/Village Treasurer 6 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Village of Buffalo Grove Illinois For its Comprehensive Annual Financial Report For the Fiscal Year Ended December 31, 2019 Executive Director/CEO 7 FINANCIAL SECTION This section includes: • Independent Auditors’ Report • Management’s Discussion and Analysis • Basic Financial Statements • Required Supplementary Information • Combining and Individual Fund Statements and Schedules • Supplemental Schedules INDEPENDENT AUDITORS’ REPORT This section includes the opinion of the Village’s independent auditing firm. INDEPENDENT AUDITORS' REPORT August 5, 2021 The Honorable Village President Members of the Board of Trustees Village of Buffalo Grove, Illinois Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village of Buffalo Grove, Illinois, as of and for the year ended December 31, 2020, and the related notes to the financial statements, which collectively comprise the Village’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Village’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Village’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 8 Village of Buffalo Grove, Illinois August 5, 2021 Page 2 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village of Buffalo Grove, Illinois, as of December 31, 2020, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis as listed in the table of contents and budgetary information reported in the required supplementary information as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Village of Buffalo Grove, Illinois’ basic financial statements. The introductory section, other supplementary information, supplemental schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The other supplementary information and supplemental schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other supplementary information and supplemental schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. 9 Village of Buffalo Grove, Illinois August 5, 2021 Page 3 Other Matters – Continued Other Information – Continued The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 5, 2021, on our consideration of the Village’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Village’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Village’s internal control over financial reporting and compliance. Lauterbach & Amen, LLP LAUTERBACH & AMEN, LLP 10 MANAGEMENT’S DISCUSSION AND ANAYLSIS VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 The Village of Buffalo Grove’s 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, 2020. This information presented here should be considered in conjunction with additional information provided in the letter of transmittal, which is found in the introductory section of this report. Financial Highlights • The assets and deferred outflows of the Village exceeded its liabilities and deferred inflows at December 31, 2020 by $74.6 million (net position). The Net Position for governmental activities is $19.2 million or 25.7 percent of the total, and business-type activities account for $55.4 million. Of this amount, ($18.9) million is unrestricted, the negative amount of unrestricted assets is directly related to the recognition of all retirement obligations in noncurrent liabilities, which is $59.7 million for 2020 (a decrease of $12.6 million or 17.4% from 2019). • The Village’s total debt increased by $22.3 million (or 122.5 percent). Total general bonded debt outstanding is $34.6 million as of December 31, 2020. The General Fund transferred $2.9 million from fund balance to the Capital Projects Fund. • The Village’s net position increased by $13.8 million (or 22.7 percent) during the fiscal year ending December 31, 2020. The governmental net position increased by $6.9 million (56.1 percent) and the business-type activities net position increased by $6.9 million (14.2 percent). • As of December 31, 2020, the Village of Buffalo Grove’s General Fund reported ending fund balance of $30.5 million, an increase of $2.6 million from the prior year. Of this amount, $20.1 million was unassigned. Overview of the Financial Statements The MD&A is intended to serve 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 financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide financial statements The government-wide financial statements are designed to provide readers with a broad overview of the Village’s finances similar to the corporate sector in that all governmental and business-type activities are consolidated into one total for the Primary Government. The statement of net position presents information on all assets and deferred outflows and liabilities and deferred inflows, with the difference between the two reported as net position. Changing of the net position total over time can be one useful indicator in assessing the financial position of the Village. This statement combines and consolidates governmental funds’ current financial resources (short-term spendable resources) with capital assets and long-term obligations using the accrual basis of accounting and economic resources measurement focus. The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event causing the change occurs, regardless of the timing of related cash flows. Revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods (e.g., uncollected taxes). 11 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 Both of the government-wide financial statements distinguish functions of the Village that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the Village include public safety (police and fire), public works, streets and sidewalks, community development, and general government. Property taxes, state and home rule sales tax, shared state income tax, real estate transfer tax, prepared food and beverage tax, and utility taxes finance most 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, infrastructure replacement, and debt services 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 ensure 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 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 financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Village of Buffalo Grove maintains nine individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General, Debt Service, Facilities Development, Street Maintenance, and Vehicle Equipment Replacement Funds, which are classified as major funds. Data on the other four governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in the report. Proprietary Funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The Village uses enterprise 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 financial statements provide separate information for the Water and Sewer Fund and the Arboretum Golf Fund as they are considered major funds. 12 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 Fiduciary Funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are reflected in the government-wide financial statement since the implementation of GASB 67 & 68. The implementation was completed in fiscal year 2015. The accounting used for fiduciary funds is much like that used for proprietary funds. Notes to the financial statement provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the budgetary comparison to actual for the general fund, as well as the Village’s progress in funding its obligation to provide pension and retiree benefit plans to its employees. Government-wide Financial Analysis The assets and deferred outflows of the Village of Buffalo Grove exceeded liabilities and deferred inflows by $74.6 million as of December 31, 2020. The largest portion of the Village’s net position reflects its net investment in capital assets ($89.5 million). Those capital assets include land, buildings, streets, utility 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 cannot be used to reduce these liabilities. A portion of the Village’s net position ($4.0 million) represents resources that are subject to external restrictions on how they may be used, of that amount $3.0 million is restricted for improvements to roadway, public infrastructure, and other municipal public improvements. The remaining balance of unrestricted net position (($18.9) million) reduces total net position significantly due to GASB 68 and 75, which requires the Village to show the outstanding retirement obligations in noncurrent liabilities. The total increase in unrestricted net position from the prior year is $9.9 million (34.4 percent). The Village’s combined net position increased by $13.8 million as a result of governmental activities increasing by $6.9 million and business-type activities increasing by $6.9 million. The net position of the Village’s governmental fund was $19.2 million. The Village’s unrestricted net position for governmental activities that are available for day-to-day financial operations were ($35.6) million compared to ($40.2) million at December 31, 2019. The net position of business-type activities was $55.4 million. The business type activities unrestricted net position increased by $5.3 million from the previous year. 13 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 Please refer to table below for condensed Statement of Net Position: 2020 2019 2020 2019 2020 2019 Assets Current / Other Assets $72.4 51.0 19.3 14.6 91.7 65.6 Capital Assets 71.6 62.5 44.6 43.4 116.2 105.9 Total Assets 144.0 113.5 63.9 58.0 207.9 171.5 Deferred Outflows 12.2 14.1 2.3 1.0 14.5 15.1 Total Assets/Deferred Outflows 156.2 127.6 66.2 59.0 222.4 186.6 Liabilities Current Liabilities 7.5 6.0 1.4 2.1 8.9 8.1 Non-Current Liabilities 93.9 80.7 8.9 8.2 102.8 88.9 Total Liabilities 101.4 86.7 10.3 10.3 111.7 97.0 Deferred Infows 35.6 28.6 0.5 0.2 36.1 28.8 Total Liabilities/ Deferred Inflows 137.0 115.3 10.8 10.5 147.8 125.8 Net Position: Net Investment in Capital Assets 50.8 50.7 38.7 37.1 89.5 87.8 Restricted 4.0 1.8 - - 4.0 1.8 Unrestricted (35.6) (40.2) 16.7 11.4 (18.9) (28.8) Total Net Position 19.2 12.3 55.4 48.5 74.6 60.8 Village of Buffalo Grove's Net Position (in Millions) Governmental Business-Type Activities Activities Total 14 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 Normal Impacts There are five basic (normal) transactions that will affect the comparability of the Statement of Net Position summary presentation. Net Results of Activities – which will impact (increase/decrease) current assets and unrestricted net position. 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 net investment in capital assets. Reduction of Capital Assets through Depreciation – which will reduce capital assets and net investment in capital assets. Current Year Impacts At the end of the current fiscal year, the Village reported positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. Within the governmental activities, the Village increase in “Current and Other Assets” of $21.5 million is primarily related to $20.9 million more in cash and investments, $0.2 million more in receivables and $0.4 million more in prepaid reserves related to terminal illness coverage at the end of 2020 compared to 2019. The Village experienced a slight decrease of $0.2 million (-4.1 percent) in service charge revenues, $0.4 million (-30.8 percent) in telecommunications taxes, $0.2 million (-7.1 percent) in utility taxes and $2.5 million (-51% percent) in other general revenues. Real estate (property) transfer taxes stayed consistent to the prior year. Interest Income decreased $0.5 million (-66 percent) and miscellaneous income decreased $1.5 million (-58 percent). The Village maintained capital improvement and asset purchases in 2020. The Village has adopted a philosophy of funding capital improvements to a large extent on a pay-as-you –go basis, and retires debt obligations quickly, resulting in positive net position calculations. Declines in “Capital Assets” are primarily as a result of depreciation. Changes in Net Position. The Village’s total revenues and expenses for governmental and business-type activities are reflected in the following chart: 15 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 2020 2019 2020 2019 2020 2019 Revenues Program Revenues Charges for Services $ 4.7 4.9 18.2 13.8 22.9 18.7 Grants / Contributions Operating 3.8 1.7 - - 3.8 1.7 Capital 2.0 0.2 0.3 0.3 2.3 0.5 General Revenues Property Taxes 17.0 16.3 - - 17.0 16.3 Sales and Use Taxes 11.6 11.3 - - 11.6 11.3 Income Taxes 4.6 4.5 - - 4.6 4.5 Telecommunications Taxes 0.9 1.3 - - 0.9 1.3 Utility Taxes 2.6 2.8 - - 2.6 2.8 Property Transfer Taxes 1.0 1.0 - - 1.0 1.0 Other General Revenues 2.5 4.9 0.6 0.8 3.1 5.7 Total Revenues 50.7 48.9 19.1 14.9 69.8 63.8 Expenses General Government 7.2 7.0 - - 7.2 7.0 Public Safety 26.1 30.2 - - 26.1 30.2 Public Works 7.7 10.2 - - 7.7 10.2 Interest 1.2 0.3 - - 1.2 0.3 Water - - 10.4 9.7 10.4 9.7 Sewer - - 0.8 2.8 0.8 2.8 Golf - - 2.6 0.8 2.6 0.8 Total Expenses 42.2 47.7 13.8 13.3 56.0 61.0 Change in Net Position Before Transfers 8.5 1.2 5.3 1.6 13.8 2.8 Transfers (1.6) 1.2 1.6 (1.2) - - Change in Net Position 6.9 2.4 6.9 0.4 13.8 2.8 Net Position - Beginning 12.3 9.9 48.5 48.1 60.8 58.0 Net Position - Ending 19.2 12.3 55.4 48.5 74.6 60.8 Activities Activities Total Village of Buffalo Grove's Changes in Net Position (in Millions) Governmental Business-Type 16 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 Normal Impacts Revenues Economic Condition – which can reflect a declining, stable or growing economic environment and has a substantial impact on property, sales, income, utility tax revenues as well as public spending habits for building permits, elective user fees and volumes of consumption. Increase/Decrease in the Village Approved Rates – while certain tax rates are set by statute, the Village has significant authority to impose and periodically increase/decrease rates (water, building and licensing fees, ambulance fee, etc.). Changing patterns in Intergovernmental and Grant Revenue – (both recurring and non-recurring) – certain recurring revenue (state shared revenues) may experience significant changes periodically while non-recurring (one-time) grants are less predictable and often distorting in their impact on year-to-year comparisons. Market Impact 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. Expenses Changes in Authorized Personnel – changes in service demand may cause the Village to increase/decrease authorized staffing. Salary Increase (general wage adjustments and merit) – compensation adjustments to ensure the Village can attract and retain high level employees. Inflation – while overall inflation appears to be reasonably modest, the Village is a major consumer of certain commodities such as supplies, fuels, and parts. Some functions may experience unusual commodity-specific increases (e.g. fuel, road salt). Current Year Impacts Government Activities: Governmental activities increased the Village’s net position by $6.8 million to $19.1 million. Significant elements contributing to this net change are as follows; Revenues: Revenues for the Village’s governmental activities for the year ended December 31, 2020 were $50.7 million an increase of $1.8 million or 3.7 percent. Property taxes continue to be the Village’s largest source of revenue (33.5 percent) at $17.0 million. Included within the property tax revenues are the pension levies for the Police and Firefighter Pension Funds and IMRF/Social Security. The pension levies account for 39.5 percent of the property tax levy. Other taxes and intergovernmental revenue including sales tax, state income tax, utility tax, prepared food and beverage tax, hotel tax, and real estate transfer tax total $20.7 million or 40.8 percent of total governmental activities revenue. Property taxes increased by $0.7 million. There was a 0% increase in the corporate agency tax levy collected in 2020. The corporate levy for 2020, to be collected in 2021, is funding Police and Fire Protection. 17 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 The Police Protection levy increased $.2 million (4.8 percent) and the Fire Protection Levy decreased $.2 million (3.0 percent). The total tax levy decreased .16 percent due to $.6 million in abatements. Sales and use tax increased by $0.3 million compared to the previous year primarily due to sales tax (net of rebates) declining 2.7%. Utility taxes decreased $0.2 million compared to prior year. Income taxes continue to rebound increasing $0.1 million from FY 2019, a 2.2 percent jump. Real estate transfer taxes stayed consistent with prior year. Income tax and sales and use tax are key indicators for the Village of Buffalo Grove’s local economy and are improving year over year. Expenses: The cost of all governmental activities this year was $42.2 million, a decrease of 11.5 percent from 2019 ($47.7 million). The largest decrease was made in Public Safety expenses $4.1 million in 2020. Public Works expenses decreased by $2.5 million (24.5 percent). 18 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 The Statement of Activities shows that $4.7 million in revenue was generated to finance the services rendered by the user fees. Another $5.8 million in revenue was generated by operating and capital grants and other contributions that was expended for capital improvement. Business-Type Activities: Business-type activities net position increased by $6.9 million. Significant changes are noted below. Revenue: Water sales increased $3.9 million from the previous year. The total amount pumped was 1.24 billion gallons in 2019 versus 1.26 billion in 2020. The utility increased revenue with a 11.0 percent water rate increase. There was a slight increase in water consumed .05 billion gallons (4.3 percent). The two golf courses generated $2.5 million in 2020, $0.5 million (25 percent) better than 2019 earnings. The following graph shows a comparison of revenues and expenses for each business type activity (excludes non-operating activity, transfers and GAAP adjustments). Expenses: Expenses from all business-type activities increased by $0.5 million or 3.8 percent. The Water Fund expenses increased by $0.7 million due to more expenses in 2020 related to capital projects that weren’t capitalized at year end. Golf expenses were increased in 2020 to $2.6 million in total or increase of 225.0 percent. Financial Analysis of the Village’s Funds As noted earlier the Village utilizes fund accounting to ensure and demonstrate compliance with finance related legal requirements. Governmental Funds The focus of the Village’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. 0.0 5.0 10.0 15.0 20.0 Water Fund Refuse Fund Arboretum Golf Buffalo Grove Golf Village of Buffalo Grove 2020 Business Type Activities Revenues and Expenses (In Millions) Revenues Expenses 19 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 The Village’s governmental funds for the year ended December 31, 2020 reflect a combined fund balance of $50.7 million on its balance sheet. This represents a $21.1 million dollar increase over the balance posted last year. While most revenue streams for the Village decreased from 2019, the Village issued $24 million in General Obligation Bonds in 2020 and experienced an overall increase in revenues of $1.9 million. New revenue streams due to Illinois Rebuild funds of $.9 million, $.5 million in Motor Fuel Tax Transportation Renewal Distribution funds, and $.4 million in Local Motor Fuel Tax funds were received in 2020. While the Village curbed expenditures due to Covid-19, the overall increase over prior year of $8.3 million is due to inflationary costs along with an increase in capital project expenditure activity of $5.9 million. Of the total fund balance of $50.7 million, $20.2 million is unassigned indicating availability for future obligations. The 2020 unassigned fund balance increased by $1.2 million. Nonspendable fund balance ($0.57 million) represents amounts set aside for inventory and deposits. Restricted fund balance ($20.6 million) relates to the remaining proceeds available on the 2020 General Obligation Bond, federal and state seizure funds, and non-major special revenue fund balances including the Motor Fuel Tax and Local Motor Fuel Tax funds. Committed fund balance ($9.3 million) is to be used for future 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, community development, and general administration. As such, it useful to review the liquidity of the fund by comparing the unassigned fund balance against the operating General Fund operating budget. As of December 31, 2020, the unassigned fund balance represents 47.2 percent of the FY 2020 operating budget. The Fund Balance of the General Fund increased by $2.6 million for the fiscal year ended December 31, 2020. General Fund revenues decreased by $0.2 million in 2020. Fines and Fees increased slightly reporting $3.1 million, while Miscellaneous Income is down $1.6 million (59.3 percent) from 2019. State Sales tax (net of rebates) reported for 2020 was down 2 percent ($0.1 million). Income tax increased $0.1 million (2.6 percent) and use tax increased $0.45 million (32.3 percent). Real estate transfer taxes decreased by $35,000 (-3.5 percent). Other State of Illinois shared revenues decreased $18,000 (-6.24%). It should be noted that these revenues tend to be threatened to be reduced annually by the state legislature. The Village of Buffalo Grove is focused on developing self-sustaining revenue sources. 20 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 The overall decrease in the General Fund revenue was 0.4 percent, while expenditures increased 6.7 percent ($2.7 million) in 2020. The surplus of revenues over expenditures (before other financing sources/uses) was $3.8 million. Adding in the Other Financing Sources (Uses), the net change to fund balance resulted in an increase of $2.6 million. Public Safety Expenditures increased $1.3 million, 3.4 percent, in FY 2020. Public Works increased 14.8 percent ($0.9 million) and General Government spent $0.5 million more in 2020 versus 2019. Special Revenue Funds have a combined fund balance of $3.0 million as of December 31, 2020. In 2020 the Village continued its initiative to improve local roadways by resurfacing streets, repairing bridges, and maintaining street, curb and gutter as needed. These projects were funded through Motor Fuel Tax (MFT) funds, Local Motor Fuel Tax (LMFT) funds, the Capital Projects Street Maintenance fund, and grant revenues in 2020. Revenues received from the state share of the motor fuel tax were $2.4 million and local share of motor fuel tax of $0.4 million. The scope of each year’s identified maintenance, as determined through pavement analysis studies, surpasses the revenues typically received; however, in 2020, new revenue streams brought in additional funding: Motor Fuel Transportation Renewal Fund revenues, Local Motor Fuel Tax revenues and Illinois Rebuild grant revenues to help with the relatively inelastic funding source provided by Motor Fuel Tax allotments. The intention of the 2020 debt issuance was to help fund the Village’s streets and water and sewer infrastructure modernization program. The Street Maintenance Fund expended $7.5 million which was mostly transferred from the General Fund. Some street projects tied to grant funding are not complete as of December 31, 2020, the remainder will be expended in FY 2021. The Village continues to make streets a priority spending over the annual allotment for MFT by transferring general fund revenues to funds that build and improve roadway infrastructure. The Debt Service Fund has a fund balance of $16.8 million at the end of FY 2020, The Village debt totals $34.6 million, all general obligation bonds, and retired $1.3 million in principal in the current year and issued $24.0 million in general obligation bonds. The interest paid associated with the debt retired was $1.2 million. Debt per capita is $916.91 as of December 31, 2020. The Village’s Capital Improvement plan continued in 2020. The Village expended over $0.5 million to the Facilities Development fund infrastructure in FY 2020. 21 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 Proprietary Funds The Village of Buffalo Grove’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The Village reports that both the Water and Sewer Fund and the Arboretum Golf Course as major proprietary funds. The Water and Sewer Fund accounts for all operating expenses 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 net operating income before interest and transfers of $4.4 million for FY 2020, an increase of $3.0 million (26.1 percent) from the prior fiscal year. A rate increase of 11% percent was applied to all water and sewer usage as well as a new fixed facility fee assessed for single family homes and town homes effective January 1, 2020. Sewer operations accounted for 35.7 percent, or $4.2 million of the total Water and Sewer operational expenditures. Water operations accounted for $1.8 million (15.5 percent) and capital outlay for both systems totaling $3.9 million (33.8 percent). The purchase of water accounted for 14.9 percent, or $1.7 million. Sanitary sewer fees collected on behalf of Lake County Public Works was $3.3 million for FY 2020. These two pass-through expenses account for 41.7 percent of the total operating expense of the fund. Non-operating revenue (expense) decreased $5,782 due to investment income. The unrestricted net position of the Water and Sewer Fund at the end of the current fiscal year was $15.6 million and of that amount $8.4 million is the Village’s equity interest in the Northwest Water Commission. The installment note to pay down the water meter replacement project is $5.6 million, or 65.2 percent, of total liabilities in the water and sewer enterprise. The note is paid off by the increased margin of water metering accuracy. The Village of Buffalo Grove owns and operates two municipal golf courses. 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 position balance of $0.9 million. Total revenues were up $268,000 from 2019. The Buffalo Grove Golf Course generated $1.2 million in operating revenue while incurring $1.0 million in operating expenses. A total of 58,297 paid rounds were played between the two courses in 2020. General Fund Budgetary Highlights The budget is formally presented to the Village Board in November and approved in December in conjunction with the tax levy request. As the Village operates under the Budget Officer Act, a public hearing, for public comment is conducted, before the budget is adopted. The budget document sets the legal spending ceiling for each fund and serves as the day-to-day management tool to ensure fiscal accountability. 22 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 Final Budget Actual Revenues and Transfers: Taxes $36,217 40,221 2,570 3,084 Licenses and permits 240 301 2,005 2,885 2,008 2,008 Total Revenues and Transfers 43,040 48,499 Expenditures and Transfers 44,727 42,670 3,340 3,209 48,067 45,879 Change in fund balance (5,027) 2,620 General Fund Budgetary Highlights For the Fiscal Year Ended December 31, 2020 (in thousands) Total expenditures and Transfers Fines and Fees Other Revenues Transfers in Expenditures Transfers Out Revenue (taxes) performed better than expected due to stronger than anticipated sales and income tax revenue. Actual expenditures performed better than budget due to the reduction in spending efforts as a result of the Covid-19 environment. Capital Assets At the end of December 31, 2020, the Village had a combined total capital assets of $116.1 million invested in a broad range of capital assets including, buildings, streets, storm sewers, and equipment. This amount represents a net increase (including additions and deductions) of $10.1 million. 23 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 2020 2019 2020 2019 2020 2019 Land $39.5 38.1 6.2 6.2 45.7 44.3 Construction in Progress 2.3 1.6 1.0 - 3.3 1.6 Buildings 4.4 3.5 0.7 1.0 5.1 4.5 Equipment and Vehicles 7.6 5.4 - 0.2 7.6 5.6 Land Improvements 2.6 2.6 - - 2.6 2.6 Streets and Storm Sewers 15.1 11.4 - -15.1 11.4 Water and Sewer Infrastructure - - 36.7 36.0 36.7 36.0 71.5 62.6 44.6 43.4 116.1 106.0 Village of Buffalo Grove Capital Assets at Year End (in millions) Governmental Business-Type Activities Activities Total 2020 2019 2020 2019 2020 2019 General Obligation Bonds $34.6 11.9 - - 34.6 11.9 IEPA Loans - - 0.3 0.3 0.3 0.3 Installment Contracts Payable - - 5.6 6.0 5.6 6.0 34.6 11.9 5.9 6.3 40.5 18.2 The Governmental Activities net capital assets increased from last year by $8.9 million (14.2 percent). For the Business- type activities, the net capital assets increased by $1.2 million or (2.8 percent). The capital activity for the Village of Buffalo Grove is mostly in streets, water and sewers and vehicles including the construction in progress in these areas. The amounts added to the asset classes was offset by accumulated depreciation and not shown in the table above. Detailed information on the Village’s capital assets is included in Note 3. Long-Term Debt At year end, the Village had total debt outstanding of $40.5 million as shown in the next table: Village of Buffalo Grove Long-Term Debt (in millions) Governmental Business-Type Activities Activities Total 24 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 The Village maintains assigned “AAA” ratings on its general obligation bonds from Standard and Poor’s Corporation. Moody’s Investor Services rates the Village of Buffalo Grove as “AA1”. The total per capita general obligation (GO) debt for the community stands at $916.91 and represents 0.69 percent 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 3. Economic Factors and Next Year’s Budgets and Rates The Village entered 2021 with a balanced operating budget. The budget for the fiscal year beginning January 1, 2021, is $113,221,559 a 40.1 percent increase from the previous year. The operating budget totals $49,176,622 resulting in an 8.4 percent increase over the previous year. Total capital spending during the year is estimated to be $17.4 million. Continued emphasis will remain on developing innovative ways to deliver services and reduce costs while actively working to improve sales tax collections through economic development. In 2021, the Village begins a five-year capital program to address the community’s water and sanitary sewer system infrastructure replacement and street resurfacing and reconstructions projects. The additional funding that increases in water and sewer utility rates as well as the new fixed facility fees bring in are allocated entirely to capital projects and used to offset debt service exposure in the property tax levy. Property taxes remain the Village’s most stable revenue although the total assessed value of all taxable property decreased 1.7 percent for the 2020 tax levy (extended and collected in 2021). A tax levy was adopted for the 2021 budget at the same level as the prior year for an increase of 0.0 percent. The Village mitigated an additional $3.34 million in levied taxes through full abatements of the 2016 and 2020 bonds, as well as a partial abatement of the 2012 bonds. If these amounts were not abated the levy increase would have been 19.6 percent. The Village will use operating funds to pay the bond payable amount not covered by the tax levy. A Storm Water Management User Fee introduced in the FY 2016 budget offsets the costs related to maintaining, repairing and developing an infrastructure reserve for future system needs. This revenue stream has resulted in an additional $1.1 million to the General Fund that is funding new and replacement storm sewer infrastructure. Budgeted expenditures include general wage adjustments for non-represented employees and contractual salary adjustments which are part of labor agreements. The Village currently has two represented employee groups (police and fire). Health insurance increases are minimized by the economies of scale provided by the Village’s membership in the Intergovernmental Personnel Benefits Cooperative (IPBC). In 2021, plans remain on hold for backfilling vacancies as a result of the uncertainty in the economic environment due to Covid-19 and its impact. 25 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2020 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 Chris Black, Director of Finance or Cheryl Mosqueda, Deputy Director of Finance, Village of Buffalo Grove, 50 Raupp Boulevard, Buffalo Grove, IL 60089. 26 • Government-Wide Financial Statements • Fund Financial Statements Governmental Funds Proprietary Funds Fiduciary Funds BASIC FINANCIAL STATEMENTS The basic financial Statements include integrated sets of financial statements as required by the GASB. The sets of statements include: In addition, the notes to the financial statements are included to provide information that is essential to a user’s understanding of the basic financial statements. VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Net Position December 31, 2020 See Following Page VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Net Position December 31, 2020 Business-Type Activities Totals Current Assets Cash and Cash Equivalents $47,603,189 8,171,720 55,774,909 Receivables - Net of Allowances 24,351,380 2,648,957 27,000,337 Prepaids/Inventories 571,654 56,245 627,899 Total Current Assets 72,526,223 10,876,922 83,403,145 Noncurrent Assets Capital Assets Nondepreciable 41,812,405 7,208,451 49,020,856 Depreciable 113,190,423 92,166,077 205,356,500 Accumulated Depreciation (83,403,082)(54,789,340)(138,192,422) 71,599,746 44,585,188 116,184,934 Other Assets Investment in Joint Venture - 8,374,590 8,374,590 Total Noncurrent Assets 71,599,746 52,959,778 124,559,524 Total Assets 144,125,969 63,836,700 207,962,669 Derferred Items - ARO - 1,725,500 1,725,500 Deferred Items - IMRF 2,464,270 394,664 2,858,934 Deferred Items - Police Pension 2,986,027 - 2,986,027 Deferred Items - Firefighters' Pension 2,418,583 - 2,418,583 Deferred Items - RBP 4,289,126 252,590 4,541,716 Total Deferred Outflows of Resources 12,158,006 2,372,754 14,530,760 Total Assets and Deferred Outflows of Resources 156,283,975 66,209,454 222,493,429 Governmental Activities ASSETS DEFERRED OUTFLOWS OF RESOURCES The notes to the financial statements are an integral part of this statement. 27 Business-Type Activities Totals Current Liabilities Accounts Payable $3,329,063 899,356 4,228,419 Accrued Payroll 959,295 61,630 1,020,925 Deposits Payable 443,377 31,820 475,197 Other Payables 3,762 - 3,762 Compensated Absences Payable 256,354 23,302 279,656 Current Portion of Long-Term Debt 2,550,445 456,502 3,006,947 Total Current Liabilities 7,542,296 1,472,610 9,014,906 Noncurrent Liabilities Compensated Absences Payable 1,025,415 93,207 1,118,622 Net Pension Liability - IMRF 5,160,476 826,472 5,986,948 Net Pension Liability - Police Pension 26,620,107 - 26,620,107 Net Pension Liability - Firefighters' Pension 12,274,978 - 12,274,978 Total OPEB Liability - RBP 13,996,788 824,282 14,821,070 General Obligation Bonds Payable - Net 34,800,320 - 34,800,320 IEPA Loan Payable - 272,708 272,708 Installment Note Payable - 5,178,045 5,178,045 Asset Retirement Obligation - 1,725,500 1,725,500 Total Noncurrent Liabilities 93,878,084 8,920,214 102,798,298 Total Liabilities 101,420,380 10,392,824 111,813,204 Property Taxes 17,115,541 - 17,115,541 Deferred Items - IMRF 2,785,602 446,126 3,231,728 Deferred Items - Police Pension 7,406,191 - 7,406,191 Deferred Items - Firefighters' Pension 7,769,688 - 7,769,688 Deferred Items - RBP 505,884 29,791 535,675 Total Deferred Inflows of Resources 35,582,906 475,917 36,058,823 Total Liabilities and Deferred Inflows of Resources 137,003,286 10,868,741 147,872,027 Net Investment in Capital Assets 50,847,075 38,677,933 89,525,008 Restricted - Public Safety 760,160 - 760,160 Restricted - Motor Fuel Tax 2,971,226 - 2,971,226 Restricted - Metra Parking Lot 42,070 - 42,070 Restricted - Debt Service 231,373 - 231,373 Unrestricted (Deficit)(35,571,215)16,662,780 (18,908,435) Total Net Position 19,280,689 55,340,713 74,621,402 NET POSITION LIABILITIES Activities Governmental DEFERRED INFLOWS OF RESOURCES The notes to the financial statements are an integral part of this statement. 28 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Activities For the Fiscal Year Ended December 31, 2020 Charges Operating Capital for Grants/Grants/ Services Contributions Contributions Governmental Activities General Government $7,164,852 1,658,024 - - Public Safety 26,110,362 1,675,331 2,474,586 - Public Works 7,760,350 1,409,408 1,307,198 2,002,648 Interest on Long-Term Debt 1,206,369 - - - Total Governmental Activities 42,241,933 4,742,763 3,781,784 2,002,648 Business-Type Activities Water and Sewerage 10,375,028 14,589,445 - 341,254 Arboretum Golf 1,585,158 1,293,423 - - Buffalo Grove Golf 1,079,557 1,176,219 - - Refuse Service 803,999 1,148,303 - - Total Business-Type Activities 13,843,742 18,207,390 - 341,254 Total Primary Government 56,085,675 22,950,153 3,781,784 2,343,902 General Revenues Taxes Property Home Rule Sales Tax Telecommunications Tax Utiltiy Tax Property Transfer Tax Other Taxes Intergovernmental - Unrestricted State Income Tax Sales Tax Local Use Tax Replacement Tax Other Taxes Interest Miscellaneous Transfers - Internal Activity Change in Net Position Net Position - Beginning Net Position - Ending Expenses Program Revenues The notes to the financial statements are an integral part of this statement. 29 Governmental Business-Type Activities Activities Totals (5,506,828)- (5,506,828) (21,960,445)- (21,960,445) (3,041,096)- (3,041,096) (1,206,369)- (1,206,369) (31,714,738)- (31,714,738) - 4,555,671 4,555,671 - (291,735)(291,735) - 96,662 96,662 - 344,304 344,304 - 4,704,902 4,704,902 (31,714,738)4,704,902 (27,009,836) 17,035,362 - 17,035,362 3,690,631 - 3,690,631 906,071 - 906,071 2,643,697 - 2,643,697 989,118 - 989,118 740,646 - 740,646 4,569,557 - 4,569,557 6,139,134 - 6,139,134 1,852,931 - 1,852,931 24,812 - 24,812 221,639 - 221,639 305,366 472,703 778,069 1,176,737 36,204 1,212,941 (1,629,358)1,629,358 - 38,666,343 2,138,265 40,804,608 6,951,605 6,843,167 13,794,772 12,329,084 48,497,546 60,826,630 19,280,689 55,340,713 74,621,402 Net (Expenses)/Revenues Primary Government The notes to the financial statements are an integral part of this statement. 30 VILLAGE OF BUFFALO GROVE, ILLINOIS Balance Sheet - Governmental Funds December 31, 2020 Cash and Investments $26,910,646 Receivables - Net of Allowances Taxes 21,608,148 Other 1,719,155 Due from Other Funds 151,403 Inventories 113,850 Prepaids 457,804 Total Assets 50,961,006 Accounts Payable 2,273,835 Accrued Payroll 917,409 Deposits Payable 443,377 Due to Other Governments 3,762 Due to Other Funds 91,251 Total Liabilities 3,729,634 Property Taxes 16,712,894 Total Liabilities and Deferred Inflows of Resources 20,442,528 Nonspendable 571,654 Restricted 760,160 Committed 9,052,502 Unassigned 20,134,162 Total Fund Balances 30,518,478 Total Liabilities, Deferred Inflows of Resources and Fund Balances 50,961,006 FUND BALANCES General ASSETS LIABILITIES DEFERRED INFLOWS OF RESOURCES The notes to the financial statements are an integral part of this statement. 31 Vehicle Debt Facilities Street Equipment Service Development Maintenance Replacement Nonmajor Totals 16,812,407 74,501 280,021 50,495 2,950,079 47,078,149 402,647 - - - - 22,010,795 17,060 - 466,618 - 137,752 2,340,585 - - - - - 151,403 - - - - - 113,850 - - - - - 457,804 17,232,114 74,501 746,639 50,495 3,087,831 72,152,586 - 33,194 504,888 32,750 7,761 2,852,428 - - - - - 917,409 - - - - - 443,377 - - - - - 3,762 - - - - 66,774 158,025 - 33,194 504,888 32,750 74,535 4,375,001 402,647 - - - - 17,115,541 402,647 33,194 504,888 32,750 74,535 21,490,542 - - - - - 571,654 16,829,467 - - - 3,013,296 20,602,923 - 41,307 241,751 17,745 - 9,353,305 - - - - - 20,134,162 16,829,467 41,307 241,751 17,745 3,013,296 50,662,044 17,232,114 74,501 746,639 50,495 3,087,831 72,152,586 Capital Projects The notes to the financial statements are an integral part of this statement. 32 VILLAGE OF BUFFALO GROVE, ILLINOIS Reconciliation of Total Governmental Fund Balance to Net Position - Governmental Activities December 31, 2020 Total Governmental Fund Balances $50,662,044 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not financial resources and therefore, are not reported in the funds.71,599,746 Deferred outflows (inflows) of resources related to the pensions not reported in the funds. Deferred Items - IMRF (321,332) Deferred Items - Police Pension (4,420,164) Deferred Items - Firefighters' Pension (5,351,105) Deferred Items - RBP 3,783,242 Internal service funds are used by the Village to charge the costs of vehicle and equipment management and employee compensated absences to individual funds. The assets and liabilities of the internal service funds are included in the governmental activities in the Statement of Net Position 13,141 Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. Compensated Absences Payable (1,281,769) Net Pension Liability - IMRF (5,160,476) Net Pension Liability - Police Pension (26,620,107) Net Pension Liability - Firefighters' Pension (12,274,978) Total OPEB Liability - RBP (13,996,788) General Obligation Bonds Payable - Net (37,350,765) Net Position of Governmental Activities 19,280,689 The notes to the financial statements are an integral part of this statement. 33 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds For the Fiscal Year Ended December 31, 2020 See Following Page VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds For the Fiscal Year Ended December 31, 2020 Revenues Taxes $25,114,736 Intergovernmental 15,107,505 Charges for Services 1,478,955 Licenses and Permits 301,321 Fines and Forfeitures 3,084,739 Interest 278,176 Miscellaneous 1,126,929 Total Revenues 46,492,361 Expenditures Current General Government 6,582,800 Public Safety 28,891,545 Public Works 6,973,359 Capital Outlay 222,871 Debt Service Principal Retirement - Interest and Fiscal Charges - Total Expenditures 42,670,575 Excess (Deficiency) of Revenues Over (Under) Expenditures 3,821,786 Other Financing Sources (Uses) Debt Issuance - Premium on Debt Issuance - Transfers In 2,008,315 Transfers Out (3,209,874) (1,201,559) Net Change in Fund Balances 2,620,227 Fund Balances - Beginning 27,898,251 Fund Balances - Ending 30,518,478 General The notes to the financial statements are an integral part of this statement. 34 Vehicle Debt Facilities Street Equipment Service Development Maintenance Replacement Nonmajor Totals 890,789 - - - - 26,005,525 - - 466,618 - 2,843,228 18,417,351 - - - - 302 1,479,257 - - - - - 301,321 - - - - 52,600 3,137,339 27,190 - - - - 305,366 - - 49,808 - - 1,176,737 917,979 - 516,426 - 2,896,130 50,822,896 - - - - 251,243 6,834,043 - - - - - 28,891,545 - - - - - 6,973,359 - 511,270 7,505,067 1,332,255 - 9,571,463 1,299,030 - - - - 1,299,030 1,196,044 - - - - 1,196,044 2,495,074 511,270 7,505,067 1,332,255 251,243 54,765,484 (1,577,095)(511,270)(6,988,641)(1,332,255)2,644,887 (3,942,588) 24,000,000 - - - - 24,000,000 2,720,164 - - - - 2,720,164 1,262,650 550,000 6,971,962 1,350,000 202,959 12,345,886 (9,577,055)- - - (1,188,315)(13,975,244) 18,405,759 550,000 6,971,962 1,350,000 (985,356)25,090,806 16,828,664 38,730 (16,679)17,745 1,659,531 21,148,218 803 2,577 258,430 - 1,353,765 29,513,826 16,829,467 41,307 241,751 17,745 3,013,296 50,662,044 Capital Projects The notes to the financial statements are an integral part of this statement. 35 VILLAGE OF BUFFALO GROVE, ILLINOIS Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities - Governmental Activities For the Fiscal Year Ended December 31, 2020 Net Change in Fund Balances - Total Governmental Funds $21,148,218 Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital Outlays 11,016,201 Depreciation Expense (1,999,753) Disposals - Cost (164,403) Disposals - Accumulated Depreciation 164,403 The net effect of deferred outflows (inflows) of resources related to the pensions not reported in the funds. Change in Deferred Items - IMRF (4,795,287) Change in Deferred Items - Police Pension (1,987,284) Change in Deferred Items - Firefighters'' Pension (4,644,852) Change in Deferred Items - RBP 2,533,429 The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal on long-term debt consumes the current financial resources of the governmental funds. Change in Compensated Absences Payable 600,147 Change in Net Pension Liability - IMRF 4,740,251 Change in Net Pension Liability - Police Pension 2,965,123 Change in Net Pension Liability - Firefighters' Pension 6,045,715 Change in Total OPEB Liability - RBP (3,238,844) Retirement of Debt 1,299,030 Issuance of Debt (24,000,000) Premium on Issuance of Debt (2,720,164) Amortization of Bond Premium 6,396 Amortization of Loss on Refunding (16,721) Internal service funds are used by the Village to charge the costs of vehicle and equipment management and employee compensated absences to individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities.- Changes in Net Position of Governmental Activities 6,951,605 The notes to the financial statements are an integral part of this statement. 36 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Net Position - Proprietary Funds December 31, 2020 See Following Page VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Net Position - Proprietary Funds December 31, 2020 Governmental Activities Arboretum Internal Golf Nonmajor Totals Service Current Assets Cash and Investments $6,755,186 1,035,868 380,666 8,171,720 525,040 Receivables - Net of Allowances Accounts 2,158,538 - - 2,158,538 - Other 490,419 - - 490,419 - Inventories - 29,837 26,408 56,245 - Total Current Assets 9,404,143 1,065,705 407,074 10,876,922 525,040 Noncurrent Assets Capital Assets Nondepreciable 1,009,937 5,219,738 978,776 7,208,451 - Depreciable 78,939,022 9,990,847 3,236,208 92,166,077 - Accumulated Depreciation (42,240,188)(9,980,222)(2,568,930)(54,789,340)- 37,708,771 5,230,363 1,646,054 44,585,188 - Other Assets Investment in Joint Venture 8,374,590 - - 8,374,590 - Total Noncurrent Assets 46,083,361 5,230,363 1,646,054 52,959,778 - Total Assets 55,487,504 6,296,068 2,053,128 63,836,700 525,040 1,725,500 - - 1,725,500 - Deferred Items - IMRF 306,282 62,781 25,601 394,664 - Deferred Items - RBP 223,997 - 28,593 252,590 - Total Deferred Outflows of Resources 2,255,779 62,781 54,194 2,372,754 - Total Assets and Deferred Outflows of Resources 57,743,283 6,358,849 2,107,322 66,209,454 525,040 DEFERRED OUTFLOWS OF RESOURCES Business-Type Activities - Enterprise ASSETS Water and Sewerage Deferred Items - ARO The notes to the financial statements are an integral part of this statement. 37 Governmental Activities Arboretum Internal Golf Nonmajor Totals Service Current Liabilities Accounts Payable $846,988 21,125 31,243 899,356 470,013 Accrued Payroll 52,284 3,035 6,311 61,630 41,886 Deposits Payable 25,075 - 6,745 31,820 - Compensated Absences Payable 14,450 - 8,852 23,302 - IEPA Loan Payable 19,532 - - 19,532 - Installment Note Payable 436,970 - - 436,970 - Total Current Liabilities 1,395,299 24,160 53,151 1,472,610 511,899 Noncurrent Liabilities Compensated Absences Payable 57,798 - 35,409 93,207 - Net Pension Liability - IMRF 641,390 131,471 53,611 826,472 - Total OPEB Liability - RBP 730,975 - 93,307 824,282 - IEPA Loan Payable 272,708 - - 272,708 - Installment Note Payable 5,178,045 - - 5,178,045 - Asset Retirement Obligation 1,725,500 - - 1,725,500 - Total Noncurrent Liabilities 8,606,416 131,471 182,327 8,920,214 - Total Liabilities 10,001,715 155,631 235,478 10,392,824 511,899 Deferred Items - IMRF 346,220 70,967 28,939 446,126 - Deferred Items - RBP 26,419 - 3,372 29,791 - Total Deferred Inflows of Resources 372,639 70,967 32,311 475,917 - Total Liabilities and Deferred Inflows of Resources 10,374,354 226,598 267,789 10,868,741 511,899 Net Investment in Capital Assets 31,801,516 5,230,363 1,646,054 38,677,933 - Unrestricted 15,567,413 901,888 193,479 16,662,780 13,141 Total Net Position 47,368,929 6,132,251 1,839,533 55,340,713 13,141 Total Liabilities, Deferred Inflows of Resources, and Net Position 57,743,283 6,358,849 2,107,322 66,209,454 525,040 DEFERRED INFLOWS OF RESOURCES LIABILITIES NET POSITION Business-Type Activities - Enterprise Water and Sewerage The notes to the financial statements are an integral part of this statement. 38 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds For the Fiscal Year Ended December 31, 2020 Operating Revenues Charges for Services $14,589,445 Interfund Services - Miscellaneous 36,204 Total Operating Revenues 14,625,649 Operating Expenses Operations 7,796,963 Capital Outlay 858,468 Depreciation 1,574,640 Total Operating Expenses 10,230,071 Operating Income (Loss)4,395,578 Nonoperating Revenues (Expenses) Interest Income 472,703 Interest Expense (144,957) 327,746 Income (Loss) Before Contributions and Transfers 4,723,324 Capital Contributions 341,254 Transfers In 3,553,408 Transfers Out (1,549,050) 2,345,612 Change in Net Position 7,068,936 Net Position - Beginning 40,299,993 Net Position - Ending 47,368,929 Sewerage Water and Business-Type Activities - Enterprise The notes to the financial statements are an integral part of this statement. 39 Governmental Activities Arboretum Internal Golf Nonmajor Totals Service 1,293,423 2,324,522 18,207,390 - - - - 5,750,319 - - 36,204 - 1,293,423 2,324,522 18,243,594 5,750,319 1,303,957 1,810,840 10,911,760 5,750,319 - - 858,468 - 281,201 72,716 1,928,557 - 1,585,158 1,883,556 13,698,785 5,750,319 (291,735)440,966 4,544,809 - - - 472,703 - - - (144,957)- - - 327,746 - (291,735)440,966 4,872,555 - - - 341,254 - - - 3,553,408 - - (375,000)(1,924,050)- - (375,000)1,970,612 - (291,735)65,966 6,843,167 - 6,423,986 1,773,567 48,497,546 13,141 6,132,251 1,839,533 55,340,713 13,141 Business-Type Activities - Enterprise The notes to the financial statements are an integral part of this statement. 40 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Cash Flows - Proprietary Funds For the Fiscal Year Ended December 31, 2020 Cash Flows from Operating Activities Receipts from Customers and Users $13,894,832 Interfund Services Provided - Payments to Suppliers (8,329,991) Payments to Employees (962,349) 4,602,492 Cash Flows from Capital and Related Financing Activities Purchase of Capital Assets (2,779,154) Principal Retirement (405,894) Interest Expense (144,957) (3,330,005) Cash Flows from Noncapital Financing Activities Transfers In 3,553,408 Transfers Out (1,549,050) 2,004,358 Cash Flows from Investing Activities Interest Income 472,703 Net Change in Cash and Cash Equivalents 3,749,548 Cash and Cash Equivalents - Beginning 3,005,638 Cash and Cash Equivalents - Ending 6,755,186 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities Operating Income 4,395,578 Adjustments to Reconcile Operating Income to Net Cash Provided by (Used in) Operating Activities: Depreciation and Amortization Expense 1,574,640 Other Income (Expense)67,418 (Increase) Decrease in Current Assets (798,235) Increase (Decrease) in Current Liabilities (636,909) Net Cash Provided by Operating Activities 4,602,492 Noncash Activity Capital Contributions 341,254 Sewerage Water and Business-Type Activities - Enterprise The notes to the financial statements are an integral part of this statement. 41 Governmental Activities Arboretum Internal Golf Nonmajor Totals Service 1,383,482 2,317,076 17,595,390 - - - - 5,750,319 (1,126,797)(282,270)(9,739,058)(4,636,631) (155,531)(1,629,861)(2,747,741)(1,003,613) 101,154 404,945 5,108,591 110,075 - - (2,779,154)- - - (405,894)- - - (144,957)- - - (3,330,005)- - - 3,553,408 - - (375,000)(1,924,050)- - (375,000)1,629,358 - - - 472,703 - 101,154 29,945 3,880,647 110,075 934,714 350,721 4,291,073 414,965 1,035,868 380,666 8,171,720 525,040 (291,735)440,966 4,544,809 - 281,201 72,716 1,928,557 - 83,933 99,265 250,616 - 6,126 (7,446)(799,555)- 21,629 (200,556)(815,836)110,075 101,154 404,945 5,108,591 110,075 - - 341,254 - Business-Type Activities - Enterprise The notes to the financial statements are an integral part of this statement. 42 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Fiduciary Net Position December 31, 2020 Cash and Cash Equivalents $6,772,978 Investments U.S. Treasury Obligations 7,556,203 U.S. Agency Obligations 21,659,500 Corporate Bonds 17,629,079 State and Local Obligations 2,728,349 Mutual Funds 59,402,083 Equity Securities 45,689,083 Receivables - Net of Allowance Accrued Interest 246,279 Due from Other Funds 91,251 Total Assets 161,774,805 Accounts Payable 73,006 Due to Other Funds 84,629 Total Liabilities 157,635 Net Position Restricted for Pensions 161,617,170 NET POSITION Trust Pension ASSETS LIABILITIES The notes to the financial statements are an integral part of this statement. 43 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Changes in Fiduciary Net Position For the Fiscal Year Ended December 31, 2020 Additions Contributions - Employer $5,114,898 Contributions - Plan Members 1,356,057 Total Contributions 6,470,955 Investment Earnings Interest Earned 3,191,911 Net Change in Fair Value 16,016,643 19,208,554 Less Investment Expenses (281,177) Net Investment Income 18,927,377 Total Additions 25,398,332 Deductions Administration 130,762 Benefits and Refunds 8,501,229 Total Deductions 8,631,991 Change in Fiduciary Net Position 16,766,341 Net Position Restricted for Pensions Beginning 144,850,829 Ending 161,617,170 Pension Trust The notes to the financial statements are an integral part of this statement. 44 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Village of Buffalo Grove, Illinois (the Village) incorporated in 1958, is a home-rule municipality, under the 1970 Illinois Constitution, located in both Lake County, Illinois and Cook County, Illinois. The Village operates under a Council-Manager form of government and provides public safety (police and fire protection), sanitation (water and sewer), building and zoning, engineering, recreation, civil defense and overall administration. The government-wide financial statements are prepared in accordance with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements (Statements and Interpretations). The more significant of the Village’s accounting policies established in GAAP and used by the Village are described below. REPORTING ENTITY The Village’s financial reporting entity comprises the following: Primary Government: Village of Buffalo Grove In determining the financial reporting entity, the Village complies with the provisions of GASB Statement No. 61, “The Financial Reporting Omnibus – an Amendment of GASB Statements No. 14 and No. 34,” and includes all component units that have a significant operational or financial relationship with the Village. Based upon the criteria set forth in the GASB Statement No. 61, there are no component units included in the reporting entity. Police Pension Employees Retirement System The Village’s sworn police employees participate in the Police Pension Employees Retirement System (PPERS). PPERS functions for the benefit of these employees and is governed by a five-member pension board. Two members appointed by the Village’s President, one elected pension beneficiary and two elected police employees constitute the pension board. The participants are required to contribute a percentage of salary as established by state statute and the Village is obligated to fund all remaining PPERS costs based upon actuarial valuations. The State of Illinois is authorized to establish benefit levels and the Village is authorized to approve the actuarial assumptions used in the determination of contribution levels. Although it is legally separate from the Village, the PPERS is reported as if it were part of the primary government because its sole purpose is to provide retirement benefits for the Village’s police employees. The PPERS is reported as a fiduciary fund, and specifically a pension trust fund, due to the fiduciary responsibility exercised over the PPERS. 45 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued REPORTING ENTITY – Continued Firefighters’ Pension Employees Retirement System The Village’s sworn firefighters participate in the Firefighters’ Pension Employees Retirement System (FPERS). FPERS functions for the benefit of those employees and is governed by a five-member pension board, with two members appointed by the Village President, two elected from active participants of the Fund, and one elected from the retired members of the Fund. The participants are required to contribute a percentage of salary as established by state statute and the Village is obligated to fund all remaining FPERS costs based upon actuarial valuations. The State of Illinois is authorized to establish benefit levels and the Village is authorized to approve the actuarial assumptions used in the determination of contribution levels. Although it is legally separate from the Village, the FPERS is reported as if it were part of the primary government because its sole purpose is to provide retirement benefits for the Village’s sworn firefighters. The FPERS is reported as a fiduciary fund, and specifically a pension trust fund, due to the fiduciary responsibility exercised over the FPERS. BASIS OF PRESENTATION Government-Wide Statements The Village’s basic financial statements include both government-wide (reporting the Village as a whole) and fund financial statements (reporting the Village’s major funds). Both the government-wide and fund financial statements categorize primary activities as either governmental or business type. The Village’s police and fire safety, public works, and general administrative services are classified as governmental activities. The Village’s water and sewerage, Arboretum golf, Buffalo Grove golf, and refuse services are classified as business-type activities. In the government-wide Statement of Net Position, both the governmental and business-type activities columns are: (a) presented on a consolidated basis by column, and (b) reported on a full accrual, economic resource basis, which recognizes all long-term assets/deferred outflows and receivables as well as long-term debt/deferred inflows and obligations. The Village’s net position is reported in three parts: net investment in capital assets; restricted; and unrestricted. The Village first utilizes restricted resources to finance qualifying activities. The government-wide Statement of Activities reports both the gross and net cost of each of the Village’s functions and business-type activities (general government, police and fire safety, public works, etc.). The functions are supported by general government revenues (property, sales and use taxes, certain intergovernmental revenues, fines, permits and charges, etc.). The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, which include 1) charges to customers or applicants who purchase, use, or directly benefit from foods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. 46 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued BASIS OF PRESENTATION – Continued Government-Wide Statements – Continued The net costs (by function or business-type activity) are normally covered by general revenue (property tax, sales tax, intergovernmental revenues, interest income, etc.). The Village does not allocate indirect costs. An administrative service fee is charged by the General Fund to the other operating funds that is eliminated like a reimbursement (reducing the revenue and expense in the General Fund) to recover the direct costs of General Fund services provided (finance, personnel, purchasing, legal, technology management, etc.). This government-wide focus is more on the sustainability of the Village as an entity and the change in the Village’s net position resulting from the current year’s activities. Fund Financial Statements The financial transactions of the Village are reported in individual funds in the fund financial statements. Each fund is accounted for by providing a separate set of self-balancing accounts that comprises its assets/deferred outflows, liabilities/deferred inflows, fund equity, revenues and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. The emphasis in fund financial statements is on the major funds in either the governmental or business-type activities categories. GASB Statement No. 34 sets forth minimum criteria (percentage of the assets/deferred outflows, liabilities/deferred inflows, revenues or expenditures/expenses of either fund category or the governmental and enterprise combined) for the determination of major funds. The Village electively added funds, as major funds, which either have debt outstanding or a specific or community focus. The nonmajor funds are combined in a column in the fund financial statements. A fund is considered major if it is the primary operating fund of the Village or meets the following criteria: Total assets/deferred outflows, liabilities/deferred inflows, revenues, or expenditures/expenses of that individual governmental or enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type; and Total assets/deferred outflows, liabilities/deferred inflows, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined. 47 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued BASIS OF PRESENTATION – Continued Fund Financial Statements – Continued The various funds are reported by generic classification within the financial statements. The following fund types are used by the Village: Governmental Funds The focus of the governmental funds’ measurement (in the fund statements) is upon determination of financial position and changes in financial position (sources, uses, and balances of financial resources) rather than upon net income. The following is a description of the governmental funds of the Village: General Fund is the general operating fund of the Village. It is used to account for all financial resources except those required to be accounted for in another fund. The General Fund is a major fund. Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. The Village maintains four nonmajor special revenue funds. Debt Service Funds are used to account for the accumulation of funds for the periodic payment of principal and interest on general long-term debt. The Debt Service Fund is treated as a major fund. Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by business-type/proprietary funds). The Facilities Development Fund, a major fund, is used to account for and reports financial resources that are restricted, committed or assigned to expenditures for acquisition, construction, improvement, repair, and replacement of the Village’s capital facilities. The Street Maintenance Fund, also a major fund, is used to account for and reports financial resources that are restricted, committed or assigned to expenditures for acquisition, construction, improvement, repair, and replacement of the Village’s roadways. The Vehicle Equipment Replacement Fund, also a major fund, is used to account for and reports financial resources that are restricted, committed or assigned to expenditures for the acquisition, construction, improvement, repair, and replacement of the Village's vehicles and equipment. Proprietary Funds The focus of proprietary fund measurement is upon determination of operating income, changes in net position, financial position, and cash flows. The generally accepted accounting principles applicable are those similar to businesses in the private sector. The following is a description of the proprietary funds of the Village: 48 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued BASIS OF PRESENTATION – Continued Fund Financial Statements – Continued Proprietary Funds – Continued Enterprise Funds are required to account for operations for which a fee is charged to external users for goods or services and the activity (a) is financed with debt that is solely secured by a pledge of the net revenues, (b) has third party requirements that the cost of providing services, including capital costs, be recovered with fees and charges or (c) establishes fees and charges based on a pricing policy designed to recover similar costs. The Village maintains four enterprise funds. The Water and Sewerage Fund, a major fund, is used to account for the revenue and expenses related to the operation of the water and sewerage system. The Arboretum Golf Fund, also a major fund, is used to account for the revenues and expenses related to the operation of the golf course. Internal Service Funds are used to account for the financing of goods or services provided by an activity to other departments, funds or component units of the Village on a cost-reimbursement basis. The Village maintains three internal services funds. The Information Technology Fund is used to account for all costs associated with providing technology services to all departments for the operation of the Village. The Central Garage Fund is used to account for the activity necessary to operate and maintain the Village’s automotive fleet. User departments are charged a proportionate share determined by the number and types of vehicles in each department. The Building Maintenance Fund is used to account for providing a clean, healthy, and safe working environment in Village facilities, meeting areas and public areas. The Village’s internal service funds are presented in the proprietary fund financial statements. Because the principal users of the internal services are the Village’s governmental activities, the financial statements of the internal service funds are consolidated into the governmental column when presented in the government-wide financial statements. To the extent possible, the cost of these services is reported in the appropriate functional activity (general government, police and fire safety, public works, etc.). 49 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued BASIS OF PRESENTATION – Continued Fund Financial Statements – Continued Fiduciary Funds Fiduciary funds are used to report assets held in a trustee or custodial capacity for others and therefore are not available to support Village programs. The reporting focus is on net position and changes in net position and is reported using accounting principles similar to proprietary funds. Pension Trust Funds are used to account for assets held in a trustee capacity for pension benefit payments. The Police Pension Fund accounts for the accumulation of resources to pay retirement and other related benefits for sworn members of the Village’s police force. The Firefighters’ Pension Fund accounts for the accumulation of resources to pay retirement and other related benefits for sworn members of the Village’s Fire Department. The Village’s pension trust funds are presented in the fiduciary fund financial statements. Since by definition these assets are being held for the benefit of a third party (pension participants) and cannot be used to address activities or obligations of the Village, these funds are not incorporated into the government-wide statements. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING Measurement focus is a term used to describe “which” transactions are recorded within the various financial statements. Basis of accounting refers to “when” transactions are recorded regardless of the measurement focus applied. Measurement Focus On the government-wide Statement of Net Position and the Statement of Activities, both governmental and business-type activities are presented using the economic resources measurement focus as defined below. In the fund financial statements, the “current financial resources” measurement focus or the “economic resources” measurement focus is used as appropriate. 50 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued MEASUREMENT FOCUS AND BASIS OF ACCOUNTING – Continued Measurement Focus – Continued All governmental funds utilize a “current financial resources” measurement focus. Only current financial assets/deferred outflows and liabilities/deferred inflows are generally included on their balance sheets. Their operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period. All proprietary and pension trust funds utilize an “economic resources” measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net position (or cost recovery), financial position, and cash flows. All assets/deferred outflows and liabilities/deferred inflows (whether current or noncurrent) associated with their activities are reported. Proprietary and pension trust fund equity is classified as net position. Basis of Accounting In the government-wide Statement of Net Position and Statement of Activities, both governmental and business-type activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability/deferred inflow is incurred or economic asset used. Revenues, expenses, gains, losses, assets/deferred outflows, and liabilities/deferred inflows resulting from exchange and exchange-like transactions are recognized when the exchange takes place. In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under this modified accrual basis of accounting, revenues are recognized when “measurable and available.” Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or within sixty days after year-end. The Village recognizes property taxes when they become both measurable and available in accordance with GASB Codification Section P70. A sixty-day availability period is used for revenue recognition for all other governmental fund revenues. Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for general obligation bond principal and interest which are recognized when due. In applying the susceptible to accrual concept under the modified accrual basis, those revenues susceptible to accrual are property taxes, sales and use taxes, franchise taxes, licenses, interest revenue, and charges for services. All other revenues are not susceptible to accrual because generally they are not measurable until received in cash. 51 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued MEASUREMENT FOCUS AND BASIS OF ACCOUNTING – Continued Basis of Accounting – Continued All proprietary and pension trust funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Village’s enterprise funds and of the Village’s internal service funds are charges to customers for sales and services. The Village also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. ASSETS/DEFERRED OUTFLOWS, LIABILITIES/DEFERRED INFLOWS, AND NET POSITION OR EQUITY Cash and Investments For the purpose of the Statement of Net Position, cash and cash equivalents are considered to be cash on hand, demand deposits, and cash with fiscal agent. For the purpose of the proprietary funds “Statement of Cash Flows,” cash and cash equivalents are considered to be cash on hand, demand deposits, cash with fiscal agent, and all highly liquid investments with an original maturity of three months or less. Investments are generally reported at fair value. Short-term investments are reported at cost, which approximates fair value. For investments, the Village categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Receivables In the government-wide financial statements, receivables consist of all revenues earned at year-end and not yet received. Allowances for uncollectible accounts receivable are based upon historical trends and the periodic aging of accounts receivable. Major receivables balances for governmental activities include property taxes, sales and use taxes, franchise taxes, and grants. Business-type activities report charges for services as their major receivables. 52 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued ASSETS/DEFERRED OUTFLOWS, LIABILITIES/DEFERRED INFLOWS, AND NET POSITION OR EQUITY – Continued Interfund Receivables, Payables and Activity Interfund activity is reported as loans, services provided, reimbursements or transfers. Loans are reported as interfund receivables and payables as appropriate and are subject to elimination upon consolidation. Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Internal service fund services provided and used are not eliminated in the process of consolidation. Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide financial statements. Prepaids/Inventories Prepaids/inventories are valued at cost, which approximates market, using the first-in/first-out (FIFO) method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaids in both the government-wide and fund financial statements. The costs of governmental fund-type prepaids/inventories are recorded as expenditures when consumed rather than when purchased. Capital Assets Capital assets purchased or acquired with an original cost of $10,000 or more (depending on asset class) are reported at historical cost or estimated historical cost. Contributed assets are reported at acquisition value as of the date received. Additions, improvements and other capital outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. General capital assets are long-lived assets of the Village as a whole. When purchased, such assets are recorded as expenditures in the governmental funds and capitalized. Infrastructure such as streets, traffic signals and signs are capitalized. The valuation basis for general capital assets are historical cost, or where historical cost is not available, estimated historical cost based on replacement costs. Capital assets in the proprietary funds are capitalized in the fund in which they are utilized. The valuation bases for proprietary fund capital assets are the same as those used for the general capital assets. Donated capital assets are recorded at acquisition value on the date donated. 53 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued ASSETS/DEFERRED OUTFLOWS, LIABILITIES/DEFERRED INFLOWS, AND NET POSITION OR EQUITY – Continued Capital Assets – Continued Depreciation on all assets is computed and recorded using the straight-line method of depreciation over the following estimated useful lives: Buildings 20 Years Equipment and Vehicles 2 – 10 Years Land Improvements 5 – 50 Years Streets 5 – 50 Years Storm Sewers 5 – 50 Years Infrastructure 5 – 50 Years Deferred Outflows/Inflows of Resources Deferred outflow/inflow of resources represents an acquisition/reduction of net position that applies to a future period and therefore will not be recognized as an outflow of resources (expense)/inflow of resources (revenue) until that future time. Compensated Absences The Village accrues accumulated unpaid vacation and associated employee-related costs when earned (or estimated to be earned) by the employee. In accordance with GASB Statement No. 16, no liability is recorded for nonvesting accumulation rights to receive sick pay benefits. However, a liability is recognized for that portion of accumulated sick leave that is estimated to be taken as “terminal leave” prior to retirement. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements. 54 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued ASSETS/DEFERRED OUTFLOWS, LIABILITIES/DEFERRED INFLOWS, AND NET POSITION OR EQUITY – Continued Long-Term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as expenses at the time of issuance. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Net Position In the government-wide financial statements, equity is classified as net position and displayed in three components: Net Investment in Capital Assets – Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Restricted – Consists of net position with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislations. Unrestricted – All other net position balances that do not meet the definition of “restricted” or “net investment in capital assets.” 55 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY BUDGETARY INFORMATION The budget data included in the financial statements represent the Village’s program budget and the appropriations represent the Village’s legal expenditure limit. Budgets are adopted for the General, Special Revenue, Debt Service, Capital Projects, Proprietary, Pension Trust Funds and Internal Service Funds. All governmental fund-type budgets, pension trust fund-type budgets and internal service 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 financial 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 re-appropriated in the following year for the expenditure to be made. The Village does not employ the encumbrance method of accounting to reserve net position for subsequent year expenditures. 56 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY EXCESS OF ACTUAL EXPENDITURES/EXPENSES OVER BUDGET IN INDIVIDUAL FUND The following funds had an excess of actual expenditures/expenses, exclusive of depreciation, over budget as of the date of this report: Fund Arboretum Golf $ 24,127 Police Pension 292,047 Firefighters' Pension 637,086 Excess NOTE 3 – DETAIL NOTES ON ALL FUNDS DEPOSITS AND INVESTMENTS The Village maintains a cash and investment pool that is available for use by all funds except the pension trust funds. Each fund type's portion of this pool is displayed on the financial statements as "cash and investments." In addition, investments are separately held by several of the Village’s funds. The deposits and investments of the pension trust funds are held separately from those of other funds. Permitted Deposits and Investments – Statutes authorize the Village to make deposits/invest in commercial banks, savings and loan institutions, obligations of the U.S. Treasury and U.S. Agencies, obligations of States and their political subdivisions, credit union shares, repurchase agreements, commercial paper rated within the three highest classifications by at least two standard rating services, Illinois Funds, the Illinois Metropolitan Investment Fund and the Illinois Public Reserves Investment Management Trust. The Illinois Funds is an investment pool managed by the Illinois Public Treasurer’s Office which allows governments within the State to pool their funds for investment purposes. Illinois Funds is not registered with the SEC as an investment company. Investments in Illinois Funds are valued at the share price, the price for which the investment could be sold. The Illinois Metropolitan Investment Fund (IMET) is a non-for-profit investment trust formed pursuant to the Illinois Municipal Code. IMET is managed by a Board of Trustees elected from the participating members. IMET is not registered with the SEC as an Investment Company. Investments in IMET are valued at the share price, the price for which the investment could be sold. 57 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued The Illinois Public Reserves Investment Management Trust (IPRIME) is an investment opportunity and cash management service for Illinois Municipal Treasurers acting on behalf of counties, townships, cities, towns, villages, special road districts, public water supply districts, fire protection districts, drainage districts, levee districts, sewer districts, housing authorities, and all other political corporations or subdivisions of the State of Illinois. Participation in IPRIME is voluntary. IPRIME is not registered with the SEC as an Investment Company. Investments in IPRIME are valued at the share price, the price for which the investment could be sold. The deposits and investments of the Pension Funds are held separately from those of other Village funds. Statutes authorize the Pension Fund to make deposits/invest in interest bearing direct obligations of the United States of America; obligations that are fully guaranteed or insured as to the payment of principal and interest by the United States of America; bonds, notes, debentures, or similar obligations of agencies of the United States of America; savings accounts or certificates of deposit issued by banks or savings and loan associations chartered by the United States of America or by the State of Illinois, to the extent that the deposits are insured by the agencies or instrumentalities of the federal government; credit unions, to the extent that the deposits are insured by the agencies or instrumentalities of the federal government; State of Illinois bonds; pooled accounts managed by the Illinois Funds Market Fund (formerly known as IPTIP, Illinois Public Treasurer’s Investment Pool), or by banks, their subsidiaries or holding companies, in accordance with the laws of the State of Illinois; bonds or tax anticipation warrants of any county, township, or municipal corporation of the State of Illinois; direct obligations of the State of Israel; money market mutual funds managed by investment companies that are registered under the Federal Investment Company Act of 1940 and the Illinois Securities Law of 1953 and are diversified, open-ended management investment companies, provided the portfolio is limited to specified restrictions; general accounts of life insurance companies; and separate accounts of life insurance companies and mutual funds, the mutual funds must meet specific restrictions, provided the investment in separate accounts and mutual funds does not exceed ten percent of the Pension Fund’s plan net position; and corporate bonds managed through an investment advisor, rated as investment grade by one of the two largest rating services at the time of purchase. Pension Funds with plan net position of $2.5 million or more may invest up to forty-five percent of plan net position in separate accounts of life insurance companies and mutual funds. Pension Funds with plan net position of at least $5 million that have appointed an investment advisor, may through that investment advisor invest up to forty-five percent of the plan net position in common and preferred stocks that meet specific restrictions. In addition, Pension Funds with plan net position of at least $10 million that have appointed an investment advisor, may invest up to fifty percent of its net position in common and preferred stocks and mutual funds that meet specific restrictions effective July 1, 2011 and up to fifty-five percent effective July 1, 2012. Village – Interest Rate Risk, Credit Risk, Custodial Credit Risk and Concentration Risk Deposits. At year-end, the carrying amount of the Village’s deposits for governmental and business- type activities totaled $18,802,003 and the bank balances totaled $16,286,768. 58 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Village – Interest Rate Risk, Credit Risk, Custodial Credit Risk and Concentration Risk – Continued Investments. The Village has the following investment fair values and maturities: Fair Less Than More Than Investment Type Value 1 1 to 5 6 to 10 10 State and Local Obligations $ 918,586 657,196 261,390 - - Illinois Funds 8,698,318 8,698,318 - - - IMET 7,835,919 7,835,919 - - - IPRIME 19,520,083 19,520,083 - - - 36,972,906 36,711,516 261,390 - - Investment Maturities (in Years) The Village has the following recurring fair value measurements as of December 31, 2020: Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Investments by Fair Value Level (Level 1) (Level 2) (Level 3) Debt Securities State and Local Obligations $ 918,586 - 918,586 - Investments Measured at the Net Asset Value (NAV) Illinois Funds 8,698,318 IMET 7,835,919 IPRIME 19,520,083 Total Investments at the (NAV)36,054,320 Total Investments Measured at Fair Value 36,972,906 Fair Value Measurements Using Totals 59 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Village – Interest Rate Risk, Credit Risk, Custodial Credit Risk and Concentration Risk – Continued Investments - Continued. Debt Securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. 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. Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Village’s investment policy applies the “prudent person” standard in managing its investment portfolio. As such, all investments are made with such judgement 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. At year- end, the Village’s investment in the Illinois Funds was rated AAAm by Standard & Poor’s, the Illinois Metropolitan Investment Trust Convenience Fund was not rated and the Illinois Public Reserves Investment Management Trust was rated AAAm by Standard & Poor’s. The ratings on the Village’s investments in the state and local obligations are rated AA to AA+ by Standard & Poor’s. Custodial Credit Risk. In the case of deposits, this is the risk that in the event of a bank failure, the Village’s deposits may not be returned to it. The Village’s investment policy requires securing deposit collateral from depository institutions when deposits are in excess of FDIC limits. The amount of deposits not collateralized or insured by an agency of the federal government shall not exceed 75% of the capital stock and surplus of a banking institution. These values shall be reviewed on a quarterly basis comparing actual deposits not insured or collateralized against the capital stock and surplus measure. Values shall be taken from published regulatory agency reports required by either the Comptroller of the Currency or the Commissioner of Banks and Trust Companies. 60 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Village – Interest Rate Risk, Credit Risk, Custodial Credit Risk and Concentration Risk – Continued Custodial Credit Risk – Continued. If deposits are maintained with a savings and loan association, the amount of deposits not collateralized or insured shall not exceed 75% of the net worth of the institution as defined and reported to the regulatory agencies. At year-end, the entire amount of the bank balance of deposits was covered by collateral, federal depository or equivalent insurance. For an investment, this 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 that are in the possession of an outside party. It is the policy of the Village to require all investments and investment collateral to be held in safekeeping by a third-party custodial institution as designated by the Treasurer in the Village’s name. Direct investments guaranteed by the United States or an agency of the United States do not require collateral. The Village’s investments in the Illinois Funds, IMET, and IPRIME are not subject to custodial credit risk. Concentration Risk. This is the risk of loss attributed to the magnitude of the Village’s investment in a single issuer. The Village limits the amount that can be invested in commercial paper to one-third of the Village’s total investments. At year-end, the Village does not have any investments over 5 percent of the total cash and investment portfolio (other than investments issued or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools, and other pooled investments). Police Pension Fund – Interest Rate Risk, Credit Risk, Custodial Credit Risk and Concentration Risk Deposits. At year-end, the carrying amount of the Fund’s deposits totaled $4,291,646 and the bank balances totaled $4,300,806. Investments. The Fund has the following investment fair values and maturities: Fair Less Than More Than Investment Type Value 1 1 to 5 6 to 10 10 U.S. Treasury Obligations $ 4,804,948 275,911 597,992 3,931,045 - U.S. Agency Obligations 7,803,370 2,434,957 4,119,348 501,183 747,882 Corporate Bonds 12,515,277 602,212 3,539,175 7,475,478 898,412 25,123,595 3,313,080 8,256,515 11,907,706 1,646,294 Investment Maturities (in Years) 61 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Police Pension Fund – Interest Rate Risk, Credit Risk, Custodial Credit Risk and Concentration Risk – Continued The Fund has the following recurring fair value measurements as of December 31, 2020: Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Investments by Fair Value Level (Level 1) (Level 2) (Level 3) Debt Securities U.S. Treasury Obligations $ 4,804,948 4,804,948 - - U.S. Agency Obligations 7,803,370 - 7,803,370 - Corporate Bonds 12,515,277 - 12,515,277 - Equity Securities Mutual Funds 9,356,385 9,356,385 - - Equity Securities 45,689,083 45,689,083 - - Total Investments Measured at Fair Value 80,169,063 59,850,416 20,318,647 - Totals Fair Value Measurements Using Debt Securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. Interest Rate Risk. The Fund’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 Fund 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. 62 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Police Pension Fund – Interest Rate Risk, Credit Risk, Custodial Credit Risk and Concentration Risk – Continued Credit Risk. The Fund’s investment policy applies the “prudent person” standard in managing its investment portfolio. As such, all investments are made with such judgement 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 Fund’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. At year-end, the Fund’s investments in U.S. agency obligations ratings were not available and investments in corporate bonds were rated Baa1 to A1 by Moody’s. Custodial Credit Risk. The Fund’s investment policy requires securing deposit collateral from depository institutions when deposits are in excess of FDIC limits. The amount of deposits not collateralized or insured by an agency of the federal government shall not exceed 75% of the capital stock and surplus of a banking institution. These values shall be reviewed on a quarterly basis comparing actual deposits not insured or collateralized against the capital stock and surplus measure. Values shall be taken from published regulatory agency reports required by either the Comptroller of the Currency or the Commissioner of Banks and Trust Companies. If deposits are maintained with a savings and loan association, the amount of deposits not collateralized or insured shall not exceed 75% of the net worth of the institution as defined and reported to the regulatory agencies. At year-end, the entire amount of the bank balance of deposits was covered by collateral, federal depository or equivalent insurance. For an investment, this is the risk that in the event of the failure of the counterparty, the Fund will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. It is the policy of the Fund to require all investments and investment collateral to be held in safekeeping by a third-party custodial institution as designated by the Treasurer in the Fund’s name. Direct investments guaranteed by the United States or an agency of the United States do not require collateral. Concentration Risk. The Fund limits the amount that can be invested in commercial paper to one-third of the Fund’s total investments. In addition to the securities and fair values listed above, the Fund also has $9,356,385 invested in mutual funds and $45,689,083 invested in equity securities. At year-end, the Fund does not have any investments over 5 percent of net plan assets available for retirement benefits (other than investments issued or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools, and other pooled investments). 63 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Police Pension Fund – Interest Rate Risk, Credit Risk, Custodial Credit Risk and Concentration Risk – Continued Concentration Risk – Continued. The Fund’s investment policy in accordance with Illinois Compiled Statutes (ILCS) establishes the following target allocation across asset classes: Long-Term Expected Real Asset Class Target Rate of Return Fixed Income 33.00% 0.70% - 3.20% Large Cap Domestic Equities 52.00%3.60% Small Cap Domestic Equities 5.00%4.50% International Equities 5.00%5.20% Real Estate 3.00%4.00% Cash and Cash Equivalents 2.00%0.00% Illinois Compiled Statutes (ILCS) limit the Fund’s investments in equities, mutual funds and variable annuities to 65%. Securities in any one company should not exceed 5% of the total fund. The long-term expected rate of return on the Fund’s investments was determined using an asset allocation study conducted by the Fund’s investment management consultant in January of 2021 in which best-estimate ranges of expected future real rates of return (net of pension plan investment expense and inflation) were developed for each major asset class. These ranges were combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding the expected inflation. Best estimates or arithmetic real rates of return for each major asset class included in the Fund’s target asset allocation as of December 31, 2020, are listed in the table above. Rate of Return For the year ended December 31, 2020, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 11.06%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. 64 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Firefighters’ Pension Fund – Interest Rate Risk, Credit Risk, Custodial Credit Risk and Concentration Risk Deposits. At year-end, the carrying amount of the Fund’s deposits totaled $2,481,332 and the bank balances totaled $2,481,339. Investments. The Fund has the following investment fair values and maturities: Fair Less Than More Than Investment Type Value 1 1 to 5 6 to 10 10 U.S. Treasury Obligations $ 2,751,255 354,399 772,762 1,624,094 - U.S. Agency Obligations 13,856,130 - 4,492,477 9,363,653 - Corporate Bonds 5,113,802 201,214 1,076,157 3,836,431 - State and Local Obligations 2,728,349 357,340 884,513 1,358,583 127,913 24,449,536 912,953 7,225,909 16,182,761 127,913 Investment Maturities (in Years) The Fund has the following recurring fair value measurements as of December 31, 2020: Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Investments by Fair Value Level (Level 1) (Level 2) (Level 3) Debt Securities U.S. Treasury Obligations $ 2,751,255 2,751,255 - - U.S. Agency Obligations 13,856,130 - 13,856,130 - Corporate Bonds 5,113,802 - 5,113,802 - State and Local Obligations 2,728,349 - 2,728,349 - Equity Securities Mutual Funds 50,045,698 50,045,698 - - Total Investments Measured at Fair Value 74,495,234 52,796,953 21,698,281 - Fair Value Measurements Using Totals Debt Securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. 65 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Firefighters’ Pension Fund – Interest Rate Risk, Credit Risk, Custodial Credit Risk and Concentration Risk – Continued Interest Rate Risk. The Fund’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 Fund 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. Credit Risk. The Fund’s investment policy applies the “prudent person” standard in managing its investment portfolio. As such, all investments are made with such judgement 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 Fund’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. At year-end, the Fund’s investments in U.S. agency obligations and corporate bonds ratings were not available and investments in state and local obligations were not rated or rated Aaa to Aa1 by Moody’s. Custodial Credit Risk. The Fund’s investment policy requires securing deposit collateral from depository institutions when deposits are in excess of FDIC limits. The amount of deposits not collateralized or insured by an agency of the federal government shall not exceed 75% of the capital stock and surplus of a banking institution. These values shall be reviewed on a quarterly basis comparing actual deposits not insured or collateralized against the capital stock and surplus measure. Values shall be taken from published regulatory agency reports required by either the Comptroller of the Currency or the Commissioner of Banks and Trust Companies. If deposits are maintained with a savings and loan association, the amount of deposits not collateralized or insured shall not exceed 75% of the net worth of the institution as defined and reported to the regulatory agencies. At year-end, the entire amount of the bank balance of deposits was covered by collateral, federal depository or equivalent insurance. For an investment, this is the risk that in the event of the failure of the counterparty, the Fund will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. It is the policy of the Fund to require all investments and investment collateral to be held in safekeeping by a third-party custodial institution as designated by the Treasurer in the Fund’s name. Direct investments guaranteed by the United States or an agency of the United States do not require collateral. 66 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Firefighters’ Pension Fund – Interest Rate Risk, Credit Risk, Custodial Credit Risk and Concentration Risk – Continued Concentration Risk. The Fund limits the amount that can be invested in commercial paper to one-third of the Fund’s total investments. In addition to the securities and fair values listed above, the Fund also has $50,045,698 invested in mutual funds. At year-end, the Fund does not have any investments over 5 percent of net plan assets available for retirement benefits (other than investments issued or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools, and other pooled investments). The Fund’s investment policy in accordance with Illinois Compiled Statutes (ILCS) establishes the following target allocation across asset classes: Long-Term Expected Real Asset Class Target Rate of Return Fixed Income 35.00%1.50% Large Cap Domestic Equities 45.50%5.90% Small Cap Domestic Equities 13.00%7.70% International Equities 6.50%7.20% Cash and Cash Equivalents 0.00%0.00% Illinois Compiled Statutes (ILCS) limit the Fund’s investments in equities, mutual funds and variable annuities to 65%. Securities in any one company should not exceed 5% of the total fund. The long-term expected rate of return on the Fund’s investments was determined using an asset allocation study conducted by the Fund’s investment management consultant in January of 2021 in which best-estimate ranges of expected future real rates of return (net of pension plan investment expense and inflation) were developed for each major asset class. These ranges were combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding the expected inflation. Best estimates or arithmetic real rates of return for each major asset class included in the Fund’s target asset allocation as of December 31, 2020, are listed in the table above. Rate of Return For the year ended December 31, 2020, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 15.46%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. 67 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued INTERFUND BALANCES Interfund balances are advances in anticipation of receipts to cover temporary cash shortages. The composition of interfund balances as of the date of this report, is as follows: Receivable Fund Payable Fund General Nonmajor Governmental $ 66,774 General Police Pension 84,629 Police Pension General 55,236 Fire Pension General 36,015 242,654 Amount INTERFUND TRANSFERS Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the Debt Service Fund as debt service payments become due, and (3) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. Interfund transfers for the year consisted of the following: Transfer In Transfer Out General Debt Service $ 240,000 (1) General Nonmajor Governmental 988,315 (1) General Water and Sewerage 780,000 (1) Debt Service General 118,600 (2) Debt Service Water and Sewerage 769,050 (2) Debt Service Nonmajor Business-Type 375,000 (2) Facilities Development General 550,000 (2) Street Maintenance General 988,315 (2) Street Maintenance Debt Service 5,783,647 (1) Street Maintenance Nonmajor Governmental 200,000 (1) Vehicle Replacement General 1,350,000 (2) Nonmajor Governmental General 202,959 (3) Water and Sewerage Debt Service 3,553,408 (1) 15,899,294 Amount 68 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued CAPITAL ASSETS Governmental Activities Governmental capital asset activity for the year was as follows: Ending Increases Decreases Balances Nondepreciable Capital Assets Land $ 38,160,179 1,342,757 - 39,502,936 Construction in Progress 1,581,460 2,309,469 1,581,460 2,309,469 39,741,639 3,652,226 1,581,460 41,812,405 Depreciable Capital Assets Buildings 25,509,852 1,253,352 - 26,763,204 Equipment and Vehicles 13,342,453 3,080,365 164,403 16,258,415 Land Improvements 3,242,060 - - 3,242,060 Streets 23,844,548 4,611,718 - 28,456,266 Storm Sewers 38,470,478 - - 38,470,478 104,409,391 8,945,435 164,403 113,190,423 Less Accumulated Depreciation Buildings 21,956,843 404,352 - 22,361,195 Equipment and Vehicles 7,854,880 877,993 164,403 8,568,470 Land Improvements 601,382 64,845 - 666,227 Streets 14,247,025 433,737 - 14,680,762 Storm Sewers 36,907,602 218,826 - 37,126,428 81,567,732 1,999,753 164,403 83,403,082 Net Depreciable Capital Assets 22,841,659 6,945,682 - 29,787,341 Net Capital Assets 62,583,298 10,597,908 1,581,460 71,599,746 Beginning Balances Depreciation expense was charged to governmental activities as follows: General Government $ 170,505 Public Safety 518,125 Public Works 1,311,123 1,999,753 69 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued CAPITAL ASSETS – Continued Business-Type Activities Business-type capital asset activity for the year was as follows: Ending Increases Decreases Balances Nondepreciable Capital Assets Land $ 6,198,514 - - 6,198,514 Construction in Progress - 1,009,937 - 1,009,937 6,198,514 1,009,937 - 7,208,451 Depreciable Capital Assets Buildings 11,170,610 - - 11,170,610 Equipment and Vehicles 89,960 - - 89,960 Land Improvements 1,966,485 - - 1,966,485 Infrastructure 76,828,552 2,110,470 - 78,939,022 90,055,607 2,110,470 - 92,166,077 Less Accumulated Depreciation Buildings 10,156,289 351,936 - 10,508,225 Equipment and Vehicles 72,461 1,981 - 74,442 Land Improvements 1,966,485 - - 1,966,485 Infrastructure 40,665,548 1,574,640 - 42,240,188 52,860,783 1,928,557 - 54,789,340 Net Depreciable Capital Assets 37,194,824 181,913 - 37,376,737 Net Capital Assets 43,393,338 1,191,850 - 44,585,188 Beginning Balances Depreciation expense was charged to business-type activities as follows: Water and Sewerage $ 1,574,640 Arboretum Golf 281,201 Buffalo Grove Golf 72,716 1,928,557 70 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued LONG-TERM DEBT General Obligation Bonds The Village issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for governmental activities. General obligation bonds are direct obligations and pledge the full faith and credit of the Village. General obligation bonds currently outstanding are as follows: Fund Debt Ending Issue Retired by Issuances Retirements Balances Debt Service $ 395,000 - 395,000 - Debt Service 5,800,000 - 100,000 5,700,000 Debt Service 4,215,000 - 570,000 3,645,000 Debt Service 1,449,275 - 234,030 1,215,245 Debt Service - 24,000,000 - 24,000,000 11,859,275 24,000,000 1,299,030 34,560,245 Beginning Balances $5,160,000 General Obligation Refunding Bonds of 2010A -Due in annual installments of $325,000 to $620,000 plus interest at 2.00% to 4.00% through December 30, 2020. $6,000,000 General Obligation Bonds of 2012 -Due in annual installments of $100,0000 to $750,000 plus interest at 2.00%to 2.75% through June 30, 2030. $6,125,000 General Obligation Bonds of 2016 -Due in annual installments of $300,000 to $730,000 plus interest at 2.00%to 3.00% through December 30, 2031. $1,449,275 General Obligation Refunding Bonds of 2019 -Due in annual installments of $234,030 to $251,180 plus interest at 1.40%to 1.80% through December 30, 2025. $24,000,000 General Obligation Bonds of 2020 -Due in annual installments of $1,330,000 to $1,840,000 plus interest at 3.00% to 5.00% through December 30, 2035. 71 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued LONG-TERM DEBT – Continued IEPA Loans Payable The Village has entered into loan agreements with the IEPA to provide low interest financing for pump station improvements. IEPA loans currently outstanding are as follows: Fund Debt Ending Retired by Issuances Retirements Balances Water and Sewerage $ 311,332 - 19,092 292,240 Issue $6,638,399 IEPA Loan Payable of 2013 -Pump Stations Improvements -Due in semi-annual installments of $6,788 to $12,916, plus interest at 2.295%, through December 1, 2033. Beginning Balances Installment Contract Payable The Village also issues installment contracts payable to provide funds for the purchase of capital assets. Installment contracts currently outstanding are as follows: Fund Debt Ending Retired by Issuances Retirements Balances Water and Sewerage $ 6,001,817 - 386,802 5,615,015 Issue Installment Note Payable dated March 27, 2015, due in quarterly installments of $21,449 to $227,680, plus interest at 2.35% through June 1, 2029. Beginning Balances Asset Retirement Obligation The Village has recognized an asset retirement obligation (ARO) and related deferred outflow of resources in connection with its obligation to seal and abandon various water wells, to seal underground tanks, and lift station at the end of their estimated useful lives in accordance with federal, state, and/or local requirements. The ARO was measured using actual historical costs for similar abandonments, adjusted for inflation through the end of the year. The estimated remaining useful lives of the water wells are 25 years, underground tanks are 1-50 years, and lift stations are 5 years. 72 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS LONG-TERM DEBT – Continued Long-Term Liability Activity Changes in long-term liabilities during the fiscal year were as follows: Amounts Ending Due within Additions Deductions Balances One Year Governmental Activities Compensated Absences $ 1,881,916 600,147 1,200,294 1,281,769 256,354 Net Pension Liability - IMRF Governmental Activities 9,900,727 - 4,740,251 5,160,476 - Net Pension Liability - Police 29,585,230 - 2,965,123 26,620,107 - Net Pension Liability - Firefighters'18,320,693 - 6,045,715 12,274,978 - Total OPEB Liability - RBP 10,757,944 3,238,844 - 13,996,788 - General Obligation Bonds 11,859,275 24,000,000 1,299,030 34,560,245 2,550,445 Plus: Unamortized Premium 76,752 2,720,164 6,396 2,790,520 - 82,382,537 30,559,155 16,256,809 96,684,883 2,806,799 Business-Type Activities Compensated Absences 101,971 29,076 14,538 116,509 23,302 Net Pension Liability - IMRF 1,566,929 - 740,457 826,472 - Total OPEB Liability - RBP 621,870 202,412 - 824,282 - IEPA Loans Payable 311,332 - 19,092 292,240 19,532 Installment Note Payable 6,001,817 - 386,802 5,615,015 436,970 Asset Retirement Obligation - 1,725,500 - 1,725,500 - 8,603,919 1,956,988 1,160,889 9,400,018 479,804 Beginning Type of Debt Balances For the governmental activities, payments on the compensated absences, the net pension liabilities and the total OPEB liability are made by the General Fund. Payments on general obligation bonds are being liquidated by the Debt Service Fund. 73 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued LONG-TERM DEBT – Continued Long-Term Liability Activity – Continued Additionally, for the business-type activities, the compensated absences are being liquidated by the Water and Sewerage Fund and the Buffalo Grove Golf Fund. The net pension liability is being liquidated by the Water and Sewerage Fund, the Arboretum Golf Fund and the Buffalo Grove Golf Fund. The total OPEB liability is being liquidated by the Water and Sewerage Fund and Buffalo Grove Golf Fund. The IEPA loans payable, installment note payable and asset retirement obligation are being liquidated by the Water and Sewerage Fund. Debt Service Requirements to Maturity The annual debt service requirements to maturity, including principal and interest, are as follows: Principal Interest Principal Interest Principal Interest 2021 $ 2,550,445 1,198,614 19,532 6,596 436,970 128,372 2022 2,570,990 1,100,782 19,983 6,145 490,763 117,611 2023 2,591,265 1,002,446 20,444 5,684 548,394 105,549 2024 2,611,365 903,466 20,916 5,212 610,091 92,095 2025 2,646,180 803,976 21,399 4,729 676,096 77,149 2026 2,310,000 702,969 21,893 4,235 746,659 60,610 2027 2,385,000 615,244 22,398 3,730 822,046 42,367 2028 2,510,000 522,688 22,915 3,213 902,537 22,304 2029 2,640,000 424,175 23,444 2,684 381,459 3,371 2030 2,695,000 350,475 23,985 2,143 - - 2031 2,005,000 271,500 24,539 1,589 - - 2032 1,685,000 211,350 25,105 1,023 - - 2033 1,735,000 160,800 25,687 441 - - 2034 1,785,000 108,750 - - - - 2035 1,840,000 55,200 - - - - 34,560,245 8,432,435 292,240 47,424 5,615,015 649,428 Fiscal Bonds Loan Payable Year Totals Installment Note Payable Business-Type ActivitiesGovernmental Activities General Obligation IEPA 74 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued LONG-TERM DEBT – Continued Legal Debt Margin Article VII, Section 6(k) of the 1970 Illinois Constitution governs the computation of legal debt margin. “The General Assembly may limit by law the amount and require referendum approval of debt to the incurred by home rule municipalities, payable from ad valorem property tax receipts, only in excess of the following percentages of the assessed value of its taxable property…(2) if its population is more than 25,000 and less than 500,000 an aggregate of one percent: indebtedness which is outstanding on the effective date (July 1, 1971) of this constitution or which is thereafter approved by referendum…shall not be included in the foregoing percentage amounts.” To date the Illinois General Assembly has set no limits for home rule municipalities. The Village is a home rule municipality. OPERATING LEASES The Village has commitments with non-Village entities to lease certain property. Future minimum rental commitments are as follows: Fiscal Year 2021 $136,193 2022 138,917 2023 141,695 2024 144,529 561,334 Total Payments Lease PROPERTY TAXES Property taxes for 2019 attach as an enforceable lien on January 1, on property values assessed as of the same date. Taxes are levied by December of the subsequent fiscal year (by passage of a Tax Levy Ordinance). Tax bills are prepared by Lake County and are payable in two installments, on or about July 1 and September 1 during the following year. The County collects such taxes and remits them periodically. The allowance for uncollectible taxes has been stated at 1% of the tax levy to reflect actual collection experience. 75 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued TAX ABATEMENTS The Village has entered into a tax abatement agreement with Woodman’s Food Market, Inc. as an incentive to stimulate economic development. The abatement is authorized through a Development Agreement passed by the Village Board in Ordinance 2016-067 on December 19, 2018. Woodman’s will be financially responsible for constructing all necessary offsite roadway and intersection improvements as required by the Village, County, or State along the public roadways along the perimeter of the property. The offsite improvements are estimated to be $4,000,000. The Village will reimburse Woodman’s an amount not to exceed $4,000,000 for the roadway improvements and an additional payment of $3,000,000 for a combined total of $7,000,000. In order to promote and assist Woodman’s with the project, the Village agrees to share certain sales tax received that corresponds to the new sales tax revenue generated from the retail sales of the project. The sales tax allowable is limited to the sales tax associated with grocery, general merchandise, and products only. Woodman’s must acquire or otherwise be authorized to use the premise in Buffalo Grove, construct and operate the business, and construct the offsite roadway improvements to be eligible for the incentives. As of December 31, 2020, the Village owes Woodman’s Food Market, Inc. $865,504. The Village has entered into a tax abatement agreement with Edward Hines Lumber Co. as an incentive to stimulate economic development. The abatement is authorized through Village Ordinance 2000-67 on November 20, 2000 and has since been amended with Village Ordinance 2003-18 on March 3, 2003, Ordinance 2009-47 on August 3 2009 and Ordinance 2020-060 on August 17, 2020. Edward Hines Lumber Co. shall maintain a single order-acceptance point policy for all credit sales and shall not relocate the single order-acceptance point outside of the Village unless it violates or contravenes any state or federal law or court decision/determination. The Village will remit 6o percent of the municipal sales tax resulting from the credit sales received by the Village to Edward Hines Lumber Co. The Village will keep the remaining 40 percent. The Village's incentive payments for the year ended December 31, 2020 were $1,323,149. The Village has entered into a tax abatement agreement with LAB Development, LLC as an incentive to stimulate economic development. The abatement is authorized through Village Ordinance 2011-14 on March 21, 2011 and has since been amended with Village Ordinance 2016-032 on May 10, 2016. LAB Development, LLC shall conduct its business in Buffalo Grove, maintain a single order- acceptance point on premise. The amendment to the original agreement in 2016 requires LAB Development, LLC to extend their current lease at the premise in Buffalo Grove and expand the operation from 61,416 square feet to 124,605 square feet. The lease extension must be no less than 8.5 years, commencing January 1, 2016. The original agreement provided LAB Development, LLC with a tax abatement of 100 percent of the municipal sales tax in year one of the agreement, this percentage decreases 10 percent per year until year seven of the agreement. The amount of municipal sales tax abated to LAB Development, LLC could not exceed $500,000 over the seven-year term. The amended agreement extended the abatements to LAB Development, LLC under new terms. LAB Development, 76 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued TAX ABATEMENTS – Continued LLC is entitled to 80 percent of the base municipal sales tax above $162,207 in year one. The percentage per year decreases 10 percent until year five, from year five to year eight and a half the percentage is fixed at 50 percent. The base municipal sales tax amount of $162,207 is fixed for the term of the contract and prorated for the half year in 2024. The amount of municipal sales tax to be abated is not to exceed $2,600,000 over the life of the amended agreement. If LAB Development, LLC relocates or ceases business operations on the premise within five years of the commencement date of the amended contract they shall reimburse the Village 100 percent of the municipal sales tax payments to the Village within ninety days. IF LAB Development, LLC relocates or ceases business operations on the premise after the fifth year they will remit $750,000 to the Village within ninety days. If LAB Development, LLC relocates or ceases business operations on the premise after the sixth year they will remit $375,000 to the Village within ninety days. If LAB Development, LLC relocates or ceases business operations on the premise after the seventh year they will remit $187,500 to the Village within ninety days. If LAB Development, LLC conducts less than $30,000,000 of taxable sales at the premise in any given year of the contract they shall not receive more than 50 percent of the municipal sales tax increment for that year. The Village's incentive payments for the year ended December 31, 2020 were $186,364. The Village has entered into a tax abatement agreement with Zonatherm. In order to encourage Zonatherm to maintain its business operation in the Village, and to assist with their project in the Village, the Village agrees to share home rule sales tax received by the Village using a formula which corresponds to new sales tax generated by Zonatherm over a finite period of time. For the fist sales tax year, 100 percent of that year’s incremental municipal sales tax above the base of $100,000 will be paid to Zonatherm. For the second sales tax year 90 percent of that year’s municipal sales tax above the base of $100,000 will be paid to Zonatherm. For the third sales tax year 80 percent of that year’s municipal sales tax above the base of $100,000 will be paid to Zonatherm. For the fourth sales tax year 70 percent of that year’s municipal sales tax above the base of $100,000 will be paid to Zonatherm. For the fifth sales tax year 60 percent of that year’s municipal sales tax above the base of $100,000 will be paid to Zonatherm. For the sixth sales tax year 50 percent of that year’s municipal sales tax above the base of $100,000 will be paid to Zonatherm. For the seventh sales tax year 50 percent of that year’s municipal sales tax above the base of $100,000 will be paid to Zonatherm. The entire distribution cannot exceed $500,000 in aggregate. This agreement will end upon the completion of the seventh year or the $500,000 cap. In the event that Zonatherm ceases the business with seven years or generate less than $1,000 in sales tax in any sales tax year, Zonatherm shall reimburse the Village 100 percent of the municipal sales tax payments received. The Village's incentive payments for the year ended December 31, 2020 were $0. In order to encourage BITS to relocate its business operation to the Village of Buffalo Grove, and to assist with their project in the Village, the Village agrees to share a portion of its home rule sales tax received by the Village using a formula which corresponds to new sales tax revenue generated by the business over a finite period of time. For the first sales tax year, 75 percent of that year’s home rule sales tax received by the Village for the first $40,000,000 in annual taxable sales and 100 percent of 77 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued TAX ABATEMENTS – Continued that year’s home rule sales tax for annual taxable sales greater than $40,000,000. For the second sales tax year, 75 percent of that year’s home rule sales tax received by the Village for the first $40,000,000 in annual taxable sales and 100 percent of that year’s home rule sales tax for the annual taxable sales greater than $40,000,000. For the third sales tax year, 75 percent of that year’s home rule sales tax received by the Village for the first $40,000,000 in annual taxable sales and 100 percent of that year’s home rule sales tax for the annual taxable sales greater than $40,000,000. For the fourth sales tax year, 75 percent of that year’s home rule sales tax received by the Village for the first $40,000,000 in annual taxable sales and 100 percent of that year’s home rule sales tax for the annual taxable sales greater than $40,000,000. For the fifth sales tax year, 75 percent of that year’s home rule sales tax received by the Village for the first $40,000,000 in annual taxable sales and 100 percent of that year’s home rule sales tax for the annual taxable sales greater than $40,000,000. For the sixth sales tax year, 75 percent of that year’s home rule sales tax received by the Village for the first $40,000,000 in annual taxable sales and 100 percent of that year’s home rule sales tax for the annual taxable sales greater than $40,000,000. Should BITS relocate or cease its business within the first two years of the agreement BITS shall reimburse the Village 85 percent of the total home rule sales tax distributed. Should BITS relocate or cease business after two years of this agreement than BITS agrees to reimburse the Village 75 percent of the total home rules sales tax payments received. Should BITS relocate or cease business after three years of this agreement than BITS agrees to reimburse the Village 55 percent of the total home rules sales tax payments received. Should BITS relocate or cease business after four years of this agreement than BITS agrees to reimburse the Village 40 percent of the total home rules sales tax payments received. Should BITS relocate or cease business after five years of this agreement than BITS agrees to reimburse the Village 35 percent of the total home rules sales tax payments received. The Village's incentive payments for the year ended December 31, 2020 were $441,261. FUND BALANCE/NET POSITION Fund Balance Classifications In the governmental fund financial statements, the Village considers restricted amounts to have been spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available. The Village first utilizes committed, then assigned and then unassigned fund balance when an expenditure is incurred for purposes for which all three unrestricted fund balances are available. Nonspendable Fund Balance. Consists of resources that cannot be spent because they are either: a) not in a spendable form; or b) legally or contractually required to be maintained intact. Restricted Fund Balance. Consists of resources that are restricted to specific purposes, that is, when constraints placed on the use of resources are either: a) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or b) imposed by law through constitutional provisions or enabling legislation. 78 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued FUND BALANCE/NET POSITION – Continued Fund Balance Classifications – Continued Committed Fund Balance. Consists of resources constrained (issuance of an ordinance) to specific purposes by the government itself, using its highest level of decision-making authority, the Village Board; to be reported as committed, amounts cannot be used for any other purpose unless the government takes the same highest-level action to remove or change the constraint. Assigned Fund Balance. Consists of amounts that are constrained by the Village Board intent to be used for specific purposes but are neither restricted nor committed. Intent is expressed by the Village Board itself or by a body or official to which the Village Board has delegated the authority to assign amounts to be used for specific purposes. The Village’s’ highest level of decision-making authority is the Village Board, who is authorized to assign amounts to a specific purpose. Unassigned Fund Balance. Consists of residual net resources of a fund that has not been restricted, committed, or assigned within the General Fund and deficit fund balances of other governmental funds. Minimum Fund Balance Policy. The Village’s fund balance policy for the General Fund requires committed fund balance to be maintained at a minimum of 25% of budgeted operating expenditures. The following is a schedule of fund balance classifications for the governmental funds as of the date of this report: Vehicle Debt Facilities Street Equipment Service Development Maintenance Replacement Nonmajor Totals Fund Balances Nonspendable Inventories $113,850 - - - - - 113,850 Prepaids 457,804 - - - - - 457,804 571,654 - - - - - 571,654 Restricted Seizure Funds 497,577 - - - - - 497,577 IMRF 262,583 - - - - - 262,583 Motor Fuel Tax - - - - - 2,971,226 2,971,226 Metra Parking Lot - - - - - 42,070 42,070 Debt Service - 231,373 - - - - 231,373 Capital Projects - 16,598,094 - - - - 16,598,094 760,160 16,829,467 - - - 3,013,296 20,602,923 Committed Capital Projects 9,052,502 - 41,307 241,751 17,745 - 9,353,305 Unassigned 20,134,162 - - - - - 20,134,162 Total Fund Balances 30,518,478 16,829,467 41,307 241,751 17,745 3,013,296 50,662,044 General Capital Projects 79 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued NET POSITION/FUND BALANCE – Continued Net Position Classifications Net investment in capital assets was comprised of the following as of December 31, 2020: Governmental Activities Capital Assets - Net of Accumulated Depreciation $ 71,599,746 Plus: Unspent Bond Proceeds 16,598,094 Less Capital Related Debt: General Obligation Bonds (34,560,245) Unamortized Premium (2,790,520) Net Investment in Capital Assets 50,847,075 Business-Type Activities Capital Assets - Net of Accumulated Depreciation 44,585,188 Less Capital Related Debt: IEPA Loans Payable (292,240) Installment Note Payable (5,615,015) Net Investment in Capital Assets 38,677,933 NOTE 4 – OTHER INFORMATION 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 has purchased insurance from private insurance companies. Risks covered included certain types of liabilities and bonds. Premiums have been displayed as expenditures/expenses in appropriate funds. There were no significant changes in insurance coverages from the prior year and settlements did not exceed insurance coverage in any of the past three fiscal years. 80 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued 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 financial condition of the Village. Grants Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the Village expects such amounts, if any, to be immaterial. Financial Impact of COVID-19 In March of 2020, the World Health Organization declared the COVID-19 virus a public health emergency. As of the date of this report, the extent of the impact of COVID-19 on the Village’s operations and financial position cannot be determined. JOINT VENTURES Northwest Water Commission (NWWC) The Village is a member of the Northwest Water Commission (NWWC) which consists of four municipalities. NWWC 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). NWWC 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. The four members of NWWC and their percentage shares as of April 30, 2020 are as follows: Percent Share Village of Arlington Heights 36.43 % Village of Buffalo Grove 17.06 Village of Palatine 29.10 Village of Wheeling 17.41 100.00 % 81 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued JOINT VENTURES – Continued Northwest Water Commission (NWWC) – Continued These percentage shares are based upon formula contained in the water supply agreement and are subject to change in future years based on consumption by the municipalities. The members form a contiguous geographic service area which is located northwest of downtown Chicago. Under the NWWC Agreement, additional members may join NWWC upon the approval of each member. NWWC 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 NWWC are appointed by the Board of Commissioners. The Board of Commissioners determines the general policy of NWWC, makes all appropriations, approves contracts for sale or purchase of water, adopts by-laws, rules and regulations, and exercises such powers and performs such duties as may be prescribed in the NWWC Agreement or the by-laws. Summary of financial positions as of April 30, 2020: Current Assets $16,034,979 Current Liabilities $ 748,620 Noncurrent Assets Noncurrent Liabilities - Capital Assets 33,802,677 Total Liabilities 748,620 Total Assets 49,837,656 Net Position 49,089,036 Summary of revenues, expenses and changes in net position for the year ended April 30, 2020: Operating Revenues $ 12,606,012 Operating Expenses 10,898,057 Operating Income 1,707,955 Nonoperating Revenue (Expenses)517,692 Change in Net Position 2,225,647 Net Position - Beginning 46,863,389 Net Position - Ending 49,089,036 82 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued JOINT VENTURES – Continued Northwest Water Commission (NWWC) – Continued Complete financial statements can be obtained from the Northwest Water Commission, 1525 North Wolf Road, Des Plaines, Illinois 60015. NWWC’s bonds are revenue obligations. They are limited obligations of NWWC 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 NWWC resolutions. The bonds are not a debt of any member. NWWC has no power to levy taxes. Revenues of the system consist of: (a) all receipts derived from Water Supply Contracts or any other contract for the supply of water; (b) all income derived from the investment of monies; and (c) all income, fees, water service charges, and all rates, rents and receipts derived by NWWC from the ownership and operation of the system and the sale of water. JAWA covenants to establish fees and charges sufficient to provide revenues to meet all its requirements. N/WWC has entered into Water Supply Contracts with the four-member municipalities for a term of 40 years, extending to 2030. The Water Supply Contracts are irrevocable and may not be terminated or amended except as provided in the Water Supply 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. NWWC 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 NWWC through the year 2030. 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 NWWC of its obligations under this Contract. The payments required to be made by the Village under this Contract are required to be made solely from revenues to be derived by the Village from the operation of the Village’s system. Members are not prohibited by the Contract from using other available funds to make payments required under the Contract. This Contract shall not constitute an indebtedness of the Village within the meaning of any statutory or constitutional limitation. The obligation of the Village to make payments required by this Agreement from revenues of the Waterworks and Sewerage System shall be payable from the operation and maintenance account of the Water and Sewerage Fund. In accordance with the joint venture agreement, the Village remitted $1,756,594 to NWWC for the year ended April 30, 2020. All payments were paid from the Water and Sewerage Fund. The Village’s share of net position of NWWC was $8,374,590 at April 30, 2020. 83 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued JOINT VENTURES – Continued Solid Waste Agency of Northern Cook County (SWANCC) The Village is a member of the Solid Waste Agency of Northern Cook County (SWANCC) which consists of twenty-three municipalities. SWANCC is a municipal corporation and public body politic established pursuant to the Constitution Act of the State of Illinois and the Intergovernmental Cooperation Act of the State of Illinois, as amended. SWANCC is empowered to plan, construct, finance, operate, and maintain a solid waste disposal system to serve its members. SWANCC is governed by a Board of Directors which consists of one appointed representative from each member municipality. Each Director has an equal vote. The officers of SWANCC are appointed by the Board of Directors. The Board of Directors determines the general policy of SWANCC, makes all appropriations, approves contracts, adopts resolutions providing for the issuance of bonds or notes by SWANCC, adopts by- laws, rules and regulations, and exercises such powers and performs such duties as may be prescribed in the SWANCC agreement or the by-laws. Separate audited financial statements are available at 77 W Hintz Road, Suite 200, Wheeling, Illinois 60090. SWANCC’s bonds are revenue obligations. They are limited obligations of SWANCC, 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 SWANCC resolutions. SWANCC 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 SWANCC from the ownership and operation of the system. SWANCC covenants to establish fees and charges sufficient to provide revenues to meet all its requirements. SWANCC 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 obligation of the Village to make all payments as required by this Contract is unconditional and irrevocable, without regard to performance or nonperformance by SWANCC of its obligations under this Contract. 84 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued JOINT VENTURES – Continued Solid Waste Agency of Northern Cook County (SWANCC) – Continued The payments required to be made by the Village under this Contract are required to be made solely from revenues to be derived by the Village from the operation of the Municipal Waste System Fund. The Village is not prohibited by the Contract from using any other funds to make the payments required by the Contract. The Contract shall not constitute an indebtedness of the Village within the meaning of nay statutory or constitutional limitation. In accordance with the joint venture agreement, the Village remitted $803,999 to SWANCC for the year ended December 31, 2020, which is recorded in the Village’s Refuse Service Fund. EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS The Village contributes to three defined benefit pension plans, the Illinois Municipal Retirement Fund (IMRF), a defined benefit agent multiple-employer public employee retirement system and the Police Pension Plan which is a single-employer pension plan, and the Firefighters’ Pension Plan which is a single-employer pension plan. A separate report is issued for the Police Pension Plan and Firefighters’ Pension Plan and may be obtained by writing to the Village at 50 Raupp Boulevard, Buffalo Grove, Illinois 60089. IMRF issues a publicly available financial report that includes financial statements and required supplementary information for the plan as a whole, but not by individual employer. That report may be obtained online at www.imrf.org. The benefits, benefit levels, employee contributions, and employer contributions are governed by Illinois Compiled Statutes (ILCS) and can only be amended by the Illinois General Assembly. The aggregate amount recognized for the three pension plans is: Net Pension Deferred Deferred Liability Outflows Inflows IMRF $ 1,292,481 5,986,948 2,858,934 3,231,728 Police Pension 2,117,754 26,620,107 2,986,027 7,406,191 Firefighters' Pension 618,442 12,274,978 2,418,583 7,769,688 4,028,677 44,882,033 8,263,544 18,407,607 Pension Expense Illinois Municipal Retirement Fund (IMRF) Plan Descriptions Plan Administration. All employees (other than those covered by the Police Pension Plan and the Firefighters’ Pension Plan) hired in positions that meet or exceed the prescribed annual hourly standard must be enrolled in IMRF as participating members. The plan is accounted for on the economic resources measurement focus and the accrual basis of accounting. Employer and employee contributions are recognized when earned in the year that the contributions are required, benefits and refunds are recognized as an expense and liability when due and payable. 85 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Illinois Municipal Retirement Fund (IMRF) – Continued Plan Descriptions – Continued Benefits Provided. IMRF has three benefit plans. The vast majority of IMRF members participate in the Regular Plan (RP). The Sheriff’s Law Enforcement Personnel (SLEP) plan is for sheriffs, deputy sheriffs, and selected police chiefs. Counties could adopt the Elected County Official (ECO) plan for officials elected prior to August 8, 2011 (the ECO plan was closed to new participants after that date). IMRF provides two tiers of pension benefits. Employees hired before January 1, 2011, are eligible for Tier 1 benefits. Tier 1 employees are vested for pension benefits when they have at least eight years of qualifying service credit. Tier 1 employees who retire at age 55 (at reduced benefits) or after age 60 (at full benefits) with eight years of service are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to 1-2/3% of the final rate of earnings for the first 15 years of service credit, plus 2% for each year of service credit after 15 years to a maximum of 75% of their final rate of earnings. Final rate of earnings is the highest total earnings during any consecutive 48 months within the last 10 years of service, divided by 48. Under Tier 1, the pension is increased by 3% of the original amount on January 1 every year after retirement. Employees hired on or after January 1, 2011, are eligible for Tier 2 benefits. For Tier 2 employees, pension benefits vest after ten years of service. Participating employees who retire at age 62 (at reduced benefits) or after age 67 (at full benefits) with ten years of service are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to 1-2/3% of the final rate of earnings for the first 15 years of service credit, plus 2% for each year of service credit after 15 years to a maximum of 75% of their final rate of earnings. Final rate of earnings is the highest total earnings during any 96 consecutive months within the last 10 years of service, divided by 96. Under Tier 2, the pension is increased on January 1 every year after retirement, upon reaching age 67, by the lesser of: • 3% of the original pension amount, or • 1/2 of the increase in the Consumer Price Index of the original pension amount. 86 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Illinois Municipal Retirement Fund (IMRF) – Continued Plan Descriptions – Continued Plan Membership. As of December 31, 2019, the measurement date, the following employees were covered by the benefit terms: Inactive Plan Members Currently Receiving Benefits 112 Inactive Plan Members Entitled to but not yet Receiving Benefits 58 Active Plan Members 100 Total 270 Contributions. As set by statute, the Village’s Regular Plan Members are required to contribute 4.5% of their annual covered salary. The statute requires employers to contribute the amount necessary, in addition to member contributions, to finance the retirement coverage of its own employees. For the year-ended December 31, 2020, the Village’s contribution was 13.63% of covered payroll. Net Pension Liability. The Village’s net pension liability was measured as of December 31, 2019. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. Actuarial Assumptions. The total pension liability was determined by an actuarial valuation performed, as of December 31, 2019, using the following actuarial methods and assumptions: Actuarial Cost Method Entry Age Normal Asset Valuation Method Market Actuarial Assumptions Interest Rate 7.25% Salary Increases 3.35% to 14.25% Cost of Living Adjustments 3.25% Inflation 2.50% 87 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Illinois Municipal Retirement Fund (IMRF) – Continued Plan Descriptions – Continued Actuarial Assumptions – Continued. For non-disabled retirees, an IMRF specific mortality table was used with fully generational projection scale MP-2017 (base year 2015). The IMRF specific rates were developed from the RP-2014 Blue Collar Health Annuitant Mortality Table with adjustments to match current IMRF experience. For disabled retirees, an IMRF specific mortality table was used with fully generational projection scale MP-2017 (base year 2015). The IMRF specific rates were developed from the RP-2014 Disabled Retirees Mortality Table applying the same adjustment that were applied for non-disabled lives. For active members, an IMRF specific mortality table was used with fully generational projection scale MP-2017 (base year 2015). The IMRF specific rates were developed from the RP-2014 Employee Mortality Table with adjustments to match current IMRF experience. The long-term expected rate of return on pension plan investments was determined using a building- block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense, and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return to the target asset allocation percentage and adding expected inflation. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: Long-Term Expected Real Asset Class Target Rate of Return Fixed Income 28.00%3.25% Domestic Equities 37.00%5.75% International Equities 18.00%6.50% Real Estate 9.00%5.20% Blended 7.00% 3.60% - 7.60% Cash and Cash Equivalents 1.00%1.85% 88 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Illinois Municipal Retirement Fund (IMRF) – Continued Discount Rate The discount rate used to measure the total pension liability was 7.25%, the same as the prior valuation. The projection of cash flows used to determine the discount rate assumed that member contributions will be made at the current contribution rate and that Village contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, the IMRF’s fiduciary net position was projected to be available to make all project future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all period of projected benefit payments to determine the total pension liability. Discount Rate Sensitivity The following is a sensitivity analysis of the net pension liability to changes in the discount rate. The table below presents the pension liability of the Village calculated using the discount rate as well as what the Village’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate: Current Discount Rate (7.25%) Net Pension Liability/(Asset)$ 14,663,672 5,986,948 (1,164,549) 1% Decrease 1% Increase (6.25%)(8.25%) 89 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Illinois Municipal Retirement Fund (IMRF) – Continued Changes in the Net Pension Liability Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (A) (B) (A) - (B) Balances at December 31, 2018 $ 65,716,729 54,249,073 11,467,656 Changes for the Year: Service Cost 908,935 - 908,935 Interest on the Total Pension Liability 4,689,245 - 4,689,245 Changes of Benefit Terms - - - Difference Between Expected and Actual Experience of the Total Pension Liability 492,814 - 492,814 Changes of Assumptions - - - Contributions - Employer - 1,053,229 (1,053,229) Contributions - Employees - 421,491 (421,491) Net Investment Income - 10,038,062 (10,038,062) Benefit Payments, including Refunds of Employee Contributions (2,983,908) (2,983,908)- Other (Net Transfer)- 58,920 (58,920) Net Changes 3,107,086 8,587,794 (5,480,708) Balances at December 31, 2019 68,823,815 62,836,867 5,986,948 90 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Illinois Municipal Retirement Fund (IMRF) – Continued Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions For the year ended December 31, 2020, the Village recognized pension expense of $1,292,481. At December 31, 2020, the Village reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Inflows of Resources Totals Difference Between Expected and Actual Experience $ 682,363 (55,664) 626,699 Change in Assumptions 958,198 (586,806) 371,392 Net Difference Between Projected and Actual Earnings on Pension Plan Investments -(2,589,258) (2,589,258) Total Pension Expense to be Recognized in Future Periods 1,640,561 (3,231,728) (1,591,167) Pension Contributions Made Subsequent to the Measurement Date 1,218,373 -1,218,373 Total Deferred Amounts Related to IMRF 2,858,934 (3,231,728) (372,794) Deferred Outflows of Resources $1,218,373 reported as deferred outflows of resources related to pensions resulting from employer contributions subsequent to the measurement date and will be recognized as a reduction of the net pension liability in the reporting year ended December 31, 2021. Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense in future periods as follows: Net Deferred Outflows/ Fiscal (Inflows) Year of Resources 2021 $ (581,083) 2022 (215,188) 2023 436,620 2024 (1,231,516) 2025 - Thereafter - Total (1,591,167) 91 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Police Pension Plan Plan Descriptions Plan Administration. The Police Pension Plan is a single-employer defined benefit pension plan that covers all sworn police personnel. The defined benefits and employee and minimum employer contribution levels are governed by Illinois Compiled Statutes (40 ILCS 5/3-1) and may be amended only by the Illinois legislature. The Village accounts for the Fund as a pension trust fund. The Fund is governed by a five-member pension board. Two members of the Board are appointed by the Village President, one member is elected by pension beneficiaries and two members are elected by active police employees. Plan Membership. At December 31, 2020, the measurement date, membership consisted of the following: Inactive Plan Members Currently Receiving Benefits 54 Inactive Plan Members Entitled to but not yet Receiving Benefits 8 Active Plan Members 64 Total 126 Benefits Provided. The following is a summary of the Police Pension Plan as provided for in Illinois State Statutes. The Police Pension Plan provides retirement benefits through two tiers of benefits as well as death and disability benefits. Covered employees hired before January 1, 2011 (Tier 1), attaining the age of 50 or older with 20 or more years of creditable service are entitled to receive an annual retirement benefit of ½ of the salary attached to the rank held on the last day of service, or for one year prior to the last day, whichever is greater. The annual benefit shall be increased by 2.5 percent of such salary for each additional year of service over 20 years up to 30 years, to a maximum of 75 percent of such salary. Employees with at least eight years but less than 20 years of credited service may retire at or after age 60 and receive a reduced benefit. The monthly benefit of a police officer who retired with 20 or more years of service after January 1, 1977 shall be increased annually, following the first anniversary date of retirement and be paid upon reaching the age of at least 55 years, by 3 percent of the original pension and 3 percent compounded annually thereafter. Covered employees hired on or after January 1, 2011 (Tier 2), attaining the age of 55 or older with 10 or more years of creditable service are entitled to receive an annual retirement benefit equal to the average monthly salary obtained by dividing the total salary of the police officer during the 48 consecutive months of service within the last 60 months of service in which the total salary was the highest by the number of months of service in that period. Police officer salary for the pension purposes is capped at $106,800, plus the lesser of ½ of the annual change in the Consumer Price Index or 3 percent compounded. 92 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Police Pension Plan – Continued Plan Descriptions – Continued Benefits Provided – Continued. The annual benefit shall be increased by 2.5 percent of such a salary for each additional year of service over 20 years up to 30 years to a maximum of 75 percent of such salary. Employees with at least 10 years may retire at or after age 50 and receive a reduced benefit (i.e., ½ percent for each month under 55). The monthly benefit of a Tier 2 police officer shall be increased annually at age 60 on the January 1st after the police officer retires, or the first anniversary of the pension starting date, whichever is later. Noncompounding increases occur annually, each January thereafter. The increase is the lesser of 3 percent or ½ of the change in the Consumer Price Index for the proceeding calendar year. Contributions. 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 and the administrative costs as actuarially determined by an enrolled actuary. However, effective January 1, 2011, ILCS requires the Village to contribute a minimum amount annually calculated using the projected unit credit actuarial cost method that will result in the funding of 90% of the past service cost by the year 2040. For the year-ended December 31, 2020, the Village’s contribution was 42.31% of covered payroll. Concentrations. At year end, the Pension Plan does not have any investments (other than investments issued or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools, and other pooled investments) in any one organization that represent 5 percent or more of net position available for benefits. Actuarial Assumptions The total pension liability was determined by an actuarial valuation performed, as of December 31, 2020, using the following actuarial methods and assumptions: Actuarial Cost Method Entry Age Normal Asset Valuation Method Market Actuarial Assumptions Interest Rate 7.00% Salary Increases Graded by Years of Service Cost of Living Adjustments 3.25% Inflation 2.25% 93 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Police Pension Plan – Continued Actuarial Assumptions – Continued Mortality rates were based on the PubS-2010(A) adjusted for plan status, collar, and Illinois Public Pension data, as appropriate. Discount Rate The discount rate used to measure the total pension liability was 7.00%, the same as the prior valuation. The projection of cash flows used to determine the discount rate assumed that member contributions will be made at the current contribution rate and that Village contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, the Fund’s fiduciary net position was projected to be available to make all project future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all period of projected benefit payments to determine the total pension liability. Discount Rate Sensitivity The following is a sensitivity analysis of the net pension liability to changes in the discount rate. The table below presents the pension liability of the Village calculated using the discount rate as well as what the Village’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate: Current Discount Rate (7.00%) Net Pension Liability $ 44,362,120 26,620,107 12,297,499 1% Decrease 1% Increase (6.00%)(8.00%) 94 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Police Pension Plan – Continued Changes in the Net Pension Liability Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (A) (B) (A) - (B) Balances at December 31, 2019 $ 106,403,950 76,818,720 29,585,230 Changes for the Year: Service Cost 1,978,338 - 1,978,338 Interest on the Total Pension Liability 7,214,313 - 7,214,313 Changes of Benefit Terms - - - Difference Between Expected and Actual Experience of the Total Pension Liability 832,348 - 832,348 Changes of Assumptions (639,813)- (639,813) Contributions - Employer - 3,095,593 (3,095,593) Contributions - Employees - 820,098 (820,098) Contributions - Other - - - Net Investment Income - 8,491,232 (8,491,232) Benefit Payments, including Refunds of Employee Contributions (4,677,746) (4,677,746)- Administrative Expense - (56,614) 56,614 Net Changes 4,707,440 7,672,563 (2,965,123) Balances at December 31, 2020 111,111,390 84,491,283 26,620,107 95 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Police Pension Plan – Continued Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions For the year ended December 31, 2020, the Village recognized pension expense of $2,117,754. At December 31, 2020, the Village reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Totals Difference Between Expected and Actual Experience $ 1,849,559 (63,619) 1,785,940 Change in Assumptions 1,136,468 (1,758,538) (622,070) Net Difference Between Projected and Actual Earnings on Pension Plan Investments - (5,584,034) (5,584,034) Total Deferred Amounts Related to Police Pension 2,986,027 (7,406,191) (4,420,164) Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense in future periods as follows: Fiscal Year 2021 $ (1,615,759) 2022 (939,239) 2023 (1,944,003) 2024 (154,089) 2025 232,926 Thereafter - Total (4,420,164) Net Deferred (Inflows) of Resources Outflows/ 96 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Firefighters’ Pension Plan Plan Descriptions Plan Administration. The Firefighters’ Pension Plan is a single-employer defined benefit pension plan that covers all sworn firefighter personnel. The defined benefits and employee and minimum employer contribution levels are governed by Illinois Compiled Statutes (40 ILCS 5/4-1) and may be amended only by the Illinois legislature. The Village accounts for the Fund as a pension trust fund. The Fund is governed by a five-member pension board. Two members of the Board are appointed by the Village President, one member is elected by pension beneficiaries and two members are elected by active fire employees. Plan Membership. At December 31, 2020, the measurement date, membership consisted of the following: Inactive Plan Members Currently Receiving Benefits 47 Inactive Plan Members Entitled to but not yet Receiving Benefits 1 Active Plan Members 56 Total 104 Benefits Provided. The following is a summary of the Firefighters’ Pension Plan as provided for in Illinois State Statutes. The Firefighters’ Pension Plan provides retirement benefits through two tiers of benefits as well as death and disability benefits. Covered employees hired before January 1, 2011 (Tier 1), attaining the age of 50 or older with 20 or more years of creditable service are entitled to receive an annual retirement benefit of ½ of the salary attached to the rank held on the last day of service, or for one year prior to the last day, whichever is greater. The annual benefit shall be increased by 2.5 percent of such salary for each additional year of service over 20 years up to 30 years, to a maximum of 75 percent of such salary. Employees with at least eight years but less than 20 years of credited service may retire at or after age 60 and receive a reduced benefit. The monthly benefit of a firefighter who retired with 20 or more years of service after January 1, 1977 shall be increased annually, following the first anniversary date of retirement and be paid upon reaching the age of at least 55 years, by 3 percent of the original pension and 3percent compounded annually thereafter. 97 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Firefighters’ Pension Plan – Continued Plan Descriptions – Continued Benefits Provided – Continued. Covered employees hired on or after January 1, 2011 (Tier 2), attaining the age of 55 or older with 10 or more years of creditable service are entitled to receive an annual retirement benefit equal to the average monthly salary obtained by dividing the total salary of the firefighter during the 48 consecutive months of service within the last 60 months of service in which the total salary was the highest by the number of months of service in that period. Firefighters’ salary for the pension purposes is capped at $106,800, plus the lesser of ½ of the annual change in the Consumer Price Index or 3 percent compounded. The annual benefit shall be increased by 2.5 percent of such a salary for each additional year of service over 20 years up to 30 years to a maximum of 75 percent of such salary. Employees with at least 10 years may retire at or after age 50 and receive a reduced benefit (i.e., ½ percent for each month under 55). The monthly benefit of a Tier 2 firefighter shall be increased annually at age 60 on the January 1st after the firefighter retires, or the first anniversary of the pension starting date, whichever is later. Noncompounding increases occur annually, each January thereafter. The increase is the lesser of 3 percent or ½ of the change in the Consumer Price Index for the proceeding calendar year. Contributions. Covered employees are required to contribute 9.455% of their base 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 and the administrative costs as actuarially determined by an enrolled actuary. However, effective January 1, 2011, ILCS requires the Village to contribute a minimum amount annually calculated using the projected unit credit actuarial cost method that will result in the funding of 90% of the past service cost by the year 2040. For the year-ended December 31, 2020, the Village’s contribution was 34.28% of covered payroll. Concentrations. At year end, the Pension Plan does not have any investments (other than investments issued or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools, and other pooled investments) in any one organization that represent 5 percent or more of net position available for benefits. 98 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Firefighters’ Pension Plan – Continued Actuarial Assumptions The total pension liability was determined by an actuarial valuation performed, as of December 31, 2020, using the following actuarial methods and assumptions: Actuarial Cost Method Entry Age Normal Asset Valuation Method Market Actuarial Assumptions Interest Rate 7.00% Salary Increases Graded by Years of Service Cost of Living Adjustments 3.25% Mortality rates were based on the PubS-2010(A) adjusted for plan status, collar, and Illinois Public Pension data, as appropriate. Discount Rate The discount rate used to measure the total pension liability was 7.00%, the same as the prior valuation. The projection of cash flows used to determine the discount rate assumed that member contributions will be made at the current contribution rate and that Village contributions will be made at rates equal to the difference between the actuarially determined contribution rates and the member rate. Based on those assumptions, the Fund’s fiduciary net position was projected to be available to make all project future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all period of projected benefit payments to determine the total pension liability. 99 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Firefighters’ Pension Plan – Continued Discount Rate Sensitivity The following is a sensitivity analysis of the net pension liability to changes in the discount rate. The table below presents the pension liability of the Village calculated using the discount rate as well as what the Village’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate: Current Discount Rate (7.00%) Net Pension Liability $ 25,529,577 12,274,978 1,522,854 1% Decrease 1% Increase (6.00%)(8.00%) Changes in the Net Pension Liability Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (A) (B) (A) - (B) Balances at December 31, 2019 $ 86,352,802 68,032,109 18,320,693 Changes for the Year: Service Cost 1,621,266 - 1,621,266 Interest on the Total Pension Liability 5,825,574 - 5,825,574 Changes of Benefit Terms - - - Difference Between Expected and Actual Experience of the Total Pension Liability (121,525)- (121,525) Changes of Assumptions (453,769)- (453,769) Contributions - Employer - 2,019,305 (2,019,305) Contributions - Employees - 535,959 (535,959) Net Investment Income - 10,436,145 (10,436,145) Benefit Payments, including Refunds of Employee Contributions (3,823,483) (3,823,483)- Administrative Expense - (74,148) 74,148 Net Changes 3,048,063 9,093,778 (6,045,715) Balances at December 31, 2020 89,400,865 77,125,887 12,274,978 100 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Firefighters’ Pension Plan – Continued Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions For the year ended December 31, 2020, the Village recognized pension expense of $618,442. At December 31, 2020, the Village reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Totals Difference Between Expected and Actual Experience $ 1,200,307 (456,967) 743,340 Change in Assumptions 1,218,276 (631,966) 586,310 Net Difference Between Projected and Actual Earnings on Pension Plan Investments - (6,680,755) (6,680,755) Total Deferred Amounts Related to Firefighters' Pension 2,418,583 (7,769,688) (5,351,105) Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense in future periods as follows: Fiscal Year 2021 $ (1,676,708) 2022 (913,453) 2023 (2,359,942) 2024 (897,176) 2025 260,345 Thereafter 235,829 Total (5,351,105) Net Deferred (Inflows) of Resources Outflows/ 101 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued OTHER POST-EMPLOYMENT BENEFITS General Information about the OPEB Plan Plan Description. The Village’s defined benefit OPEB plan, Village of Buffalo Grove Retiree Benefits Plan (RBP), provides OPEB for all permanent full-time general and public safety employees of the Village. RBP is a single-employer defined benefit OPEB plan administered by the Village. Article 11 of the State Compiled Statutes grants the authority to establish and amend the benefit terms and financing requirements to the Village Board. No assets are accumulated in a trust that meets the criteria in paragraph 4 of Statement 75. Benefits Provided. RBP offers medical, prescription, vision, dental, life insurance coverage to retirees. Retirees pay full cost of coverage. Coverage ends at age 65 or once retirees are eligible for Medicare. Plan Membership. As of December 31, 2020, the measurement date, the following employees were covered by the benefit terms: Inactive Plan Members Currently Receiving Benefits 60 Inactive Plan Members Entitled to but not yet Receiving Benefits - Active Plan Members 195 Total 255 Total OPEB Liability The Village’s total OPEB liability was measured as of December 31, 2020, and was determined by an actuarial valuation as of that date. Actuarial assumptions and other inputs. The total OPEB liability in the December 31, 2020 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: 102 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued OTHER POST-EMPLOYMENT BENEFITS – Continued Total OPEB Liability – Continued Actuarial assumptions and other inputs - Continued. Inflation 2.25% Salary Increases 3.00% Discount Rate 2.00% Healthcare Cost Trend Rates Retirees' Share of Benefit-Related Costs 100% of Benefit-Related Costs 6.00% for 2020,decreasing to an ultimate rate of 4.50% for 2024 and later years The discount rate was based on a combination of the expected long-term rate of return on plan investments and the municipal bond rate. Mortality rates were based on the sex distinct raw rates as developed in the RP-2014 study, with blue collar adjustment. These rates are improved generationally using MP-2020 improvement rates. Change in the Total OPEB Liability Balance at December 31, 2019 $ 11,379,814 Changes for the Year: Service Cost 525,258 Interest on the Total Pension Liability 304,253 Changes of Benefit Terms - Difference Between Expected and Actual Experience 1,668,331 Changes of Assumptions or Other Inputs 1,494,795 Benefit Payments (551,381) Net Changes 3,441,256 Balance at December 31, 2020 14,821,070 Total OPEB Liability 103 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued OTHER POST-EMPLOYMENT BENEFITS – Continued Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The discount rate used to measure the total pension liability was 2.00%, while the prior valuation used 2.74%. The following presents the total OPEB liability, calculated using the discount rate, as well as what the total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher: Current Discount Rate 1% Increase (2.00%) (3.00%) Total OPEB Liability $ 17,314,562 14,821,070 12,858,816 1% Decrease (1.00%) Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates The following is a sensitivity analysis of the total OPEB liability to changes in the healthcare cost trend rates. The table below presents the OPEB liability of the Village calculated using the discount rate as well as what the Village’s total OPEB liability would be if it were calculated using healthcare trend rates that are one percentage point lower or one percentage point higher than the current rates: Healthcare Cost Trend Rates (6.00% (7.00% decreasing to decreasing to 4.50%) 5.50%) Total OPEB Liability $ 12,589,522 14,821,070 17,732,162 3.50%) (5.00% decreasing to 104 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2020 NOTE 4 – OTHER INFORMATION – Continued OTHER POST-EMPLOYMENT BENEFITS – Continued OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended December 31, 2020, the Village recognized OPEB expense of $1,308,656. At December 31, 2020, the Village reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Inflows of Resources Totals Difference Between Expected and Actual Experience $ 1,490,601 - 1,490,601 Change in Assumptions 3,051,115 (535,675) 2,515,440 Net Difference Between Projected and Actual Earnings on Pension Plan Investments - - - Total Deferred Amounts Related to OPEB 4,541,716 (535,675) 4,006,041 Deferred Outflows of Resources Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Net Deferred Fiscal Outflows Year of Resources 2021 $ 479,145 2022 479,145 2023 479,145 2024 479,145 2025 479,145 Thereafter 1,610,316 Total 4,006,041 SUBSEQUENT EVENT On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law. This act provides $350 billion in funding for local governments. The Village has been allocated $5,002,946 to be received in two installments. As of the date of these financial statements, the Village has not received their first installment. 105 • Schedule of Employer Contributions Illinois Municipal Retirement Fund Police Pension Fund Firefighters' Pension Fund • Schedule of Changes in the Employer’s Net Pension Liability Illinois Municipal Retirement Fund Police Pension Fund Firefighters' Pension Fund • Schedule of Investment Returns Police Pension Fund Firefighters' Pension Fund • Schedule of Changes in the Employer's Total OPEB Liability Retiree Benefit Plan • Budgetary Comparison Schedule General Fund Notes to the Required Supplementary Information REQUIRED SUPPLEMENTARY INFORMATION Required supplementary information includes financial information and disclosures that are required by the GASB but are not considered a part of the basic financial statements. Such information includes: Budgetary Information –Budgets are adopted on a basis consistent with generally accepted accounting principles. VILLAGE OF BUFFALO GROVE, ILLINOIS Illinois Municipal Retirement Fund Required Supplementary Information Schedule of Employer Contributions December 31, 2020 Contributions as Fiscal a Percentage of Year Covered Payroll 2014 $1,020,544 $1,071,994 $51,450 $7,802,324 13.74% 2015 1,093,142 1,093,142 - 8,157,772 13.40% 2016 1,112,901 1,112,901 - 8,023,803 13.87% 2017 1,164,635 1,164,635 - 8,384,700 13.89% 2018 1,225,584 1,225,584 - 8,810,810 13.91% 2019 1,045,988 1,053,229 7,241 9,272,947 11.36% 2020 1,218,373 1,218,373 - 8,938,907 13.63% Notes to the Required Supplementary Information: Actuarial Cost Method Entry Age Normal Amortization Method Level % Pay (Closed) Remaining Amortization Period 24 Years Asset Valuation Method 5-Year Smoothed Market Inflation 2.50% Salary Increases 3.35% - 14.25% Investment Rate of Return 7.50% Retirement Age See the Notes to the Financial Statements Mortality Contributions in Relation to the Actuarially Determined Contribution Covered Payroll Actuarially Determined Contribution Contribution Excess/ (Deficiency) Note: This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. An IMRF specific mortality table was used with fully generational projection scale MP-2017 (base year 2015). 106 VILLAGE OF BUFFALO GROVE, ILLINOIS Police Pension Fund Required Supplementary Information Schedule of Employer Contributions December 31, 2020 Contributions as Fiscal a Percentage of Year Covered Payroll 2014 $2,359,777 $2,083,758 $(276,019)$5,984,178 34.82% 2015 2,256,676 2,284,315 27,639 6,056,962 37.71% 2016 2,407,865 2,430,017 22,152 6,406,672 37.93% 2017 2,538,183 2,641,453 103,270 6,565,793 40.23% 2018 2,673,256 2,668,632 (4,624)6,738,022 39.61% 2019 2,795,672 2,899,820 104,148 6,957,008 41.68% 2020 3,034,524 3,095,593 61,069 7,316,636 42.31% Notes to the Required Supplementary Information: Actuarial Cost Method Entry Age Normal Amortization Method Level % Pay (Closed) Remaining Amortization Period 20 Years Asset Valuation Method 5-Year Smoothed Market Inflation 2.25% Salary Increases Graded by Years of Service Investment Rate of Return 7.00% Retirement Age Graded by Age (11% at 50 to 100% at age 62) Mortality Note: This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. Contribution Determined Excess/ Contribution (Deficiency) Actuarially Determined Contribution PubS-2010(A) Adjusted for Plan Status, Collar, and Illinois Public Pension Data, as Appropriate Contributions in Relation to the Actuarially Payroll Covered 107 VILLAGE OF BUFFALO GROVE, ILLINOIS Firefighters' Pension Fund Required Supplementary Information Schedule of Employer Contributions December 31, 2020 Contributions as Fiscal a Percentage of Year Covered Payroll 2014 $1,884,815 $2,168,844 $284,029 $5,224,950 41.51% 2015 1,848,990 2,202,138 353,148 5,308,713 41.48% 2016 1,728,496 2,166,040 437,544 5,390,509 40.18% 2017 1,862,674 1,864,498 1,824 5,585,881 33.38% 2018 1,897,942 1,897,968 26 5,836,466 32.52% 2019 1,859,212 1,915,164 55,952 6,026,152 31.78% 2020 1,984,773 2,019,305 34,532 5,890,818 34.28% Notes to the Required Supplementary Information: Actuarial Cost Method Entry Age Normal Amortization Method Level % Pay (Closed) Remaining Amortization Period 20 Years Asset Valuation Method 5-Year Smoothed Market Inflation 2.20% Salary Increases Graded by Years of Service Investment Rate of Return 7.00% Retirement Age Graded by Age (11% at 50 to 100% at age 62) Mortality Contributions in Relation to Actuarially the Actuarially Contribution Note: This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. Determined Determined Excess/Covered Contribution Contribution (Deficiency)Payroll PubS-2010(A) Adjusted for Plan Status, Collar, and Illinois Public Pension Data, as Appropriate 108 VILLAGE OF BUFFALO GROVE, ILLINOIS Illinois Municipal Retirement Fund Required Supplementary Information Schedule of Changes in the Employer's Net Pension Liability December 31, 2020 Total Pension Liability Service Cost $964,574 Interest 3,808,085 Differences Between Expected and Actual Experience (1,126,970) Change of Assumptions 1,736,515 Benefit Payments, Including Refunds of Member Contributions (2,148,231) Net Change in Total Pension Liability 3,233,973 Total Pension Liability - Beginning 51,366,296 Total Pension Liability - Ending 54,600,269 Plan Fiduciary Net Position Contributions - Employer $1,071,994 Contributions - Members 369,278 Net Investment Income 2,892,087 Benefit Payments, Including Refunds of Member Contributions (2,148,231) Other (Net Transfer)(1,146,370) Net Change in Plan Fiduciary Net Position 1,038,758 Plan Net Position - Beginning 47,764,745 Plan Net Position - Ending 48,803,503 Employer's Net Pension Liability $5,796,766 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 89.38% Covered Payroll $8,195,678 Employer's Net Pension Liability as a Percentage of Covered Payroll 70.73% Note: This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. 12/31/14 109 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 860,654 871,953 858,070 843,915 908,935 4,031,299 4,310,485 4,434,597 4,483,157 4,689,245 1,338,146 (921,372) 40,460 582,645 492,814 145,117 (220,386) (1,963,662) 1,849,878 - (2,416,367) (2,582,301) (2,637,150) (2,792,678) (2,983,908) 3,958,849 1,458,379 732,315 4,966,917 3,107,086 54,600,269 58,559,118 60,017,497 60,749,812 65,716,729 58,559,118 60,017,497 60,749,812 65,716,729 68,823,815 1,093,142 1,112,901 1,164,635 1,218,342 1,053,229 402,168 428,936 377,312 394,144 421,491 241,715 3,350,903 8,949,122 (2,997,666) 10,038,062 (2,416,367) (2,582,301) (2,637,150) (2,792,678) (2,983,908) 520,582 (346,357) (974,388) 938,575 58,920 (158,760) 1,964,082 6,879,531 (3,239,283) 8,587,794 48,803,503 48,644,743 50,608,825 57,488,356 54,249,073 48,644,743 50,608,825 57,488,356 54,249,073 62,836,867 9,914,375 9,408,672 3,261,456 11,467,656 5,986,948 83.07%84.32%94.63%82.55%91.30% 8,157,772 8,023,803 8,384,700 8,758,756 9,272,947 121.53%117.26%38.90%130.93%64.56% 110 VILLAGE OF BUFFALO GROVE, ILLINOIS Police Pension Fund Required Supplementary Information Schedule of Changes in the Employer's Net Pension Liability December 31, 2020 Total Pension Liability Service Cost $1,415,171 Interest 5,318,732 Differences Between Expected and Actual Experience - Change of Assumptions - Change of Benefit Terms - Benefit Payments, Including Refunds of Member Contributions (2,747,592) Net Change in Total Pension Liability 3,986,311 Total Pension Liability - Beginning 77,355,682 Total Pension Liability - Ending 81,341,993 Plan Fiduciary Net Position Contributions - Employer $2,083,758 Contributions - Members 654,693 Contributions - Other - Net Investment Income 3,756,487 Benefit Payments, Including Refunds of Member Contributions (2,747,592) Administrative Expense (33,343) Net Change in Plan Fiduciary Net Position 3,714,003 Plan Net Position - Beginning 52,540,449 Plan Net Position - Ending 56,254,452 Employer's Net Pension Liability 25,087,541 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 69.16% Covered Payroll $5,984,178 Employer's Net Pension Liability as a Percentage of Covered Payroll 419.23% 2014 Note: This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. 111 2015 2016 2017 2018 2019 2020 1,386,660 1,534,051 1,637,139 1,628,794 1,649,198 1,978,338 5,438,273 5,861,687 6,171,179 6,489,093 6,772,474 7,214,313 (1,015,708) 358,140 353,405 (92,557) 1,380,756 832,348 4,811,344 170,816 (3,590,403) - 1,501,809 (639,813) - - - - 425,172 - (2,969,657) (3,283,543) (3,602,086) (3,803,918) (4,150,161) (4,677,746) 7,650,912 4,641,151 969,234 4,221,412 7,579,248 4,707,440 81,341,993 88,992,905 93,634,056 94,603,290 98,824,702 106,403,950 88,992,905 93,634,056 94,603,290 98,824,702 106,403,950 111,111,390 2,284,315 2,430,017 2,524,306 2,668,632 2,899,820 3,095,593 669,077 622,198 627,548 674,488 660,350 820,098 - - 117,147 28,742 83,945 - 186,635 3,418,114 8,300,527 (2,726,611) 13,161,796 8,491,232 (2,969,657) (3,283,543) (3,602,086) (3,803,919) (4,150,161) (4,677,746) (39,870) (43,969) (62,733) (51,073) (59,767) (56,614) 130,500 3,142,817 7,904,709 (3,209,741) 12,595,983 7,672,563 56,254,452 56,384,952 59,527,769 67,432,478 64,222,737 76,818,720 56,384,952 59,527,769 67,432,478 64,222,737 76,818,720 84,491,283 32,607,953 34,106,287 27,170,812 34,601,965 29,585,230 26,620,107 63.36%63.57%71.28%64.99%72.20%76.04% 6,056,962 6,406,672 6,565,793 6,738,022 6,957,008 7,316,636 538.35%532.36%413.82%513.53%425.26%363.83% 112 VILLAGE OF BUFFALO GROVE, ILLINOIS Firefighters' Pension Fund Required Supplementary Information Schedule of Changes in the Employer's Net Pension Liability December 31, 2020 Total Pension Liability Service Cost $1,378,069 Interest 4,304,137 Differences Between Expected and Actual Experience 218,159 Change of Assumptions (938,734) Change in Benefit Terms - Benefit Payments, Including Refunds of Member Contributions (1,943,411) Net Change in Total Pension Liability 3,018,220 Total Pension Liability - Beginning 62,459,374 Total Pension Liability - Ending 65,477,594 Plan Fiduciary Net Position Contributions - Employer $2,168,844 Contributions - Members 502,014 Contributions - Other - Net Investment Income 3,195,916 Benefit Payments, Including Refunds of Member Contributions (1,943,409) Administrative Expense (42,368) Net Change in Plan Fiduciary Net Position 3,880,997 Plan Net Position - Beginning 45,275,721 Plan Net Position - Ending 49,156,718 Employer's Net Pension Liability 16,320,876 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 75.07% Covered Payroll $5,224,950 Employer's Net Pension Liability as a Percentage of Covered Payroll 312.36% 2014 Note: This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. 113 2015 2016 2017 2018 2019 2020 1,179,270 1,260,242 1,348,459 1,325,255 1,264,639 1,621,266 4,508,473 4,757,917 4,961,836 5,226,040 5,477,561 5,825,574 (1,080,688) (133,067) 204,895 234,796 1,246,145 (121,525) 1,139,953 (588,791) - - 1,195,177 (453,769) - - - - 640,951 - (2,141,668) (2,225,410) (2,540,912) (2,940,773) (3,445,092) (3,823,483) 3,605,340 3,070,891 3,974,278 3,845,318 6,379,381 3,048,063 65,477,594 69,082,934 72,153,825 76,128,103 79,973,421 86,352,802 69,082,934 72,153,825 76,128,103 79,973,421 86,352,802 89,400,865 2,202,138 2,166,040 1,863,911 1,897,968 1,915,164 2,019,305 524,714 516,422 520,184 533,534 542,215 535,959 - - 588 - - - 654,625 3,415,513 7,601,179 (2,917,744) 11,064,141 10,436,145 (2,141,668) (2,225,410) (2,540,912) (2,940,773) (3,445,092) (3,823,483) (48,363) (42,284) (60,925) (75,110) (104,664) (74,148) 1,191,446 3,830,281 7,384,025 (3,502,125) 9,971,764 9,093,778 49,156,718 50,348,164 54,178,445 61,562,470 58,060,345 68,032,109 50,348,164 54,178,445 61,562,470 58,060,345 68,032,109 77,125,887 18,734,770 17,975,380 14,565,633 21,913,076 18,320,693 12,274,978 72.88%75.09%80.87%72.60%78.78%86.27% 5,308,713 5,390,509 5,585,881 5,836,466 6,026,152 5,890,818 352.91%333.46%260.76%375.45%304.02%208.37% 114 VILLAGE OF BUFFALO GROVE, ILLINOIS Police Pension Fund Required Supplementary Information Schedule of Investment Returns December 31, 2020 Annual Money- Weighted Rate of Return, Net Fiscal of Investment Year Expense 2014 7.00% 2015 0.67% 2016 5.71% 2017 14.38% 2018 (4.09%) 2019 20.58% 2020 11.06% Note: This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. 115 VILLAGE OF BUFFALO GROVE, ILLINOIS Firefighters' Pension Fund Required Supplementary Information Schedule of Investment Returns December 31, 2020 Annual Money- Weighted Rate of Return, Net Fiscal of Investment Year Expense 2014 7.08% 2015 1.32% 2016 6.78% 2017 14.05% 2018 (4.77%) 2019 19.23% 2020 15.46% Note: This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. 116 VILLAGE OF BUFFALO GROVE, ILLINOIS Retiree Benefit Plan Required Supplementary Information Schedule of Changes in the Employer's Total OPEB Liability December 31, 2020 2019 2020 Total OPEB Liability Service Cost $298,851 263,570 525,258 Interest 321,987 360,862 304,253 Changes in Benefit Terms - - - Differences Between Expected and Actual Experience - - 1,668,331 Change of Assumptions or Other Inputs (774,109) 2,158,863 1,494,795 Benefit Payments (389,489) (409,592) (551,381) Net Change in Total OPEB Liability (542,760) 2,373,703 3,441,256 Total OPEB Liability - Beginning 9,548,871 9,006,111 11,379,814 Total OPEB Liability - Ending 9,006,111 11,379,814 14,821,070 Covered Payroll $21,900,270 22,925,736 19,323,659 Total OPEB Liability as a Percentage of Covered Payroll 41.12%49.64%76.70% Notes: 2018 This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. Changes of Assumptions.Changes in assumptions related to the discount rate were made in 2018, 2019 and 2020. 117 VILLAGE OF BUFFALO GROVE, ILLINOIS General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Revenues Property Taxes $16,202,772 16,040,744 16,144,573 Other Taxes 10,310,000 8,283,100 8,970,163 Intergovernmental 12,348,247 11,894,557 15,107,505 Charges for Services 1,293,657 1,116,717 1,478,955 Licenses and Permits 349,600 239,600 301,321 Fines and Forfeitures 2,880,591 2,570,591 3,084,739 Interest 290,000 145,000 278,176 Miscellaneous 952,340 741,340 1,126,929 Total Revenues 44,627,207 41,031,649 46,492,361 Expenditures Current General Government 6,717,432 7,243,961 6,582,800 Public Safety 29,107,950 29,882,678 28,891,545 Public Works 8,253,126 7,530,691 6,973,359 Capital Outlay 70,000 70,000 222,871 Total Expenditures 44,148,508 44,727,330 42,670,575 Excess (Deficiency) of Revenues Over (Under) Expenditures 478,699 (3,695,681)3,821,786 Other Financing Sources (Uses) Transfers In 780,000 2,008,315 2,008,315 Transfers Out (1,228,394)(3,339,668)(3,209,874) (448,394)(1,331,353)(1,201,559) Net Change in Fund Balance 30,305 (5,027,034)2,620,227 Fund Balance - Beginning 27,898,251 Fund Balance - Ending 30,518,478 Budget Original 118 Such statements and schedules include: • Budgetary Comparison Schedules – Major Governmental Funds • Combining Statements – Nonmajor Governmental Funds • Budgetary Comparison Schedules – Nonmajor Governmental Funds • Budgetary Comparison Schedules – Major Enterprise Funds • Combining Statements – Nonmajor Enterprise Funds • Budgetary Comparison Schedules – Nonmajor Enterprise Funds • Combining Statements – Internal Service Funds • Budgetary Comparison Schedules – Internal Service Funds • Combining Statements – Pension Trust Funds • Budgetary Comparison Schedules – Pension Trust Funds • Consolidated Year-End Financial Report OTHER SUPPLEMENTARY INFORMATION Other supplementary information includes financial statements and schedules not required by the GASB, nor a part of the basic financial statements, but are presented for purposes of additional analysis. DEBT SERVICE FUND The Local Motor Fuel Tax Fund is used to finance local road and street improvements from local gasoline tax revenues collected and distributed by the State of Illinois. Lake Cook Road TIF Fund The Lake Cook Road TIF Fund is used to account for incremental revenues generated within the TIF boundaries and costs incurred from the formation and redevelopment of the Village's Lake Cook Road Corridor. INDIVIDUAL FUND SCHEDULES GENERAL FUND The General Fund is used to account for all financial resources except those required to be accounted for in another fund. SPECIAL REVENUE FUNDS The Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than fiduciary funds or capital projects funds) that are legally restricted to expenditure for specified purposes. The Motor Fuel Tax Fund is used to account for expenditures related to approved motor fuel tax projects and revenue from the state gasoline tax as collected and distributed by the State of Illinois. The Metra Parking Lot fund is used to account for revenue generated and costs incurred from the operation of the Metra parking lot operated by the Village. The Debt Service Fund is used to account for monies restricted, committed or assigned to pay for principal and interest payments on the Village’s debt obligations. Motor Fuel Tax Fund Metra Parking Lot Fund Local Motor Fuel Tax Fund Street Maintenance Fund INDIVIDUAL FUND SCHEDULES ENTERPRISE FUNDS Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises where the intent is that costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or where it has been decided that periodic determination of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purpose. Vehicle Equipment Replacement Fund The Vehicle Equipment Replacement Fund is used to account for the purchase of vehicles and capital equipment for the General Fund operating departments. Financing is typically provided by the General Fund committed fund balance. CAPITAL PROJECTS FUNDS The Street Maintenance Fund is used to account for and reports financial resources that are restricted, committed or assigned to expenditures for acquisition, construction, improvement, repair, and replacement of the Village’s roadways. The Capital Projects Funds are used to account for all resources used for the acquisition of capital assets except those financed by Proprietary Funds. Facilities Development Fund The Facilities Development Fund is used to account for and reports financial resources that are restricted, committed or assigned to expenditures for acquisition, construction, improvement, repair, and replacement of the Village’s capital facilities. Water and Sewerage Fund The Water and Sewerage Fund is used to account for the revenue and expenses related to the operation of the water and sewerage system. Arboretum Golf Fund The Arboretum Fund is used to account for the revenues and expenses related to the operation of the Arboretum golf course. The Buffalo Grove Golf Fund is used to account for revenue and expenses associated with operating the Villages golf course. INTERNAL SERVICE FUNDS Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies other governmental unit, or to other governmental units, on a cost- reimbursement basis. Information Technology Fund Central Garage Fund Building Maintenance Fund The Building Maintenance Fund is used to account for providing a clean, healthy, and safe working environment in Village facilities, meeting area’s and public area’s. The Central Garage Fund is used to account for the activities required to operate and maintain the Village’s automotive fleet. Department charges are derived from the work order process; which documents the type of work performed and cost(s) associated with the work. The Technology Fund is used to account for all costs associated with providing technology services to all departments in the Village. This fund accounts for global technology costs, shared, and/or exclusive department specific hardware, software, and other technology needs. Costs are assessed to each department by combining the cost of all direct and indirect/shared services as incurred. The indirect/shared costs are charged back per the user base of service(s). INDIVIDUAL FUND SCHEDULES Refuse Service Fund The Refuse Fund is used to account for refuse services contracted by the Village for the benefit of its citizens by a private entity. The fund is financed by the fees charged to residents by the private entity and remitted back to the Village of Buffalo Grove. Buffalo Grove Golf Fund ENTERPRISE FUNDS - Continued Firefighter's Pension Fund Police Pension Fund The Police Pension Fund is used to account for the resources necessary to provide retirement and disability pension benefits to full-time sworn police personnel. Although this is a single-employer pension plan, the defined benefits and employer and employee contribution levels are governed by Illinois Compiled Statutes (40 ILCS 5/3-1) and may be amended only by the Illinois legislature. Financing is provided by the Village contributions, employee payroll withholdings, and investment income. The Firefighters’Pension Fund is used to account for the accumulation of resources to be used for retirement annuity payments to employees on the fire department at appropriate amounts and times in the future. Resources are contributed by employees at rates fixed by law and by the Village at amounts determined by an annual actuarial study. TRUST AND CUSTODIAL FUNDS PENSION TRUST FUNDS INDIVIDUAL FUND SCHEDULES VILLAGE OF BUFFALO GROVE, ILLINOIS Debt Service Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Revenues Taxes Property Taxes $912,769 898,460 890,789 Interest - - 27,190 Total Revenues 912,769 898,460 917,979 Expenditures Debt Service Principal Retirement 1,285,000 1,300,000 1,299,030 Interest and Fiscal Charges 301,369 1,205,000 1,196,044 Total Expenditures 1,586,369 2,505,000 2,495,074 Excess (Deficiency) of Revenues Over (Under) Expenditures (673,600)(1,606,540)(1,577,095) Other Financing Sources (Uses) Debt Issuance - 26,382,646 24,000,000 Premium on Debt Issuance - - 2,720,164 Transfers In 673,600 1,262,650 1,262,650 Transfers Out - (9,577,055)(9,577,055) 673,600 18,068,241 18,405,759 Net Change in Fund Balance - 16,461,701 16,828,664 Fund Balance - Beginning 803 Fund Balance - Ending 16,829,467 Budget Original 119 VILLAGE OF BUFFALO GROVE, ILLINOIS Facilities Development - Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Revenues None $- - - Expenditures Capital Outlay 375,000 520,000 511,270 Excess (Deficiency) of Revenues Over (Under) Expenditures (375,000)(520,000)(511,270) Other Financing Sources Transfers In 375,000 550,000 550,000 Net Change in Fund Balance - 30,000 38,730 Fund Balance - Beginning 2,577 Fund Balance - Ending 41,307 Original Budget 120 VILLAGE OF BUFFALO GROVE, ILLINOIS Street Maintenance - Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Revenues Intergovernmental $- 650,000 466,618 Miscellaneous - - 49,808 Total Revenues - 650,000 516,426 Expenditures Capital Outlay 1,600,000 7,514,000 7,505,067 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,600,000)(6,864,000)(6,988,641) Other Financing Sources Transfers In 1,600,000 6,971,962 6,971,962 Net Change in Fund Balance - 107,962 (16,679) Fund Balance - Beginning 258,430 Fund Balance - Ending 241,751 Original Budget 121 VILLAGE OF BUFFALO GROVE, ILLINOIS Vehicle Equipment Replacement - Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Revenues None $- - - Expenditures Capital Outlay - 1,339,000 1,332,255 Excess (Deficiency) of Revenues Over (Under) Expenditures - (1,339,000)(1,332,255) Other Financing Sources Transfers In - 1,350,000 1,350,000 Net Change in Fund Balance - 11,000 17,745 Fund Balance - Beginning - Fund Balance - Ending 17,745 Original Budget 122 VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Governmental Funds Combining Balance Sheet December 31, 2020 Local Lake Metra Motor Cook Parking Fuel Tax Road TIF Lot Totals Cash and Investments $2,611,924 221,550 72,959 43,646 2,950,079 Receivables - Net of Allowances Other 137,752 - - - 137,752 Total Assets 2,749,676 221,550 72,959 43,646 3,087,831 Accounts Payable - - 6,185 1,576 7,761 Due to Other Funds - - 66,774 - 66,774 Total Liabilities - - 72,959 1,576 74,535 Restricted 2,749,676 221,550 - 42,070 3,013,296 Total Liabilities and Fund Balances 2,749,676 221,550 72,959 43,646 3,087,831 Special Revenue FUND BALANCES Motor Fuel Tax ASSETS LIABILITIES 123 VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended December 31, 2020 Local Lake Metra Motor Cook Parking Fuel Tax Road TIF Lot Totals Revenues Intergovernmental $2,421,678 421,550 - - 2,843,228 Charges for Services - - - 302 302 Fines and Forfeitures - - - 52,600 52,600 Total Revenues 2,421,678 421,550 - 52,902 2,896,130 Expenditures Current General Government - - 72,959 178,284 251,243 Excess (Deficiency) of Revenues Over (Under) Expenditures 2,421,678 421,550 (72,959)(125,382)2,644,887 Other Financing Sources (Uses) Transfers In - - 72,959 130,000 202,959 Transfers Out (988,315)(200,000)- - (1,188,315) (988,315)(200,000)72,959 130,000 (985,356) Net Change in Fund Balances 1,433,363 221,550 - 4,618 1,659,531 Fund Balances - Beginning 1,316,313 - - 37,452 1,353,765 Fund Balances - Ending 2,749,676 221,550 - 42,070 3,013,296 Motor Fuel Tax Special Revenue 124 VILLAGE OF BUFFALO GROVE, ILLINOIS Motor Fuel Tax - Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Revenues Intergovernmental Motor Fuel Tax $1,600,000 1,600,000 885,648 Grants - - 1,536,030 Total Revenue 1,600,000 1,600,000 2,421,678 Expenditures Current Public Works 1,600,000 - - Excess (Deficiency) of Revenues Over (Under) Expenditures - 1,600,000 2,421,678 Other Financing (Uses) Transfers Out - (988,315)(988,315) Net Change in Fund Balance - 611,685 1,433,363 Fund Balance - Beginning 1,316,313 Fund Balance - Ending 2,749,676 Original Budget 125 VILLAGE OF BUFFALO GROVE, ILLINOIS Local Motor Fuel Tax - Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Revenues Intergovernmental Local Motor Fuel Tax $- 400,000 421,550 Expenditures None - - - Excess (Deficiency) of Revenues Over (Under) Expenditures - 400,000 421,550 Other Financing (Uses) Transfers Out - (200,000)(200,000) Net Change in Fund Balance - 200,000 221,550 Fund Balance - Beginning - Fund Balance - Ending 221,550 Original Budget 126 VILLAGE OF BUFFALO GROVE, ILLINOIS Lake Cook Road TIF - Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Revenues None $- - - Expenditures Current General Government -72,959 72,959 Excess (Deficiency) of Revenues Over (Under) Expenditures -(72,959)(72,959) Other Financing Sources Transfers In -72,959 72,959 Net Change in Fund Balance - - - Fund Balance - Beginning - Fund Balance - Ending - Original Budget 127 VILLAGE OF BUFFALO GROVE, ILLINOIS Metra Parking Lot - Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Revenues Charges for Services $950 950 302 Fines and Forfeitures 215,000 215,000 52,600 Total Revenues 215,950 215,950 52,902 Expenditures Current General Government 202,654 202,654 178,284 Excess (Deficiency) of Revenues Over (Under) Expenditures 13,296 13,296 (125,382) Other Financing Sources (Uses) Transfers In - 130,000 130,000 Transfers Out (12,000)(12,000)- (12,000)118,000 130,000 Net Change in Fund Balance 1,296 131,296 4,618 Fund Balance - Beginning 37,452 Fund Balance - Ending 42,070 Budget Original 128 VILLAGE OF BUFFALO GROVE, ILLINOIS Water and Sewerage - Enterprise Fund Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Operating Revenues Charges for Services Water and Sewer Charges $12,219,500 14,715,942 14,293,950 Connection and Recapture Fees 106,000 106,000 295,495 Miscellaneous - - 36,204 Total Operating Revenues 12,325,500 14,821,942 14,625,649 Operating Expenses Operations Water 2,519,165 2,519,165 1,830,642 Sewer 4,450,127 4,450,127 4,209,727 Water Purchases 1,725,000 1,725,000 1,756,594 Capital Outlay 3,085,544 8,881,934 3,978,875 Total Operating Expenses 11,779,836 17,576,226 11,775,838 Operating Income (Loss)545,664 (2,754,284)2,849,811 Nonoperating Revenue (Expenses) Interest Income 60,500 60,500 472,703 Interest Expense (137,921)(137,921)(144,957) (77,421)(77,421)327,746 Income (Loss) Before Contributions and Transfers 468,243 (2,831,705)3,177,557 Capital Contributions - - 341,254 Transfers In - 3,553,408 3,553,408 Transfers Out (960,000)(1,549,050)(1,549,050) (960,000)2,004,358 2,345,612 Income (Loss) Before GAAP Adjustments (491,757)(827,347)5,523,169 Beginning Net Position - Budgetary Basis (437,356) Ending Net Position - Budgetary Basis 5,085,813 Original Budget 129 VILLAGE OF BUFFALO GROVE, ILLINOIS Water and Sewerage - Enterprise Fund Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual - Continued For the Fiscal Year Ended December 31, 2020 Final Budget Actual Income (Loss) Before GAAP Adjustments $(491,757)(827,347)5,523,169 GAAP Adjustments Capitalized Assets - - 3,120,407 Depreciation - - (1,574,640) - - 1,545,767 Change in Net Position 468,243 (2,831,705)7,068,936 Net Position - Beginning 40,299,993 Net Position - Ending 47,368,929 Original Budget 130 VILLAGE OF BUFFALO GROVE, ILLINOIS Arboretum Golf - Enterprise Fund Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Operating Revenues Charges for Services Daily Greens Fee and Membership $816,000 816,000 967,257 Merchandise Sales 56,160 56,160 56,819 Cart, Club and Other Rentals 224,400 224,400 237,986 Miscellaneous 53,500 53,500 31,361 Total Operating Revenues 1,150,060 1,150,060 1,293,423 Operating Expenses Operations Golf Operations 1,234,830 1,234,830 1,263,535 Cost of Sales - Pro Shop 45,000 45,000 40,422 Total Operating Expenses 1,279,830 1,279,830 1,303,957 (Loss) Before Transfers (129,770)(129,770)(10,534) Transfers In 129,794 129,794 - Income Before GAAP Adjustments 24 24 (10,534) Beginning Net Position - Budgetary Basis 896,252 Ending Net Position - Budgetary Basis 885,718 Original Budget 131 VILLAGE OF BUFFALO GROVE, ILLINOIS Arboretum Golf - Enterprise Fund Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual - Continued For the Fiscal Year Ended December 31, 2020 Final Budget Actual Income Before GAAP Adjustments $24 24 (10,534) GAAP Adjustments Depreciation - - (281,201) Change in Net Position 24 24 (291,735) Net Position - Beginning 6,423,986 Net Position - Ending 6,132,251 Original Budget 132 VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Enterprise Funds Combining Statement of Net Position December 31, 2020 Refuse Service Totals ASSETS Current Assets Cash and Investments $200,151 180,515 380,666 Inventories 26,408 - 26,408 Total Current Assets 226,559 180,515 407,074 Noncurrent Assets Capital Assets Nondepreciable 978,776 - 978,776 Depreciable 3,236,208 - 3,236,208 Accumulated Depreciation (2,568,930)- (2,568,930) Total Noncurrent Assets 1,646,054 - 1,646,054 Total Assets 1,872,613 180,515 2,053,128 Deferred Items - IMRF 25,601 - 25,601 Deferred Items - RBP 28,593 - 28,593 Total Deferred Outflows of Resources 54,194 - 54,194 Total Assets and Deferred Outflows of Resources 1,926,807 180,515 2,107,322 Buffalo Grove Golf DEFERRED OUTFLOWS OF RESOURCES 133 Refuse Service Totals LIABILITIES Current Liabilities Accounts Payable $16,313 14,930 31,243 Accrued Payroll 6,311 - 6,311 Deposit Payable 6,745 - 6,745 Compensated Absences Payable 8,852 - 8,852 Total Current Liabilities 38,221 14,930 53,151 Noncurrent Liabilities Compensated Absences Payable 35,409 - 35,409 Net Pension Liability - IMRF 53,611 - 53,611 Total OPEB Liability - RBP 93,307 - 93,307 Total Noncurrent Liabilities 182,327 - 182,327 Total Liabilities 220,548 14,930 235,478 Deferred Items - IMRF 28,939 - 28,939 Deferred Items - RBP 3,372 - 3,372 Total Deferred Inflows of Resources 32,311 - 32,311 Total Liabilities and Deferred Inflow of Resources 252,859 14,930 267,789 Investment in Capital Assets 1,646,054 - 1,646,054 Unrestricted (Deficit)27,894 165,585 193,479 Total Net Position 1,673,948 165,585 1,839,533 Total Liabilities, Deferred Inflows of Resources, and Net Position 1,926,807 180,515 2,107,322 NET POSITION DEFERRED INFLOWS OF RESOURCES Buffalo Grove Golf 134 VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Enterprise Funds Combining Statement of Revenues, Expenses and Changes in Net Position For the Fiscal Year Ended December 31, 2020 Refuse Service Totals Operating Revenues Charges for Services $1,176,219 1,148,303 2,324,522 Operating Expenses Operations Golf Operations 973,939 - 973,939 Cost of Sales - Pro Shop 32,902 - 32,902 Refuse - 803,999 803,999 Depreciation 72,716 - 72,716 Total Operating Expenses 1,079,557 803,999 1,883,556 Income Before Transfers 96,662 344,304 440,966 Transfers Out - (375,000)(375,000) Change in Net Position 96,662 (30,696)65,966 Net Position - Beginning 1,577,286 196,281 1,773,567 Net Position - Ending 1,673,948 165,585 1,839,533 Buffalo Grove Golf 135 VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Enterprise Funds Combining Statement of Cash Flows For the Fiscal Year Ended December 31, 2020 Refuse Service Totals Cash Flows from Operating Activities Receipts from Customers and Users $1,168,773 1,148,303 2,317,076 Payments to Employees (282,270)- (282,270) Payments to Suppliers (772,037)(857,824)(1,629,861) 114,466 290,479 404,945 Cash Flows from Noncapital Financing Activities Transfers Out - (375,000)(375,000) Net Change in Cash and Cash Equivalents 114,466 (84,521)29,945 Cash and Cash Equivalents - Beginning 85,685 265,036 350,721 Cash and Cash Equivalents - Ending 200,151 180,515 380,666 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities Operating Income (Loss)96,662 344,304 440,966 Adjustments to Reconcile Operating Income to Net Income to Net Cash Provided by (Used in) Operating Activities Depreciation and Amortization Expense 72,716 - 72,716 Other Income (Expense)99,265 - 99,265 (Increase) Decrease in Current Assets (7,446)- (7,446) Increase (Decrease) in Current Liabilities (146,731)(53,825)(200,556) Net Cash Provided by Operating Activities 114,466 290,479 404,945 Buffalo Grove Golf 136 VILLAGE OF BUFFALO GROVE, ILLINOIS Buffalo Grove Golf - Enterprise Fund Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Operating Revenues Charges for Services Daily Greens Fee and Membership $733,000 733,000 768,655 Merchandise Sales 73,700 73,700 63,951 Cart, Club and Other Rentals 271,050 271,050 231,517 Driving Range Fees 70,000 70,000 96,420 Miscellaneous 32,200 32,200 15,676 Total Operating Revenues 1,179,950 1,179,950 1,176,219 Operating Expenses Operations Golf Operations 1,039,775 1,039,775 973,939 Cost of Sales - Pro Shop 50,000 50,000 32,902 Capital Outlay 75,600 75,600 - Total Operating Expenses 1,165,375 1,165,375 1,006,841 Income Before GAAP Adjustments 14,575 14,575 169,378 Beginning Net Position - Budgetary Basis 944,557 Ending Net Position - Budgetary Basis 1,113,935 Original Budget 137 VILLAGE OF BUFFALO GROVE, ILLINOIS Buffalo Grove Golf - Enterprise Fund Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual - Continued For the Fiscal Year Ended December 31, 2020 Final Budget Actual Income Before GAAP Adjustments $14,575 14,575 169,378 GAAP Adjustments Depreciation - - (72,716) Change in Net Position 14,575 14,575 96,662 Net Position - Beginning 1,577,286 Net Position - Ending 1,673,948 Original Budget 138 VILLAGE OF BUFFALO GROVE, ILLINOIS Refuse Service - Enterprise Fund Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Operating Revenues Charges for Services SWANCC User Fees $1,060,000 1,060,000 1,148,303 Operating Expenses Operations Refuse 870,000 870,000 803,999 Income Before Transfers 190,000 190,000 344,304 Transfers Out (375,000)(375,000)(375,000) Change in Net Position (185,000)(185,000)(30,696) Net Position - Beginning 196,281 Net Position - Ending 165,585 Original Budget 139 VILLAGE OF BUFFALO GROVE, ILLINOIS Internal Service Funds Combining Statement of Net Position December 31, 2020 Central Building Garage Maintenance Totals Current Assets Cash and Investments $177,617 113,502 233,921 525,040 LIABILITIES Current Liabilities Accounts Payable 176,827 89,382 203,804 470,013 Accrued Payroll - 19,027 22,859 41,886 Total Liabilities 176,827 108,409 226,663 511,899 Unrestricted 790 5,093 7,258 13,141 Total Liabilities and Net Position 177,617 113,502 233,921 525,040 Information ASSETS NET POSITION Technology 140 VILLAGE OF BUFFALO GROVE, ILLINOIS Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Net Position For the Fiscal Year Ended December 31, 2020 Central Building Garage Maintenance Totals Operating Revenues Interfund Services $1,871,458 2,139,433 1,739,428 5,750,319 Operating Expenses Operations Information Technology 1,871,458 - - 1,871,458 Central Garage - 2,139,433 - 2,139,433 Building Maintenance - - 1,739,428 1,739,428 Total Operating Expenses 1,871,458 2,139,433 1,739,428 5,750,319 Change in Net Position - - - - Net Position - Beginning 790 5,093 7,258 13,141 Net Position - Ending 790 5,093 7,258 13,141 Information Technology 141 VILLAGE OF BUFFALO GROVE, ILLINOIS Internal Service Funds Combining Statement of Cash Flows For the Fiscal Year Ended December 31, 2020 Central Building Garage Maintenance Totals Cash Flows from Operating Activities Interfund Services Provided $1,871,458 2,139,433 1,739,428 5,750,319 Payments to Suppliers (1,820,843)(1,670,893)(1,144,895)(4,636,631) Payments to Employees - (551,350)(452,263)(1,003,613) 50,615 (82,810)142,270 110,075 Cash and Cash Equivalents - Beginning 127,002 196,312 91,651 414,965 Cash and Cash Equivalents - Ending 177,617 113,502 233,921 525,040 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities Operating Income - - - - Adjustments to Reconcile Operating Income to Net Cash Provided by (Used in) Operating Activities Increase (Decrease) in Current Liabilities 50,615 (82,810)142,270 110,075 Net Cash Provided by Operating Activities 50,615 (82,810)142,270 110,075 Technology Information 142 VILLAGE OF BUFFALO GROVE, ILLINOIS Information Technology - Internal Service Fund Schedule of Revenues, Expenses and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Operating Revenues Interfund Services $1,819,152 1,949,152 1,871,458 Operating Expenses Operations Information Technology 1,819,152 1,949,152 1,871,458 Change in Net Position - - - Net Position - Beginning 790 Net Position - Ending 790 Original Budget 143 VILLAGE OF BUFFALO GROVE, ILLINOIS Central Garage - Internal Service Fund Schedule of Revenues, Expenses and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Operating Revenues Interfund Services $1,788,935 2,470,192 2,139,433 Operating Expenses Operations Central Garage 1,788,935 2,470,192 2,139,433 Change in Net Position - - - Net Position - Beginning 5,093 Net Position - Ending 5,093 Original Budget 144 VILLAGE OF BUFFALO GROVE, ILLINOIS Building Maintenance - Internal Service Fund Schedule of Revenues, Expenses and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Operating Revenues Interfund Services $1,755,455 1,755,455 1,739,428 Operating Expenses Operations Building Maintenance 1,755,455 1,755,455 1,739,428 Change in Net Position - - - Net Position - Beginning 7,258 Net Position - Ending 7,258 Original Budget 145 VILLAGE OF BUFFALO GROVE, ILLINOIS Pension Trust Funds Combining Statement of Fiduciary Net Position December 31, 2020 Firefighters' Pension Totals Cash and Cash Equivalents $4,291,646 2,481,332 6,772,978 Investments U.S. Treasury Obligations 4,804,948 2,751,255 7,556,203 U.S. Agency Obligations 7,803,370 13,856,130 21,659,500 Corporate Bonds 12,515,277 5,113,802 17,629,079 State and Local Obligations - 2,728,349 2,728,349 Mutual Funds 9,356,385 50,045,698 59,402,083 Equity Securities 45,689,083 - 45,689,083 Receivables - Net of Allowance Accrued Interest 107,946 138,333 246,279 Due from Other Funds 55,236 36,015 91,251 Total Assets 84,623,891 77,150,914 161,774,805 Accounts Payable 47,979 25,027 73,006 Due to Other Funds 84,629 - 84,629 Total Liabilities 132,608 25,027 157,635 Net Position Restricted for Pensions 84,491,283 77,125,887 161,617,170 Pension ASSETS LIABILITIES NET POSITION Police 146 VILLAGE OF BUFFALO GROVE, ILLINOIS Pension Trust Funds Combining Statement of Changes in Fiduciary Net Position For the Fiscal Year Ended December 31, 2020 Police Firefighters' Pension Pension Totals Additions Contributions - Employer $3,095,593 2,019,305 5,114,898 Contributions - Plan Members 820,098 535,959 1,356,057 Total Contributions 3,915,691 2,555,264 6,470,955 Investment Income Interest Earned 1,384,182 1,807,729 3,191,911 Net Change in Fair Value 7,286,235 8,730,408 16,016,643 8,670,417 10,538,137 19,208,554 Less Investment Expenses (179,185)(101,992)(281,177) Net Investment Income 8,491,232 10,436,145 18,927,377 Total Additions 12,406,923 12,991,409 25,398,332 Deductions Administration 56,614 74,148 130,762 Benefits and Refunds 4,677,746 3,823,483 8,501,229 Total Deductions 4,734,360 3,897,631 8,631,991 Change in Fiduciary Net Position 7,672,563 9,093,778 16,766,341 Net Position Restricted for Pensions Beginning 76,818,720 68,032,109 144,850,829 Ending 84,491,283 77,125,887 161,617,170 147 VILLAGE OF BUFFALO GROVE, ILLINOIS Police Pension - Pension Trust Fund Schedule of Changes in Fiduciary Net Position - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Additions Contributions - Employer $3,125,296 3,125,296 3,095,593 Contributions - Plan Members 730,557 730,557 820,098 Total Contributions 3,855,853 3,855,853 3,915,691 Investment Income Interest Earned 535,000 535,000 1,384,182 Net Change in Fair Value 3,059,500 3,059,500 7,286,235 3,594,500 3,594,500 8,670,417 Less Investment Expenses (250,000)(250,000)(179,185) Net Investment Income 3,344,500 3,344,500 8,491,232 Total Additions 7,200,353 7,200,353 12,406,923 Deductions Administration 65,000 65,000 56,614 Benefits and Refunds 4,377,313 4,377,313 4,677,746 Total Deductions 4,442,313 4,442,313 4,734,360 Change in Fiduciary Net Position 2,758,040 2,758,040 7,672,563 Net Position Restricted for Pensions Beginning 76,818,720 Ending 84,491,283 Budget Original 148 VILLAGE OF BUFFALO GROVE, ILLINOIS Firefighters' Pension - Pension Trust Fund Schedule of Changes in Fiduciary Net Position - Budget and Actual For the Fiscal Year Ended December 31, 2020 Final Budget Actual Additions Contributions - Employer $2,042,773 2,042,773 2,019,305 Contributions - Plan Members 545,365 545,365 535,959 Total Contributions 2,588,138 2,588,138 2,555,264 Investment Income Interest Earned 374,500 374,500 1,807,729 Net Change in Fair Value 3,288,500 3,288,500 8,730,408 3,663,000 3,663,000 10,538,137 Less Investment Expenses (200,000)(200,000)(101,992) Net Investment Income 3,463,000 3,463,000 10,436,145 Total Additions 6,051,138 6,051,138 12,991,409 Deductions Administration 100,000 100,000 74,148 Benefits and Refunds 3,160,545 3,160,545 3,823,483 Total Deductions 3,260,545 3,260,545 3,897,631 Change in Fiduciary Net Position 2,790,593 2,790,593 9,093,778 Net Position Restricted for Pensions Beginning 68,032,109 Ending 77,125,887 Original Budget 149 VILLAGE OF BUFFALO GROVE, ILLINOIS Consolidated Year-End Financial Report December 31, 2020 CSFA #Program Name State Federal Other Totals 494-00-2554 Local - Federal COVID Relief Funding $- 1,369,327 - 1,369,327 494-00-1488 Motor Fuel Tax Program 1,188,315 - - 1,188,315 494-42-0495 Local Surface Transportation Program - 574,547 - 574,547 494-10-0343 State and Community Highway Safety/National Priority Safety Program 7,595 14,223 - 21,818 Other Grant Programs and Activities - 923,288 9,500 932,788 All Other Costs Not Allocated - - 51,998,880 51,998,880 Totals 1,195,910 2,881,385 52,008,380 56,085,675 150 SUPPLEMENTAL SCHEDULES VILLAGE OF BUFFALO GROVE, ILLINOIS Long-Term Debt Requirements General Obligation Bonds of 2012 December 31, 2020 Date of Issue August 27, 2012 Date of Maturity June 30, 2030 Authorized Issue $6,000,000 Denomination of Bonds $5,000 Interest Rates 2.00% - 2.75% Interest Dates June 30 and December 30 Principal Maturity Date December 30 Payable at Amalgamated Bank of Chicago CURRENT AND LONG-TERM PRINCIPAL AND INTEREST REQUIREMENTS Fiscal Year Interest Totals Jun. 30 Amount Dec. 30 Amount 2021 $415,000 131,525 546,525 2021 65,762 2021 65,763 2022 425,000 123,225 548,225 2022 61,612 2022 61,613 2023 440,000 114,725 554,725 2023 57,362 2023 57,363 2024 450,000 105,925 555,925 2024 52,962 2024 52,963 2025 470,000 96,925 566,925 2025 48,462 2025 48,463 2026 650,000 86,938 736,938 2026 43,469 2026 43,469 2027 650,000 72,313 722,313 2027 36,156 2027 36,157 2028 700,000 56,875 756,875 2028 28,437 2028 28,438 2029 750,000 39,375 789,375 2029 19,687 2029 19,688 2030 750,000 20,625 770,625 2030 10,312 2030 10,313 5,700,000 848,451 6,548,451 424,221 424,230 Requirements Interest Due on Principal 151 VILLAGE OF BUFFALO GROVE, ILLINOIS Long-Term Debt Requirements General Obligation Bonds of 2016 December 31, 2020 Date of Issue May 3, 2016 Date of Maturity December 30, 2031 Authorized Issue $6,125,000 Denomination of Bonds $5,000 Interest Rates 2.00% - 3.00% Interest Dates June 30 and December 30 Principal Maturity Date December 30 Payable at Amalgamated Bank of Chicago CURRENT AND LONG-TERM PRINCIPAL AND INTEREST REQUIREMENTS Fiscal Year Interest Totals Jun. 30 Amount Dec. 30 Amount 2021 $300,000 83,231 383,231 2021 41,615 2021 41,616 2022 305,000 77,231 382,231 2022 38,615 2022 38,616 2023 310,000 71,131 381,131 2023 35,565 2023 35,566 2024 315,000 64,931 379,931 2024 32,465 2024 32,466 2025 325,000 58,631 383,631 2025 29,315 2025 29,316 2026 330,000 52,131 382,131 2026 26,065 2026 26,066 2027 335,000 45,531 380,531 2027 22,765 2027 22,766 2028 345,000 38,413 383,413 2028 19,206 2028 19,207 2029 350,000 30,650 380,650 2029 15,325 2029 15,325 2030 360,000 21,900 381,900 2030 10,950 2030 10,950 2031 370,000 11,100 381,100 2031 5,550 2031 5,550 3,645,000 554,880 4,199,880 277,436 277,444 Requirements Interest Due on Principal 152 VILLAGE OF BUFFALO GROVE, ILLINOIS Long-Term Debt Requirements General Obligation Refunding Bonds of 2019 December 31, 2020 Date of Issue December 17, 2019 Date of Maturity December 30, 2025 Authorized Issue $1,449,275 Denomination of Bonds $5,000 Interest Rates 1.40% - 1.80% Interest Dates June 30 and December 30 Principal Maturity Date December 30 Payable at Amalgamated Bank of Chicago CURRENT AND LONG-TERM PRINCIPAL AND INTEREST REQUIREMENTS Fiscal Year Interest Totals Jun. 30 Amount Dec. 30 Amount 2021 $235,445 19,958 255,403 2021 9,979 2021 9,979 2022 240,990 16,426 257,416 2022 8,213 2022 8,213 2023 241,265 12,690 253,955 2023 6,345 2023 6,345 2024 246,365 8,710 255,075 2024 4,355 2024 4,355 2025 251,180 4,520 255,700 2025 2,260 2025 2,260 1,215,245 62,304 1,277,549 31,152 31,152 Requirements Interest Due on Principal 153 VILLAGE OF BUFFALO GROVE, ILLINOIS Long-Term Debt Requirements General Obligation Bonds of 2020 December 31, 2020 Date of Issue May 20, 2020 Date of Maturity December 30, 2035 Authorized Issue $24,000,000 Denomination of Bonds $5,000 Interest Rates 3.00% - 5.00% Interest Dates June 30 and December 30 Principal Maturity Date December 30 Payable at Amalgamated Bank of Chicago CURRENT AND LONG-TERM PRINCIPAL AND INTEREST REQUIREMENTS Fiscal Year Interest Totals Jun. 30 Amount Dec. 30 Amount 2021 $1,600,000 963,900 2,563,900 2021 481,950 2021 481,950 2022 1,600,000 883,900 2,483,900 2022 441,950 2022 441,950 2023 1,600,000 803,900 2,403,900 2023 401,950 2023 401,950 2024 1,600,000 723,900 2,323,900 2024 361,950 2024 361,950 2025 1,600,000 643,900 2,243,900 2025 321,950 2025 321,950 2026 1,330,000 563,900 1,893,900 2026 281,950 2026 281,950 2027 1,400,000 497,400 1,897,400 2027 248,700 2027 248,700 2028 1,465,000 427,400 1,892,400 2028 213,700 2028 213,700 2029 1,540,000 354,150 1,894,150 2029 177,075 2029 177,075 2030 1,585,000 307,950 1,892,950 2030 153,975 2030 153,975 2031 1,635,000 260,400 1,895,400 2031 130,200 2031 130,200 2032 1,685,000 211,350 1,896,350 2032 105,675 2032 105,675 2033 1,735,000 160,800 1,895,800 2033 80,400 2033 80,400 2034 1,785,000 108,750 1,893,750 2034 54,375 2034 54,375 2035 1,840,000 55,200 1,895,200 2035 27,600 2035 27,600 24,000,000 6,966,800 30,966,800 3,483,400 3,483,400 Requirements Interest Due on Principal 154 VILLAGE OF BUFFALO GROVE, ILLINOIS Long-Term Debt Requirements IEPA Loan Payable of 2013 - Pump Stations Improvements December 31, 2020 Date of Issue November 20, 2013 Date of Maturity December 1, 2033 Authorized Issue $407,307 Interest Rate 2.295% Interest Dates June 1 and December 1 Principal Maturity Date December 1 Payable at Illinois Environmental Protection Agency Fiscal Year Interest Totals 2021 $19,532 6,596 26,128 2022 19,983 6,145 26,128 2023 20,444 5,684 26,128 2024 20,916 5,212 26,128 2025 21,399 4,729 26,128 2026 21,893 4,235 26,128 2027 22,398 3,730 26,128 2028 22,915 3,213 26,128 2029 23,444 2,684 26,128 2030 23,985 2,143 26,128 2031 24,539 1,589 26,128 2032 25,105 1,023 26,128 2033 25,687 441 26,128 292,240 47,424 339,664 CURRENT AND LONG-TERM PRINCIPAL AND INTEREST REQUIREMENTS Principal 155 VILLAGE OF BUFFALO GROVE, ILLINOIS Long-Term Debt Requirements Installment Note Payable of 2015 December 31, 2020 Date of Issue March 27, 2015 Date of Maturity June 1, 2029 Original Contract $6,970,999 Interest Rate 2.35% Interest Dates Quarterly Principal Maturity Date Quarterly Payable at U.S. Bank National Association Fiscal Year Interest Totals 2021 $436,970 128,372 565,342 2022 490,763 117,611 608,374 2023 548,394 105,549 653,943 2024 610,091 92,095 702,186 2025 676,096 77,149 753,245 2026 746,659 60,610 807,269 2027 822,046 42,367 864,413 2028 902,537 22,304 924,841 2029 381,459 3,371 384,830 5,615,015 649,428 6,264,443 CURRENT AND LONG-TERM PRINCIPAL AND INTEREST REQUIREMENTS Principal 156 These schedules contain trend information to help the reader understand how the Village’s financial performance and well-being have changed over time. STATISTICAL SECTION (Unaudited) This part of the 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 financial health. Financial Trends These schedules contain service and infrastructure data to help the reader understand how the information in the Village’s financial report relates to the services the Village provides and the activities it performs. Operating Information Revenue Capacity These schedules contain information to help the reader assess the Village’s most significant local revenue 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 in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the Village’s financial activities take place. VILLAGE OF BUFFALO GROVE, ILLINOIS Net Position by Component - Last Ten Fiscal Years* 2012**2013 2014 Governmental Activities Net Investment in Capital Assets $53,362,147 52,096,183 51,011,919 50,712,982 Restricted 1,918,263 6,268,039 2,412,222 2,664,110 Unrestricted (Deficit)13,429,876 11,550,011 12,387,400 11,048,700 Total Governmental Activities Net Position 68,710,286 69,914,233 65,811,541 64,425,792 Business-Type Activities Net Investment in Capital Assets 37,807,146 36,706,161 35,553,648 35,871,503 Unrestricted 12,989,124 11,242,301 11,515,793 11,067,173 Total Business-Type Activities Net Position 50,796,270 47,948,462 47,069,441 46,938,676 Primary Government Net Investment in Capital Assets 91,169,293 88,802,344 86,565,567 86,584,485 Restricted 1,918,263 6,268,039 2,412,222 2,664,110 Unrestricted (Deficit)26,419,000 22,792,312 23,903,193 22,115,873 Total Primary Government Net Position 119,506,556 117,862,695 112,880,982 111,364,468 * Accrual Basis of Accounting ** Auditors restated 2012, from 2011 and earlier have not been adjusted. Data Source: Audited Financial Statements December 31, 2020 (Unaudited) *** Beginning in 2015, the Village implemented GASB 68 which resulted in the inclusion of net pension liabilities. 2011 157 2015***2016 2017 2018 2019 2020 50,609,420 51,756,933 53,318,041 49,126,833 50,663,992 50,847,075 1,974,115 1,632,934 1,629,079 1,909,851 1,839,449 4,004,829 (34,637,401) (36,592,629) (36,022,097) (41,165,382) (40,174,356) (35,571,215) 17,946,134 16,797,238 18,925,023 9,871,302 12,329,085 19,280,689 38,372,943 35,494,070 36,802,425 36,831,535 37,080,189 38,677,933 7,770,059 11,034,826 10,837,462 11,296,427 11,417,357 16,662,780 46,143,002 46,528,896 47,639,887 48,127,962 48,497,546 55,340,713 88,982,363 87,251,003 90,120,466 85,958,368 87,744,181 89,525,008 1,974,115 1,632,934 1,629,079 1,909,851 1,839,449 4,004,829 (26,867,342) (25,557,803) (25,184,635) (29,868,955) (28,756,999) (18,908,435) 64,089,136 63,326,134 66,564,910 57,999,264 60,826,631 74,621,402 158 VI L L A G E O F B U F F A L O G R O V E , I L L I N O I S Ch a n g e s i n N e t P o s i t i o n - L a s t T e n F i s c a l Y e a r s * 20 1 2 * * 20 1 3 20 1 4 20 1 5 20 1 6 20 1 7 20 1 8 20 1 9 20 2 0 Ex p e n s e s Go v e r n m e n t a l A c t i v i t i e s Ge n e r a l G o v e r n m e n t $ 5, 0 1 0 , 2 7 4 6, 1 0 1 , 0 0 8 6, 5 6 7 , 5 4 5 5, 8 4 3 , 6 2 3 5, 8 8 5 , 8 1 1 6, 4 4 1 , 7 0 7 6, 6 4 2 , 7 9 8 7, 5 7 6 , 1 6 3 7, 0 4 0 , 7 2 8 7, 1 6 4 , 8 5 2 Pu b l i c S a f e t y 22 , 6 5 7 , 6 4 3 22 , 3 4 4 , 1 1 7 21 , 9 6 4 , 9 8 9 22 , 9 2 0 , 1 8 0 27 , 2 5 6 , 7 3 7 30 , 5 2 8 , 1 2 7 27 , 3 8 4 , 9 6 4 30 , 2 6 6 , 2 0 7 30 , 1 8 7 , 9 6 7 26 , 1 1 0 , 3 6 2 Pu b l i c W o r k s 11 , 1 0 6 , 4 3 3 12 , 0 2 6 , 9 1 1 15 , 0 9 1 , 4 1 4 13 , 5 5 3 , 0 9 3 11 , 5 5 1 , 6 0 6 8, 0 7 8 , 8 7 4 9, 7 6 4 , 8 7 4 9, 1 7 3 , 5 8 4 10 , 1 6 1 , 0 5 9 7, 7 6 0 , 3 5 0 In t e r e s t o n L o n g - T e r m D e b t 24 8 , 5 3 9 38 4 , 1 8 0 37 4 , 5 1 1 30 2 , 7 8 1 28 5 , 8 6 3 35 6 , 7 9 9 38 4 , 0 7 3 36 3 , 9 2 5 25 2 , 5 9 0 1, 2 0 6 , 3 6 9 To t a l G o v e r n m e n t a l Ac t i v i t i e s E x p e n s e s 39 , 0 2 2 , 8 8 9 40 , 8 5 6 , 2 1 6 43 , 9 9 8 , 4 5 9 42 , 6 1 9 , 6 7 7 44 , 9 8 0 , 0 1 7 45 , 4 0 5 , 5 0 7 44 , 1 7 6 , 7 0 9 47 , 3 7 9 , 8 7 9 47 , 6 4 2 , 3 4 4 42 , 2 4 1 , 9 3 3 Bu s i n e s s - T y p e A c t i v i t i e s Wa t e r & S e w e r 8, 7 5 3 , 1 4 9 8, 9 3 1 , 3 3 6 8, 0 7 9 , 3 6 4 8, 4 3 5 , 4 6 3 8, 5 6 1 , 2 4 8 9, 0 0 1 , 6 3 2 9, 4 5 4 , 5 5 4 10 , 0 7 8 , 5 9 4 9, 6 7 1 , 8 4 5 10 , 3 7 5 , 0 2 8 Re f u s e S e r v i c e 93 5 , 3 6 5 87 4 , 3 6 6 90 2 , 8 1 1 80 3 , 0 3 9 70 2 , 1 0 6 70 3 , 5 6 5 70 5 , 3 9 3 86 8 , 7 9 4 81 6 , 8 4 9 80 3 , 9 9 9 Go l f C o u r s e s 3, 0 5 7 , 9 1 2 2, 9 9 1 , 1 7 0 2, 9 4 2 , 7 4 7 2, 7 3 9 , 0 7 7 3, 2 8 8 , 8 8 2 2, 8 8 6 , 4 0 4 2, 8 8 8 , 8 7 3 2, 7 4 8 , 0 3 5 2, 8 2 8 , 1 6 8 2, 6 6 4 , 7 1 5 To t a l B u s i n e s s - T y p e Ac t i v i t i e s E x p e n s e s 12 , 7 4 6 , 4 2 6 12 , 7 9 6 , 8 7 2 11 , 9 2 4 , 9 2 2 11 , 9 7 7 , 5 7 9 12 , 5 5 2 , 2 3 6 12 , 5 9 1 , 6 0 1 13 , 0 4 8 , 8 2 0 13 , 6 9 5 , 4 2 3 13 , 3 1 6 , 8 6 2 13 , 8 4 3 , 7 4 2 To t a l P r i m a r y Go v e r n m e n t E x p e n s e s 51 , 7 6 9 , 3 1 5 53 , 6 5 3 , 0 8 8 55 , 9 2 3 , 3 8 1 54 , 5 9 7 , 2 5 6 57 , 5 3 2 , 2 5 3 57 , 9 9 7 , 1 0 8 57 , 2 2 5 , 5 2 9 61 , 0 7 5 , 3 0 2 60 , 9 5 9 , 2 0 6 56 , 0 8 5 , 6 7 5 Pr o g r a m R e v e n u e s Go v e r n m e n t a l A c t i v i t i e s Ch a r g e s f o r S e r v i c e s Ge n e r a l G o v e r n m e n t 1, 2 4 0 , 5 4 7 1, 2 2 6 , 5 5 2 1, 2 0 7 , 5 0 4 1, 9 0 1 , 9 9 6 1, 6 2 4 , 1 3 4 1, 8 5 5 , 5 0 6 2, 1 4 8 , 7 6 0 1, 7 4 8 , 5 5 5 2, 0 0 1 , 0 1 8 1, 6 5 8 , 0 2 4 Pu b l i c S a f e t y 1, 4 0 4 , 3 0 8 1, 2 8 3 , 9 5 6 1, 4 9 8 , 8 1 9 1, 6 2 3 , 1 7 1 1, 7 4 5 , 5 8 0 1, 7 1 8 , 6 4 7 1, 6 8 7 , 7 5 9 1, 6 8 6 , 3 9 0 1, 7 9 6 , 0 6 5 1, 6 7 5 , 3 3 1 Pu b l i c W o r k s 86 , 4 2 1 11 8 , 5 4 7 82 , 3 9 3 88 , 6 6 5 61 , 1 9 4 1, 1 5 1 , 5 9 4 1, 2 0 9 , 7 8 4 1, 1 3 4 , 3 8 3 1, 1 4 1 , 9 9 8 1, 4 0 9 , 4 0 8 Op e r a t i n g G r a n t s / C o n t r i b u t i o n s 1, 2 3 0 , 3 8 7 1, 1 7 8 , 4 4 2 1, 1 6 1 , 5 0 9 1, 2 8 5 , 3 9 6 1, 2 2 9 , 0 2 8 1, 2 8 1 , 7 3 2 1, 2 7 1 , 6 0 2 1, 3 0 9 , 3 2 4 1, 6 6 4 , 5 3 7 3, 7 8 1 , 7 8 4 Ca p i t a l G r a n t s / C o n t r i b u t i o n s - - - - - - 1, 4 7 8 , 0 1 5 - 25 4 , 8 1 4 2, 0 0 2 , 6 4 8 To t a l G o v e r n m e n t a l A c t i v i t i e s Pr o g r a m R e v e n u e s 3, 9 6 1 , 6 6 3 3, 8 0 7 , 4 9 7 3, 9 5 0 , 2 2 5 4, 8 9 9 , 2 2 8 4, 6 5 9 , 9 3 6 6, 0 0 7 , 4 7 9 7, 7 9 5 , 9 2 0 5, 8 7 8 , 6 5 2 6, 8 5 8 , 4 3 2 10 , 5 2 7 , 1 9 5 Bu s i n e s s - T y p e A c t i v i t i e s Ch a r g e s f o r S e r v i c e s Wa t e r & S e w e r 7, 7 8 2 , 0 0 0 7, 4 6 4 , 8 7 0 8, 6 9 2 , 8 1 2 9, 0 7 6 , 2 6 1 9, 4 9 5 , 6 9 1 10 , 3 0 4 , 6 3 8 11 , 0 6 0 , 9 3 8 10 , 8 3 2 , 7 8 2 10 , 6 6 3 , 7 6 6 14 , 5 8 9 , 4 4 5 Re f u s e S e r v i c e 1, 0 3 6 , 8 7 2 1, 0 5 0 , 3 8 6 1, 0 4 0 , 8 7 8 1, 0 4 4 , 4 4 2 1, 0 3 9 , 8 7 6 1, 1 3 5 , 7 4 8 97 0 , 2 6 8 1, 0 5 3 , 7 5 9 1, 0 5 8 , 2 8 2 1, 1 4 8 , 3 0 3 Go l f C o u r s e s 2, 1 7 5 , 4 1 8 2, 2 2 1 , 7 1 4 1, 1 7 8 , 3 6 8 2, 2 5 7 , 4 9 4 2, 3 3 5 , 9 2 8 2, 2 4 0 , 8 6 8 2, 2 0 1 , 4 6 0 2, 0 4 2 , 7 4 7 2, 0 3 9 , 5 8 4 2, 4 6 9 , 6 4 2 Op e r a t i n g G r a n t s / C o n t r i b u t i o n s - - 1, 0 7 2 , 4 9 9 - - - - Ca p i t a l G r a n t s / C o n t r i b u t i o n s - - - - - 94 , 3 2 6 - 25 0 , 6 2 2 35 0 , 0 0 0 34 1 , 2 5 4 To t a l B u s i n e s s - T y p e A c t i v i t i e s P r o g r a m R e v e n u e s 10 , 9 9 4 , 2 9 0 10 , 7 3 6 , 9 7 0 11 , 9 8 4 , 5 5 7 12 , 3 7 8 , 1 9 7 12 , 8 7 1 , 4 9 5 13 , 7 7 5 , 5 8 0 14 , 2 3 2 , 6 6 6 14 , 1 7 9 , 9 1 0 14 , 1 1 1 , 6 3 2 18 , 5 4 8 , 6 4 4 To t a l P r i m a r y G o v e r n m e n t P r o g r a m R e v e n u e s 14 , 9 5 5 , 9 5 3 14 , 5 4 4 , 4 6 7 15 , 9 3 4 , 7 8 2 17 , 2 7 7 , 4 2 5 17 , 5 3 1 , 4 3 1 19 , 7 8 3 , 0 5 9 22 , 0 2 8 , 5 8 6 20 , 0 5 8 , 5 6 2 20 , 9 7 0 , 0 6 4 29 , 0 7 5 , 8 3 9 De c e m b e r 3 1 , 2 0 1 8 ( U n a u d i t e d ) 20 1 1 15 9 20 1 2 * * 20 1 3 20 1 4 20 1 5 20 1 6 20 1 7 20 1 8 20 1 9 20 2 0 Ne t ( E x p e n s e ) R e v e n u e Go v e r n m e n t a l A c t i v i t i e s $ (3 5 , 0 6 1 , 2 2 6 ) (3 7 , 0 4 8 , 7 1 9 ) (4 0 , 0 4 8 , 2 3 4 ) (3 7 , 7 2 0 , 4 4 9 ) (4 0 , 3 2 0 , 0 8 1 ) (3 9 , 3 9 8 , 0 2 8 ) (3 6 , 3 8 0 , 7 8 9 ) (4 1 , 5 0 1 , 2 2 7 ) (4 0 , 7 8 3 , 9 1 2 ) (3 1 , 7 1 4 , 7 3 8 ) Bu s i n e s s - T y p e A c t i v i t i e s (1 , 7 5 2 , 1 3 6 ) (2 , 0 5 9 , 9 0 2 ) 59 , 6 3 5 40 0 , 6 1 8 31 9 , 2 5 9 1, 1 8 3 , 9 7 9 1, 1 8 3 , 8 4 6 48 4 , 4 8 7 79 4 , 7 7 0 4, 7 0 4 , 9 0 2 To t a l P r i m a r y G o v e r n m e n t Ne t ( E x p e n s e ) R e v e n u e (3 6 , 8 1 3 , 3 6 2 ) (3 9 , 1 0 8 , 6 2 1 ) (3 9 , 9 8 8 , 5 9 9 ) (3 7 , 3 1 9 , 8 3 1 ) (4 0 , 0 0 0 , 8 2 2 ) (3 8 , 2 1 4 , 0 4 9 ) (3 5 , 1 9 6 , 9 4 3 ) (4 1 , 0 1 6 , 7 4 0 ) (3 9 , 9 8 9 , 1 4 2 ) (2 7 , 0 0 9 , 8 3 6 ) Ge n e r a l R e v e n u e s a n d O t h e r C h a n g e s i n N e t P o s i t i o n Go v e r n m e n t a l A c t i v i t i e s Ta x e s Pr o p e r t y 14 , 4 5 8 , 2 4 8 14 , 3 3 0 , 4 0 7 14 , 5 0 4 , 7 5 0 14 , 5 5 4 , 5 6 4 14 , 7 4 2 , 6 2 2 15 , 0 3 4 , 5 8 3 15 , 5 1 0 , 1 2 7 15 , 9 8 0 , 7 7 1 16 , 3 2 1 , 8 7 6 17 , 0 3 5 , 3 6 2 Sa l e s a n d H o m e R u l e 6, 9 8 4 , 1 3 4 7, 5 7 0 , 9 1 5 7, 8 0 3 , 7 4 9 8, 4 5 5 , 9 7 2 9, 2 7 4 , 7 7 7 9, 0 9 5 , 4 7 1 9, 2 2 9 , 2 5 4 10 , 1 5 9 , 8 6 6 9, 9 4 5 , 7 4 4 9, 8 2 9 , 7 6 5 In c o m e a n d U s e 3, 7 1 4 , 8 6 4 5, 4 6 2 , 1 1 1 4, 7 3 7 , 6 5 6 4, 1 0 4 , 7 3 6 5, 4 0 9 , 8 7 5 4, 9 9 4 , 4 2 6 4, 8 4 3 , 2 5 1 5, 2 2 1 , 8 2 7 5, 8 5 2 , 3 9 7 6, 4 2 2 , 4 8 8 Te l e c o m m u n i c a t i o n s 2, 1 3 4 , 4 6 2 2, 2 0 0 , 8 0 9 1, 9 4 3 , 8 1 1 1, 6 7 9 , 6 5 3 1, 6 4 4 , 3 0 9 1, 5 1 3 , 2 5 4 1, 5 8 6 , 1 2 8 1, 7 6 1 , 3 2 6 1, 3 0 4 , 4 2 5 90 6 , 0 7 1 Ut i l i t y 2, 5 6 7 , 0 9 1 2, 5 1 0 , 2 4 2 2, 6 2 9 , 9 9 7 2, 8 1 9 , 4 2 7 2, 6 4 3 , 6 4 2 2, 6 5 9 , 5 5 4 2, 5 3 2 , 6 6 2 2, 8 0 5 , 9 1 2 2, 7 6 3 , 4 7 1 2, 6 4 3 , 6 9 7 Pr o p e r t y T r a n s f e r 62 9 , 3 7 6 45 9 , 0 3 6 76 0 , 1 6 4 79 0 , 8 1 9 90 4 , 3 1 1 1, 1 1 5 , 3 6 0 1, 2 5 6 , 9 1 9 96 9 , 0 3 9 1, 0 2 4 , 7 6 9 98 9 , 1 1 8 Ot h e r 1, 0 4 4 , 1 6 4 1, 0 7 0 , 4 0 9 1, 0 5 2 , 7 8 8 1, 1 1 3 , 8 3 1 1, 0 9 2 , 5 5 4 1, 1 1 0 , 5 0 3 1, 0 1 9 , 8 0 7 1, 0 8 7 , 4 9 7 1, 3 4 0 , 5 6 4 98 7 , 0 9 7 In v e s t m e n t E a r n i n g s 13 3 , 0 5 9 13 2 , 4 3 6 54 , 5 2 2 10 7 , 7 6 5 25 , 0 6 1 65 , 6 0 0 15 3 , 8 1 6 29 2 , 3 4 0 80 7 , 3 3 0 30 5 , 3 6 6 Mi s c e l l a n e o u s 1, 4 9 5 , 1 5 5 1, 2 3 9 , 9 0 6 1, 5 0 6 , 9 9 4 1, 6 3 6 , 7 2 1 1, 4 5 8 , 1 1 8 1, 5 9 6 , 8 0 6 1, 4 0 9 , 5 3 7 1, 8 8 4 , 5 7 9 2, 6 9 4 , 3 3 1 1, 1 7 6 , 7 3 7 Tr a n s f e r s 55 3 , 0 0 0 63 5 , 5 0 0 95 1 , 1 1 1 1, 0 7 0 , 7 2 4 74 9 , 0 2 7 1, 0 6 2 , 1 9 0 95 8 , 3 1 5 53 , 7 1 5 1, 1 8 6 , 7 8 8 (1 , 6 2 9 , 3 5 8 ) Ga i n o n s a l e s o f a s s e t s - - - 48 8 1, 6 0 1 1, 3 8 5 8, 7 5 8 - - - To t a l G o v e r n m e n t a l A c t i v i t i e s Ge n e r a l R e v e n u e s 33 , 7 1 3 , 5 5 3 35 , 6 1 1 , 7 7 1 35 , 9 4 5 , 5 4 2 36 , 3 3 4 , 7 0 0 37 , 9 4 5 , 8 9 7 38 , 2 4 9 , 1 3 2 38 , 5 0 8 , 5 7 4 40 , 2 1 6 , 8 7 2 43 , 2 4 1 , 6 9 5 38 , 6 6 6 , 3 4 3 Bu s i n e s s - T y p e A c t i v i t i e s In v e s t m e n t E a r n i n g s 41 , 1 0 0 27 , 0 8 7 12 , 4 5 5 18 , 8 2 0 10 , 1 1 2 14 , 1 5 9 49 2 , 1 3 2 35 9 , 3 7 1 48 7 , 3 3 3 47 2 , 7 0 3 Mi s c e l l a n e o u s 4, 9 9 9 1, 2 5 9 - 52 0 , 5 2 1 5, 7 3 7 24 9 , 9 4 6 39 3 , 3 2 8 24 2 , 0 5 8 27 4 , 2 6 9 36 , 2 0 4 Tr a n s f e r s (5 5 3 , 0 0 0 ) (6 3 5 , 5 0 0 ) (9 5 1 , 1 1 1 ) (1 , 0 7 0 , 7 2 4 ) (7 4 9 , 0 2 7 ) (1 , 0 6 2 , 1 9 0 ) (9 5 8 , 3 1 5 ) (5 3 , 7 1 5 ) (1 , 1 8 6 , 7 8 8 ) 1, 6 2 9 , 3 5 8 To t a l B u s i n e s s - T y p e A c t i v i t i e s Ge n e r a l R e v e n u e s (5 0 6 , 9 0 1 ) (6 0 7 , 1 5 4 ) (9 3 8 , 6 5 6 ) (5 3 1 , 3 8 3 ) (7 3 3 , 1 7 8 ) (7 9 8 , 0 8 5 ) (7 2 , 8 5 5 ) 54 7 , 7 1 4 (4 2 5 , 1 8 6 ) 2, 1 3 8 , 2 6 5 To t a l P r i m a r y G o v e r n m e n t Ge n e r a l R e v e n u e s 33 , 2 0 6 , 6 5 2 35 , 0 0 4 , 6 1 7 35 , 0 0 6 , 8 8 6 35 , 8 0 3 , 3 1 7 37 , 2 1 2 , 7 1 9 37 , 4 5 1 , 0 4 7 38 , 4 3 5 , 7 1 9 40 , 7 6 4 , 5 8 6 42 , 8 1 6 , 5 0 9 40 , 8 0 4 , 6 0 8 Ch a n g e s i n N e t P o s i t i o n Go v e r n m e n t a l A c t i v i t i e s (1 , 3 4 7 , 6 7 3 ) (1 , 4 3 6 , 9 4 8 ) (4 , 1 0 2 , 6 9 2 ) (1 , 3 8 5 , 7 4 9 ) (2 , 3 7 4 , 1 8 4 ) (1 , 1 4 8 , 8 9 6 ) 2, 1 2 7 , 7 8 5 (1 , 2 8 4 , 3 5 5 ) 2, 4 5 7 , 7 8 3 6, 9 5 1 , 6 0 5 Bu s i n e s s - T y p e A c t i v i t i e s (2 , 2 5 9 , 0 3 7 ) (2 , 6 6 7 , 0 5 6 ) (8 7 9 , 0 2 1 ) (1 3 0 , 7 6 5 ) (4 1 3 , 9 1 9 ) 38 5 , 8 9 4 1, 1 1 0 , 9 9 1 1, 0 3 2 , 2 0 1 36 9 , 5 8 4 6, 8 4 3 , 1 6 7 To t a l P r i m a r y G o v e r n m e n t Ch a n g e s i n N e t P o s i t i o n (3 , 6 0 6 , 7 1 0 ) (4 , 1 0 4 , 0 0 4 ) (4 , 9 8 1 , 7 1 3 ) (1 , 5 1 6 , 5 1 4 ) (2 , 7 8 8 , 1 0 3 ) (7 6 3 , 0 0 2 ) 3, 2 3 8 , 7 7 6 (2 5 2 , 1 5 4 ) 2, 8 2 7 , 3 6 7 13 , 7 9 4 , 7 7 2 * A c c r u a l B a s i s o f A c c o u n t i n g ** A u d i t o r s r e s t a t e d 2 0 1 2 , f r o m 2 0 1 1 a n d e a r l i e r h a v e n o t b e e n a d j u s t e d . Da t a S o u r c e : A u d i t e d F i n a n c i a l S t a t e m e n t s 20 1 1 16 0 VILLAGE OF BUFFALO GROVE, ILLINOIS Fund Balances of Governmental Funds - Last Ten Fiscal Years* 2012**2013 2014 General Fund Nonspendable $1,031,936 518,437 562,399 573,812 Restricted - - 162,274 130,435 Committed 7,948,344 7,335,685 7,345,420 7,438,256 Unassigned 9,871,895 10,759,935 12,395,113 13,225,644 Total General Fund 18,852,175 18,614,057 20,465,206 21,368,147 All Other Governmental Funds Restricted 1,918,263 6,112,703 1,796,997 1,965,328 Assigned 146,116 144,075 101,213 - Committed - - - - Unassigned (234,206) (253,826) (927,395) (2,324,296) Total All Other Governmental Funds 1,830,173 6,002,952 970,815 (358,968) Total Governmental Funds 20,682,348 24,617,009 21,436,021 21,009,179 * Modified Accrual Basis of Accounting **Auditors restated 2012, from 2011 and earlier have not been adjusted. Data Source: Audited Financial Statements December 31, 2020 (Unaudited) 2011 161 2015 2016 2017 2018 2019 2020 551,242 167,957 132,843 132,134 159,494 571,654 223,622 229,953 252,729 607,411 484,881 760,160 7,532,123 8,511,306 7,758,348 6,827,236 8,313,902 9,052,502 14,991,907 16,143,726 18,902,476 17,039,974 18,939,974 20,134,162 23,298,894 25,052,942 27,046,396 24,606,755 27,898,251 30,518,478 1,974,115 1,632,934 1,629,079 1,302,440 1,354,568 19,842,763 - - - - - - - - - - 261,007 300,803 (3,707,560) (3,859,964) (3,714,759) (268,260) - - (1,733,445) (2,227,030) (2,085,680) 1,034,180 1,615,575 20,143,566 21,565,449 22,825,912 24,960,716 25,640,935 29,513,826 50,662,044 162 VILLAGE OF BUFFALO GROVE, ILLINOIS Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years* 2012**2013 2014*** Revenues Propety Taxes $14,458,248 14,330,407 14,504,750 14,554,564 Other Taxes 17,074,091 18,325,614 19,240,365 9,564,978 Licenses and Permits 280,139 275,434 294,622 207,312 Intergovernmental 1,060,719 1,011,949 997,371 11,081,081 Fines and Forteitures 1,404,308 1,283,956 1,647,364 1,803,317 Charges for Services 1,216,497 1,236,158 1,010,868 1,371,779 Investment Income 133,196 132,457 54,522 107,765 Miscellaneous 1,442,617 1,239,861 1,506,994 2,107,628 Total Revenues 37,069,815 37,835,836 39,256,856 40,798,424 Expenditures Current General Government 5,509,433 5,556,101 6,465,636 5,522,549 Public Safety 22,008,351 21,791,218 21,805,910 22,773,535 Public Works 8,256,079 9,865,723 12,178,705 10,878,278 Capital Outlay 1,510,924 1,561,904 1,347,276 2,018,451 Debt Service Principal 1,055,000 920,000 940,000 790,000 Interest 248,539 285,420 385,395 313,665 Total Expenditures 38,588,326 39,980,366 43,122,922 42,296,478 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,518,511) (2,144,530) (3,866,066) (1,498,054) Other Financing Sources (Uses) Transfers In 1,891,354 2,621,132 2,119,313 2,552,288 Transfers Out (1,338,354) (1,985,632) (1,434,235) (1,481,564) Sales of Capital Assets - - - 488 Auction Proceeds 52,538 45 - - Bond Issued - 6,000,000 - - Premium of Issuance of Debt - 91,669 - - Transfer to Escrow Agent - - - - Total Other Financing Sources (Uses)605,538 6,727,214 685,078 1,071,212 Net Change in Fund Balances (912,973) 4,582,684 (3,180,988) (426,842) Debt Service as a Percentage of Noncapital Expenditures 3.52%3.14%3.17%2.68% * Modified Accrual Basis of Accounting **Auditors restated 2012, from 2011 and earlier have not been adjusted. ***Beginning in 2014, state shared revenues have been recorded as intergovernmental revenues. Data Source: Village Records December 31, 2020 (Unaudited) 2011 163 2015 2016 2017 2018 2019 2020 14,742,622 15,034,583 15,510,127 15,980,771 16,321,876 17,035,362 9,712,718 9,701,271 9,816,523 10,494,959 9,835,616 8,970,163 1,330,769 326,177 1,763,982 344,389 362,747 301,321 1,931,512 11,843,812 3,043,453 12,623,735 14,074,544 18,417,351 350,042 3,025,628 330,475 2,820,773 3,121,111 3,137,339 12,271,219 1,504,400 11,709,919 1,600,263 1,695,784 1,479,257 25,061 65,600 153,816 292,340 807,330 305,366 1,404,841 1,610,746 1,456,876 1,884,579 2,694,331 1,176,737 41,768,784 43,112,217 43,785,171 46,041,809 48,913,339 50,822,896 5,084,772 5,693,142 5,774,748 6,804,142 6,293,156 6,834,043 25,237,115 27,407,019 25,776,184 26,732,460 27,561,835 28,891,545 8,092,735 6,978,307 8,101,888 8,710,363 7,341,611 6,973,359 2,828,194 8,252,604 1,362,213 1,502,272 3,689,375 9,571,463 510,000 525,000 1,275,000 1,315,000 1,210,000 1,299,030 296,747 371,456 401,609 370,202 325,743 1,196,044 42,049,563 49,227,528 42,691,642 45,434,439 46,421,720 54,765,484 (280,779) (6,115,311) 1,093,529 607,370 2,491,619 (3,942,588) 3,521,760 3,402,595 4,204,943 9,068,487 5,397,700 12,345,886 (2,686,312) (2,253,984) (3,192,426) (8,995,638) (4,171,708) (13,975,244) 1,601 1,385 28,758 - 163,085 - - - - - - - - 6,125,000 - - 1,449,275 24,000,000 - 100,778 - - - 2,720,164 - - - - (1,457,080) - 837,049 7,375,774 1,041,275 72,849 1,381,272 25,090,806 556,270 1,260,463 2,134,804 680,219 3,872,891 21,148,218 2.06%2.19%4.24%3.89%3.48%5.70% 164 VILLAGE OF BUFFALO GROVE, ILLINOIS Assessed Value and Actual Value of Taxable Property - Last Ten Tax Levy Years Tax Levy Year 2011 $1,338,206,375 $315,118,343 $10,706,904 $832,216 $ 2012 1,223,424,081 296,910,564 10,221,534 617,198 2013 1,115,221,955 292,225,583 9,050,042 618,433 2014 1,120,788,463 294,457,084 9,119,150 696,091 2015 1,181,620,776 290,063,933 3,377,285 631,771 2016 1,299,550,777 310,452,203 3,611,330 636,718 2017 1,336,606,286 318,894,119 3,900,196 628,731 2018 1,347,695,708 334,731,537 4,684,958 653,520 2019 1,445,252,883 365,037,719 5,211,860 42,604 2020 1,426,077,134 *354,930,152 *5,900,081 *691,021 * Note: Total Direct Tax Rate is weighted for both Cook and Lake Counties. Data Source: Office of the Cook County Clerk/Office of the Lake County Clerk * Cook County property class and assessed valuation is an estimate. Cook County information not yet available. December 31, 2020 (Unaudited) Property Property Property Property Residential Commercial Industrial Other 165 Estimated Tax Rate Actual Taxable for Lake County Value % $1,664,863,838 $4,994,591,514 0.8520 33.333% 1,531,173,377 4,593,520,131 0.9290 33.333% 1,417,116,013 4,251,348,039 0.9830 33.333% 1,425,060,788 4,275,182,364 0.9930 33.333% 1,475,693,765 4,427,081,295 0.9550 33.333% 1,614,251,028 4,842,753,084 0.9210 33.333% 1,660,029,332 4,980,087,996 0.9080 33.333% 1,687,765,723 5,063,297,169 0.9070 33.333% 1,815,545,066 5,446,635,198 0.8905 33.333% 1,787,598,388 *5,362,795,164 0.9032 33.333% Value Value Estimated Total Assessed Actual Taxable 166 VILLAGE OF BUFFALO GROVE, ILLINOIS Direct and Overlapping Property Tax Rates - Last Ten Tax LevyYears 2011 2012 2013 Direct Rate Lake County Village of Buffalo Grove 0.852 0.929 0.983 Cook County Village of Buffalo Grove 0.886 1.030 1.211 Total 1.738 1.959 2.194 Overlapping Rate Lake County County, including Forest Preserve 0.755 0.820 0.881 Combined School Districts (102, 125, 532)6.158 6.779 7.068 Buffalo Grove Park District 0.452 0.511 0.537 Vernon Area Public Library 0.385 0.441 0.311 All Other (1)0.092 0.106 0.105 Cook County County, including Forest Preserve 0.520 0.594 0.125 Metropolitan Water Reclamation District of Greater Chicago 0.320 0.370 0.417 Combined School Districts (21, 214, 512)6.565 6.917 8.053 Buffalo Grove Park District 0.479 0.557 0.658 Indian Trails Public Library District 0.393 0.463 0.504 All other (2)0.107 0.187 0.129 Total (3)16.226 17.745 18.788 Notes: Taxes Levied on a calendar year basis for collection in the subsequent year. (1) Includes Road and Bridge and General Assistance for the Township herein. N/A - Not Available Data Source: Cook County Tax Extension/Lake County Tax Extension December 31, 2020 (Unaudited) The Village is home rule unit under the 1970 Illinois State Constitution and,as such, has no statutory tax rate limitations. (2) Includes Northwest Mosquito Abatement, Consolidated Elections, Road and Bridge, and General Assistance for the Township herein. (3) Representative tax rates for other government units are from Vernon Township Tax Code 16-92, which the largest portion of the Village's 2019 EAV. Representative tax rates for other government units are from Cook County Tax Code 38077, which represents the largest portion of the Village's 2018 EAV within Cook County. 167 2014 2015 2016 2017 2018 2019 2020 0.993 0.955 0.921 0.908 0.907 0.890 0.903 1.235 1.316 1.138 0.969 1.210 1.136 N/A 2.228 2.271 2.059 1.877 2.117 2.026 0.903 0.893 0.871 0.825 0.809 0.794 0.776 0.780 7.164 7.034 6.680 6.634 6.665 6.459 6.754 0.553 0.517 0.492 0.482 0.480 0.465 0.478 0.317 0.308 0.293 0.291 0.294 0.293 0.304 0.113 0.110 0.104 0.099 0.096 0.091 0.093 0.126 0.621 0.596 0.558 N/A 0.513 N/A 0.430 0.426 0.406 0.402 N/A 0.389 N/A 8.657 8.989 7.909 8.010 N/A 7.450 N/A 0.677 0.714 0.606 0.641 N/A 0.584 N/A 0.529 0.534 0.476 0.481 N/A 0.446 N/A 0.094 0.130 0.073 0.108 N/A 0.100 N/A 19.553 20.254 18.460 18.515 8.328 17.565 N/A 168 VILLAGE OF BUFFALO GROVE, ILLINOIS Principal Property Tax Payers - Current Year and Nine Years Ago Percentage Percentage of Total Village of Total Village Taxable Taxable Assessed Assessed Taxpayer Rank Value Rank Value Chevy Chase Busniess Park Ltd $36,245,336 1 2.00%$32,419,958 1 1.95% The Wheatlands, LLC 12,585,977 2 0.69% BRI 1862 Riverwalk LLC (5)9,547,124 3 0.53% Millbrook 9,504,994 4 0.52%10,526,585 4 0.63% Resource Real Estate Inc 8,788,755 5 0.48% Leider Lane Investors LLC 8,736,753 6 0.48% Arthur J. Rogers and Co (4)8,470,984 7 0.47%8,994,528 6 0.54% Riverwalk South LLC (2)6,747,740 8 0.37%8,388,778 7 0.50% Woodman's Food Market Inc 6,442,584 9 0.35% Inland Woodlands LLC 6,423,126 10 0.35%6,078,177 10 0.37% Hamilton Partners (1)18,164,709 2 1.09% Remax Consumer Plastics Inc 13,732,947 3 0.83% Penobscot Management LLC (3)9,204,717 5 0.55% Amli at Chevy Chase LP 6,427,630 8 0.39% Aptakisic Creek Corporate Park 6,394,414 9 0.38% 113,493,373 6.25%120,332,443 7.23% Data Source: Office of the County Clerk of Cook/Office of the County Clerk of Lake Value Value 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. December 31, 2020 (Unaudited) 2020 2011 Taxable Taxable Assessed Assessed 169 VI L L A G E O F B U F F A L O G R O V E , I L L I N O I S Pr o p e r t y T a x L e v i e s a n d C o l l e c t i o n s - L a s t T e n F i s c a l Y e a r s De c e m b e r 3 1 , 2 0 2 0 ( U n a u d i t e d ) Ta x Le v y Pe r c e n t a g e Pe r c e n t a g e Pe r c e n t a g e Ye a r of L e v y of L e v y of L e v y 20 1 0 $ 10 , 9 1 1 , 6 2 9 $ 10 , 9 0 2 , 7 5 7 99 . 9 2 % $ 3, 2 8 0 , 0 8 3 $ 3, 2 0 3 , 6 7 6 97 . 6 7 % $ 14 , 1 0 6 , 4 3 3 99 . 4 0 % 20 1 1 11 , 0 2 6 , 4 7 8 11 , 0 1 9 , 6 3 8 99 . 9 4 % 3, 2 7 9 , 2 8 5 3, 2 2 5 , 8 2 4 98 . 3 7 % 14 , 2 4 5 , 4 6 2 99 . 5 8 % 20 1 2 11 , 1 8 3 , 7 8 0 11 , 1 0 5 , 2 7 4 99 . 3 0 % 3, 4 4 9 , 5 7 2 3, 3 9 9 , 4 7 7 98 . 5 5 % 14 , 5 0 4 , 7 5 1 99 . 1 2 % 20 1 3 11 , 4 1 3 , 0 6 7 11 , 1 7 2 , 7 4 5 97 . 8 9 % 3, 4 2 4 , 5 1 5 3, 3 8 1 , 8 1 9 98 . 7 5 % 14 , 5 5 4 , 5 6 4 98 . 0 9 % 20 1 4 11 , 3 3 9 , 3 2 6 11 , 3 2 2 , 0 8 7 99 . 8 5 % 3, 5 0 0 , 8 0 0 3, 4 0 9 , 4 5 8 97 . 3 9 % 14 , 7 3 1 , 5 4 5 99 . 2 7 % 20 1 5 11 , 6 7 8 , 7 4 2 11 , 4 2 6 , 1 1 5 97 . 8 4 % 3, 5 1 4 , 1 0 6 3, 6 0 8 , 4 6 8 10 2 . 6 9 % 15 , 0 3 4 , 5 8 3 98 . 9 6 % 20 1 6 11 , 7 8 3 , 0 4 7 11 , 7 6 1 , 3 6 5 99 . 8 2 % 3, 8 1 1 , 2 2 8 3, 7 4 8 , 7 6 3 98 . 3 6 % 15 , 5 1 0 , 1 2 8 99 . 4 6 % 20 1 7 12 , 0 5 5 , 1 3 0 12 , 0 5 5 , 1 3 0 10 0 . 0 0 % 4, 0 2 2 , 6 2 7 3, 9 1 6 , 4 5 3 97 . 3 6 % 15 , 9 7 1 , 5 8 3 99 . 3 4 % 20 1 8 12 , 2 9 6 , 7 5 0 12 , 2 7 3 , 5 4 0 99 . 8 1 % 4, 1 7 7 , 9 9 2 4, 0 4 8 , 3 3 7 96 . 9 0 % 16 , 3 2 1 , 8 7 7 99 . 0 7 % 20 1 9 12 , 7 6 7 , 8 3 0 12 , 5 2 8 , 8 9 8 98 . 1 3 % 4, 3 3 3 , 4 5 3 4, 2 4 5 , 1 9 5 97 . 9 6 % 16 , 7 7 4 , 0 9 3 98 . 0 9 % Da t a S o u r c e : O f f i c e o f t h e C o u n t y C l e r k o f C o o k / O f f i c e o f t h e C o u n t y C l e r k o f L a k e Am o u n t Vi l l a g e T o t a l La k e C o u n t y Ta x e s Le v i e d f o r Co l l e c t e d w i t h i n t h e Ta x e s Co l l e c t e d w i t h i n t h e th e F i s c a l Ye a r Co o k C o u n t y Fi s c a l Y e a r o f t h e L e v y Le v i e d f o r Fi s c a l Y e a r o f t h e L e v y th e F i s c a l Am o u n t Ye a r Am o u n t 17 0 VILLAGE OF BUFFALO GROVE, ILLINOIS Taxable Sales by Category - Last Ten Calendar Years December 31, 2020 (Unaudited) 2012 2013 General Merchandise $18,514 17,526 10,105 Food 1,244,667 1,193,312 1,133,605 Drinking and Eating Places 921,617 997,738 1,025,547 Apparel 129,402 130,163 120,210 Furniture, Households and radio 378,836 437,774 463,678 Lumber, Building and Hardware 534,413 812,434 1,236,689 Automobile and Filling Stations 853,864 954,996 857,713 Drugs and Misc. Retail 1,982,824 1,847,550 1,915,937 Agriculture and All Others 1,193,620 1,347,303 1,572,248 Manufacturers 378,326 334,442 285,848 Totals 7,636,083 8,073,238 8,621,580 Total Number of Taxpayers 1,286 966 972 Village Direct Sales Tax rate 1.00%1.00%1.00% Village Home Rule Tax rate 1.00%1.00%1.00% *Excludes values for taxpayers in Cook County. Data Source: Office of the County Clerk of Cook Office of the County Clerk of Lake Illinois Department of Revenue 2011 Note: Blank Categories have less than four taxpayers; therefore, no data is shown to protect the confidentiality of the individual taxpayers. 171 2014 2015 2016 2017 2018 2019 2020 9,098 66,228 86,125 - - - 66,754 1,080,556 1,552,983 1,481,195 1,557,474 1,836,131 2,419,704 2,485,816 1,023,545 1,062,206 1,118,330 1,107,878 1,133,048 1,203,642 987,063 104,229 94,538 92,409 68,075 66,797 167,211 57,933 356,095 521,007 369,583 380,907 1,250,788 1,294,886 1,482,689 1,666,708 1,879,818 2,074,008 2,357,551 2,202,029 2,119,185 2,267,449 947,278 918,216 867,250 1,007,356 1,068,115 1,089,620 848,373 2,349,469 1,790,381 1,986,578 1,568,024 1,536,061 1,481,357 1,515,668 1,693,506 2,313,502 2,231,299 2,573,323 2,470,229 2,484,560 2,303,808 270,063 351,808 220,927 200,727 180,646 213,851 170,291 9,500,547 10,550,687 10,527,704 10,821,315 11,743,844 12,474,017 12,185,844 974 1,043 1,022 1,036 1,036 987 902 1.00%1.00%1.00%1.00%1.00%1.00%1.00% 1.00%1.00%1.00%1.00%1.00%1.00%1.00% 172 State of Village Village Illinois Fiscal Direct Home Rule Sales Tax Year Rate Rate Rate 2011 1.00%1.00%6.50% 2012 1.00%1.00%6.50% 2013 1.00%1.00%6.50% 2014 1.00%1.00%6.50% 2015 1.00%1.00%6.50% 2016 1.00%1.00%6.50% 2017 1.00%1.00%6.50% 2018 1.00%1.00%6.50% 2019 1.00%1.00%6.50% 2020 1.00%1.00%6.50% Data Source: Illinois Department of Revenue VILLAGE OF BUFFALO GROVE, ILLINOIS Direct and Overlapping Sales Tax Rates - Last Ten Fiscal Years December 31, 2020 (Unaudited) 173 VILLAGE OF BUFFALO GROVE, ILLINOIS Ratios of Outstanding Debt By Type - Last Ten Fiscal Years Fiscal Year 2011 $7,200,000 $- $- $- 2012 12,280,000 - - - 2013 11,340,000 - 173,618 - 2014 10,730,503 - 400,519 - 2015 10,202,453 - 383,487 1,193,599 2016 15,881,408 - 366,060 6,894,447 2017 14,581,706 - 348,233 6,638,399 2018 13,243,707 - 329,993 6,341,869 2019 11,936,027 - 311,332 6,001,817 2020 37,350,765 - 292,240 5,615,015 Notes: Details of the Village's outstanding debt can be found in the Notes to Financial Statements. Obligation Obligation IEPA Installment General (2) See the Schedule of Assessed Value and Actual Value of Taxable Property for equalized assessed valuation data. (1) See the Schedule of Demographic and Economic Statistics for personal income and population data. December 31, 2020 (Unaudited) General Activities Bonds Bonds Loan Note Governmental Business-Type Activities 174 Ratio of Total Outstanding Debt Debt to Total Outstanding Equalized Outstanding as a Percentage Assessed Debt of Personal Valuation (2)Per Capita (1)Income (1) $7,200,000 0.14%171.79 0.39% 12,280,000 0.27%290.10 0.65% 11,513,618 0.27%275.59 0.61% 11,131,022 0.26%265.11 0.57% 11,779,539 0.27%283.82 0.61% 23,141,915 0.48%557.64 1.19% 21,568,338 0.43%523.17 1.11% 19,915,569 0.39%487.49 0.98% 18,249,176 0.34%450.66 0.84% 43,258,020 0.81%1068.26 2.00% Government Notes: Details of the Village's outstanding debt can be found in the Notes to Financial Statements. Total Primary 175 Percentage of Total Taxable Less: Amounts Assessed Fiscal Available in Value of Per Year Debt Service Total Property (1)Capita (2) 2011 $7,200,000 $- $7,200,000 0.14%$171.79 2012 12,280,000 - 12,280,000 0.27%290.10 2013 11,340,000 - 11,340,000 0.27%271.43 2014 10,730,503 - 10,730,503 0.25%255.57 2015 10,202,453 - 10,202,453 0.23%245.82 2016 15,881,408 - 15,881,408 0.33%382.68 2017 14,581,706 - 14,581,706 0.29%353.70 2018 13,243,707 - 13,243,707 0.26%324.18 2019 11,936,027 803 11,935,224 0.22%294.74 2020 37,350,765 231,373 37,119,392 0.69%916.66 (1) See the Schedule of Assessed Value and Actual Value of Taxable Property for property value data. (2) See the Schedule of Demographic and Economic Statistics for population data. Note: Details of the Village's outstanding debt can be found in the Notes to the Financial Statements. Data Source: Village Records Bonds December 31, 2020 (Unaudited) VILLAGE OF BUFFALO GROVE, ILLINOIS Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years General Obligation 176 VILLAGE OF BUFFALO GROVE, ILLINOIS Schedule of Direct and Overlapping Governmental Activities Debt Percentage of Debt Applicable Governmental Unit to Village (1) Village $37,350,765 100.00%$37,350,765 Overlapping Debt School Districts Cook County School District #21 88,265,000 18.25%16,111,191 Kildeer Countryside Community Consolidated #96 - 38.78%- Aptakisic-Tripp Community Consolidated #102 16,700,000 75.06%12,535,540 Lincolnshire-Half Day District #103 6,785,000 12.21%828,667 Adlai E. Stevenson H.S. District #125 37,245,000 38.21%14,232,027 Wheeling Township H.S. District #214 27,650,000 3.81%1,054,335 Harper Community College #512 254,770,000 1.78%4,534,925 College of Lake County #532 43,070,000 5.42%2,332,414 Total of School Districts 474,485,000 51,629,099 Other than School Districts Lake County 147,785,000 5.16%7,620,547 Lake County Forest Preserve 206,810,000 5.16%10,664,176 Cook County 2,596,351,750 0.23%5,937,478 Cook County Forest Preserve 122,255,000 0.23%279,579 Metropolitan Water Reclamation District 2,181,154,590 0.23%5,075,027 Buffalo Grove Park District 11,663,000 95.69%11,160,113 Wheeling Park District 9,725,000 7.15%695,135 Total Other than School Districts 5,275,744,340 41,432,055 Total Direct and Overlapping Debt 5,313,095,105 93,061,154 Data Source: Cook County Tax Extension Department Note: Overlapping governments are those that coincide,at least in part, with the geographic boudries of the Village. This schedule estimates the portion of 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 a debt, of each overlapping government. December 31, 2020 (Unaudited) Village's Share of Gross Debt Debt (1) Determined by ratio of assessed valuation of property subject to taxation in the Village to valuation of property subject to taxation in overlapping unit. 177 VILLAGE OF BUFFALO GROVE, ILLINOIS Schedule of Legal Debt Margin December 31, 2020 (Unaudited) The Village is a home rule municipality. Article VII, Section 6(k) of the 1970 Illinois constitution governs computation of legal debt margin. To date the General Assembly has set no limits for home rule municipalities. The General Assembly may limit by law the amount and require referendum approval of debt to be incurred by some home rule municipalities, payable from ad valorem property tax receipts, only in excess of the following percentages of the assessed value of its taxable property...(2)if its population is more than 25,000 and less than 500,000 an aggregate of one percent: indebtedness which is outstanding on the effective date (July 1, 1971) of this constitution or which is thereafter approved by referendum...shall not be included in the foregoing percentage amounts. 178 VILLAGE OF BUFFALO GROVE, ILLINOIS Demographic and Economic Statistics - Last Ten Fiscal Years December 31, 2020 (Unaudited) Per Equalized Capita Fiscal Assessed Personal Personal Per Capita Unemployment Year Population Valuation EAV Income Income Rate 2011 41,911 E $1,664,431,364 $39,713 1,854,311,029 44,244 E 7.6% 2012 42,330 E 1,531,173,377 36,172 1,891,582,681 44,687 E 7.1% 2013 41,778 E 1,456,040,510 34,852 1,882,391,346 45,057 (1) 6.8% 2014 41,987 E 1,425,060,788 33,941 1,939,085,621 46,183 E 5.7% 2015 41,503 E 1,475,693,765 35,556 1,930,595,051 46,517 (1) 4.2% 2016 41,500 E 1,614,251,028 38,898 1,949,794,500 46,983 (2) 4.3% 2017 41,226 E 1,662,450,463 40,325 1,938,570,198 47,023 (2) 5.7% 2018 40,853 E 1,687,765,723 41,313 2,041,301,851 49,967 (2) 3.3% 2019 40,494 E 1,815,545,066 44,835 2,161,569,720 53,380 (2) 3.0% 2020 40,494 E 1,787,598,388 44,145 2,159,342,550 53,325 (2) 13.7% E - Estimate (1) - US Census Website (2) - Illinois Department of Employment Security Data Source: U.S. Department of Labor, Bureau of Labor Statistics, U.S. Census Bureau 179 VILLAGE OF BUFFALO GROVE, ILLINOIS Principal Employers - Current Year and Nine Years Ago Percentage Percentage of Total of Total Village Village Employer Rank Employment Rank Employment Siemens Building Technologies 1,800 1 4.45%1,030 1 2.48% I.S.I.1,200 2 2.96% ESS 550 3 1.36% Plexus Corp 370 4 0.91%370 5 0.89% Veritas Document Solutions 300 5 0.74% US LBM Holdings, LLC 250 6 0.62% Village of Buffalo Grove 217 7 0.54% ARxIUM 200 8 0.49% Vapor Bus International 200 9 0.49%483 3 1.16% Leica Microsystems Inc.200 9 0.49% Rexam 573 2 1.38% Dominick's Finer Foods (three locations)483 4 1.16% Harris Trust & Savings Bank 371 6 0.89% SMS-NA USA 354 7 0.85% Baxter Global Technical Services 250 8 0.60% Caremark 230 9 0.55% ASAP Software 230 10 0.55% 5,287 13.06%4,374 10.51% Data Source: Sources: 2020 Illinois Manufacturing Directory 2020 Illinois Services Directory and a selective telephone survey Employees Employees December 31, 2020 (Unaudited) 2020 2011 180 VILLAGE OF BUFFALO GROVE, ILLINOIS Full-Time Equivalent Village Government Employees by Function - Last Ten Fiscal Years 2012 2013 General Government Administration Village Managers Office 4.0 4.5 5.5 Information Technology 3.5 3.5 3.5 Human Resources 2.0 2.0 2.0 Finance 8.5 8.5 9.5 Community Development 10.0 10.0 10.0 Planning 1.5 1.5 1.5 Public Safety Police Full-Time Police Officers 69.0 69.0 64.0 Community Service Officers 3.0 3.0 3.0 Civilians 17.5 16.5 17.0 Fire Full-time Firefighters/Paramedics 62.0 62.0 58.0 Civilians 6.0 3.5 3.5 Public Works Public Works Administration 11.0 11.0 5.0 Streets/Forestry 20.0 20.0 18.5 Water/Sewer 13.0 13.0 8.0 Central garage 5.5 5.5 5.5 Building Maintenance 4.0 4.0 4.0 Recreation Administration 13.5 13.5 18.0 Grounds Maintenance 15.0 15.0 16.0 Total 269.0 266.0 252.5 Recreation Seasonal 34.0 34.0 30.0 Data Source: Village Finance Department December 31, 2020 (Unaudited) 2011 181 2014 2015 2016 2017 2018 2019 2020 7.5 6.0 5.0 5.5 5.5 5.5 4.5 3.0 - - - - - - 2.0 2.0 2.0 2.0 2.0 2.0 2.0 10.0 8.0 9.0 9.0 9.0 8.0 9.0 9.5 12.0 12.0 14.0 15.0 13.0 13.0 1.5 - - - - - - 63.0 63.0 63.0 61.0 61.0 63.0 60.0 3.0 3.0 3.0 2.0 2.0 2.0 2.0 15.0 15.0 15.5 16.0 16.0 20.0 16.0 58.0 59.0 59.0 58.0 59.0 56.0 56.0 1.5 1.0 1.0 4.5 5.0 7.0 9.0 6.0 6.0 6.0 12.0 11.5 10.0 11.0 18.5 20.0 20.0 20.0 20.0 17.0 17.0 9.0 10.0 9.0 12.0 12.0 13.0 12.0 5.5 5.5 5.5 5.5 5.5 5.5 5.5 6.0 6.0 6.0 4.5 4.5 4.5 4.5 19.5 19.5 4.0 4.0 4.0 2.0 2.0 11.5 11.5 - - - - - 250.0 247.5 220.0 230.0 232.0 228.5 223.5 30.0 30.0 30.0 30.0 30.0 29.0 38.0 182 VILLAGE OF BUFFALO GROVE, ILLINOIS Operating Indicators by Function/Program - Last Ten Fiscal Years 2012 2013 General Government Building and Zoning Building Permits Issued 1,930 2,206 2,651 Building Inspections Conducted 9,661 15,858 7,456 Property Maintenance Inspections Conducted 3,462 5,828 3,288 Public Safety Police Physical Arrests 820 671 759 Parking Violations 2,031 3,341 2,984 Traffic Violations 11,867 10,826 13,171 DUI Arrests 164 107 124 Vehicle Crashes 1,396 1,260 1,507 Fire Ambulance Calls/EMS 2,568 2,789 2,613 Service Calls 1,053 487 483 Fire Calls 737 698 865 Auto Aid/Mutual Aid 676 680 654 Public Works Streets Street Resurfacing (Miles)2.90 5.51 10.84 Parks and Recreation Park Sites 46 46 46 Golf Course - Combined Golf Rounds Played - Paid 56,918 59,937 53,639 Water New Connections (Tap ons)12 15 27 Average Daily Consumption (1)4.09 3.92 3.70 Peak Daily Consumption (1)7.84 7.93 6.20 (1) - Millions of Gallons Data Source: Various Village Departments December 31, 2020 (Unaudited) 2011 183 2014 2015 2016 2017 2018 2019 2020 2,833 2,582 2,957 2,567 2,502 3,443 2,697 7,074 11,625 9,053 6,692 6,817 7,361 5,540 3,172 1,894 2,160 1,954 1,902 2,254 1,856 886 809 521 441 452 406 283 3,634 3,766 5,754 6,781 5,748 3,404 2,185 8,349 7,969 6,054 5,310 6,054 4,844 3,439 154 97 74 87 85 74 54 1,429 363 1,473 1,294 1,353 1,459 829 3,385 3,123 3,160 3,201 3,145 3,145 3,276 1,245 340 309 293 309 409 249 821 1,585 1,279 1,082 1,257 1,253 1,096 1,063 1,055 987 1,045 967 1,193 1,198 3.28 2.45 11.40 2.76 0.97 2.64 4.97 46 46 46 46 46 46 46 54,689 68,602 53,599 51,138 48,770 44,000 58,297 9 23 19 3 23 11 23 3.58 3.39 3.60 3.23 3.49 3.13 3.33 5.40 5.14 5.54 5.98 5.69 4.83 4.97 184 VILLAGE OF BUFFALO GROVE, ILLINOIS Capital Asset Statistics by Function/Program - Last Ten Fiscal Years 2012 2013 Public Safety Police Stations 1 1 1 Vehicles 36 34 28 Fire Stations 3 3 3 Vehicles*21 21 21 Public Works Streets 117.70 117.70 117.70 Street (Miles)2,778 2,778 2,778 Streetlights Water Water Mains 180.25 180.25 180.30 Fire Hydrants 2,474 2,475 2,477 Wastewater Sanitary Sewers 139.27 139.27 139.30 Data Source: Various Village Departments * Includes fire engines/towers, ambulances, and staff cars December 31, 2020 (Unaudited) 2011 185 2014 2015 2016 2017 2018 2019 2020 1 1 1 1 1 1 1 29 30 29 31 30 29 30 3 3 3 3 3 3 3 20 20 20 20 20 20 20 118.20 118.20 118.22 114.02 114.02 113.90 110.83 2,786 2,789 2,789 2,790 2,755 2,437 3,115 180.90 181.14 181.31 181.97 185.99 186.19 188.60 2,487 2,493 2,501 2,514 2,507 2,507 2,584 139.80 139.92 139.92 139.96 141.60 135.94 137.38 186