Loading...
2022 CAFRVILLAGE OF BUFFALO GROVE, ILLINOIS ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022 50 Raupp Blvd Buffalo Grove, IL 60089 Phone: 847.459.2500 www.vbg.org VILLAGE OF BUFFALO GROVE, ILLINOIS ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022 Prepared by: Finance Department Chris Black Finance Director/Village Treasurer VILLAGE OF BUFFALO GROVE, ILLINOIS TABLE OF CONTENTS 1 2 Letter of Transmittal 3 7 INDEPENDENT AUDITORS' REPORT 10 MANAGEMENT’S DISCUSSION AND ANALYSIS 14 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 32 Statement of Activities 34 Fund Financial Statements Balance Sheet – Governmental Funds 36 Reconciliation of Total Governmental Fund Balance to the Statement of Net Position – Governmental Activities 38 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 40 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities – Governmental Activities 42 Statement of Net Position – Proprietary Funds 44 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds 46 Statement of Cash Flows – Proprietary Funds 48 Statement of Fiduciary Net Position 50 Statement of Changes in Fiduciary Net Position 51 Notes to Financial Statements 52 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Employer Contributions Illinois Municipal Retirement Fund 109 Police Pension Fund 110 Firefighters' Pension Fund 111 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 112 Police Pension Fund 114 Firefighters’ Pension Fund 116 Schedule of Investment Returns Police Pension Fund 118 Firefighters’ Pension Fund 119 Schedule of Changes in the Employer's Total OPEB Liability Retiree Benefit Plan 120 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual General Fund 121 Lake Cook Road TIF - Special Revenue Fund 122 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Debt Service Fund 127 Facilities Development - Capital Projects Fund 128 Street Maintenance - Capital Projects Fund 129 Vehicle Equipment Replacement - Capital Projects Fund 130 Combining Balance Sheet - Nonmajor Governmental Funds 131 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds 132 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Motor Fuel Tax - Special Revenue Fund 133 Local Motor Fuel Tax - Special Revenue Fund 134 Metra Parking Lot - Special Revenue Fund 135 Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual Waterworks and Sewerage - Enterprise Fund 136 Arboretum Golf - Enterprise Fund 138 Combing Statement of Net Position - Nonmajor Enterprise Funds 140 Combining Statement of Revenues, Expenses and Changes in Net Position Nonmajor Enterprise Funds 142 Combining Statement of Cash Flows - Nonmajor Enterprise Funds 143 Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual Buffalo Grove Golf - Enterprise Fund 144 Refuse Service - Enterprise Fund 146 Combining Statement of Net Position - Internal Service Funds 147 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 148 Combining Statement of Cash Flows - Internal Service Funds 149 Schedule of Revenues, Expenses and Changes in Fund Balance - Budget and Actual Information Technology - Internal Service Fund 150 Central Garage - Internal Service Fund 151 Building Maintenance - Internal Service Fund 152 Combining Statement of Fiduciary Net Position - Pension Trust Funds 153 Combining Statement of Changes in Fiduciary Net Position - Pension Trust Funds 154 Schedule of Changes in Fiduciary Net Position - Budget and Actual Police Pension - Pension Trust Fund 155 Firefighter's Pension - Pension Trust Fund 156 SUPPLEMENTAL SCHEDULES Long-Term Debt Requirements General Obligation Bonds of 2012 158 General Obligation Bonds of 2016 159 General Obligation Refunding Bonds of 2019 160 General Obligation Bonds of 2020 161 General Obligation Bonds of 2022 162 IEPA Loan Payable of 2013 - Pump Stations Improvements 163 Installment Note Payable of 2015 164 Consolidated Year-End Financial Report 165 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters 166 Based on an Audit of Financial Statements Performed in Accordance with Governmental Auditing Standards Net Position by Component – Last Ten Fiscal Years 170 Changes in Net Position – Last Ten Fiscal Years 172 Fund Balances of Governmental Funds – Last Ten Fiscal Years 174 Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years 176 Assessed Value and Actual Value of Taxable Property – Last Ten Tax Levy Years 178 Direct and Overlapping Property Tax Rates – Last Ten Tax Levy Years 180 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 Tax Levy Years Ago 182 Property Tax Levies and Collections – Last Ten Tax Levy Years 183 Taxable Sales by Category – Last Ten Calendar Years 184 Direct and Overlapping Sales Tax Rates – Last Ten Fiscal Years 186 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years 188 Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years 190 Schedule of Direct and Overlapping Governmental Activities Debt 191 Schedule of Legal Debt Margin 192 Demographic and Economic Statistics – Last Ten Fiscal Years 193 Principal Employers – Current Fiscal Year and Nine Fiscal Years Ago 194 Full-Time Equivalent Government Employees by Function/Program Last Ten Fiscal Years 196 Operating Indicators by Function/Program – Last Ten Fiscal Years 198 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years 200 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, 2022 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 Christopher Stilling Chris Black Deputy Village Manager Finance Director/Village Treasurer Brian Budds William Baker Chief of Police Fire Chief Michael Skibbe Arthur Malinowski Deputy Village Manager/Public Works Director Human Resource Director Darren Monico Nicole Woods Village Engineer Director of Community Development Geoff Tollefson Golf Course Manager Brett Robinson Administrative Services Director 1 1 ORGANIZATIONAL CHART Residents of Buffalo Grove Village Board Village Manager/ Deputy Village Clerk Deputy Village Manager Community Development Building and Zoning Environmental Health Planning & Econ Development Finance General Services Fire Emergency Medical Services Fire Suppression and Rescue Fire Prevention &Education Emergency Management Human Resources Legal Deputy Village Manger Police Patrol Investigations Traffic Police Records Communications Golf Operations Public Works Building Maintenance Central Garage Engineering Forestry & Grounds Sewer & Drainage Streets Water Administrative Services Purchasing Information Technology Records Management 2 June 14, 2023 The Honorable Eric Smith Members of the Village Board Citizens of the Village of Buffalo Grove The Annual Comprehensive Financial Report of the Village of Buffalo Grove for the year ended December 31, 2022, is submitted herewith. This report represents a comprehensive picture of the Village’s financial activities during Fiscal Year 2022 and the financial condition of its various funds at December 31, 2022. 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 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, 2022. 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 2020 U.S. Census, serves a population of 43,212. 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. 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 212 full-time and 38 part-time/seasonal positions in the Fiscal Year 2022 annual budget. 3 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, department, and 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 is primarily residential, with supporting commercial activity and limited industrial and manufacturing activity. There are approximately 720 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 3.1 percent besting the state by 1.5 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 $17,037,557 which is a slight increase over the previous year’s total of $16,970,657, or 0.4 percent. • Water and Sewer collections decreased from $16,326,679 in 2021 to $16,119,322 in 2022; a total decrease of 1.3 percent. • Sales taxes, both state shared and home rule, generated $18,309,654 in 2022, an increase of 14.3 percent. The Village equalized assessed valuation decreased by $72.2 million or 4.0 percent to $1.71 billion for the 2021 levy year. The Lake County portion of the Village’s equalized assessed value decreased by 3.0 percent and Cook County portion decreased by 7.7 percent. 4 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. At the end of 2022, the Village has a planned decrease in unassigned fund balance of $4.86 million and a corresponding increase in committed fund balance to finance capital improvements at a new public works facility. Unassigned Budgeted Fiscal Year Ended Fund Balance Expenditures Percent 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, 2019 $18,939,974 $43,948,348 43.10% December 31, 2020 $20,134,162 $44,657,330 45.09% December 31, 2021 $22,485,209 $44,610,467 50.40% December 31, 2022 $17,701,070 $46,945,915 37.70% * 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. The Village is in year three of a five-year Infrastructure Modernization Program that involves 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 2022, the Village of Buffalo Grove issued over 3,100 commercial and residential building permits. These permits represent a total project valuation of $135 million invested into the Buffalo Grove community. In addition to building permit activity, the following major projects occurred in 2022: A facility remodel was complete at the Arboretum Golf Club, including the offering of indoor year-round golf simulators and private lessons, a newly refurbished and managed full-service dining and entertainment area and a new outdoor patio with fire pits and a large retractable window wall, creating an open air concept between the indoor restaurant seating and the patio. Work continued on the new Link Crossing Development by K. Hovnanian Homes. This project will have a total of 187 units and include a mix of 68 clustered single-family detached homes and 119 two-story townhomes. 5 The Ricky Rockets commercial development at 700 E. Lake Cook Road neared completion during the year. This project includes an 8,720 square foot convenience store, fuel center and car wash complex, 8,550 square foot retail center, and a 2,400 square foot quick service restaurant. Development plans for the long-awaited Town Center Redevelopment, The Clove, were approved and groundbreaking occurred in September. Several structures have been demolished and construction is underway for the grocer, residential buildings and outlots. Remodeling of the existing building north of Old Checker Road is ongoing as well. When complete, the redevelopment will be a new, modern central entertainment and residential district anchored by a national grocery store, retail shops, a park, restaurants and luxury multi-family residential and includes 65,000 square feet of retail space. Project costs are estimated to exceed $150 million. A two-tenant commercial building project began at 41 S. McHenry Road, which will bring specialized meat and seafood grocer, Wild Fork as well as a 24-hour emergency room for animals, Veterinary Emergency Group (VEG). The Village purchased the building at 1650 Leider Lane to house its public works and engineering services. The 173,000 square foot facility offers ample space to accommodate operations now and will into the future. After years of planning and coordination, a new and improved pedestrian crossing made its debut at Buffalo Grove High School across Arlington Heights Road. In 2022, 106 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 Annual Comprehensive Financial Report for the fiscal year ended December 31, 2021. The Village of Buffalo Grove has received Certificates of Achievement since 1981. To be awarded a Certificate of Achievement, the government published an easily readable and efficiently organized Annual Comprehensive 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 Annual Comprehensive 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, 2022. 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. 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 manner. 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 Annual Comprehensive Financial Report For the Fiscal Year Ended December 31, 2021 Executive Director/CEO 7 FINANCIAL SECTION This section includes: Independent Auditors’ Report Management’s Discussion and Analysis Basic Financial Statements Required Supplementary Information Other Supplementary Information Supplemental Schedule 8 INDEPENDENT AUDITORS’ REPORT This section includes the opinion of the Village’s independent auditing firm. 9 INDEPENDENT AUDITOR’S REPORT June 14, 2023 The Honorable Village President Members of the Board of Trustees Village of Buffalo Grove, Illinois Report on the Audit of the Financial Statements Opinion 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 (the Village), Illinois, as of and for the year ended December 31, 2022, and the related notes to the financial statements, which collectively comprise the Village’s basic financial statements as listed in the table of contents. 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, as of December 31, 2022, 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. Basis for Opinions 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. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Village, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Village’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 10 Village of Buffalo Grove, Illinois June 14, 2023 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Village’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the budgetary comparison schedules, GASB-required pension and other post- employment benefit (OPEB) reporting, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 11 Village of Buffalo Grove, Illinois June 14, 2023 Supplementary 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 other supplementary information and supplemental schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The 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, other supplementary information and supplemental schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 14, 2023, 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 12 MANAGEMENT’S DISCUSSION AND ANAYLSIS 13 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 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, 2022. 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, and the Village’s financial statements, which can be found in the basic financial statement section of this report. Financial Highlights •The assets and deferred outflows of the Village exceeded its liabilities and deferred inflows at December 31, 2022 by $107.1 million (net position). The Net Position for governmental activities is $30.5 million or 28.5 percent of the total, and business-type activities account for $76.5 million. Of this amount, ($7.6) million is unrestricted. Governmental activities unrestricted amount is ($30.0) million at the end of the year. This negative amount of unrestricted assets is directly related to the recognition of all retirement obligations in noncurrent liabilities, which is $67.6 million for 2022 (an increase of $23.0 million or 51.6% from 2021). •The Village’s total debt increased by $34.4 million (or 91.7 percent). Total general bonded debt outstanding is $48.0 million as of December 31, 2022. During the year, the Village issued $18.5 million in general obligation bonds and is accounting for $19 million in TIF Revenue notes per a developer agreement for redevelopment of property located in the TIF District. •The Village’s net position increased by $5.9 million (or 5.8 percent) from a beginning balance of $101.2 million during the fiscal year ending December 31, 2022. The governmental net position decreased by $6.2 million (16.9 percent) from a beginning balance of $36.7 million and the business-type activities net position increased by $12.1 million (18.8 percent) from a beginning balance of $64.5 million. •As of December 31, 2022, the Village of Buffalo Grove’s General Fund reported ending fund balance of $47.8 million, an increase of $9.5 million from the prior year. Of this amount, $17.7 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. 14 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 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). 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. 15 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 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, Lake Cook Road TIF, Debt Service, Facilities Development, Street Maintenance, and Vehicle Equipment Replacement Funds, which are classified as major funds. Data on the other three 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. 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 $107.1 million as of December 31, 2022. The largest portion of the Village’s net position reflects its net investment in capital assets ($103.3 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 ($11.4 million) represents resources that are subject to external restrictions on how they may be used, of that amount $4.4 million is restricted for improvements to roadway, public infrastructure, and other municipal public improvements. The remaining balance of unrestricted net position of ($7.6) million includes $7.4 million for capital projects related to the new Public Works facility. The total decrease in unrestricted net position from the prior year is $8.2 million (1,366.7 percent). 16 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 The Village’s combined net position increased by $5.9 million as a result of governmental activities decreasing by $6.2 million and business-type activities increasing by $12.1 million. The net position of the Village’s governmental funds was $30.5 million. The Village’s unrestricted net position for governmental activities that are available for day-to-day financial operations were ($30.0) million compared to ($19.6) million at December 31, 2021. The net position of business-type activities was $76.6 million. The business type activities unrestricted net position increased by $2.2 million from the previous year. 2022 2021 2022 2021 2022 2021 Assets Current / Other Assets $ 96.5 76.5 30.1 23.3 126.6 99.8 Capital Assets 95.7 78.0 58.2 49.8 153.9 127.8 Total Assets 192.2 154.5 88.3 73.1 280.5 227.6 Deferred Outflows 28.4 14.6 2.1 2.3 30.5 16.9 Total Assets/Deferred Outflows 220.6 169.1 90.4 75.4 311.0 244.5 Liabilities Current Liabilities 12.2 8.3 3.5 2.2 15.7 10.5 Non-Current Liabilities 137.6 76.7 6.7 7.8 144.3 84.5 Total Liabilities 149.8 85.0 10.2 10.0 160.0 95.0 Deferred Infows 40.3 47.4 3.6 0.9 43.9 48.3 Total Liabilities/ Deferred Inflows 190.1 132.4 13.8 10.9 203.9 143.3 Net Position: Net Investment in Capital Assets 50.0 51.4 53.3 44.3 103.3 95.7 Restricted 10.5 4.9 0.9 - 11.4 4.9 Unrestricted (30.0) (19.6) 22.4 20.2 (7.6) 0.6 Total Net Position 30.5 36.7 76.6 64.5 107.1 101.2 * Values may differ from financials due to rounding. Village of Buffalo Grove's Net Position (in Millions)* Governmental Business-Type Activities Activities Total 17 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 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 two of the three categories of net position for the government as a whole as well as for governmental activities; whereas all three categories of net position for business-type activities resulted in positive balances. Within the governmental activities, the Village increase in “Current and Other Assets” of $20.0 million is primarily related to $12.8 million more in cash and investments and $2.5 million more in receivables. The Village experienced an increase of $0.2 million (3.4 percent) in service charge revenues, $2.0 million (62.5 percent) in operating grants/contributions, $2.5 million (14.2 percent) in sales and use taxes, $1.5 million (26.8 percent) in income taxes, $0.1 million (3.8 percent) in utility taxes, $0.4 million (25.0 percent) in property transfer taxes, and $0.4 million (11.8 percent) in other revenues. Property taxes and telecommunications taxes stayed consistent to the prior year. The Village experienced a decrease of $0.1 million (5.9 percent) in capital grants/contributions. The Village maintained capital improvement and asset purchases in 2022. 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 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: 18 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 2022 2021 2022 2021 2022 2021 Revenues Program Revenues Charges for Services $6.0 5.8 19.5 19.9 25.5 25.7 Grants / Contributions Operating 5.2 3.2 - - 5.2 3.2 Capital 1.6 1.7 0.3 - 1.9 1.7 General Revenues Property Taxes 17.0 17.0 - - 17.0 17.0 Sales and Use Taxes 20.1 17.6 - - 20.1 17.6 Income Taxes 7.1 5.6 - - 7.1 5.6 Telecommunications Taxes 0.7 0.7 - - 0.7 0.7 Utility Taxes 2.7 2.6 - - 2.7 2.6 Property Transfer Taxes 2.0 1.6 - - 2.0 1.6 Other General Revenues 3.8 3.4 0.9 0.8 4.7 4.2 Total Revenues 66.2 59.2 20.7 20.7 86.9 79.9 Expenses General Government 27.1 7.7 - - 27.1 7.7 Public Safety 30.8 23.9 - - 30.8 23.9 Public Works 8.0 8.0 - - 8.0 8.0 Interest 1.2 1.0 - - 1.2 1.0 Water - - 10.6 10.5 10.6 10.5 Sewer - - 0.9 0.9 0.9 0.9 Golf - - 2.4 2.8 2.4 2.8 Total Expenses 67.1 40.6 13.9 14.2 81.0 54.8 Change in Net Position Before Transfers (0.9) 18.6 6.8 6.5 5.9 25.1 Transfers (5.3) (1.9) 5.3 1.9 - - Change in Net Position (6.2) 16.7 12.1 8.4 5.9 25.1 Net Position - Beginning as Restated 36.7 20.0 64.5 56.1 101.2 76.1 Net Position - Ending 30.5 36.7 76.6 64.5 107.1 101.2 * Values may differ from financials due to rounding. Governmental Business-Type Activities Activities Total Village of Buffalo Grove's Changes in Net Position (in Millions)* 19 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 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 decreased the Village’s net position by $6.2 million to $30.5 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, 2022 were $66.2 million, an increase of $7.0 million or 11.8 percent. Property taxes continue to be one of the Village’s largest sources of revenue (25.7 percent) at $17.0 million. There was a 0.69% increase in the corporate agency tax levy collected in 2022 as the counties were able to collect a higher percentage of taxes billed than in 2021. The corporate levy for 2022, to be collected in 2023, is funding Police and Fire Protection. 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 37.2 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 $32.6 million or 49.2 percent of total governmental activities revenue. 20 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 Sales and uses taxes increased by $2.5 million compared to the previous year as retail sales remained strong throughout the year. Telecommunications taxes stayed consistent compared to prior year. Income taxes continue to rebound increasing $1.5 million from FY 2021, a 26.8 percent change. Utility taxes increased $0.1 million compared to the prior year. Property transfer taxes increased $0.4 million compared to prior year. 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 $67.1 million, an increase of 65.3 percent from 2021 ($26.5 million). The largest increase was made in General Government expenses of $19.4 million (251.9 percent) in 2022 as the Village recognized developer expenses of $19 million in the TIF Fund as per a developer agreement for redevelopment of property located in the TIF District. Public Safety expenses increased by $6.9 million and Public Works stayed consistent to the prior year. 9% 10% 26% 30% 11% 1%4%3%6% Village of Buffalo Grove 2022 Revenue by Source Governmental Activities Charges for Service Grants and Contributions Property Tax Sales and Use Tax Income Tax Telecommunication Utility Tax Property Transfer Tax Other Taxes 40% 46% 12%2% Village of Buffalo Grove 2022 Expenses by Function Governmental Activities Expenses General Government Public Safety Public Works Interest 21 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 The Statement of Activities shows that $6.0 million in revenue was generated to finance the services rendered by the user fees. Another $6.8 million in revenue was generated by operating and capital grants and other contributions that was expended for capital improvements. Business-Type Activities: Business-type activities net position increased by $12.1 million. Significant changes are noted below. Revenue: Water sales decreased $200 thousand from the previous year. The total amount pumped was 1.29 billion gallons in 2021 versus 1.31 billion in 2022. The utility increased revenue with a 4.0 percent water rate increase. There was a slight decrease in water consumed of 0.61 billion gallons (5.09 percent) which equates to a decrease in water sales. The two golf courses generated $2.4 million in 2022, $0.2 million (7.7 percent) less than 2021 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 decreased by $0.3 million or 2.1 percent. The Water Fund expenses stayed consistent compared to prior year, which compares favorably to a budgeted increase in expenses. Golf expenses were decreased in 2022 to $0.2 million in total or 7.7 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 2022 Business Type Activities Revenues and Expenses (In Millions) Revenues Expenses 22 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 The Village’s governmental funds for the year ended December 31, 2022, reflect a combined fund balance of $61.7 million on its balance sheet. This represents a $10.6 million dollar increase over the balance posted last year. Governmental revenues increased a total of $7.0 million. Sales taxes, both state shared and home rule, increased by $2.3 million dollars. The increase reflects a strong year in retail sales. State shared income taxes increased by $1.5 million and building permit revenues decreased by $224 thousand. Governmental expenditures increased over prior year by $26.5 million. Of this amount, $19 million can be attributed to an expenditure recorded in the Lake Cook Road TIF fund related to a TIF Revenue Note. The net decrease in fund balance for the Debt Service Fund in 2022 was $8.2 million compared to a combined increase in all other Governmental Funds of $18.8 million. This decrease resulted from transfers out to other funds as the remaining 2020 bond proceeds were spent during the year. The Capital Projects Facilities balance increase of $7.4 million can be attributed to bond proceeds and premium of $21.4 million, offset by capital expenditures utilizing bond money of $14.3 million. Of the total fund balance of $61.7 million, $17.7 million is unassigned indicating availability for future obligations. The 2022 unassigned fund balance decreased by $4.8 million. Nonspendable fund balance ($138 thousand) represents amounts set aside for inventory and deposits. Restricted fund balance ($13.0 million) relates to the remaining proceeds available on the 2022 General Obligation Bond, federal and state seizure funds, and nonmajor special revenue fund balances including the Motor Fuel Tax and Local Motor Fuel Tax funds. Committed fund balance ($30.8 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’s useful to review the liquidity of the fund by comparing the unassigned fund balance against the General Fund operating budget. As of December 31, 2022, the unassigned fund balance represents 37.7 percent of the FY 2022 operating budget. The Fund Balance of the General Fund increased by $9.5 million for the fiscal year ended December 31, 2022. General Fund revenues increased by $6.6 million in 2022. The most notable increases were in grants, state shared income tax, state shared sales tax and home rule sales tax of $1.7 million, $1.4 million, $1.2 million, and $1.2 million, respectively. During the year, the Village recognized $2.7 million in American Rescue Plan Act (ARPA) grant money. As noted earlier, the increase in sales taxes was due to strong retail sales during the year. Real estate transfer taxes increased by $0.40 million (25%). Local use tax increased $0.14 million (8.4 percent), while building permit revenue decreased by $0.22 million (10.3%). Other State of Illinois shared revenues increased $259,196 (72.7%). 0.0 5.0 10.0 15.0 20.0 25.0 Village of Buffalo Grove 2022 General Fund Revenue (in millions) 2022 2021 23 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 The overall increase in the General Fund revenue was 12.0 percent, while expenditures increased 6.3 percent ($2.8 million) in 2022. The surplus of revenues over expenditures (before other financing sources/uses) was $14.2 million. Adding in the Other Financing Sources (Uses), the net change to fund balance resulted in an increase of $9.5 million. Public Safety Expenditures increased $0.8 million, 2.7 percent, in FY 2022. Public Works increased 7.9 percent ($0.5 million) and General Government spent $1.3 million more in 2022 versus 2021. Special Revenue Funds have a combined fund balance of $4.4 million as of December 31, 2022. In 2022 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 by state and local motor fuel tax revenue, bond proceeds, transfers from the General Fund and grant revenues in 2022. Revenues received from the state share of the motor fuel tax were $2.6 million and local share of motor fuel tax of $0.67 million. The scope of each year’s identified maintenance, as determined through pavement analysis studies, typically surpasses the revenues received. The Capital Projects Street Fund expended $5.1 million using the various revenue sources. Some street projects tied to grant funding were completed in 2022, the remainder will be expended in FY 2023. The Debt Service Fund has a fund balance of $32,249 at the end of FY 2022, which is a decrease of $8,200,531 as the remaining funds from the 2020 bond proceeds were spent and the money transferred out to the applicable funds. The Village debt totals $67.0 million, which includes general obligation bonds and a TIF revenue note. A total of $2.6 million in principal was retired in the current year. The interest paid associated with the debt retired was $1.2 million. Debt per capita is $1,366.74 as of December 31, 2022. 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. 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 General Government Public Safety Public Works Capital Outlay Village of Buffalo Grove 2022 General Fund Expenditures 2022 2021 24 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 The water and sewer utility experienced net operating income before interest and transfers of $5.7 million for FY 2022, a decrease of $0.1 million (2.1 percent) from the prior fiscal year. A rate increase of 4 percent was applied to all water and sewer usage. Sewer operations accounted for 29.7 percent, or $5.3 million of the total Water and Sewer operational expenses. Water operations accounted for $1.5 million (8.2 percent) and capital outlay for both systems totaling $9.2 million (51.3 percent). The purchase of water accounted for 10.8 percent, or $1.9 million. Sanitary sewer fees collected on behalf of Lake County Public Works was $3.5 million for FY 2022. These two pass-through expenses account for 31 percent of the total operating expense of the fund. Nonoperating revenue (expense) increased $73,748 due to investment income. The unrestricted net position of the Water and Sewer Fund at the end of the current fiscal year was $21.7 million and of that amount $9.2 million is the Village’s equity interest in the Northwest Water Commission. The installment note to pay down the water meter replacement project is $4.7 million, or 47.6 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 $138,313. Total revenues were up $20,254 from 2021. The Buffalo Grove Golf Course generated $1.3 million in operating revenue while incurring $1.1 million in operating expenses. A total of 71,773 paid rounds were played between the two courses in 2022. 25 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 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. Final Budget Actual Revenues and Transfers: Taxes $44,768 53,777 Charges for Services 2,403 3,109 1,703 2,490 Licenses and permits 355 416 1,071 1,806 1,000 1,000 Total Revenues and Transfers 51,300 62,598 Expenditures and Transfers 46,946 47,419 6,208 5,648 53,154 53,067 Change in fund balance (1,854) 9,531 * Values may differ from financials due to rounding. General Fund Budgetary Highlights For the Fiscal Year Ended December 31, 2022 (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, income tax, and real estate transfer taxes. Actual expenditures slightly performed better than budget due to the reduction in transfers out to other funds. Capital Assets At the end of December 31, 2022, the Village had a combined total capital assets of $153.9 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 $26.1 million. 26 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 2022 2021 2022 2021 2022 2021 Land $43.9 39.5 6.2 6.2 50.1 45.7 Construction in Progress 13.6 8.0 13.3 5.2 26.9 13.2 Buildings 12.8 4.2 1.6 0.6 14.4 4.8 Equipment and Vehicles 6.8 7.4 0.2 0.1 7.0 7.5 Land Improvements 2.4 2.5 - - 2.4 2.5 Streets and Storm Sewers 16.2 16.4 - - 16.2 16.4 Water and Sewer Infrastructure - - 36.9 37.7 36.9 37.7 95.7 78.0 58.2 49.8 153.9 127.8 * Values may differ from financials due to rounding. Village of Buffalo Grove Capital Assets at Year End (in millions)* Governmental Business-Type Activities Activities Total The Governmental Activities net capital assets increased from last year by $17.7 million (22.7 percent). For the Business-type activities, the net capital assets increased by $8.4 million or (16.9 percent). The capital activity for the Village of Buffalo Grove is mostly in streets, water and sewer, 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 $71.9 million as shown in the next table: 2022 2021 2022 2021 2022 2021 General Obligation Bonds $48.0 32.0 - - 48.0 32.0 TIF Revenue Note Payable 19.0 - - - 19.0 - IEPA Loans - - 0.2 0.3 0.2 0.3 Installment Contracts Payable - - 4.7 5.2 4.7 5.2 67.0 32.0 4.9 5.5 71.9 37.5 * Values may differ from financials due to rounding. Village of Buffalo Grove Long-Term Debt (in millions)* Governmental Business-Type Activities Activities Total 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”. 27 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 The total per capita general obligation (GO) debt for the community stands at $1,231.33 and represents 1.00 percent of the 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 2023 with a balanced operating budget. The budget for the fiscal year beginning January 1, 2023, is $126,164,748 a 6.1 percent increase from the previous year. The general fund operating budget totals $60,549,697 resulting in a 13.9 percent increase over the previous year. Total capital spending during the year is estimated to be $25.5 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 2023, the Village enters year 3 of 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 was not expected to increase for the 2022 tax levy (extended and collected in 2023). A tax levy was adopted for the 2023 budget at the same level as the prior year for an increase of 0.0 percent. The Village mitigated an additional $4.42 million in levied taxes through full abatements of the 2020 and 2022 bonds, as well as a partial abatement of the 2012 and 2016 bonds. If these amounts were not abated the levy increase would have been 20.5 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 2023, included in the budget are monies to restore additional positions eliminated as part of the 2021 Budget due to Covid-19 and its economic impact. 28 VILLAGE OF BUFFALO GROVE, ILLINOIS Management’s Discussion and Analysis (Unaudited) December 31, 2022 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 Christine Berman, Deputy Director of Finance, Village of Buffalo Grove, 50 Raupp Boulevard, Buffalo Grove, IL 60089. 29 • 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. 30 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Net Position December 31, 2022 See Following Page 31 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Net Position December 31, 2022 Business-Type Activities Totals Current Assets Cash and Investments $ 62,209,670 15,072,584 77,282,254 Receivables - Net of Allowances 29,198,417 4,922,932 34,121,349 Prepaids/Inventories 138,071 53,792 191,863 Total Current Assets 91,546,158 20,049,308 111,595,466 Noncurrent Assets Capital Assets Nondepreciable 57,466,683 19,511,631 76,978,314 Depreciable 125,056,980 96,893,484 221,950,464 Accumulated Depreciation (86,788,173)(58,156,921)(144,945,094) 95,735,490 58,248,194 153,983,684 Other Assets Investment in Joint Venture - 9,190,522 9,190,522 Net Pension Asset - IMRF 4,970,471 890,233 5,860,704 Total Noncurrent Assets 100,705,961 68,328,949 169,034,910 Total Assets 192,252,119 88,378,257 280,630,376 Deferred Items - ARO - 1,531,200 1,531,200 Deferred Items - IMRF 2,293,744 410,820 2,704,564 Deferred Items - Police Pension 11,158,448 - 11,158,448 Deferred Items - Firefighters' Pension 11,346,940 - 11,346,940 Deferred Items - RBP 3,565,817 173,691 3,739,508 Total Deferred Outflows of Resources 28,364,949 2,115,711 30,480,660 Total Assets and Deferred Outflows of Resources 220,617,068 90,493,968 311,111,036 Activities ASSETS DEFERRED OUTFLOWS OF RESOURCES Governmental The notes to the financial statements are an integral part of this statement. 32 Business-Type Activities Totals Current Liabilities Accounts Payable $ 7,031,261 2,894,008 9,925,269 Accrued Payroll 1,016,406 61,676 1,078,082 Deposits Payable 386,397 25,075 411,472 Other Payables 955,998 - 955,998 Compensated Absences Payable 222,102 12,784 234,886 Current Portion of Long-Term Debt 2,591,265 568,838 3,160,103 Total Current Liabilities 12,203,429 3,562,381 15,765,810 Noncurrent Liabilities Compensated Absences Payable 888,407 51,138 939,545 Net Pension Liability - Police Pension 33,213,214 - 33,213,214 Net Pension Liability - Firefighters' Pension 22,405,314 - 22,405,314 Total OPEB Liability - RBP 11,449,608 557,713 12,007,321 General Obligation Bonds Payable - Net 50,649,401 - 50,649,401 TIF Revenue Note Payable 19,000,000 - 19,000,000 IEPA Loan Payable - 232,281 232,281 Installment Note Payable - 4,138,889 4,138,889 Asset Retirement Obligation - 1,725,500 1,725,500 Total Noncurrent Liabilities 137,605,944 6,705,521 144,311,465 Total Liabilities 149,809,373 10,267,902 160,077,275 Grants 3,267,964 - 3,267,964 Property Taxes 17,115,541 - 17,115,541 Deferred Items - IMRF 8,059,272 1,443,451 9,502,723 Deferred Items - Police Pension 4,641,661 - 4,641,661 Deferred Items - Firefighters' Pension 3,706,422 - 3,706,422 Deferred Items - RBP 3,550,591 172,950 3,723,541 Deferred Items - Leases - 2,001,931 2,001,931 Total Deferred Inflows of Resources 40,341,451 3,618,332 43,959,783 Total Liabilities and Deferred Inflows of Resources 190,150,824 13,886,234 204,037,058 Net Investment in Capital Assets 49,965,851 53,308,186 103,274,037 Restricted - IMRF 5,605,545 890,233 6,495,778 Restricted - Seizure Funds 459,276 - 459,276 Restricted - Motor Fuel Tax 4,362,004 - 4,362,004 Restricted - Metra Parking Lot 15,852 -15,852 Restricted - TIF 62,355 -62,355 Restricted - Debt Service 32,249 -32,249 Unrestricted (Deficit)(30,036,888)22,409,315 (7,627,573) Total Net Position 30,466,244 76,607,734 107,073,978 NET POSITION LIABILITIES Activities Governmental DEFERRED INFLOWS OF RESOURCES The notes to the financial statements are an integral part of this statement. 33 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Activities For the Fiscal Year Ended December 31, 2022 Charges Operating Capital for Grants/Grants/ Services Contributions Contributions Governmental Activities General Government $27,146,989 3,569,113 - - Public Safety 30,816,345 2,506,306 2,823,541 - Public Works 8,038,122 (16,340)2,357,866 1,610,891 Interest on Long-Term Debt 1,187,011 - - - Total Governmental Activities 67,188,467 6,059,079 5,181,407 1,610,891 Business-Type Activities Water and Sewerage 10,550,484 15,710,593 - - Arboretum Golf 1,273,723 1,368,785 - - Buffalo Grove Golf 1,104,467 1,349,627 - 300,000 Refuse Service 897,956 1,072,015 - - Total Business-Type Activities 13,826,630 19,501,020 - 300,000 Total Primary Government 81,015,097 25,560,099 5,181,407 1,910,891 General Revenues Taxes Property Home Rule Sales Tax Telecommunications Tax Utility Tax Property Transfer Tax Food and Beverage Tax Hotel/Motel Tax Other Taxes Intergovernmental - Unrestricted State Income Tax Sales Tax Local Use Tax Replacement Tax Road and Bridge Tax Vernon Video Gaming Tax Cannabis 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. 34 Governmental Business-Type Activities Activities Totals (23,577,876)- (23,577,876) (25,486,498)- (25,486,498) (4,085,705)- (4,085,705) (1,187,011)- (1,187,011) (54,337,090)- (54,337,090) - 5,160,109 5,160,109 - 95,062 95,062 - 545,160 545,160 - 174,059 174,059 - 5,974,390 5,974,390 (54,337,090)5,974,390 (48,362,700) 17,037,557 - 17,037,557 8,030,359 - 8,030,359 666,083 - 666,083 2,688,047 - 2,688,047 2,001,475 - 2,001,475 938,652 - 938,652 107,094 - 107,094 92,642 - 92,642 7,095,630 - 7,095,630 10,279,295 - 10,279,295 1,751,302 - 1,751,302 86,704 - 86,704 128,752 - 128,752 124,063 - 124,063 251,551 - 251,551 24,481 - 24,481 334,289 457,233 791,522 1,771,784 408,729 2,180,513 (5,314,424)5,314,424 - 48,095,336 6,180,386 54,275,722 (6,241,754)12,154,776 5,913,022 36,707,998 64,452,958 101,160,956 30,466,244 76,607,734 107,073,978 Net (Expenses)/Revenues Primary Government The notes to the financial statements are an integral part of this statement. 35 VILLAGE OF BUFFALO GROVE, ILLINOIS Balance Sheet - Governmental Funds December 31, 2022 Special Revenue Lake Cook Road TIF Cash and Investments $ 47,147,517 66,774 Receivables - Net of Allowances Taxes 24,127,070 - Other 3,075,656 - Due from Other Funds 4,419 - Inventories 136,380 - Prepaids 1,691 - Total Assets 74,492,733 66,774 Accounts Payable 4,104,140 - Accrued Payroll 965,411 - Deposits Payable 386,397 - Due to Other Governments 955,998 - Due to Other Funds 399,388 4,419 Total Liabilities 6,811,334 4,419 Grants 3,110,605 - Property Taxes 16,780,272 - 19,890,877 - Total Liabilities and Deferred Inflows of Resources 26,702,211 4,419 Nonspendable 138,071 - Restricted 1,094,350 62,355 Committed 28,857,031 - Unassigned 17,701,070 - Total Fund Balances 47,790,522 62,355 Total Liabilities, Deferred Inflows of Resources and Fund Balances 74,492,733 66,774 FUND BALANCES General ASSETS LIABILITIES DEFERRED INFLOWS OF RESOURCES The notes to the financial statements are an integral part of this statement. 36 Vehicle Debt Facilities Street Equipment Service Development Maintenance Replacement Nonmajor Totals 3,176 7,932,643 2,280,601 53,122 4,209,390 61,693,223 335,269 - - - - 24,462,339 29,073 - 1,462,691 - 168,658 4,736,078 - - - - - 4,419 - - - - - 136,380 - - - - - 1,691 367,518 7,932,643 3,743,292 53,122 4,378,048 91,034,130 - 456,160 1,631,259 35,377 192 6,227,128 - - - - - 965,411 - - - - - 386,397 - - - - - 955,998 - - - - - 403,807 - 456,160 1,631,259 35,377 192 8,938,741 - - 157,359 - - 3,267,964 335,269 - - - - 17,115,541 335,269 - 157,359 - - 20,383,505 335,269 456,160 1,788,618 35,377 192 29,322,246 - - - - - 138,071 32,249 7,471,027 - - 4,377,856 13,037,837 - 5,456 1,954,674 17,745 - 30,834,906 - - - - - 17,701,070 32,249 7,476,483 1,954,674 17,745 4,377,856 61,711,884 367,518 7,932,643 3,743,292 53,122 4,378,048 91,034,130 Capital Projects The notes to the financial statements are an integral part of this statement. 37 VILLAGE OF BUFFALO GROVE, ILLINOIS Reconciliation of Total Governmental Fund Balance to Net Position - Governmental Activities December 31, 2022 Total Governmental Fund Balances $ 61,711,884 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.95,735,490 A net pension asset is not considered to represent a financial resource and therefore is not reported in the funds. Net Pension Asset - IMRF 4,970,471 Deferred outflows (inflows) of resources related to the pensions not reported in the funds. Deferred Items - IMRF (5,765,528) Deferred Items - Police Pension 6,516,787 Deferred Items - Firefighters' Pension 7,640,518 Deferred Items - RBP 15,226 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 60,707 Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. Compensated Absences Payable (1,110,509) Net Pension Liability - Police Pension (33,213,214) Net Pension Liability - Firefighters' Pension (22,405,314) Total OPEB Liability - RBP (11,449,608) General Obligation Bonds Payable - Net (53,240,666) TIF Revenue Note Payable (19,000,000) Net Position of Governmental Activities 30,466,244 The notes to the financial statements are an integral part of this statement. 38 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds For the Fiscal Year Ended December 31, 2022 See Following Page 39 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds For the Fiscal Year Ended December 31, 2022 Special Revenue Lake Cook Road TIF Revenues Taxes $ 31,211,441 17,013 Intergovernmental 22,565,319 - Charges for Services 3,108,954 - Licenses and Permits 416,436 - Fines and Forfeitures 2,489,966 - Interest 220,455 - Miscellaneous 1,585,152 100,000 Total Revenues 61,597,723 117,013 Expenditures General Government 10,026,720 19,066,491 Public Safety 30,178,107 - Public Works 6,775,205 - Capital Outlay 439,202 - Debt Service Principal Retirement - - Interest and Fiscal Charges - - Total Expenditures 47,419,234 19,066,491 Excess (Deficiency) of Revenues Over (Under) Expenditures 14,178,489 (18,949,478) Other Financing Sources (Uses) Debt Issuance - 19,000,000 Premium on Debt Issuance - - Transfers In 999,600 - Transfers Out (5,647,516)- (4,647,916) 19,000,000 Net Change in Fund Balances 9,530,573 50,522 Fund Balances - Beginning 38,259,949 11,833 Fund Balances - Ending 47,790,522 62,355 General The notes to the financial statements are an integral part of this statement. 40 Vehicle Debt Facilities Street Equipment Service Development Maintenance Replacement Nonmajor Totals 333,455 - - - - 31,561,909 - - 699,308 - 3,269,449 26,534,076 - - - - 304 3,109,258 - - - - - 416,436 - - - - 43,419 2,533,385 113,834 - - - - 334,289 - 86,632 - - - 1,771,784 447,289 86,632 699,308 - 3,313,172 66,261,137 - - - - 202,971 29,296,182 - - - - - 30,178,107 - - - - - 6,775,205 - 14,272,497 5,096,136 776,703 - 20,584,538 2,570,990 - - - - 2,570,990 1,122,929 251,822 - - - 1,374,751 3,693,919 14,524,319 5,096,136 776,703 202,971 90,779,773 (3,246,630) (14,437,687) (4,396,828) (776,703) 3,110,201 (24,518,636) - 18,530,000 - - - 37,530,000 - 2,856,816 - - - 2,856,816 3,386,503 486,047 5,552,981 776,703 160,000 11,361,834 (8,340,404)- - - (2,688,338) (16,676,258) (4,953,901) 21,872,863 5,552,981 776,703 (2,528,338) 35,072,392 (8,200,531) 7,435,176 1,156,153 - 581,863 10,553,756 8,232,780 41,307 798,521 17,745 3,795,993 51,158,128 32,249 7,476,483 1,954,674 17,745 4,377,856 61,711,884 Capital Projects The notes to the financial statements are an integral part of this statement. 41 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, 2022 Net Change in Fund Balances - Total Governmental Funds $ 10,553,756 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 20,313,750 Depreciation Expense (2,608,583) Disposals - Cost (636,841) Disposals - Accumulated Depreciation 636,841 The net effect of deferred outflows (inflows) of resources related to the pensions not reported in the funds. Change in Deferred Items - IMRF (3,136,518) Change in Deferred Items - Police Pension 14,376,097 Change in Deferred Items - Firefighters'' Pension 13,776,937 Change in Deferred Items - RBP (3,661,186) 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 234,031 Change in Net Pension Liability - IMRF 5,646,050 Change in Net Pension Liability - Police Pension (13,428,783) Change in Net Pension Liability - Firefighters' Pension (13,955,259) Change in Total OPEB Liability - RBP 3,276,040 Issuance of Debt - Net (40,386,816) Retirement of Debt - Net 2,758,730 Changes in Net Position of Governmental Activities (6,241,754) The notes to the financial statements are an integral part of this statement. 42 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Net Position - Proprietary Funds December 31, 2022 See Following Page 43 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Net Position - Proprietary Funds December 31, 2022 Governmental Activities Arboretum Internal Golf Nonmajor Totals Service Current Assets Cash and Investments $ 13,851,357 271,232 949,995 15,072,584 516,447 Receivables - Net of Allowances Accounts 2,111,435 - - 2,111,435 - Other 705,398 8,892 1,308 715,598 - Leases Receivable - 1,116,994 978,905 2,095,899 - Inventories - 35,294 18,498 53,792 - Total Current Assets 16,668,190 1,432,412 1,948,706 20,049,308 516,447 Noncurrent Assets Capital Assets Nondepreciable 13,313,117 5,219,738 978,776 19,511,631 - Depreciable 82,614,944 11,042,332 3,236,208 96,893,484 - Accumulated Depreciation (45,487,598) (9,993,063) (2,676,260) (58,156,921) - 50,440,463 6,269,007 1,538,724 58,248,194 - Other Assets Investment in Joint Venture 9,190,522 - - 9,190,522 - Net Pension Asset - IMRF 673,857 70,195 146,181 890,233 - Total Noncurrent Assets 60,304,842 6,339,202 1,684,905 68,328,949 - Total Assets 76,973,032 7,771,614 3,633,611 88,378,257 516,447 1,531,200 - - 1,531,200 - Deferred Items - IMRF 310,968 32,393 67,459 410,820 - Deferred Items - RBP 145,524 - 28,167 173,691 - Total Deferred Outflows of Resources 1,987,692 32,393 95,626 2,115,711 - Total Assets and Deferred Outflows of Resources 78,960,724 7,804,007 3,729,237 90,493,968 516,447 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. 44 Governmental Activities Arboretum Internal Golf Nonmajor Totals Service Current Liabilities Accounts Payable $ 2,634,773 149,568 109,667 2,894,008 404,745 Accrued Payroll 47,175 6,095 8,406 61,676 50,995 Deposits Payable 25,075 - - 25,075 - Compensated Absences Payable 1,457 - 11,327 12,784 - IEPA Loan Payable 20,444 - - 20,444 - Installment Note Payable 548,394 - - 548,394 - Total Current Liabilities 3,277,318 155,663 129,400 3,562,381 455,740 Noncurrent Liabilities Compensated Absences Payable 5,830 - 45,308 51,138 - Total OPEB Liability - RBP 467,270 - 90,443 557,713 - IEPA Loan Payable 232,281 - - 232,281 - Installment Note Payable 4,138,889 - - 4,138,889 - Asset Retirement Obligation 1,725,500 - - 1,725,500 - Total Noncurrent Liabilities 6,569,770 - 135,751 6,705,521 - Total Liabilities 9,847,088 155,663 265,151 10,267,902 455,740 Deferred Items - IMRF 1,092,611 113,816 237,024 1,443,451 - Deferred Items - RBP 144,903 - 28,047 172,950 - Deferred Items - Leases - 1,057,013 944,918 2,001,931 - Total Deferred Inflows of Resources 1,237,514 1,170,829 1,209,989 3,618,332 - Total Liabilities and Deferred Inflows of Resources 11,084,602 1,326,492 1,475,140 13,886,234 455,740 Net Investment in Capital Assets 45,500,455 6,269,007 1,538,724 53,308,186 - Restricted 673,857 70,195 146,181 890,233 - Unrestricted 21,701,810 138,313 569,192 22,409,315 60,707 Total Net Position 67,876,122 6,477,515 2,254,097 76,607,734 60,707 Total Liabilities, Deferred Inflows of Resources, and Net Position 78,960,724 7,804,007 3,729,237 90,493,968 516,447 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. 45 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds For the Fiscal Year Ended December 31, 2022 Operating Revenues Charges for Services $ 15,710,593 Interfund Services - Miscellaneous 408,729 Total Operating Revenues 16,119,322 Operating Expenses Operations 8,692,805 Capital Outlay 7,669 Depreciation and Amortization 1,726,255 Total Operating Expenses 10,426,729 Operating Income 5,692,593 Nonoperating Revenues (Expenses) Interest Income 457,233 Interest Expense (123,755) 333,478 Income Before Transfers and Capital Contributions 6,026,071 Transfers In 8,010,974 Transfers Out (2,421,550) Capital Contributions - 5,589,424 Change in Net Position 11,615,495 Net Position - Beginning 56,260,627 Net Position - Ending 67,876,122 Sewerage Water and The notes to the financial statements are an integral part of this statement. 46 Governmental Activities Arboretum Internal Golf Nonmajor Totals Service 1,368,785 2,421,642 19,501,020 - - - - 5,473,064 - - 408,729 - 1,368,785 2,421,642 19,909,749 5,473,064 1,271,507 1,919,797 11,884,109 5,473,064 - 28,961 36,630 - 2,216 53,665 1,782,136 - 1,273,723 2,002,423 13,702,875 5,473,064 95,062 419,219 6,206,874 - - - 457,233 - - - (123,755)- - - 333,478 - 95,062 419,219 6,540,352 - - - 8,010,974 - - (275,000)(2,696,550)- 300,000 - 300,000 300,000 (275,000)5,614,424 - 395,062 144,219 12,154,776 - 6,082,453 2,109,878 64,452,958 60,707 6,477,515 2,254,097 76,607,734 60,707 Business-Type Activities - Enterprise The notes to the financial statements are an integral part of this statement. 47 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Cash Flows - Proprietary Funds For the Fiscal Year Ended December 31, 2022 Cash Flows from Operating Activities Receipts from Customers and Users $ 15,313,723 Interfund Services Provided - Payments to Suppliers (6,191,664) Payments to Employees (1,126,355) 7,995,704 Cash Flows from Capital and Related Financing Activities Purchase of Capital Assets (9,159,143) Principal Retirement (510,745) Interest Expense (123,755) (9,793,643) Cash Flows from Noncapital Financing Activities Transfers In 8,010,974 Transfers Out (2,421,550) 5,589,424 Cash Flows from Investing Activities Interest Income 457,233 Net Change in Cash and Cash Equivalents 4,248,718 Cash and Cash Equivalents - Beginning 9,602,639 Cash and Cash Equivalents - Ending 13,851,357 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities Operating Income 5,692,593 Adjustments to Reconcile Operating Income to Net Cash Provided by (Used in) Operating Activities: Depreciation and Amortization Expense 1,726,255 Other Income (Expense)(866,892) (Increase) Decrease in Current Assets 61,293 Increase (Decrease) in Current Liabilities 1,382,455 Net Cash Provided by Operating Activities 7,995,704 Sewerage Water and The notes to the financial statements are an integral part of this statement. 48 Governmental Activities Arboretum Internal Golf Nonmajor Totals Service 200,874 1,432,558 16,947,155 - - - - 5,473,064 (125,071)(361,759)(6,678,494)(4,303,388) (243,269)(669,845)(2,039,469)(1,003,613) (167,466)400,954 8,229,192 166,063 (740,408)- (9,899,551)- - - (510,745)- - - (123,755)- (740,408)- (10,534,051)- - - 8,010,974 - - (275,000)(2,696,550)- - (275,000)5,314,424 - - - 457,233 - (907,874)125,954 3,466,798 166,063 1,179,106 824,041 11,605,786 350,384 271,232 949,995 15,072,584 516,447 95,062 419,219 6,206,874 - 2,216 53,665 1,782,136 - (34,537)(36,654)(938,083)- (1,133,374)(989,084)(2,061,165)- 903,167 953,808 3,239,430 166,063 (167,466)400,954 8,229,192 166,063 Business-Type Activities - Enterprise The notes to the financial statements are an integral part of this statement. 49 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Fiduciary Net Position December 31, 2022 Cash and Cash Equivalents $ 3,514,505 Investments Illinois Police Officers' Pension Investment Fund 79,911,618 Illinois Firefighters' Pension Investment Fund 71,443,718 Equity Securities 1,272,176 Receivables - Net of Allowance Accrued Interest 850 Due from Other Funds 399,388 Prepaids 795 Total Assets 156,543,050 Accounts Payable 3,974 Net Position Restricted for Pensions 156,539,076 NET POSITION Trust Pension ASSETS LIABILITIES The notes to the financial statements are an integral part of this statement. 50 VILLAGE OF BUFFALO GROVE, ILLINOIS Statement of Changes in Fiduciary Net Position For the Fiscal Year Ended December 31, 2022 Additions Contributions - Employer $ 5,785,278 Contributions - Plan Members 1,279,108 Contributions - Other 147,907 Total Contributions 7,212,293 Investment Earnings Interest Earned 1,300,007 Net Change in Fair Value (27,015,248) (25,715,241) Less Investment Expenses (131,520) Net Investment Income (25,846,761) Total Additions (18,634,468) Deductions Administration 107,159 Benefits and Refunds 9,374,105 Total Deductions 9,481,264 Change in Fiduciary Net Position (28,115,732) Net Position Restricted for Pensions Beginning 184,654,808 Ending 156,539,076 Pension Trust The notes to the financial statements are an integral part of this statement. 51 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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 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. 52 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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. 53 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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. 54 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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: 55 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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.). 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. 56 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued BASIS OF PRESENTATION – Continued Fund Financial Statements – Continued Fiduciary Funds – Continued 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. 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. 57 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued MEASUREMENT FOCUS AND BASIS OF ACCOUNTING – Continued 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. 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. 58 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 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. 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. 59 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued ASSETS/DEFERRED OUTFLOWS, LIABILITIES/DEFERRED INFLOWS, AND NET POSITION OR EQUITY – Continued 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 basis 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. 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 a consumption/acquisition of net assets 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. 60 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued ASSETS/DEFERRED OUTFLOWS, LIABILITIES/DEFERRED INFLOWS, AND NET POSITION OR EQUITY – Continued Compensated Absences – Continued 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. 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.” 61 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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 Fund, Special Revenue Funds except for the Lake Cook Road TIF Fund, Debt Service Funds, Capital Projects Funds, Proprietary Funds, 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. EXCESS OF ACTUAL EXPENDITURES/EXPENSES OVER BUDGET IN INDIVIDUAL FUNDS The following funds had an excess of actual expenditures/expenses, exclusive of depreciation, over budget as of the date of this report: Fund General $ 473,319 Lake Cook Road TIF 18,999,999 Firefighters' Pension 605,851 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. 62 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued 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. 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. Village Deposits. At year-end, the carrying amount of the Village’s deposits for governmental and business- type activities totaled $45,227,134 and the bank balances totaled $40,543,305. 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 U.S. Treasuries $2,781,134 - 2,781,134 - - State and Local Obligations 501,143 501,143 - - - Illinois Funds 10,303,721 10,303,721 - - - IMET 7,813,370 7,813,370 - - - IPRIME 10,655,752 10,655,752 - - - 32,055,120 29,273,986 2,781,134 - - Investment Maturities (in Years) 63 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Village – Continued The Village has the following recurring fair value measurements as of December 31, 2022: 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. Treasuries $2,781,134 2,781,134 - - State and Local Obligations 501,143 - 501,143 - 3,282,277 2,781,134 501,143 - Investments Measured at the Net Asset Value (NAV) Illinois Funds 10,303,721 IMET 7,813,370 IPRIME 10,655,752 Total Investments at the (NAV)28,772,843 Total Investments Measured at Fair Value 32,055,120 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. 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. 64 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Village – Continued Credit Risk – Continued. 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. 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). 65 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Police Pension Fund The Illinois Police Officers Pension Investment Fund (IPOPIF) is an investment trust fund responsible for the consolidation and fiduciary management of the pension assets of Illinois suburban and downstate police pension funds. IPOPIF was created by Public Act 101-0610, and codified within the Illinois Pension Code, becoming effective January 1, 2020, to streamline investments and eliminate unnecessary and redundant administrative costs, thereby ensuring assets are available to fund pension benefits for the beneficiaries of the participating pension funds. Participation in IPOPIF by Illinois suburban and downstate police pension funds is mandatory. Investments of the Fund are combined in a commingled external investment pool and held by IPOPIF. A schedule of investment expenses is included in IPOPIF‘s annual report. For additional information on IPOPIF’s investments, please refer to their annual report, which can be obtained from IFPIF at 456 Fulton Street, Suite 402 Peoria, Illinois 61602 or at www.ipopif.org. The Fund transferred all eligible assets to the Investment Fund on May 2, 2022. Deposits. The Fund retains all its available cash with one financial institution. Available cash is determined to be that amount which is required for the current expenditures of the Fund. The excess of available cash is required to be transferred to IPOPIF for purposes of the long-term investment for the Fund. At year-end, the carrying amount of the Fund’s cash on hand totaled $2,899,529 and the bank balances totaled $2,712,954. Custodial Credit Risk. In the case of deposits, this is the risk that in the event of a bank failure, the Fund’s deposits may not be returned to it. 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, 2022 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Police Pension Fund – Continued Investments. At year-end the Fund has $79,911,618 invested in IPOPIF, which is measured at the Net Asset Value (NAV) per share as determined by the pool. The pooled investments consist of the investments as noted in the target allocation table available at www.ipopif.org. In addition the Fund had $1,272,176 invested in equity securities. Investment Policy. IPOPIF’s current investment policy was adopted by the Board of Trustees on December 17, 2021. IPOPIF is authorized to invest in all investments allowed by Illinois Compiled Statutes (ILCS). The IPOPIF shall not be subject to any of the limitations applicable to investments of pension fund assets currently held by the transferor pension funds under Sections 1-113.1 through 1- 113.12 or Article 3 of the Illinois Pension Code. Rate of Return At year-end, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was (13.49%). The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Firefighters’ Pension Fund The Illinois Firefighters’ Pension Investment Fund (IFPIF) is an investment trust fund responsible for the consolidation and fiduciary management of the pension assets of Illinois suburban and downstate firefighter pension funds. IFPIF was created by Public Act 101-0610, and codified within the Illinois Pension Code, becoming effective January 1, 2020, to streamline investments and eliminate unnecessary and redundant administrative costs, thereby ensuring assets are available to fund pension benefits for the beneficiaries of the participating pension funds. Participation in IFPIF by Illinois suburban and downstate firefighter pension funds is mandatory. Investments of the Fund are combined in a commingled external investment pool and held by IFPIF. A schedule of investment expenses is included in IFPIF’s annual report. For additional information on IFPIF’s investments, please refer to their annual report, which can be obtained from IFPIF at 1919 South Highland Avenue, Building A, Suite 237, Lombard, IL 60148 or at www.ifpif.org. The Fund transferred all eligible assets to the IFPIF on January 4, 2022. Deposits. The Fund retains all its available cash with one financial institution. Available cash is determined to be that amount which is required for the current expenditures of the Fund. The excess of available cash is required to be transferred to IFPIF for purposes of the long-term investment for the Fund. At year-end, the carrying amount of the Fund’s cash on hand totaled $614,976 and the bank balances totaled $614,875. 67 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued DEPOSITS AND INVESTMENTS – Continued Firefighters’ Pension Fund – Continued Custodial Credit Risk. In the case of deposits, this is the risk that in the event of a bank failure, the Fund’s deposits may not be returned to it. 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. Investments. At year-end the Fund has $71,443,718 invested in IFPIF, which is measured at the Net Asset Value (NAV) per share as determined by the pool. The pooled investments consist of the investments as noted in the target allocation table available at www.ifpif.org. Investment Policy. IFPIF’s current investment policy was adopted by the Board of Trustees on June 17, 2022. IFPIF is authorized to invest in all investments allowed by Illinois Compiled Statutes (ILCS). The IFPIF shall not be subject to any of the limitations applicable to investments of pension fund assets currently held by the transferor pension funds under Sections 1-113.1 through 1-113.12 or Article 4 of the Illinois Pension Code. Rate of Return At year-end, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was (15.79%). The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. 68 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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 $ 4,419 Police Pension General 232,971 Fire Pension General 166,417 403,807 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 Water and Sewerage $ 999,600 (1) Debt Service General 447,603 (1) Debt Service Water and Sewerage 1,421,950 (2) Debt Service Nonmajor Governmental 1,241,950 (2) Debt Service Nonmajor Business-Type 275,000 (2) Facilities Development General 486,047 (2) Street Maintenance General 1,380,000 (2) Street Maintenance Debt Service 2,726,593 (1) Street Maintenance Nonmajor Governmental 1,446,388 (1) Vehicle Replacement General 776,703 (2) Nonmajor Governmental General 160,000 (3) Water and Sewerage General 2,397,163 (1) Water and Sewerage Debt Service 5,613,811 (1) 19,372,808 Amount 69 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued LEASES RECEIVABLE The Village is a lessor on the following leases at year end: Leases Term Start Date Payments Interest Range WJN Golf LLC 10 years May 15, 2022 $ 10,417 per month 1.05% T-Mobile Cell Tower 7.6 years January 1, 2022 $ 3,790 per month 4.00% Buffalo Grove Golf Course 15 years January 1, 2022 $ 4,547 per month 1.01% During the fiscal year, the Village has recognized $138,640 of lease revenue. The future principal and interest lease payments as of year-end, are as follows: Fiscal Year Ending Principal Interest 2023 194,721 30,323 2024 198,054 26,990 2025 202,510 16,497 2026 207,653 14,542 2027 213,376 12,543 2028 218,736 10,493 2029 210,365 8,403 2030 182,968 6,264 2031 186,876 4,078 2032 70,820 2,435 2033 53,793 1,871 2034 54,339 1,325 2035 54,890 774 2036 46,798 220 2,095,899 136,758 70 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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 $39,502,936 4,379,994 - 43,882,930 Construction in Progress 8,005,461 6,132,907 554,615 13,583,753 47,508,397 10,512,901 554,615 57,466,683 Depreciable Capital Assets Buildings 27,019,561 9,154,937 521,953 35,652,545 Equipment and Vehicles 16,175,927 636,144 114,888 16,697,183 Land Improvements 3,242,060 - - 3,242,060 Streets 30,363,831 564,383 - 30,928,214 Storm Sewers 38,536,978 - - 38,536,978 115,338,357 10,355,464 636,841 125,056,980 Less Accumulated Depreciation Buildings 22,820,291 511,905 521,953 22,810,243 Equipment and Vehicles 8,731,434 1,266,718 114,888 9,883,264 Land Improvements 731,072 64,845 - 795,917 Streets 15,203,533 558,870 - 15,762,403 Storm Sewers 37,330,101 206,245 - 37,536,346 84,816,431 2,608,583 636,841 86,788,173 Net Depreciable Capital Assets 30,521,926 7,746,881 - 38,268,807 Net Capital Assets 78,030,323 18,259,782 554,615 95,735,490 Beginning Balances Depreciation expense was charged to governmental activities as follows: General Government $209,224 Public Safety 1,407,230 Public Works 992,129 2,608,583 71 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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 5,246,587 8,944,951 878,421 13,313,117 11,445,101 8,944,951 878,421 19,511,631 Depreciable Capital Assets Buildings 11,181,687 1,003,153 - 12,184,840 Equipment and Vehicles 136,362 147,977 - 284,339 Land Improvements 1,966,485 37,255 - 2,003,740 Infrastructure 81,475,929 944,636 - 82,420,565 94,760,463 2,133,021 - 96,893,484 Less Accumulated Depreciation Buildings 10,570,535 53,899 - 10,624,434 Equipment and Vehicles 76,423 6,621 - 83,044 Land Improvements 1,966,485 - - 1,966,485 Infrastructure 43,828,493 1,654,465 - 45,482,958 56,441,936 1,714,985 - 58,156,921 Net Depreciable Capital Assets 38,318,527 418,036 - 38,736,563 Net Capital Assets 49,763,628 9,362,987 878,421 58,248,194 Beginning Balances Depreciation expense was charged to business-type activities as follows: Water and Sewerage $1,659,105 Arboretum Golf 2,215 Buffalo Grove Golf 53,665 1,714,985 72 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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 $5,285,000 - 425,000 4,860,000 Debt Service 3,345,000 - 305,000 3,040,000 Debt Service 979,800 - 240,990 738,810 Debt Service 22,400,000 - 1,600,000 20,800,000 Debt Service - 18,530,000 - 18,530,000 32,009,800 18,530,000 2,570,990 47,968,810 Beginning Balances $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. $19,000,000 General Obligation Bonds of 2022 -Due in annual installments of $1,330,000 to $1,840,000 plus interest at 3.00% to 5.00% through December 30, 2042. $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. 73 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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 $ 272,708 - 19,983 252,725 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 $ 5,178,045 - 490,762 4,687,283 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 TIF Revenue Notes Payable TIF revenue notes payable are issued to reimburse developers for qualifying costs incurred in the tax increment financing (TIF) districts and are expected to be repaid solely from tax increment financing revenues. Since these revenues are not determinable, there is no debt service requirement to maturity schedule. None of the TIF notes payable produced a capital asset owned by the Village. Developer notes currently outstanding are as follows: Fund Debt Ending Issue Retired by Issuances Retirements Balances Lake Cook Road TIF $ - 19,000,000 - 19,000,000 Beginning Balances $19,000,000 Tax Increment Revenue Note of 2022, bearing interest at 6.20% through January 1, 2042. 74 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 3 – DETAIL NOTES ON ALL FUNDS LONG-TERM DEBT – Continued 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 24 years, underground tanks are 49 years, and lift stations are 4 years. 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 $ 1,344,540 234,031 468,062 1,110,509 222,102 Net Pension Liability/(Asset) - IMRF Governmental Activities 675,579 - 5,646,050 (4,970,471) - Net Pension Liability - Police 19,784,431 13,428,783 - 33,213,214 - Net Pension Liability - Firefighters' 8,450,055 13,955,259 - 22,405,314 - Total OPEB Liability - RBP 14,725,648 - 3,276,040 11,449,608 - General Obligation Bonds 32,009,800 18,530,000 2,570,990 47,968,810 2,591,265 Plus: Unamortized Premium 2,602,780 2,856,816 187,740 5,271,856 - TIF Revenue Note Payable - 19,000,000 - 19,000,000 79,592,833 68,004,889 12,148,882 135,448,840 2,813,367 Business-Type Activities Compensated Absences 124,792 60,870 121,740 63,922 12,784 Net Pension Liability/(Asset) - IMRF 123,357 - 1,013,590 (890,233) - Total OPEB Liability - RBP 833,813 - 276,100 557,713 - IEPA Loans Payable 272,708 - 19,983 252,725 20,444 Installment Note Payable 5,178,045 - 490,762 4,687,283 548,394 Asset Retirement Obligation 1,725,500 - - 1,725,500 - 8,258,215 60,870 1,922,175 6,396,910 581,622 Beginning Type of Debt Balances For the governmental activities, payments on the compensated absences, the net pension liabilities/(asset) and the total OPEB liability are made by the General Fund. Payments on general obligation bonds are being liquidated by the Debt Service Fund, and the TIF revenue note payable are made by the Lake Cook Road TIF Fund. 75 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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/(asset) 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 2023 $ 2,591,265 2,160,411 20,444 5,684 548,394 105,549 2024 2,611,365 1,796,116 20,916 5,212 610,091 92,095 2025 2,646,180 1,696,626 21,399 4,729 676,096 77,149 2026 2,410,000 1,595,619 21,893 4,235 746,659 60,610 2027 2,485,000 1,502,894 22,398 3,730 822,046 42,367 2028 2,510,000 1,405,338 22,915 3,213 902,537 22,304 2029 2,640,000 1,306,825 23,444 2,684 381,460 3,371 2030 2,795,000 1,233,125 23,985 2,143 - - 2031 2,865,000 1,149,150 24,539 1,589 - - 2032 2,975,000 1,046,000 25,105 1,023 - - 2033 3,085,000 930,950 25,687 441 - - 2034 3,205,000 811,400 - - - - 2035 3,350,000 686,850 - - - - 2,340,000 556,150 2,460,000 439,150 2,580,000 316,150 1,035,000 187,150 1,085,000 135,400 1,130,000 92,000 1,170,000 46,800 47,968,810 19,094,104 252,725 34,683 4,687,283 403,445 Year Totals 2036 2042 2040 2039 2038 2037 2041 Installment Note PayableFiscalBonds Business-Type ActivitiesGovernmental Activities General Obligation IEPA Loan Payable 76 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued LONG-TERM DEBT – Continued Revolving Line-of-Credit The Village has established a $7,500,000 revolving line-of-credit with Northbrook Bank & Trust Company for working capital needs. At December 31, 2022 the balance is $0 as the Village has not drawn on the line-of-credit. 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. PROPERTY TAXES Property taxes for 2021 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. 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, 2022, the Village owes Woodman’s Food Market, Inc. $521,798. 77 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued TAX ABATEMENTS – Continued 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, 2022 were $2,108,097. 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, 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, 2022 were $164,783. 78 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued TAX ABATEMENTS – Continued 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 had no incentive payments for the year ended December 31, 2022. 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 ofthat 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 79 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued TAX ABATEMENTS – Continued 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, 2022 were $734,602. 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. 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. 80 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 3 – DETAIL NOTES ON ALL FUNDS – Continued FUND BALANCE CLASSIFICATIONS – Continued 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: Special Revenue Lake Vehicle Cook Debt Facilities Street Equipment Road TIF Service Development Maintenance Replacement Nonmajor Totals Fund Balances Nonspendable Inventories $136,380 - - - - - - 136,380 Prepaids 1,691 - - - - - - 1,691 138,071 - - - - - - 138,071 Restricted Seizure Funds 459,276 - - - - - - 459,276 IMRF 635,074 - - - - - - 635,074 Motor Fuel Tax - - - - - - 4,362,004 4,362,004 Metra Parking Lot - - - - - - 15,852 15,852 TIF - 62,355 - - - - - 62,355 Debt Service - - 32,249 - - - - 32,249 Capital Projects - - - 7,471,027 - - - 7,471,027 1,094,350 62,355 32,249 7,471,027 - - 4,377,856 13,037,837 Committed Capital Projects 28,857,031 - - 5,456 1,954,674 17,745 - 30,834,906 Unassigned 17,701,070 - - - - - - 17,701,070 Total Fund Balances 47,790,522 62,355 32,249 7,476,483 1,954,674 17,745 4,377,856 61,711,884 General Capital Projects 81 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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, 2022: Governmental Activities Capital Assets - Net of Accumulated Depreciation $95,735,490 Plus: Unspent Bond Proceeds 7,471,027 Less Capital Related Debt: General Obligation Bonds (47,968,810) Unamortized Premium (5,271,856) Net Investment in Capital Assets 49,965,851 Business-Type Activities Capital Assets - Net of Accumulated Depreciation 58,248,194 Less Capital Related Debt: IEPA Loans Payable (252,725) Installment Note Payable (4,687,283) Net Investment in Capital Assets 53,308,186 82 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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 include 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. 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. 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. 83 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 4 – OTHER INFORMATION – Continued JOINT VENTURES – Continued Northwest Water Commission (NWWC) – Continued The four members of NWWC and their percentage shares as of April 30, 2022 are as follows: Percent Share Village of Arlington Heights 38.30 % Village of Buffalo Grove 17.65 Village of Palatine 28.61 Village of Wheeling 15.44 100.00 % 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, 2022: Current Assets $21,715,385 Current Liabilities $884,658 Noncurrent Assets Noncurrent Liabilities - Capital Assets 31,210,733 Total Liabilities 884,658 Total Assets 52,926,118 Net Position 52,041,460 84 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 4 – OTHER INFORMATION – Continued JOINT VENTURES – Continued Northwest Water Commission (NWWC) – Continued Summary of revenues, expenses and changes in net position for the year ended April 30, 2022: Operating Revenues $ 13,798,277 Operating Expenses 11,626,816 Operating Income 2,171,461 Nonoperating Revenue (Expenses)84,809 Change in Net Position 2,256,270 Net Position - Beginning 49,785,190 Net Position - Ending 52,041,460 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. NWWC covenants to establish fees and charges sufficient to provide revenues to meet all its requirements. NWWC 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. 85 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 4 – OTHER INFORMATION – Continued JOINT VENTURES – Continued Northwest Water Commission (NWWC) – Continued 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 $1,925,672 to NWWC for the year ended April 30, 2022. All payments were paid from the Water and Sewerage Fund. The Village’s share of net position of NWWC was $9,190,522 at April 30, 2022. 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. 86 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 4 – OTHER INFORMATION – Continued JOINT VENTURES – Continued Solid Waste Agency of Northern Cook County (SWANCC) – Continued 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. 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 any statutory or constitutional limitation. In accordance with the joint venture agreement, the Village remitted $897,956 to SWANCC for the year ended December 31, 2022, 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. 87 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued The aggregate amount recognized for the three pension plans is: Net Pension Deferred Deferred Liability/(Asset) Outflows Inflows IMRF $ (4,110,545) (5,860,704) 2,704,564 9,502,723 Police Pension 2,427,380 33,213,214 11,158,448 4,641,661 Firefighters' Pension 2,588,906 22,405,314 11,346,940 3,706,422 905,741 49,757,824 25,209,952 17,850,806 Pension (Revenue) 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. 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. 88 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Illinois Municipal Retirement Fund (IMRF) – Continued Plan Descriptions – Continued Benefits Provided - Continued. 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. Plan Membership. As of December 31, 2021, the measurement date, the following employees were covered by the benefit terms: Inactive Plan Members Currently Receiving Benefits 124 Inactive Plan Members Entitled to but not yet Receiving Benefits 72 Active Plan Members 84 Total 280 Contributions. As set by statute, the Village’s Regular Plan Members are required to contribute 4.50% 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, 2022, the Village’s contribution was 11.64% of covered payroll. Net Pension (Asset). The Village’s net pension (asset) was measured as of December 31, 2021. The total pension liability used to calculate the net pension (asset) 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, 2021, using the following actuarial methods and assumptions: 89 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Illinois Municipal Retirement Fund (IMRF) – Continued Plan Descriptions – Continued Actuarial Cost Method Entry Age Normal Asset Valuation Method Fair Value Actuarial Assumptions Interest Rate 7.25% Salary Increases 2.85% to 13.75% Cost of Living Adjustments 3.25% Inflation 2.25% For nondisabled retirees, the Pub-2010, Amount-Weighted, below-median income, General, Retiree, Male (adjusted 106%) and Female (adjusted 105%) tables, and future mortality improvements projected using scale MP-2020. For disabled retirees, the Pub-2010, Amount-Weighted, below-median income, General, Disabled Retiree, Male and Female (both unadjusted) tables, and future mortality improvements projected using scale MP-2020. For active members, the Pub-2010, Amount-Weighted, below-median income, General, Employee, Male and Female (both unadjusted) tables, and future mortality improvements projected using scale MP-2020. 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: 90 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 NOTE 4 – OTHER INFORMATION – Continued EMPLOYEE RETIREMENT SYSTEM – DEFINED BENEFIT PENSION PLANS – Continued Illinois Municipal Retirement Fund (IMRF) – Continued Plan Descriptions – Continued Long-Term Expected Real Asset Class Target Rate of Return Fixed Income 28.00% (0.85%) Domestic Equities 37.00%2.85% International Equities 18.00%3.85% Real Estate 9.00%4.05% Blended 7.00%0.70% - 4.80% Cash and Cash Equivalents 1.00%(1.45%) 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/(asset) to changes in the discount rate. The table below presents the net pension liability/(asset) of the Village calculated using the discount rate as well as what the Village’s net pension liability/(asset) 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)$2,718,618 (5,860,704) (12,740,117) 1% Decrease 1% Increase (6.25%)(8.25%) 91 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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/(Asset) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability/(Asset) (A) (B) (A) - (B) Balances at December 31, 2020 $71,608,632 70,809,696 798,936 Changes for the Year: Service Cost 785,687 - 785,687 Interest on the Total Pension Liability 5,082,733 - 5,082,733 Changes of Benefit Terms - - - Difference Between Expected and Actual Experience of the Total Pension Liability 1,307,006 - 1,307,006 Changes of Assumptions - - - Contributions - Employer - 1,140,015 (1,140,015) Contributions - Employees - 383,301 (383,301) Net Investment Income - 12,021,830 (12,021,830) Benefit Payments, including Refunds of Employee Contributions (3,789,614) (3,789,614)- Other (Net Transfer)- 289,920 (289,920) Net Changes 3,385,812 10,045,452 (6,659,640) Balances at December 31, 2021 74,994,444 80,855,148 (5,860,704) 92 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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, 2022, the Village recognized pension revenue of $4,110,545. At December 31, 2022, 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 $1,583,103 - 1,583,103 Change in Assumptions 66,518 (373,585) (307,067) Net Difference Between Projected and Actual Earnings on Pension Plan Investments - (9,129,138) (9,129,138) Total Pension Expense to be Recognized in Future Periods 1,649,621 (9,502,723) (7,853,102) Pension Contributions Made Subsequent to the Measurement Date 1,054,943 - 1,054,943 Total Deferred Amounts Related to IMRF 2,704,564 (9,502,723) (6,798,159) Deferred Outflows of Resources $1,054,943 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, 2022. 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 Fiscal (Inflows) Year of Resources 2023 $(1,386,693) 2024 (3,054,829) 2025 (2,019,625) 2026 (1,391,955) 2027 - Thereafter - Total (7,853,102) 93 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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, 2022, the measurement date, membership consisted of the following: Inactive Plan Members Currently Receiving Benefits 62 Inactive Plan Members Entitled to but not yet Receiving Benefits 10 Active Plan Members 58 Total 130 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. 94 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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, 2022, the Village’s contribution was 48.24% 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, 2022, 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 3.75% - 8.42% Cost of Living Adjustments 3.25% Inflation 2.25% 95 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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 adjusted for plan status, demographics, 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 $ 45,385,798 33,213,214 16,155,538 1% Decrease 1% Increase (6.00%)(8.00%) 96 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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, 2021 $ 118,040,661 98,256,230 19,784,431 Changes for the Year: Service Cost 1,545,376 - 1,545,376 Interest on the Total Pension Liability 7,732,224 - 7,732,224 Changes of Benefit Terms (46,145)- (46,145) Difference Between Expected and Actual Experience of the Total Pension Liability (5,311,797)- (5,311,797) Changes of Assumptions 530,076 - 530,076 Contributions - Employer - 3,374,694 (3,374,694) Contributions - Employees - 691,080 (691,080) Contributions - Other - 147,907 (147,907) Net Investment Income - (13,134,888) 13,134,888 Benefit Payments, including Refunds of Employee Contributions (4,961,571) (4,961,571)- Administrative Expense - (57,842) 57,842 Net Changes (511,837) (13,940,620) 13,428,783 Balances at December 31, 2022 117,528,824 84,315,610 33,213,214 97 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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, 2022, the Village recognized pension expense of $2,427,380. At December 31, 2022, 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 $ 2,613,105 (4,283,320) (1,670,215) Change in Assumptions 1,062,325 (358,341) 703,984 Net Difference Between Projected and Actual Earnings on Pension Plan Investments 7,483,018 - 7,483,018 Total Deferred Amounts Related to Police Pension 11,158,448 (4,641,661) 6,516,787 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 2023 $ (177,959) 2024 1,611,955 2025 1,998,970 2026 3,149,842 2027 (66,021) Thereafter - Total 6,516,787 Net Deferred (Inflows) of Resources Outflows/ 98 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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, 2022, the measurement date, membership consisted of the following: Inactive Plan Members Currently Receiving Benefits 50 Inactive Plan Members Entitled to but not yet Receiving Benefits 2 Active Plan Members 55 Total 107 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. 99 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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, 2022, the Village’s contribution was 39.42% 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. 100 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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, 2022, 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 3.75% - 9.48% Cost of Living Adjustments 3.25% Inflation 2.25% Mortality rates were based on the PubS-2010 adjusted for plan status, demographics, 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. 101 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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 $ 35,520,501 22,405,314 11,657,151 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, 2021 $ 94,848,633 86,398,578 8,450,055 Changes for the Year: Service Cost 1,443,273 - 1,443,273 Interest on the Total Pension Liability 6,222,731 - 6,222,731 Changes of Benefit Terms (140,724) - (140,724) Difference Between Expected and Actual Experience of the Total Pension Liability (3,700,466) - (3,700,466) Changes of Assumptions 367,867 - 367,867 Contributions - Employer - 2,410,584 (2,410,584) Contributions - Employees - 588,028 (588,028) Net Investment Income - (12,711,873) 12,711,873 Benefit Payments, including Refunds of Employee Contributions (4,412,534) (4,412,534) - Administrative Expense - (49,317) 49,317 Net Changes (219,853) (14,175,112) 13,955,259 Balances at December 31, 2022 94,628,780 72,223,466 22,405,314 102 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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, 2022, the Village recognized pension expense of $2,588,906. At December 31, 2022, 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 $ 2,189,029 (3,330,852) (1,141,823) Change in Assumptions 1,029,756 (375,570) 654,186 Net Difference Between Projected and Actual Earnings on Pension Plan Investments 8,128,155 - 8,128,155 Total Deferred Amounts Related to Firefighters' Pension 11,346,940 (3,706,422) 7,640,518 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 2023 $ 152,535 2024 1,615,302 2025 2,772,822 2026 3,794,571 2027 (180,548) Thereafter (514,164) Total 7,640,518 Net Deferred (Inflows) of Resources Outflows/ 103 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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. There are no separately issued financial statements. 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, 2022, the measurement date, the following employees were covered by the benefit terms: Inactive Plan Members Currently Receiving Benefits 55 Inactive Plan Members Entitled to but not yet Receiving Benefits - Active Plan Members 201 Total 256 Total OPEB Liability The Village’s total OPEB liability was measured as of December 31, 2022, and was determined by an actuarial valuation as of December 31, 2021. Actuarial Assumptions and Other Inputs. The total OPEB liability in the December 31, 2021 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: 104 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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 3.50% Discount Rate 3.72% Healthcare Cost Trend Rates Retirees' Share of Benefit-Related Costs 100% of Benefit-Related Costs 5.75%for 2020,decreasing to an ultimate rate of 4.50% for 2026 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, 2021 $15,559,461 Changes for the Year: Service Cost 643,540 Interest on the Total Pension Liability 314,733 Changes of Benefit Terms (293,086) Difference Between Expected and Actual Experience (996,070) Changes of Assumptions or Other Inputs (2,658,932) Benefit Payments (562,325) Net Changes (3,552,140) Balance at December 31, 2022 12,007,321 Total OPEB Liability 105 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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 3.72%, while the prior valuation used 1.84%. 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 (2.72%) (3.72%) (4.72%) Total OPEB Liability $13,883,636 12,007,321 10,511,367 1% Decrease 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: 1%Healthcare Cost 1% Decrease Trend Rates Increase (Varies)(Varies) Total OPEB Liability $10,217,484 12,007,321 14,342,368 (Varies) 106 VILLAGE OF BUFFALO GROVE, ILLINOIS Notes to the Financial Statements December 31, 2022 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, 2022, the Village recognized OPEB expense of $878,800. At December 31, 2022, 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 $1,135,141 (912,084) 223,057 Change in Assumptions 2,604,367 (2,811,457) (207,090) Net Difference Between Projected and Actual Earnings on Pension Plan Investments - - - Total Deferred Amounts Related to OPEB 3,739,508 (3,723,541) 15,967 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/(Inflows) Year of Resources 2023 $213,613 2024 213,613 2025 213,613 2026 213,613 2027 234,284 Thereafter (1,072,769) Total 15,967 107 • Schedule of Employer Contributions Illinois Municipal Retirement Fund Police Pension Fund Firefighters' Pension Fund • Schedule of Changes in the Employer’s Net Pension Liability/(Asset) 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 Lake Cook Road TIF - Special Revenue 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. 108 VILLAGE OF BUFFALO GROVE, ILLINOIS Illinois Municipal Retirement Fund Required Supplementary Information Schedule of Employer Contributions December 31, 2022 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% 2021 1,129,789 1,129,789 - 8,520,279 13.26% 2022 1,054,943 1,054,943 - 9,062,252 11.64% Notes to the Required Supplementary Information: Actuarial Cost Method Entry Age Normal Amortization Method Level % Pay (Closed) Remaining Amortization Period 22 Years Asset Valuation Method 5-Year Smoothed Market Inflation 2.50% Salary Increases 3.35% - 14.25% Investment Rate of Return 7.25% Retirement Age See the Notes to the Financial Statements Mortality 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. IMRF specific mortality table was used with fully generational projection scale MP-2017 (base year 2015). Contributions in Relation to the Actuarially Determined Contribution 109 VILLAGE OF BUFFALO GROVE, ILLINOIS Police Pension Fund Required Supplementary Information Schedule of Employer Contributions December 31, 2022 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% 2021 3,361,940 3,333,876 (28,064) 6,594,984 50.55% 2022 3,394,077 3,374,694 (19,383) 6,994,975 48.24% Notes to the Required Supplementary Information: Actuarial Cost Method Entry Age Normal Amortization Method Level % Pay (Closed) Remaining Amortization Period 18 Years Asset Valuation Method 5-Year Smoothed Market Inflation 2.25% Salary Increases 3.75% - 8.42% Investment Rate of Return 7.00% Retirement Age Graded by Age (11% at 50 to 100% at age 62) Mortality Contributions in Relation to the Actuarially Payroll Covered 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 Adjusted for Plan Status, Demographics, and Illinois Public Pension Data, as Appropriate 110 VILLAGE OF BUFFALO GROVE, ILLINOIS Firefighters' Pension Fund Required Supplementary Information Schedule of Employer Contributions December 31, 2022 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% 2021 2,390,386 2,370,805 (19,581) 5,846,393 40.55% 2022 2,424,085 2,410,584 (13,501) 6,114,396 39.42% Notes to the Required Supplementary Information: Actuarial Cost Method Entry Age Normal Amortization Method Level % Pay (Closed) Remaining Amortization Period 18 Years Asset Valuation Method 5-Year Smoothed Market Inflation 2.25% Salary Increases 3.75% - 9.48% Investment Rate of Return 7.00% Retirement Age Graded by Age (7% at 50 to 100% at age 65) Mortality 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 Adjusted for Plan Status, Demographics, and Illinois Public Pension Data, as Appropriate Contributions in Relation to Actuarially the Actuarially Contribution 111 VILLAGE OF BUFFALO GROVE, ILLINOIS Illinois Municipal Retirement Fund Required Supplementary Information Schedule of Changes in the Employer's Net Pension Liability/(Asset) December 31, 2022 12/31/15 Total Pension Liability Service Cost $ 964,574 860,654 Interest 3,808,085 4,031,299 Differences Between Expected and Actual Experience (1,126,970) 1,338,146 Change of Assumptions 1,736,515 145,117 Benefit Payments, Including Refunds of Member Contributions (2,148,231) (2,416,367) Net Change in Total Pension Liability 3,233,973 3,958,849 Total Pension Liability - Beginning 51,366,296 54,600,269 Total Pension Liability - Ending 54,600,269 58,559,118 Plan Fiduciary Net Position Contributions - Employer $ 1,071,994 1,093,142 Contributions - Members 369,278 402,168 Net Investment Income 2,892,087 241,715 Benefit Payments, Including Refunds of Member Contributions (2,148,231) (2,416,367) Other (Net Transfer)(1,146,370) 520,582 Net Change in Plan Fiduciary Net Position 1,038,758 (158,760) Plan Net Position - Beginning 47,764,745 48,803,503 Plan Net Position - Ending 48,803,503 48,644,743 Employer's Net Pension Liability/(Asset)$ 5,796,766 9,914,375 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 89.38% 83.07% Covered Payroll $ 8,195,678 8,157,772 Employer's Net Pension Liability/(Asset) as a Percentage of Covered Payroll 70.73% 121.53% 12/31/14 Note: This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. 112 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 871,953 858,070 843,915 908,935 941,942 785,687 4,310,485 4,434,597 4,483,157 4,689,245 4,904,123 5,082,733 (921,372) 40,460 582,645 492,814 980,313 1,307,006 (220,386) (1,963,662) 1,849,878 - (738,149) - (2,582,301) (2,637,150) (2,792,678) (2,983,908) (3,303,412) (3,789,614) 1,458,379 732,315 4,966,917 3,107,086 2,784,817 3,385,812 58,559,118 60,017,497 60,749,812 65,716,729 68,823,815 71,608,632 60,017,497 60,749,812 65,716,729 68,823,815 71,608,632 74,994,444 1,112,901 1,164,635 1,218,342 1,053,229 1,212,986 1,140,015 428,936 377,312 394,144 421,491 400,474 383,301 3,350,903 8,949,122 (2,997,666) 10,038,062 8,789,950 12,021,830 (2,582,301) (2,637,150) (2,792,678) (2,983,908) (3,303,412) (3,789,614) (346,357) (974,388) 938,575 58,920 872,831 289,920 1,964,082 6,879,531 (3,239,283) 8,587,794 7,972,829 10,045,452 48,644,743 50,608,825 57,488,356 54,249,073 62,836,867 70,809,696 50,608,825 57,488,356 54,249,073 62,836,867 70,809,696 80,855,148 9,408,672 3,261,456 11,467,656 5,986,948 798,936 (5,860,704) 84.32%94.63% 82.55% 91.30% 98.88% 107.81% 8,023,803 8,384,700 8,758,756 9,272,947 8,899,385 8,517,782 117.26%38.90% 130.93% 64.56%8.98%(68.81%) 113 VILLAGE OF BUFFALO GROVE, ILLINOIS Police Pension Fund Required Supplementary Information Schedule of Changes in the Employer's Net Pension Liability December 31, 2022 12/31/15 Total Pension Liability Service Cost $ 1,415,171 1,386,660 Interest 5,318,732 5,438,273 Differences Between Expected and Actual Experience - (1,015,708) Change of Assumptions - 4,811,344 Change of Benefit Terms - - Benefit Payments, Including Refunds of Member Contributions (2,747,592) (2,969,657) Net Change in Total Pension Liability 3,986,311 7,650,912 Total Pension Liability - Beginning 77,355,682 81,341,993 Total Pension Liability - Ending 81,341,993 88,992,905 Plan Fiduciary Net Position Contributions - Employer $ 2,083,758 2,284,315 Contributions - Members 654,693 669,077 Contributions - Other - - Net Investment Income 3,756,487 186,635 Benefit Payments, Including Refunds of Member Contributions (2,747,592) (2,969,657) Administrative Expense (33,343) (39,870) Net Change in Plan Fiduciary Net Position 3,714,003 130,500 Plan Net Position - Beginning 52,540,449 56,254,452 Plan Net Position - Ending 56,254,452 56,384,952 Employer's Net Pension Liability 25,087,541 32,607,953 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 69.16% 63.36% Covered Payroll $ 5,984,178 6,056,962 Employer's Net Pension Liability as a Percentage of Covered Payroll 419.23% 538.35% 12/31/14 Note: This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. 114 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 1,534,051 1,637,139 1,628,794 1,649,198 1,978,338 1,833,711 1,545,376 5,861,687 6,171,179 6,489,093 6,772,474 7,214,313 7,526,496 7,732,224 358,140 353,405 (92,557) 1,380,756 832,348 2,734,913 (5,311,797) 170,816 (3,590,403) - 1,501,809 (639,813) 105,796 530,076 - - - 425,172 - - (46,145) (3,283,543) (3,602,086) (3,803,918) (4,150,161) (4,677,746) (5,271,645) (4,961,571) 4,641,151 969,234 4,221,412 7,579,248 4,707,440 6,929,271 (511,837) 88,992,905 93,634,056 94,603,290 98,824,702 106,403,950 111,111,390 118,040,661 93,634,056 94,603,290 98,824,702 106,403,950 111,111,390 118,040,661 117,528,824 2,430,017 2,524,306 2,668,632 2,899,820 3,095,593 3,333,876 3,374,694 622,198 627,548 674,488 660,350 820,098 702,138 691,080 - 117,147 28,742 83,945 - - 147,907 3,418,114 8,300,527 (2,726,611) 13,161,796 8,491,232 15,052,674 (13,134,888) (3,283,543) (3,602,086) (3,803,919) (4,150,161) (4,677,746) (5,271,645) (4,961,571) (43,969) (62,733) (51,073) (59,767) (56,614) (52,096) (57,842) 3,142,817 7,904,709 (3,209,741) 12,595,983 7,672,563 13,764,947 (13,940,620) 56,384,952 59,527,769 67,432,478 64,222,737 76,818,720 84,491,283 98,256,230 59,527,769 67,432,478 64,222,737 76,818,720 84,491,283 98,256,230 84,315,610 34,106,287 27,170,812 34,601,965 29,585,230 26,620,107 19,784,431 33,213,214 63.57% 71.28% 64.99% 72.20% 76.04% 83.24% 71.74% 6,406,672 6,565,793 6,738,022 6,957,008 7,316,636 6,594,984 6,994,975 532.36% 413.82% 513.53% 425.26% 363.83% 299.99% 474.82% 115 VILLAGE OF BUFFALO GROVE, ILLINOIS Firefighters' Pension Fund Required Supplementary Information Schedule of Changes in the Employer's Net Pension Liability December 31, 2022 12/31/15 Total Pension Liability Service Cost $ 1,378,069 1,179,270 Interest 4,304,137 4,508,473 Differences Between Expected and Actual Experience 218,159 (1,080,688) Change of Assumptions (938,734) 1,139,953 Change in Benefit Terms - - Benefit Payments, Including Refunds of Member Contributions (1,943,411) (2,141,668) Net Change in Total Pension Liability 3,018,220 3,605,340 Total Pension Liability - Beginning 62,459,374 65,477,594 Total Pension Liability - Ending 65,477,594 69,082,934 Plan Fiduciary Net Position Contributions - Employer $ 2,168,844 2,202,138 Contributions - Members 502,014 524,714 Contributions - Other - - Net Investment Income 3,195,916 654,625 Benefit Payments, Including Refunds of Member Contributions (1,943,409) (2,141,668) Administrative Expense (42,368) (48,363) Net Change in Plan Fiduciary Net Position 3,880,997 1,191,446 Plan Net Position - Beginning 45,275,721 49,156,718 Plan Net Position - Ending 49,156,718 50,348,164 Employer's Net Pension Liability 16,320,876 18,734,770 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 75.07% 72.88% Covered Payroll $ 5,224,950 5,308,713 Employer's Net Pension Liability as a Percentage of Covered Payroll 312.36% 352.91% 12/31/14 Note: This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. 116 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 1,260,242 1,348,459 1,325,255 1,264,639 1,621,266 1,591,437 1,443,273 4,757,917 4,961,836 5,226,040 5,477,561 5,825,574 6,039,648 6,222,731 (133,067) 204,895 234,796 1,246,145 (121,525) 1,916,946 (3,700,466) (588,791) - - 1,195,177 (453,769) 81,975 367,867 - - - 640,951 - - (140,724) (2,225,410) (2,540,912) (2,940,773) (3,445,092) (3,823,483) (4,182,238) (4,412,534) 3,070,891 3,974,278 3,845,318 6,379,381 3,048,063 5,447,768 (219,853) 69,082,934 72,153,825 76,128,103 79,973,421 86,352,802 89,400,865 94,848,633 72,153,825 76,128,103 79,973,421 86,352,802 89,400,865 94,848,633 94,628,780 2,166,040 1,863,911 1,897,968 1,915,164 2,019,305 2,370,805 2,410,584 516,422 520,184 533,534 542,215 535,959 554,144 588,028 - 588 - - - - - 3,415,513 7,601,179 (2,917,744) 11,064,141 10,436,145 10,590,082 (12,711,873) (2,225,410) (2,540,912) (2,940,773) (3,445,092) (3,823,483) (4,182,238) (4,412,534) (42,284) (60,925) (75,110) (104,664) (74,148) (60,102) (49,317) 3,830,281 7,384,025 (3,502,125) 9,971,764 9,093,778 9,272,691 (14,175,112) 50,348,164 54,178,445 61,562,470 58,060,345 68,032,109 77,125,887 86,398,578 54,178,445 61,562,470 58,060,345 68,032,109 77,125,887 86,398,578 72,223,466 17,975,380 14,565,633 21,913,076 18,320,693 12,274,978 8,450,055 22,405,314 75.09% 80.87% 72.60% 78.78% 86.27% 91.09% 76.32% 5,390,509 5,585,881 5,836,466 6,026,152 5,890,818 5,846,393 6,114,396 333.46% 260.76% 375.45% 304.02% 208.37% 144.53% 366.44% 117 VILLAGE OF BUFFALO GROVE, ILLINOIS Police Pension Fund Required Supplementary Information Schedule of Investment Returns December 31, 2022 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% 2021 17.79% 2022 (13.49%) Note: This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. 118 VILLAGE OF BUFFALO GROVE, ILLINOIS Firefighters' Pension Fund Required Supplementary Information Schedule of Investment Returns December 31, 2022 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% 2021 13.76% 2022 (15.79%) Note: This schedule is intended to show information for ten years. Information for additional years will be displayed as it becomes available. 119 VILLAGE OF BUFFALO GROVE, ILLINOIS Retiree Benefit Plan Required Supplementary Information Schedule of Changes in the Employer's Total OPEB Liability December 31, 2022 12/31/19 12/31/20 12/31/21 12/31/22 Total OPEB Liability Service Cost $ 298,851 263,570 525,258 630,551 643,540 Interest 321,987 360,862 304,253 290,591 314,733 Changes in Benefit Terms - - - - (293,086) Differences Between Expected and Actual Experience - - 1,668,331 - (996,070) Change of Assumptions or Other Inputs (774,109) 2,158,863 1,494,795 400,334 (2,658,932) Benefit Payments (389,489) (409,592) (551,381) (583,085) (562,325) Net Change in Total OPEB Liability (542,760) 2,373,703 3,441,256 738,391 (3,552,140) Total OPEB Liability - Beginning 9,548,871 9,006,111 11,379,814 14,821,070 15,559,461 Total OPEB Liability - Ending 9,006,111 11,379,814 14,821,070 15,559,461 12,007,321 Covered-Employee Payroll $ 21,900,270 22,925,736 19,323,659 20,861,759 21,487,612 Total OPEB Liability as a Percentage of Covered-Employee Payroll 41.12% 49.64% 76.70% 74.58% 55.88% Notes: No assets are accumulated in a trust that meets the criteria in paragraph 4 of Statement 75. 12/31/18 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 through 2022. 120 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, 2022 Final Budget Actual Revenues Property Taxes $ 16,780,272 16,780,272 16,687,089 Other Taxes 11,120,000 11,120,000 14,524,352 Intergovernmental 14,470,268 16,867,431 22,565,319 Charges for Services 2,403,100 2,403,100 3,108,954 Licenses and Permits 355,600 355,600 416,436 Fines and Forfeitures 1,702,700 1,702,700 2,489,966 Interest 58,600 58,600 220,455 Miscellaneous 1,012,500 1,012,500 1,585,152 Total Revenues 47,903,040 50,300,203 61,597,723 Expenditures General Government 9,241,135 9,241,135 10,026,720 Public Safety 30,021,754 30,021,754 30,178,107 Public Works 7,663,026 7,663,026 6,775,205 Capital Outlay 20,000 20,000 439,202 Total Expenditures 46,945,915 46,945,915 47,419,234 Excess (Deficiency) of Revenues Over (Under) Expenditures 957,125 3,354,288 14,178,489 Other Financing Sources (Uses) Transfers In 999,600 999,600 999,600 Transfers Out (5,190,803) (6,207,966) (5,647,516) (4,191,203) (5,208,366) (4,647,916) Net Change in Fund Balance (3,234,078) (1,854,078) 9,530,573 Fund Balance - Beginning 38,259,949 Fund Balance - Ending 47,790,522 Budget Original 121 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, 2022 Final Budget Actual Revenues Taxes $- - 17,013 Miscellaneous - - 100,000 Total Revenues - - 117,013 Expenditures General Government - 66,492 19,066,491 Excess (Deficiency) of Revenues Over (Under) Expenditures - (66,492) (18,949,478) Other Financing Sources Debt Issuance - - 19,000,000 Net Change in Fund Balance - (66,492) 50,522 Fund Balance - Beginning 11,833 Fund Balance - Ending 62,355 Original Budget 122 DEBT SERVICE 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 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 123 Street Maintenance Fund 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. INDIVIDUAL FUND SCHEDULES 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. 124 The Buffalo Grove Golf Fund is used to account for revenue and expenses associated with operating the Village's 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 areas and public areas. 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 125 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 of 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 126 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, 2022 Final Budget Actual Revenues Taxes Property Taxes $ 335,269 335,269 333,455 Interest 5,000 5,000 113,834 Total Revenues 340,269 340,269 447,289 Expenditures Debt Service Principal Retirement 2,570,990 2,570,990 2,570,990 Interest and Fiscal Charges 1,105,782 1,125,782 1,122,929 Total Expenditures 3,676,772 3,696,772 3,693,919 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,336,503) (3,356,503) (3,246,630) Other Financing Sources (Uses) Transfers In 3,336,503 3,336,503 3,386,503 Transfers Out (6,631,522) (8,340,404) (8,340,404) (3,295,019) (5,003,901) (4,953,901) Net Change in Fund Balance (6,631,522) (8,360,404) (8,200,531) Fund Balance - Beginning 8,232,780 Fund Balance - Ending 32,249 Budget Original 127 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, 2022 Final Budget Actual Revenues Interest $ - - 86,632 Expenditures Capital Outlay 1,036,200 14,331,783 14,272,497 Debt Service Interest and Fiscal Charges - 251,822 251,822 Total Expenditures 1,036,200 14,583,605 14,524,319 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,036,200) (14,583,605) (14,437,687) Other Financing Sources Debt Issuance - 18,530,000 18,530,000 Premium on Debt Issuance - 2,856,816 2,856,816 Transfers In 1,036,200 1,036,200 486,047 1,036,200 22,423,016 21,872,863 Net Change in Fund Balance - 7,839,411 7,435,176 Fund Balance - Beginning 41,307 Fund Balance - Ending 7,476,483 Original Budget 128 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, 2022 Final Budget Actual Revenues Intergovernmental $ - - 699,308 Expenditures Capital Outlay 5,437,870 5,437,870 5,096,136 Excess (Deficiency) of Revenues Over (Under) Expenditures (5,437,870) (5,437,870) (4,396,828) Other Financing Sources Transfers In 5,437,870 5,437,870 5,552,981 Net Change in Fund Balance - - 1,156,153 Fund Balance - Beginning 798,521 Fund Balance - Ending 1,954,674 Original Budget 129 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, 2022 Final Budget Actual Revenues None $ - - - Expenditures Capital Outlay 2,205,000 2,205,000 776,703 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,205,000) (2,205,000) (776,703) Other Financing Sources Transfers In 2,205,000 2,205,000 776,703 Net Change in Fund Balance - - - Fund Balance - Beginning 17,745 Fund Balance - Ending 17,745 Original Budget 130 VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Governmental Funds Combining Balance Sheet December 31, 2022 Local Metra Motor Parking Fuel Tax Lot Totals Cash and Investments $ 3,746,087 447,259 16,044 4,209,390 Receivables - Net of Allowances Other 168,658 - - 168,658 Total Assets 3,914,745 447,259 16,044 4,378,048 Accounts Payable - - 192 192 Restricted 3,914,745 447,259 15,852 4,377,856 Total Liabilities and Fund Balances 3,914,745 447,259 16,044 4,378,048 Special Revenue FUND BALANCES Motor Fuel Tax ASSETS LIABILITIES 131 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, 2022 Local Metra Motor Parking Fuel Tax Lot Totals Revenues Taxes $- - - - Intergovernmental 2,606,615 662,834 - 3,269,449 Charges for Services - - 304 304 Fines and Forfeitures - - 43,419 43,419 Miscellaneous .- - - Total Revenues 2,606,615 662,834 43,723 3,313,172 Expenditures General Government - - 202,971 202,971 Capital Outlay - - - - Total Expenditures - - 202,971 202,971 Excess (Deficiency) of Revenues Over (Under) Expenditures 2,606,615 662,834 (159,248) 3,110,201 Other Financing Sources (Uses) Debt Issuance - - - - Transfers In - - 160,000 160,000 Transfers Out (2,246,388) (441,950)- (2,688,338) (2,246,388) (441,950) 160,000 (2,528,338) Net Change in Fund Balances 360,227 220,884 752 581,863 Fund Balances - Beginning 3,554,518 226,375 15,100 3,795,993 Fund Balances - Ending 3,914,745 447,259 15,852 4,377,856 Motor Fuel Tax Special Revenue 132 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, 2022 Final Budget Actual Revenues Intergovernmental Motor Fuel Tax $ 1,600,000 1,600,000 1,695,032 Grants 911,600 911,600 911,583 Total Revenue 2,511,600 2,511,600 2,606,615 Expenditures None - - - Excess (Deficiency) of Revenues Over (Under) Expenditures 2,511,600 2,511,600 2,606,615 Other Financing (Uses) Transfers Out (2,511,600) (2,511,600) (2,246,388) Net Change in Fund Balance - - 360,227 Fund Balance - Beginning 3,554,518 Fund Balance - Ending 3,914,745 Original Budget 133 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, 2022 Final Budget Actual Revenues Intergovernmental Local Motor Fuel Tax $ 445,000 445,000 662,834 Expenditures None - - - Excess (Deficiency) of Revenues Over (Under) Expenditures 445,000 445,000 662,834 Other Financing (Uses) Transfers Out (441,950) (441,950) (441,950) Net Change in Fund Balance 3,050 3,050 220,884 Fund Balance - Beginning 226,375 Fund Balance - Ending 447,259 Original Budget 134 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, 2022 Final Budget Actual Revenues Charges for Services $ - - 304 Fines and Forfeitures 29,000 29,000 43,419 Total Revenues 29,000 29,000 43,723 Expenditures General Government 200,159 203,427 202,971 Excess (Deficiency) of Revenues Over (Under) Expenditures (171,159) (174,427) (159,248) Other Financing Sources Transfers In 172,000 172,000 160,000 Net Change in Fund Balance 841 (2,427) 752 Fund Balance - Beginning 15,100 Fund Balance - Ending 15,852 Budget Original 135 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, 2022 Final Budget Actual Operating Revenues Charges for Services Water and Sewer Charges $ 15,353,178 15,353,178 15,282,366 Connection and Recapture Fees 106,000 106,000 428,227 Miscellaneous 20,000 20,000 408,729 Total Operating Revenues 15,479,178 15,479,178 16,119,322 Operating Expenses Operations Water 2,988,425 2,988,425 1,466,219 Sewer 4,827,381 4,827,381 5,300,914 Water Purchases 1,725,000 1,725,000 1,925,672 Capital Outlay 12,902,408 12,902,408 9,166,812 Total Operating Expenses 22,443,214 22,443,214 17,859,617 Operating Income (Loss)(6,964,036) (6,964,036) (1,740,295) Nonoperating Revenue (Expenses) Interest Income 29,194 29,194 457,233 Interest Expense (123,756) (123,756) (123,755) (94,562) (94,562) 333,478 (Loss) Before Transfers (7,058,598) (7,058,598) (1,406,817) Transfers In 4,285,452 4,285,452 8,010,974 Transfers Out (2,421,550) (2,421,550) (2,421,550) 1,863,902 1,863,902 5,589,424 Income Before GAAP Adjustments (5,194,696) (5,194,696) 4,182,607 Beginning Net Position - Budgetary Basis 5,085,813 Ending Net Position - Budgetary Basis 9,268,420 Original Budget 136 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, 2022 Final Budget Actual Income Before GAAP Adjustments $ (5,194,696) (5,194,696) 4,182,607 GAAP Adjustments Capitalized Assets - - 9,159,143 Depreciation and Amortization - - (1,726,255) - - 7,432,888 Change in Net Position (5,194,696) (5,194,696) 11,615,495 Net Position - Beginning as Restated 56,260,627 Net Position - Ending 67,876,122 Original Budget 137 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, 2022 Final Budget Actual Operating Revenues Charges for Services Daily Greens Fee and Membership $ 935,325 935,325 994,130 Merchandise Sales 60,560 60,560 78,040 Cart, Club and Other Rentals 303,050 303,050 263,566 Miscellaneous 54,100 54,100 33,049 Total Operating Revenues 1,353,035 1,353,035 1,368,785 Operating Expenses Operations Golf Operations 2,014,780 2,014,780 1,949,870 Cost of Sales - Pro Shop 45,000 45,000 62,045 Total Operating Expenses 2,059,780 2,059,780 2,011,915 (Loss) Before Contributions (706,745) (706,745) (643,130) Capital Contributions - - 300,000 Income Before GAAP Adjustments (706,745) (706,745) (343,130) Beginning Net Position - Budgetary Basis 835,469 Ending Net Position - Budgetary Basis 492,339 Original Budget 138 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, 2022 Final Budget Actual Income Before GAAP Adjustments $ (706,745) (706,745) (343,130) GAAP Adjustments Capitalized Assets - - 740,408 Depreciation - - (2,216) - - 738,192 Change in Net Position (706,745) (706,745) 395,062 Net Position - Beginning 6,082,453 Net Position - Ending 6,477,515 Original Budget 139 VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Enterprise Funds Combining Statement of Net Position December 31, 2022 Refuse Service Totals ASSETS Current Assets Cash and Investments $ 851,725 98,270 949,995 Receivables Other 1,308 - 1,308 Leases Receivable 978,905 - 978,905 Inventories 18,498 - 18,498 Total Current Assets 1,850,436 98,270 1,948,706 Noncurrent Assets Capital Assets Nondepreciable 978,776 - 978,776 Depreciable 3,236,208 - 3,236,208 Accumulated Depreciation (2,676,260) - (2,676,260) 1,538,724 - 1,538,724 Other Assets Net Pension Asset - IMRF 146,181 - 146,181 Total Noncurrrent Assets 1,684,905 - 1,684,905 Total Assets 3,535,341 98,270 3,633,611 Deferred Items - IMRF 67,459 - 67,459 Deferred Items - RBP 28,167 - 28,167 Total Deferred Outflows of Resources 95,626 - 95,626 Total Assets and Deferred Outflows of Resources 3,630,967 98,270 3,729,237 Buffalo Grove Golf DEFERRED OUTFLOWS OF RESOURCES 140 Refuse Service Totals LIABILITIES Current Liabilities Accounts Payable $ 90,137 19,530 109,667 Accrued Payroll 8,406 - 8,406 Compensated Absences Payable 11,327 - 11,327 Total Current Liabilities 109,870 19,530 129,400 Noncurrent Liabilities Compensated Absences Payable 45,308 - 45,308 Total OPEB Liability - RBP 90,443 - 90,443 Total Noncurrent Liabilities 135,751 - 135,751 Total Liabilities 245,621 19,530 265,151 Deferred Items - IMRF 237,024 - 237,024 Deferred Items - RBP 28,047 - 28,047 Deferred Items - Leases 944,918 - 944,918 Total Deferred Inflows of Resources 1,209,989 - 1,209,989 Total Liabilities and Deferred Inflow of Resources 1,455,610 19,530 1,475,140 Investment in Capital Assets 1,538,724 - 1,538,724 Restricted 146,181 - 146,181 Unrestricted 490,452 78,740 569,192 Total Net Position 2,175,357 78,740 2,254,097 Total Liabilities, Deferred Inflows of Resources, and Net Position 3,630,967 98,270 3,729,237 NET POSITION DEFERRED INFLOWS OF RESOURCES Buffalo Grove Golf 141 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, 2022 Refuse Service Totals Operating Revenues Charges for Services $ 1,349,627 1,072,015 2,421,642 Operating Expenses Operations Golf Operations 964,928 - 964,928 Cost of Sales - Pro Shop 56,913 - 56,913 Capital Outlay 28,961 - 28,961 Refuse - 897,956 897,956 Depreciation 53,665 - 53,665 Total Operating Expenses 1,104,467 897,956 2,002,423 Income Before Transfers 245,160 174,059 419,219 Transfers Out - (275,000) (275,000) Change in Net Position 245,160 (100,941) 144,219 Net Position - Beginning 1,930,197 179,681 2,109,878 Net Position - Ending 2,175,357 78,740 2,254,097 Buffalo Grove Golf 142 VILLAGE OF BUFFALO GROVE, ILLINOIS Nonmajor Enterprise Funds Combining Statement of Cash Flows For the Fiscal Year Ended December 31, 2022 Refuse Service Totals Cash Flows from Operating Activities Receipts from Customers and Users $ 360,543 1,072,015 1,432,558 Payments to Employees (361,759) - (361,759) Payments to Suppliers 304,671 (974,516) (669,845) 303,455 97,499 400,954 Cash Flows from Noncapital Financing Activities Transfers Out - (275,000) (275,000) Net Change in Cash and Cash Equivalents 303,455 (177,501) 125,954 Cash and Cash Equivalents - Beginning 548,270 275,771 824,041 Cash and Cash Equivalents - Ending 851,725 98,270 949,995 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities Operating Income 245,160 174,059 419,219 Adjustments to Reconcile Operating Income to Net Income to Net Cash Provided by (Used in) Operating Activities Depreciation and Amortization Expense 53,665 - 53,665 Other Income (Expense)(36,654) - (36,654) (Increase) Decrease in Current Assets (989,084) - (989,084) Increase (Decrease) in Current Liabilities 1,030,368 (76,560) 953,808 Net Cash Provided by Operating Activities 303,455 97,499 400,954 Buffalo Grove Golf 143 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, 2022 Final Budget Actual Operating Revenues Charges for Services Daily Greens Fee and Membership $ 847,100 847,100 888,631 Merchandise Sales 73,700 73,700 76,464 Cart, Club and Other Rentals 296,900 296,900 205,167 Driving Range Fees 110,000 110,000 151,071 Miscellaneous 30,000 30,000 28,294 Total Operating Revenues 1,357,700 1,357,700 1,349,627 Operating Expenses Operations Golf Operations 1,083,774 1,106,665 964,928 Cost of Sales - Pro Shop 45,000 56,913 56,913 Capital Outlay 100,000 100,000 28,961 Total Operating Expenses 1,228,774 1,263,578 1,050,802 Income Before GAAP Adjustments 128,926 94,122 298,825 Beginning Net Position - Budgetary Basis 1,423,849 Ending Net Position - Budgetary Basis 1,722,674 Original Budget 144 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, 2022 Final Budget Actual Income Before GAAP Adjustments $ 128,926 94,122 298,825 GAAP Adjustments Depreciation - - (53,665) Change in Net Position 128,926 94,122 245,160 Net Position - Beginning 1,930,197 Net Position - Ending 2,175,357 Original Budget 145 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, 2022 Final Budget Actual Operating Revenues Charges for Services SWANCC User Fees $ 1,180,400 1,180,400 1,072,015 Operating Expenses Operations Refuse 997,415 997,415 897,956 Income Before Transfers 182,985 182,985 174,059 Transfers Out (275,000) (275,000) (275,000) Change in Net Position (92,015) (92,015) (100,941) Net Position - Beginning 179,681 Net Position - Ending 78,740 Original Budget 146 VILLAGE OF BUFFALO GROVE, ILLINOIS Internal Service Funds Combining Statement of Net Position December 31, 2022 Central Building Garage Maintenance Totals Current Assets Cash and Investments $ 107,278 114,277 294,892 516,447 LIABILITIES Current Liabilities Accounts Payable 106,488 82,677 215,580 404,745 Accrued Payroll - 26,507 24,488 50,995 Total Liabilities 106,488 109,184 240,068 455,740 Unrestricted 790 5,093 54,824 60,707 Total Liabilities and Net Position 107,278 114,277 294,892 516,447 Information ASSETS NET POSITION Technology 147 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, 2022 Central Building Garage Maintenance Totals Operating Revenues Interfund Services $ 1,824,040 1,822,505 1,826,519 5,473,064 Operating Expenses Operations Information Technology 1,824,040 - - 1,824,040 Central Garage - 1,822,505 - 1,822,505 Building Maintenance - - 1,826,519 1,826,519 Total Operating Expenses 1,824,040 1,822,505 1,826,519 5,473,064 Change in Net Position - - - - Net Position - Beginning 790 5,093 54,824 60,707 Net Position - Ending 790 5,093 54,824 60,707 Information Technology 148 VILLAGE OF BUFFALO GROVE, ILLINOIS Internal Service Funds Combining Statement of Cash Flows For the Fiscal Year Ended December 31, 2022 Central Building Garage Maintenance Totals Cash Flows from Operating Activities Interfund Services Provided $ 1,824,040 1,822,505 1,826,519 5,473,064 Payments to Suppliers (1,788,043) (1,271,608) (1,243,737) (4,303,388) Payments to Employees - (551,350) (452,263) (1,003,613) 35,997 (453) 130,519 166,063 Cash and Cash Equivalents - Beginning 71,281 114,730 164,373 350,384 Cash and Cash Equivalents - Ending 107,278 114,277 294,892 516,447 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 35,997 (453) 130,519 166,063 Net Cash Provided by Operating Activities 35,997 (453) 130,519 166,063 Technology Information 149 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, 2022 Final Budget Actual Operating Revenues Interfund Services $ 1,860,503 1,860,503 1,824,040 Operating Expenses Operations Information Technology 1,860,503 1,860,503 1,824,040 Change in Net Position - - - Net Position - Beginning 790 Net Position - Ending 790 Original Budget 150 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, 2022 Final Budget Actual Operating Revenues Interfund Services $ 1,628,681 1,628,681 1,822,505 Operating Expenses Operations Central Garage 1,628,681 1,883,212 1,822,505 Change in Net Position - (254,531) - Net Position - Beginning 5,093 Net Position - Ending 5,093 Original Budget 151 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, 2022 Final Budget Actual Operating Revenues Interfund Services $ 1,756,824 1,756,824 1,826,519 Operating Expenses Operations Building Maintenance 1,756,824 1,832,159 1,826,519 Change in Net Position - (75,335) - Net Position - Beginning 54,824 Net Position - Ending 54,824 Original Budget 152 VILLAGE OF BUFFALO GROVE, ILLINOIS Pension Trust Funds Combining Statement of Fiduciary Net Position December 31, 2022 Firefighters' Pension Totals Cash and Cash Equivalents $ 2,899,529 614,976 3,514,505 Investments Illinois Police Officers' Pension Investment Fund 79,911,618 - 79,911,618 Illinois Firefighters' Pension Investment Fund - 71,443,718 71,443,718 Equity Securities 1,272,176 - 1,272,176 Receivables - Net of Allowance Accrued Interest 850 - 850 Due from Other Funds 232,971 166,417 399,388 Prepaids 795 - 795 Total Assets 84,317,939 72,225,111 156,543,050 Accounts Payable 2,329 1,645 3,974 Net Position Restricted for Pensions 84,315,610 72,223,466 156,539,076 Pension ASSETS LIABILITIES NET POSITION Police 153 VILLAGE OF BUFFALO GROVE, ILLINOIS Pension Trust Funds Combining Statement of Changes in Fiduciary Net Position For the Fiscal Year Ended December 31, 2022 Police Firefighters' Pension Pension Totals Additions Contributions - Employer $ 3,374,694 2,410,584 5,785,278 Contributions - Plan Members 691,080 588,028 1,279,108 Contributions - Other 147,907 - 147,907 Total Contributions 4,213,681 2,998,612 7,212,293 Investment Income Interest Earned 787,568 512,439 1,300,007 Net Change in Fair Value (13,837,086) (13,178,162) (27,015,248) (13,049,518) (12,665,723) (25,715,241) Less Investment Expenses (85,370) (46,150) (131,520) Net Investment Income (13,134,888) (12,711,873) (25,846,761) Total Additions (8,921,207) (9,713,261) (18,634,468) Deductions Administration 57,842 49,317 107,159 Benefits and Refunds 4,961,571 4,412,534 9,374,105 Total Deductions 5,019,413 4,461,851 9,481,264 Change in Fiduciary Net Position (13,940,620) (14,175,112) (28,115,732) Net Position Restricted for Pensions Beginning 98,256,230 86,398,578 184,654,808 Ending 84,315,610 72,223,466 156,539,076 154 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, 2022 Final Budget Actual Additions Contributions - Employer $ 3,394,077 3,394,077 3,374,694 Contributions - Plan Members 750,000 750,000 691,080 Contributions - Other 25,000 25,000 147,907 Total Contributions 4,169,077 4,169,077 4,213,681 Investment Income Interest Earned 267,540 267,540 787,568 Net Change in Fair Value 2,463,010 2,463,010 (13,837,086) 2,730,550 2,730,550 (13,049,518) Less Investment Expenses (212,000) (212,000) (85,370) Net Investment Income 2,518,550 2,518,550 (13,134,888) Total Additions 6,687,627 6,687,627 (8,921,207) Deductions Administration 65,000 65,000 57,842 Benefits and Refunds 5,013,200 5,013,200 4,961,571 Total Deductions 5,078,200 5,078,200 5,019,413 Change in Fiduciary Net Position 1,609,427 1,609,427 (13,940,620) Net Position Restricted for Pensions Beginning 98,256,230 Ending 84,315,610 Budget Original 155 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, 2022 Final Budget Actual Additions Contributions - Employer $ 2,424,085 2,424,085 2,410,584 Contributions - Plan Members 582,000 582,000 588,028 Total Contributions 3,006,085 3,006,085 2,998,612 Investment Income Interest Earned 250,000 250,000 512,439 Net Change in Fair Value 2,600,000 2,600,000 (13,178,162) 2,850,000 2,850,000 (12,665,723) Less Investment Expenses (165,000) (165,000) (46,150) Net Investment Income 2,685,000 2,685,000 (12,711,873) Total Additions 5,691,085 5,691,085 (9,713,261) Deductions Administration 80,000 80,000 49,317 Benefits and Refunds 3,776,000 3,776,000 4,412,534 Total Deductions 3,856,000 3,856,000 4,461,851 Change in Fiduciary Net Position 1,835,085 1,835,085 (14,175,112) Net Position Restricted for Pensions Beginning 86,398,578 Ending 72,223,466 Original Budget 156 SUPPLEMENTAL SCHEDULES 157 VILLAGE OF BUFFALO GROVE, ILLINOIS Long-Term Debt Requirements General Obligation Bonds of 2012 December 31, 2022 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 2023 $ 440,000 114,725 554,725 2024 450,000 105,925 555,925 2025 470,000 96,925 566,925 2026 650,000 86,938 736,938 2027 650,000 72,313 722,313 2028 700,000 56,875 756,875 2029 750,000 39,375 789,375 2030 750,000 20,625 770,625 4,860,000 593,701 5,453,701 Principal 158 VILLAGE OF BUFFALO GROVE, ILLINOIS Long-Term Debt Requirements General Obligation Bonds of 2016 December 31, 2022 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 2023 $ 310,000 71,131 381,131 2024 315,000 64,931 379,931 2025 325,000 58,631 383,631 2026 330,000 52,131 382,131 2027 335,000 45,531 380,531 2028 345,000 38,413 383,413 2029 350,000 30,650 380,650 2030 360,000 21,900 381,900 2031 370,000 11,100 381,100 3,040,000 394,418 3,434,418 Principal 159 VILLAGE OF BUFFALO GROVE, ILLINOIS Long-Term Debt Requirements General Obligation Refunding Bonds of 2019 December 31, 2022 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 2023 $ 241,265 12,690 253,955 2024 246,365 8,710 255,075 2025 251,180 4,520 255,700 738,810 25,920 764,730 Principal 160 VILLAGE OF BUFFALO GROVE, ILLINOIS Long-Term Debt Requirements General Obligation Bonds of 2020 December 31, 2022 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 2023 $ 1,600,000 803,900 2,403,900 2024 1,600,000 723,900 2,323,900 2025 1,600,000 643,900 2,243,900 2026 1,330,000 563,900 1,893,900 2027 1,400,000 497,400 1,897,400 2028 1,465,000 427,400 1,892,400 2029 1,540,000 354,150 1,894,150 2030 1,585,000 307,950 1,892,950 2031 1,635,000 260,400 1,895,400 2032 1,685,000 211,350 1,896,350 2033 1,735,000 160,800 1,895,800 2034 1,785,000 108,750 1,893,750 2035 1,840,000 55,200 1,895,200 20,800,000 5,119,000 25,919,000 Principal 161 VILLAGE OF BUFFALO GROVE, ILLINOIS Long-Term Debt Requirements General Obligation Bonds of 2022 December 31, 2022 Date of Issue September 13, 2022 Date of Maturity December 30, 2042 Authorized Issue $19,000,000 Denomination of Bonds $5,000 Interest Rates 4.00% - 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 2023 $- 1,157,965 1,157,965 2024 - 892,650 892,650 2025 - 892,650 892,650 2026 100,000 892,650 992,650 2027 100,000 887,650 987,650 2028 - 882,650 882,650 2029 - 882,650 882,650 2030 100,000 882,650 982,650 2031 860,000 877,650 1,737,650 2032 1,290,000 834,650 2,124,650 2033 1,350,000 770,150 2,120,150 2034 1,420,000 702,650 2,122,650 2035 1,510,000 631,650 2,141,650 2036 2,340,000 556,150 2,896,150 2037 2,460,000 439,150 2,899,150 2038 2,580,000 316,150 2,896,150 2039 1,035,000 187,150 1,222,150 2040 1,085,000 135,400 1,220,400 2041 1,130,000 92,000 1,222,000 2042 1,170,000 46,800 1,216,800 18,530,000 12,961,065 31,491,065 Principal 162 VILLAGE OF BUFFALO GROVE, ILLINOIS Long-Term Debt Requirements IEPA Loan Payable of 2013 - Pump Stations Improvements December 31, 2022 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 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 26,128 252,725 34,683 287,408 CURRENT AND LONG-TERM PRINCIPAL AND INTEREST REQUIREMENTS Principal 163 VILLAGE OF BUFFALO GROVE, ILLINOIS Long-Term Debt Requirements Installment Note Payable of 2015 December 31, 2022 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 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 381,460 3,371 384,831 4,687,283 403,445 5,090,728 CURRENT AND LONG-TERM PRINCIPAL AND INTEREST REQUIREMENTS Principal 164 VILLAGE OF BUFFALO GROVE, ILLINOIS Consolidated Year-End Financial Report December 31, 2022 CSFA #Program Name State Federal Other Totals 494-10-0343 State and Community Highway Safety/ National Priority Safety Program $ 80,182 - - 80,182 494-42-0495 Local Surface Transportation Program - 598,339 - 598,339 Other Grant Programs and Activities - 57,752 2,541,874 2,599,626 All Other Costs Not Allocated - - 77,736,950 77,736,950 Totals 80,182 656,091 80,278,824 81,015,097 165 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS June 14, 2023 The Honorable Village President Members of the Board of Trustees Village of Buffalo Grove, Illinois We have audited, in accordance with the 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, the 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, 2022, and the related notes to the financial statements, which collectively comprise the Village’s basic financial statements, and have issued our report thereon dated June 14, 2023. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Village’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Village’s internal control. According, we do not express an opinion on the effectiveness of the Village’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Village’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. 166 Village of Buffalo Grove, Illinois June 14, 2023 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the Village’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Village’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Village’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Lauterbach & Amen, LLP LAUTERBACH & AMEN, LLP 167 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 sources. 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. 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 annual comprehensive 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 168 VILLAGE OF BUFFALO GROVE, ILLINOIS Net Position by Component - Last Ten Fiscal Years* December 31, 2022 See Following Page 169 VILLAGE OF BUFFALO GROVE, ILLINOIS Net Position by Component - Last Ten Fiscal Years* 2014 2015** 2016 Governmental Activities Net Investment in Capital Assets $ 51,011,919 50,712,982 50,609,420 51,756,933 Restricted 2,412,222 2,664,110 1,974,115 1,632,934 Unrestricted (Deficit)12,387,400 11,048,700 (34,637,401) (36,592,629) Total Governmental Activities Net Position 65,811,541 64,425,792 17,946,134 16,797,238 Business-Type Activities Net Investment in Capital Assets 35,553,648 35,871,503 38,372,943 35,494,070 Restricted - - - - Unrestricted 11,515,793 11,067,173 7,770,059 11,034,826 Total Business-Type Activities Net Position 47,069,441 46,938,676 46,143,002 46,528,896 Primary Government Net Investment in Capital Assets 86,565,567 86,584,485 88,982,363 87,251,003 Restricted 2,412,222 2,664,110 1,974,115 1,632,934 Unrestricted (Deficit)23,903,193 22,115,873 (26,867,342) (25,557,803) Total Primary Government Net Position 112,880,982 111,364,468 64,089,136 63,326,134 * Accrual Basis of Accounting Data Source: Audited Financial Statements December 31, 2022 (Unaudited) 2013 ** Beginning in 2015, the Village implemented GASB 68 which resulted in the inclusion of net pension liabilities. 170 2017 2018 2019 2020 2021 2022 53,318,041 49,126,833 50,663,992 50,847,075 51,402,847 49,965,851 1,629,079 1,909,851 1,839,449 4,004,829 4,920,687 10,537,281 (36,022,097) (41,165,382) (40,174,356) (35,571,215) (19,615,536) (30,036,888) 18,925,023 9,871,302 12,329,085 19,280,689 36,707,998 30,466,244 36,802,425 36,831,535 37,080,189 38,677,933 44,312,875 53,308,186 - - - - - 890,233 10,837,462 11,296,427 11,417,357 16,662,780 20,140,083 22,409,315 47,639,887 48,127,962 48,497,546 55,340,713 64,452,958 76,607,734 90,120,466 85,958,368 87,744,181 89,525,008 95,715,722 103,274,037 1,629,079 1,909,851 1,839,449 4,004,829 4,920,687 11,427,514 (25,184,635) (29,868,955) (28,756,999) (18,908,435) 524,547 (7,627,573) 66,564,910 57,999,264 60,826,631 74,621,402 101,160,956 107,073,978 171 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 ges 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 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 Ex pen 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 $ 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 7 , 7 4 2 , 0 3 4 2 7 , 1 4 6 , 9 8 9 Pu b l i c S a f e t y 21 , 9 6 4 , 9 8 9 22 , 9 2 0 , 1 8 0 2 7 , 2 5 6 , 7 3 7 3 0 , 5 2 8 , 1 2 7 2 7 , 3 8 4 , 9 6 4 3 0 , 2 6 6 , 2 0 7 3 0 , 1 8 7 , 9 6 7 2 6 , 1 1 0 , 3 6 2 2 3 , 8 4 0 , 8 2 2 3 0 , 8 1 6 , 3 4 5 Pu b l i c W o r k s 1 5 , 0 9 1 , 4 1 4 1 3 , 5 5 3 , 0 9 3 1 1 , 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 1 0 , 1 6 1 , 0 5 9 7 , 7 6 0 , 3 5 0 8 , 0 1 1 , 8 0 8 8 , 0 3 8 , 1 2 2 In t e r e s t o n L o n g-T e r m D e b t 37 4 , 5 1 1 3 0 2 , 7 8 1 2 8 5 , 8 6 3 3 5 6 , 7 9 9 3 8 4 , 0 7 3 3 6 3 , 9 2 5 2 5 2 , 5 9 0 1 , 2 0 6 , 3 6 9 1 , 0 1 3 , 0 3 3 1 , 1 8 7 , 0 1 1 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 pen s e s 43 , 9 9 8 , 4 5 9 42 , 6 1 9 , 6 7 7 4 4 , 9 8 0 , 0 1 7 4 5 , 4 0 5 , 5 0 7 4 4 , 1 7 6 , 7 0 9 4 7 , 3 7 9 , 8 7 9 4 7 , 6 4 2 , 3 4 4 4 2 , 2 4 1 , 9 3 3 4 0 , 6 0 7 , 6 9 7 6 7 , 1 8 8 , 4 6 7 Bu s i n e s s - T yp e A c t i v i t i e s Wa t e r & S e w e r 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 1 0 , 0 7 8 , 5 9 4 9 , 6 7 1 , 8 4 5 1 0 , 3 7 5 , 0 2 8 1 0 , 6 4 5 , 6 2 3 1 0 , 5 5 0 , 4 8 4 Re f u s e S e r v i c e 90 2 , 8 1 1 8 0 3 , 0 3 9 7 0 2 , 1 0 6 7 0 3 , 5 6 5 7 0 5 , 3 9 3 8 6 8 , 7 9 4 8 1 6 , 8 4 9 8 0 3 , 9 9 9 9 0 8 , 6 2 0 8 9 7 , 9 5 6 Go l f C o u r s e s 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 2 , 7 6 6 , 5 4 6 2 , 3 7 8 , 1 9 0 To t a l B u s i n e s s - T yp e Ac t i v i t i e s E x pen s e s 11 , 9 2 4 , 9 2 2 11 , 9 7 7 , 5 7 9 1 2 , 5 5 2 , 2 3 6 1 2 , 5 9 1 , 6 0 1 1 3 , 0 4 8 , 8 2 0 1 3 , 6 9 5 , 4 2 3 1 3 , 3 1 6 , 8 6 2 1 3 , 8 4 3 , 7 4 2 1 4 , 3 2 0 , 7 8 9 1 3 , 8 2 6 , 6 3 0 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 55 , 9 2 3 , 3 8 1 5 4 , 5 9 7 , 2 5 6 5 7 , 5 3 2 , 2 5 3 5 7 , 9 9 7 , 1 0 8 5 7 , 2 2 5 , 5 2 9 6 1 , 0 7 5 , 3 0 2 6 0 , 9 5 9 , 2 0 6 5 6 , 0 8 5 , 6 7 5 5 4 , 9 2 8 , 4 8 6 8 1 , 0 1 5 , 0 9 7 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 ges 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 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 3 , 6 1 2 , 3 6 2 3 , 5 6 9 , 1 1 3 Pu b l i c S a f e t y 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 1 , 9 5 1 , 1 0 1 2 , 5 0 6 , 3 0 6 Pu b l i c W o r k s 8 2 , 3 9 3 8 8 , 6 6 5 6 1 , 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 2 5 4 , 5 5 7 (16 , 3 4 0 ) Oper 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, 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 3 , 1 5 7 , 4 5 1 5 , 1 8 1 , 4 0 7 Ca pit 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 - 2 5 4 , 8 1 4 2, 0 0 2 , 6 4 8 1, 6 4 2 , 2 9 2 1, 6 1 0 , 8 9 1 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 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 1 0 , 5 2 7 , 1 9 5 1 0 , 6 1 7 , 7 6 3 1 2 , 8 5 1 , 3 7 7 Bu s i n e s s - T yp e A c t i v i t i e s Ch a r ges f o r S e r v i c e s Wa t e r & S e w e r 8, 6 9 2 , 8 1 2 9 , 0 7 6 , 2 6 1 9 , 4 9 5 , 6 9 1 1 0 , 3 0 4 , 6 3 8 1 1 , 0 6 0 , 9 3 8 1 0 , 8 3 2 , 7 8 2 1 0 , 6 6 3 , 7 6 6 1 4 , 5 8 9 , 4 4 5 1 5 , 9 0 9 , 1 6 3 1 5 , 7 1 0 , 5 9 3 Re f u s e S e r v i c e 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 9 7 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 1 , 1 2 2 , 7 1 6 1 , 0 7 2 , 0 1 5 Go l f C o u r s e s 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 2 , 8 4 3 , 2 0 3 2 , 7 1 8 , 4 1 2 Oper 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 pit 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 - 30 0 , 0 0 0 To t a l B u s i n e s s - T yp e A c t i v i t i e s Pr o gra m R e v e n u e s 11 , 9 8 4 , 5 5 7 12 , 3 7 8 , 1 9 7 1 2 , 8 7 1 , 4 9 5 1 3 , 7 7 5 , 5 8 0 1 4 , 2 3 2 , 6 6 6 1 4 , 1 7 9 , 9 1 0 1 4 , 1 1 1 , 6 3 2 1 8 , 5 4 8 , 6 4 4 1 9 , 8 7 5 , 0 8 2 1 9 , 8 0 1 , 0 2 0 To t a l P r i m a r y G o v e r n m e n t Pr o g r a m R e v e n u e s 1 5 , 9 3 4 , 7 8 2 1 7 , 2 7 7 , 4 2 5 1 7 , 5 3 1 , 4 3 1 1 9 , 7 8 3 , 0 5 9 2 2 , 0 2 8 , 5 8 6 2 0 , 0 5 8 , 5 6 2 2 0 , 9 7 0 , 0 6 4 2 9 , 0 7 5 , 8 3 9 3 0 , 4 9 2 , 8 4 5 3 2 , 6 5 2 , 3 9 7 De c e m b e r 3 1 , 2 0 2 2 ( U n a u d i t e d ) 20 1 3 172 20 1 4 20 1 5 20 1 6 20 1 7 20 1 8 20 1 9 2 0 2 0 20 2 1 20 2 2 Ne t (Ex pen 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 $ (40 , 0 4 8 , 2 3 4 ) (37 , 7 2 0 , 4 4 9 ) (40 , 3 2 0 , 0 8 1 ) (39 , 3 9 8 , 0 2 8 ) (36 , 3 8 0 , 7 8 9 ) (41 , 5 0 1 , 2 2 7 ) (40 , 7 8 3 , 9 1 2 ) (31 , 7 1 4 , 7 3 8 ) (29 , 9 8 9 , 9 3 4 ) (54 , 3 3 7 , 0 9 0 ) Bu s i n e s s - T yp e A c t i v i t i e s 59 , 6 3 5 4 0 0 , 6 1 8 3 1 9 , 2 5 9 1 , 1 8 3 , 9 7 9 1 , 1 8 3 , 8 4 6 4 8 4 , 4 8 7 7 9 4 , 7 7 0 4 , 7 0 4 , 9 0 2 5 , 5 5 4 , 2 9 3 5 , 9 7 4 , 3 9 0 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 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 ) ( 2 4 , 4 3 5 , 6 4 1 ) ( 4 8 , 3 6 2 , 7 0 0 ) 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 ges 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 per t y 14 , 5 0 4 , 7 5 0 14 , 5 5 4 , 5 6 4 1 4 , 7 4 2 , 6 2 2 1 5 , 0 3 4 , 5 8 3 1 5 , 5 1 0 , 1 2 7 1 5 , 9 8 0 , 7 7 1 1 6 , 3 2 1 , 8 7 6 1 7 , 0 3 5 , 3 6 2 1 6 , 9 7 0 , 6 5 7 1 7 , 0 3 7 , 5 5 7 Sa l e s a n d H o m e R u l e 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 1 0 , 1 5 9 , 8 6 6 9 , 9 4 5 , 7 4 4 9 , 8 2 9 , 7 6 5 1 6 , 0 1 3 , 1 7 7 1 8 , 3 0 9 , 6 5 4 In c o m e a n d U s e 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 7 , 2 5 9 , 1 9 5 8 , 8 4 6 , 9 3 2 Te l e c o m m u n i c a t i o n s 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 9 0 6 , 0 7 1 7 1 6 , 7 3 7 6 6 6 , 0 8 3 Ut i l i t y 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 2 , 6 6 2 , 9 5 6 2 , 6 8 8 , 0 4 7 Pr o per t y T r a n s f e r 76 0 , 1 6 4 7 9 0 , 8 1 9 9 0 4 , 3 1 1 1 , 1 1 5 , 3 6 0 1 , 2 5 6 , 9 1 9 9 6 9 , 0 3 9 1 , 0 2 4 , 7 6 9 9 8 9 , 1 1 8 1 , 6 0 1 , 3 7 0 2 , 0 0 1 , 4 7 5 Ot h e r 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 9 8 7 , 0 9 7 1 , 2 6 8 , 6 7 7 1 , 7 5 3 , 9 3 9 In v e s t m e n t E a r n i n gs 54 , 5 2 2 1 0 7 , 7 6 5 2 5 , 0 6 1 6 5 , 6 0 0 1 5 3 , 8 1 6 2 9 2 , 3 4 0 8 0 7 , 3 3 0 3 0 5 , 3 6 6 (33 , 7 7 3 ) 33 4 , 2 8 9 Mi s c e l l a n e o u s 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 2 , 2 1 0 , 5 8 0 1 , 7 7 1 , 7 8 4 Tr a n s f e r s 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 ) (1, 9 5 5 , 7 3 8 ) (5, 3 1 4 , 4 2 4 ) Ga i n o n s a l e s o f a s s e t s - 4 8 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 35 , 9 4 5 , 5 4 2 36 , 3 3 4 , 7 0 0 3 7 , 9 4 5 , 8 9 7 3 8 , 2 4 9 , 1 3 2 3 8 , 5 0 8 , 5 7 4 4 0 , 2 1 6 , 8 7 2 4 3 , 2 4 1 , 6 9 5 3 8 , 6 6 6 , 3 4 3 4 6 , 7 1 3 , 8 3 8 4 8 , 0 9 5 , 3 3 6 Bu s i n e s s - T yp 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 gs 12 , 4 5 5 1 8 , 8 2 0 1 0 , 1 1 2 1 4 , 1 5 9 4 9 2 , 1 3 2 3 5 9 , 3 7 1 4 8 7 , 3 3 3 4 7 2 , 7 0 3 3 9 4 , 6 9 8 4 5 7 , 2 3 3 Mi s c e l l a n e o u s - 5 2 0 , 5 2 1 5 , 7 3 7 2 4 9 , 9 4 6 3 9 3 , 3 2 8 2 4 2 , 0 5 8 2 7 4 , 2 6 9 3 6 , 2 0 4 4 1 7 , 5 1 6 4 0 8 , 7 2 9 Tr a n s f e r s (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 1, 9 5 5 , 7 3 8 5, 3 1 4 , 4 2 4 To t a l B u s i n e s s - T yp 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 (93 8 , 6 5 6 ) (53 1 , 3 8 3 ) (73 3 , 1 7 8 ) (79 8 , 0 8 5 ) (72 , 8 5 5 ) 54 7 , 7 1 4 (42 5 , 1 8 6 ) 2, 1 3 8 , 2 6 5 2, 7 6 7 , 9 5 2 6, 1 8 0 , 3 8 6 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 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 49 , 4 8 1 , 7 9 0 54 , 2 7 5 , 7 2 2 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 (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 16 , 7 2 3 , 9 0 4 (6, 2 4 1 , 7 5 4 ) Bu s i n e s s - T yp e A c t i v i t i e s (87 9 , 0 2 1 ) (13 0 , 7 6 5 ) (41 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 8, 3 2 2 , 2 4 5 12 , 1 5 4 , 7 7 6 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 ( 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 1 3 , 7 9 4 , 7 7 2 2 5 , 0 4 6 , 1 4 9 5 , 9 1 3 , 0 2 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 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 3 173 VILLAGE OF BUFFALO GROVE, ILLINOIS Fund Balances of Governmental Funds - Last Ten Fiscal Years* 2014 2015 2016 General Fund Nonspendable $562,399 573,812 551,242 167,957 Restricted 162,274 130,435 223,622 229,953 Committed 7,345,420 7,438,256 7,532,123 8,511,306 Unassigned 12,395,113 13,225,644 14,991,907 16,143,726 Total General Fund 20,465,206 21,368,147 23,298,894 25,052,942 All Other Governmental Funds Restricted 1,796,997 1,965,328 1,974,115 1,632,934 Assigned 101,213 - - - Committed - - - - Unassigned (927,395) (2,324,296) (3,707,560) (3,859,964) Total All Other Governmental Funds 970,815 (358,968) (1,733,445) (2,227,030) Total Governmental Funds 21,436,021 21,009,179 21,565,449 22,825,912 * Modified Accrual Basis of Accounting Data Source: Audited Financial Statements December 31, 2022 (Unaudited) 2013 174 2017 2018 2019 2020 2021 2022 132,843 132,134 159,494 571,654 583,442 138,071 252,729 607,411 484,881 760,160 865,185 1,094,350 7,758,348 6,827,236 8,313,902 9,052,502 14,326,113 28,857,031 18,902,476 17,039,974 18,939,974 20,134,162 22,485,209 17,701,070 27,046,396 24,606,755 27,898,251 30,518,478 38,259,949 47,790,522 1,629,079 1,302,440 1,354,568 19,842,763 12,040,606 11,943,487 - - - - - - 261,007 300,803 857,573 1,977,875 (3,714,759) (268,260) - - - - (2,085,680) 1,034,180 1,615,575 20,143,566 12,898,179 13,921,362 24,960,716 25,640,935 29,513,826 50,662,044 51,158,128 61,711,884 175 VILLAGE OF BUFFALO GROVE, ILLINOIS Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years* 2014** 2015 2016 Revenues Propety Taxes $ 14,504,750 14,554,564 14,742,622 15,034,583 Other Taxes 19,240,365 9,564,978 9,712,718 9,701,271 Licenses and Permits 294,622 207,312 1,330,769 326,177 Intergovernmental 997,371 11,081,081 1,931,512 11,843,812 Fines and Forteitures 1,647,364 1,803,317 350,042 3,025,628 Charges for Services 1,010,868 1,371,779 12,271,219 1,504,400 Interest 54,522 107,765 25,061 65,600 Miscellaneous 1,506,994 2,107,628 1,404,841 1,610,746 Total Revenues 39,256,856 40,798,424 41,768,784 43,112,217 Expenditures Current General Government 6,465,636 5,522,549 5,084,772 5,693,142 Public Safety 21,805,910 22,773,535 25,237,115 27,407,019 Public Works 12,178,705 10,878,278 8,092,735 6,978,307 Capital Outlay 1,347,276 2,018,451 2,828,194 8,252,604 Debt Service Principal 940,000 790,000 510,000 525,000 Interest 385,395 313,665 296,747 371,456 Total Expenditures 43,122,922 42,296,478 42,049,563 49,227,528 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,866,066) (1,498,054) (280,779) (6,115,311) Other Financing Sources (Uses) Transfers In 2,119,313 2,552,288 3,521,760 3,402,595 Transfers Out (1,434,235) (1,481,564) (2,686,312) (2,253,984) Sales of Capital Assets - 488 1,601 1,385 Bond Issued - - - 6,125,000 Premium of Issuance of Debt - - - 100,778 Transfer to Escrow Agent - - - - Total Other Financing Sources (Uses) 685,078 1,071,212 837,049 7,375,774 Net Change in Fund Balances (3,180,988) (426,842) 556,270 1,260,463 Debt Service as a Percentage of Noncapital Expenditures 3.17%2.68%2.06%2.19% * Modified Accrual Basis of Accounting **Beginning in 2014, state shared revenues have been recorded as intergovernmental revenues. Data Source: Village Records December 31, 2022 (Unaudited) 2013 176 2017 2018 2019 2020 2021 2022 15,510,127 15,980,771 16,321,876 17,035,362 16,970,657 17,037,557 9,816,523 10,494,959 9,835,616 8,970,163 12,777,682 14,524,352 1,763,982 344,389 362,747 301,321 301,917 416,436 3,043,453 12,623,735 14,074,544 18,417,351 21,544,173 26,534,076 330,475 2,820,773 3,121,111 3,137,339 2,221,275 2,533,385 11,709,919 1,600,263 1,695,784 1,479,257 3,294,828 3,109,258 153,816 292,340 807,330 305,366 (33,773) 334,289 1,456,876 1,884,579 2,694,331 1,176,737 2,210,580 1,771,784 43,785,171 46,041,809 48,913,339 50,822,896 59,287,339 66,261,137 5,774,748 6,804,142 6,293,156 6,834,043 8,919,334 29,296,182 25,776,184 26,732,460 27,561,835 28,891,545 29,352,949 30,178,107 8,101,888 8,710,363 7,341,611 6,973,359 6,324,738 6,775,205 1,362,213 1,502,272 3,689,375 9,571,463 8,500,778 20,584,538 1,275,000 1,315,000 1,210,000 1,299,030 2,550,445 2,570,990 401,609 370,202 325,743 1,196,044 1,200,773 1,374,751 42,691,642 45,434,439 46,421,720 54,765,484 56,849,017 90,779,773 1,093,529 607,370 2,491,619 (3,942,588) 2,438,322 (24,518,636) 4,204,943 9,068,487 5,397,700 12,345,886 13,079,260 11,361,834 (3,192,426) (8,995,638) (4,171,708) (13,975,244) (15,034,998) (16,676,258) 28,758 - 163,085 - 13,500 - - - 1,449,275 24,000,000 - 37,530,000 - - - 2,720,164 - 2,856,816 - - (1,457,080) - - - 1,041,275 72,849 1,381,272 25,090,806 (1,942,238) 35,072,392 2,134,804 680,219 3,872,891 21,148,218 496,084 10,553,756 4.24%3.89%3.48%5.70%7.72%5.60% 177 VILLAGE OF BUFFALO GROVE, ILLINOIS Assessed Value and Actual Value of Taxable Property - Last Ten Tax Levy Years Tax Levy Year 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 1,493,688,565 284,382,018 5,900,081 691,021 2021 1,395,918,824 346,305,368 5,803,116 42,089 2022 1,411,906,697 * 351,836,123 * 5,872,625 687,805 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, 2022 (Unaudited) Property Property Property Property Residential Commercial Industrial Other 178 Estimated Tax Rate Actual Taxable for Lake County Value % $ 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% 1,784,661,685 5,362,795,164 0.9032 33.333% 1,748,069,397 5,244,208,191 0.9043 33.333% 1,770,303,250 * 5,310,909,750 0.8972 33.333% Value Value Estimated Total Assessed Actual Taxable 179 VILLAGE OF BUFFALO GROVE, ILLINOIS Direct and Overlapping Property Tax Rates - Last Ten Tax LevyYears 2013 2014 2015 Direct Rate Lake County Village of Buffalo Grove 0.983 0.993 0.955 Cook County Village of Buffalo Grove 1.211 1.235 1.316 Total 2.194 2.228 2.271 Overlapping Rate Lake County County, including Forest Preserve 0.881 0.893 0.871 Combined School Districts (102, 125, 532) 7.068 7.164 7.034 Buffalo Grove Park District 0.537 0.553 0.517 Vernon Area Public Library 0.311 0.317 0.308 All Other (1) 0.105 0.113 0.110 Cook County County, including Forest Preserve 0.125 0.126 0.621 Metropolitan Water Reclamation District of Greater Chicago 0.417 0.430 0.426 Combined School Districts (21, 214, 512) 8.053 8.657 8.989 Buffalo Grove Park District 0.658 0.677 0.714 Indian Trails Public Library District 0.504 0.529 0.534 All other (2) 0.129 0.094 0.130 Total (3) 18.788 19.553 20.254 Notes: Data Source: Cook County Tax Extension/Lake County Tax Extension N/A - Not Available December 31, 2022 (Unaudited) Taxes Levied on a calendar year basis for collection in the subsequent year. The Village is home rule unit under the 1970 Illinois State Constitution and, as such, has no statutory tax rate limitations. (1) Includes Road and Bridge and General Assistance for the Township herein. (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 2021 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. 180 2016 2017 2018 2019 2020 2021 2022 0.921 0.908 0.907 0.890 0.903 0.904 0.897 1.138 1.210 1.260 1.136 1.165 1.273 N/A 2.059 2.118 2.167 2.026 2.068 2.177 0.897 0.825 0.809 0.794 0.776 0.780 0.777 0.762 6.680 6.634 6.665 6.459 6.754 6.952 7.186 0.492 0.482 0.480 0.465 0.478 0.491 0.509 0.293 0.291 0.294 0.293 0.304 0.312 0.320 0.104 0.099 0.096 0.091 0.093 0.095 0.096 0.596 0.558 0.489 0.513 0.511 0.504 N/A 0.406 0.402 0.396 0.389 0.378 0.382 N/A 7.909 8.010 8.388 7.450 7.474 8.326 N/A 0.606 0.641 0.666 0.584 0.612 0.690 N/A 0.476 0.481 0.493 0.446 0.458 0.497 N/A 0.073 0.108 0.079 0.100 0.068 0.094 N/A 18.460 18.515 18.839 17.565 17.909 19.119 8.873 181 VILLAGE OF BUFFALO GROVE, ILLINOIS Principal Property Tax Payers - Current Tax Levy Year and Nine Tax Levy 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 1.58% $ 20,464,998 1 1.41% Remax Inc. 13,964,643 2 0.79% 7,471,298 8 0.45% Penobscot Management LLC 12,679,905 3 0.72% 8,467,934 4 0.58% Hamilton Partners Inc. (1)11,005,829 4 0.62% 10,137,535 2 0.70% Newport Equities LLC 8,996,519 5 0.54% Riverwalk II LLC 9,547,124 6 0.54% 5,913,136 10 0.41% G&I X Windbrooke Crossing LLC 8,854,346 7 0.50% Chricago Infill Industrial 8,521,219 8 0.48% Millbrook 7,235,339 9 0.41% 9,215,125 3 0.63% Rivewalk South LLC 6,761,418 10 0.38% 8,223,173 5 0.57% Arthur J. Rogers and Co (4)7,793,556 6 0.54% MFREVF - Windbrooke LP 7,415,247 9 0.51% Aptakisic Creek Corporate Park 7,743,800 7 0.53% 123,811,678 6.56% 92,845,802 6.33% 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, 2022 (Unaudited) 2021 2012 Taxable Taxable Assessed Assessed 182 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 2 ( U n a u d i t e d ) Fi s c a l 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 3 $ 11 , 4 1 3 , 0 6 7 $ 1 1 , 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 % $ 1 4 , 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 % 1 4 , 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 % 1 5 , 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 % 1 5 , 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 % 1 5 , 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 % 1 6 , 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 % 1 6 , 7 7 4 , 0 9 3 98 . 0 9 % 20 2 0 12 , 6 6 3 , 4 3 7 12 , 6 1 8 , 7 3 4 99 . 6 5 % 4, 4 5 5 , 1 7 5 4, 3 1 2 , 0 6 6 96 . 7 9 % 1 6 , 9 3 0 , 8 0 0 98 . 9 0 % 20 2 1 12 , 6 6 3 , 4 3 7 12 , 6 1 8 , 7 3 4 99 . 6 5 % 4, 4 5 5 , 1 7 5 4, 3 1 2 , 0 6 6 96 . 7 9 % 1 6 , 9 3 0 , 8 0 0 98 . 9 0 % 20 2 2 12 , 6 2 1 , 1 2 9 12 , 5 6 1 , 5 4 4 99 . 5 3 % 4, 4 9 4 , 5 4 2 4, 4 5 9 , 0 0 0 99 . 2 1 % 1 7 , 0 2 0 , 5 4 4 99 . 4 4 % 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 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 L e v i e d f o r F i s c a l Y e a r o f t h e L e v y 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 C o l l e c t e d w i t h i n t h e th e F i s c a l Am o u n t Ye a r A m o u n t Am o u n t 183 VILLAGE OF BUFFALO GROVE, ILLINOIS Taxable Sales by Category - Last Ten Calendar Years December 31, 2022 (Unaudited) 2014 2015 General Merchandise $ 10,105 9,098 66,228 Food 1,133,605 1,080,556 1,552,983 Drinking and Eating Places 1,025,547 1,023,545 1,062,206 Apparel 120,210 104,229 94,538 Furniture, Households and Radio 463,678 356,095 521,007 Lumber, Building and Hardware 1,236,689 1,666,708 1,879,818 Automobile and Filling Stations 857,713 947,278 918,216 Drugs and Misc. Retail 1,915,937 2,349,469 1,790,381 Agriculture and All Others 1,572,248 1,693,506 2,313,502 Manufacturers 285,848 270,063 351,808 Totals 8,621,580 9,500,547 10,550,687 Total Number of Taxpayers 972 974 1,043 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 2013 Note: Blank Categories have less than four taxpayers; therefore, no data is shown to protect the confidentiality of the individual taxpayers. 184 2016 2017 2018 2019 2020 2021 2022 86,125 - - - 66,754 133,228 127,776 1,481,195 1,557,474 1,836,131 2,419,704 2,485,816 2,772,036 3,649,009 1,118,330 1,107,878 1,133,048 1,203,642 987,063 1,166,982 1,189,430 92,409 68,075 66,797 167,211 57,933 94,887 101,998 369,583 380,907 1,250,788 1,294,886 1,482,689 2,132,025 2,079,488 2,074,008 2,357,551 2,202,029 2,119,185 2,267,449 3,132,250 3,612,201 867,250 1,007,356 1,068,115 1,089,620 848,373 1,059,622 1,178,431 1,986,578 1,568,024 1,536,061 1,481,357 1,515,668 3,054,824 3,188,075 2,231,299 2,573,323 2,470,229 2,484,560 2,303,808 2,364,628 2,902,778 220,927 200,727 180,646 213,851 170,291 192,379 247,896 10,527,704 10,821,315 11,743,844 12,474,017 12,185,844 16,102,861 18,277,081 1,022 1,036 1,036 987 902 4,532 6,003 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% 185 State of Village Village Illinois Fiscal Direct Home Rule Sales Tax Year Rate Rate Rate 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% 2021 1.00%1.00%6.50% 2022 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, 2022 (Unaudited) 186 VILLAGE OF BUFFALO GROVE, ILLINOIS Ratios of Outstanding Debt By Type - Last Ten Fiscal Years See Following Page December 31, 2022 (Unaudited) 187 VILLAGE OF BUFFALO GROVE, ILLINOIS Ratios of Outstanding Debt By Type - Last Ten Fiscal Years Fiscal TIF Revnue Year Note 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 2021 34,612,580 - 272,708 5,178,045 2022 53,240,666 19,000,000 252,725 4,687,283 Governmental Activities General Installment (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, 2022 (Unaudited) Bonds Loan Note Business-Type Activities Notes: Details of the Village's outstanding debt can be found in the Notes to Financial Statements. Obligation IEPA 188 Ratio of Total Outstanding Debt Debt to Outstanding Equalized as a Percentage Assessed of Personal Valuation (2)Income (1) $ 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%1,068.26 2.00% 40,063,333 0.76%927.13 1.70% 77,180,674 1.45%1,813.07 3.24% Debt Per Capita (1)Government Primary Total OutstandingTotal 189 Percentage of Total Taxable Less: Amounts Assessed Fiscal Available in Value of Per Year Debt Service Total Property (1) Capita (2) 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 2021 34,612,580 247,676 34,364,904 0.64%795.26 2022 53,240,666 32,249 53,208,417 1.00%1,231.33 (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, 2022 (Unaudit VILLAGE OF BUFFALO GROVE, ILLINOIS Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years General Obligation 190 VILLAGE OF BUFFALO GROVE, ILLINOIS Schedule of Direct and Overlapping Governmental Activities Debt Percentage of Debt Applicable Governmental Unit to Village (1) Village $ 72,240,666 100.00% $ 72,240,666 Overlapping Debt School Districts Cook County School District #21 84,350,000 17.63%14,867,282 Aptakisic-Tripp Community Consolidated #102 16,580,000 75.06%12,445,465 Lincolnshire-Half Day District #103 6,595,000 12.21%805,462 Adlai E. Stevenson H.S. District #125 47,840,000 38.21%18,280,579 Wheeling Township H.S. District #214 25,000,000 3.75%936,835 Harper Community College #512 243,530,000 1.76%4,287,474 College of Lake County #532 45,110,000 5.42%2,442,888 Total of School Districts 469,005,000 54,065,985 Other than School Districts Lake County 137,310,000 5.16%7,080,403 Lake County Forest Preserve 181,865,000 5.16%9,377,885 Cook County 2,425,146,750 0.22%5,336,983 Cook County Forest Preserve 113,105,000 0.22%248,908 Metropolitan Water Reclamation District 2,759,628,416 0.22%6,178,289 Buffalo Grove Park District 10,153,000 95.69%9,702,248 Wheeling Park District 9,055,000 7.15%630,584 Total Other than School Districts 5,636,263,166 38,555,300 Total Direct and Overlapping Debt 5,708,503,832 92,621,285 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, 2022 (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. 191 VILLAGE OF BUFFALO GROVE, ILLINOIS Schedule of Legal Debt Margin December 31, 2022 (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. 192 VILLAGE OF BUFFALO GROVE, ILLINOIS Demographic and Economic Statistics - Last Ten Fiscal Years December 31, 2022 (Unaudited) Per Equalized Capita Fiscal Assessed Personal Personal Per Capita Unemployment Year Population Valuation EAV Income Income Rate 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% 2021 43,212 E 1,778,137,268 41,149 2,356,263,936 54,528 (1) 3.8% 2022 42,569 E 1,770,303,250 41,587 2,379,862,514 55,906 (1) 3.8% 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 193 VILLAGE OF BUFFALO GROVE, ILLINOIS Principal Employers - Current Fiscal Year and Nine Fiscal Years Ago Percentage Percentage of Total of Total Village Village Employer Rank Employment Rank Employment Siemens Building Technologies 1,800 1 7.96%2,000 1 4.72% ESS 550 2 2.43% Plexus Corp 370 3 1.64%370 6 0.87% Veritas Document Solutions 300 4 1.33% US LBM Holdings, LLC 250 5 1.11% Village of Buffalo Grove 214 6 0.95% Vapor Bus International 200 7 0.88% Crosscom National, LLC 170 8 0.75% Schultes Precision Manufacturing 170 9 0.75% CORPTAX, Inc 160 10 0.71% SMS-NA USA 1,200 2 2.83% Rexam 800 3 1.89% Dominick's Finer Foods (three locations)483 4 1.14% GSF-USA, Inc.450 5 1.06% Harris Trust & Savings Bank 350 7 0.83% Dell 225 8 0.53% Texex Corp 220 9 0.52% Amerisource Bergen 200 10 0.47% 4,184 18.51%6,298 14.86% Data Source: Sources: 2022 Illinois Manufacturing Directory Employees Employees December 31, 2022 (Unaudited) 2022 2013 194 VILLAGE OF BUFFALO GROVE, ILLINOIS Full-Time Equivalent Village Government Employees by Function - Last Ten Fiscal Years December 31, 2022 (Unaudited) See Following Page 195 VILLAGE OF BUFFALO GROVE, ILLINOIS Full-Time Equivalent Village Government Employees by Function - Last Ten Fiscal Years 2014 2015 General Government Administration Village Managers Office 5.5 7.5 6.0 Information Technology 3.5 3.0 - Human Resources 2.0 2.0 2.0 Administrative Services - - - Finance 9.5 10.0 8.0 Community Development 10.0 9.5 12.0 Planning 1.5 1.5 - Public Safety Police Full-Time Police Officers 64.0 63.0 63.0 Community Service Officers 3.0 3.0 3.0 Civilians 17.0 15.0 15.0 Fire Full-time Firefighters/Paramedics 58.0 58.0 59.0 Civilians 3.5 1.5 1.0 Public Works Public Works Administration 5.0 6.0 6.0 Streets/Forestry 18.5 18.5 20.0 Water/Sewer 8.0 9.0 10.0 Central garage 5.5 5.5 5.5 Building Maintenance 4.0 6.0 6.0 Recreation Administration 18.0 19.5 19.5 Grounds Maintenance 16.0 11.5 11.5 Total 252.5 250.0 247.5 Recreation Seasonal 30.0 30.0 30.0 Data Source: Village Finance Department December 31, 2022 (Unaudited) 2013 196 2016 2017 2018 2019 2020 2021 2022 5.0 5.5 5.5 5.5 4.5 4.5 5.0 - - - - - - - 2.0 2.0 2.0 2.0 2.0 2.0 2.0 - - - - - - 3.5 9.0 9.0 9.0 8.0 9.0 8.0 7.0 12.0 14.0 15.0 13.0 13.0 10.0 10.0 - - - - - - - 63.0 61.0 61.0 63.0 60.0 58.0 60.0 3.0 2.0 2.0 2.0 2.0 2.0 2.0 15.5 16.0 16.0 20.0 16.0 12.5 12.0 59.0 58.0 59.0 56.0 56.0 57.0 57.0 1.0 4.5 5.0 7.0 9.0 4.5 5.0 6.0 12.0 11.5 10.0 11.0 11.0 11.0 20.0 20.0 20.0 17.0 17.0 15.0 15.0 9.0 12.0 12.0 13.0 12.0 12.0 12.0 5.5 5.5 5.5 5.5 5.5 5.5 5.5 6.0 4.5 4.5 4.5 4.5 3.0 3.0 4.0 4.0 4.0 2.0 2.0 2.0 2.0 - - - - - - - 220.0 230.0 232.0 228.5 223.5 207.0 212.0 30.0 30.0 30.0 29.0 38.0 38.0 38.0 197 VILLAGE OF BUFFALO GROVE, ILLINOIS Operating Indicators by Function/Program - Last Ten Fiscal Years 2014 2015 General Government Building and Zoning Building Permits Issued 2,651 2,833 2,957 Building Inspections Conducted 7,456 7,074 9,053 Property Maintenance Inspections Conducted 3,288 3,172 2,160 Public Safety Police Physical Arrests 759 886 521 Parking Violations 2,984 3,634 5,754 Traffic Violations 13,171 8,349 6,054 DUI Arrests 124 154 74 Vehicle Crashes 1,507 1,429 1,473 Fire Ambulance Calls/EMS 2,613 3,385 3,160 Service Calls 483 1,245 309 Fire Calls 865 821 1,279 Auto Aid/Mutual Aid 654 1,063 987 Public Works Streets Street Resurfacing (Miles)10.84 3.28 11.40 Parks and Recreation Park Sites 46 46 46 Golf Course - Combined Golf Rounds Played - Paid 53,639 54,689 53,599 Water New Connections (Tap ons)27 9 19 Average Daily Consumption (1)3.70 3.58 3.60 Peak Daily Consumption (1)6.20 5.40 5.54 (1) - Millions of Gallons Data Source: Various Village Departments December 31, 2022 (Unaudited) 2013 198 2016 2017 2018 2019 2020 2021 2,567 2,502 3,443 2,697 3,339 3,127 6,692 6,817 7,361 5,540 6,097 8,543 1,954 1,902 2,254 1,856 1,543 1,135 441 452 406 283 233 401 6,781 5,748 3,404 2,185 2,180 1481 5,310 6,054 4,844 3,439 3,760 4934 87 85 74 54 44 45 1,294 1,353 1,459 829 948 941 3,201 3,145 3,145 3,276 3,444 3,656 293 309 409 249 256 373 1,082 1,257 1,253 1,096 1,209 1,135 1,045 967 1,193 1,198 790 786 2.76 0.97 2.64 4.97 4.50 2.75 46 46 46 46 46 49 51,138 48,770 44,000 58,297 71,617 71,773 3 23 11 23 34 67 3.23 3.49 3.13 3.33 3.51 3.62 5.98 5.69 4.83 4.97 5.67 6.39 199 VILLAGE OF BUFFALO GROVE, ILLINOIS Capital Asset Statistics by Function/Program - Last Ten Fiscal Years 2014 2015 Public Safety Police Stations 1 1 1 Vehicles 28 29 30 Fire Stations 3 3 3 Vehicles*21 20 20 Public Works Streets 117.70 118.20 118.20 Street (Miles)2,778 2,786 2,789 Streetlights Water Water Mains 180.30 180.90 181.14 Fire Hydrants 2,477 2,487 2,493 Wastewater Sanitary Sewers 139.30 139.80 139.92 Data Source: Various Village Departments * Includes fire engines/towers, ambulances, and staff cars December 31, 2022 (Unaudited) 2013 200 2016 2017 2018 2019 2020 2021 2022 1 1 1 1 1 1 1 29 31 30 29 30 31 31 3 3 3 3 3 3 3 20 20 20 20 20 20 20 118.22 114.02 114.02 113.90 110.83 116.07 116.07 2,789 2,790 2,755 2,437 3,115 2,958 2,559 181.31 181.97 185.99 186.19 188.60 185.43 185.36 2,501 2,514 2,507 2,507 2,584 2,607 2,628 139.92 139.96 141.60 135.94 137.38 137.08 137.08 201