VILLAGE OF GREENDALE, WISCONSIN (Milwaukee County) $2,160,000* TAXABLE GENERAL OBLIGATION COMMUNITY DEVELOPMENT BONDS, SERIES 2018C

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1 PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER 20, 2018 In the opinion of Quarles & Brady LLP, Bond Counsel, under existing law interest on the Bonds is included in gross income for federal income tax purposes. See "TAXABILITY OF INTEREST" herein. The interest on the Bonds is not exempt from present Wisconsin income or franchise taxes. This Preliminary Official Statement and the information contained herein are subject to completion and amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy these securities nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This Preliminary Official Statement is in a form deemed final as of its date for purposes of SEC Rule 15c2-12(b) (1), but is subject to revision, amendment and completion in a Final Official Statement. The Village will NOT designate the Bonds as "qualified tax-exempt obligations" pursuant to Section 265 of the Internal Revenue Code of 1986, as amended, which permits financial institutions to deduct interest expenses allocable to the Bonds to the extent permitted under prior law. New Issue VILLAGE OF GREENDALE, WISCONSIN (Milwaukee County) Rating Application Made: Moody's Investors Service $2,160,000* TAXABLE GENERAL OBLIGATION COMMUNITY DEVELOPMENT BONDS, SERIES 2018C BID OPENING: December 4, 2018, 10:00 A.M., C.T. CONSIDERATION: December 4, 2018, 7:00 P.M., C.T. PURPOSE/AUTHORITY/SECURITY: The $2,160,000* Taxable General Obligation Community Development Bonds, Series 2018C (the "Bonds") of the Village of Greendale, Wisconsin (the "Village") are being issued pursuant to Section 67.04,Wisconsin Statutes, for the public purpose of providing financial assistance to community development projects under Section , Wisconsin Statutes, by paying project costs of the Village s Tax Incremental District No. 5. The Bonds are valid and binding general obligations of the Village, and all the taxable property in the Village is subject to the levy of a tax to pay the principal of and interest on the Bonds as they become due which tax may, under current law, be levied without limitation as to rate or amount. Delivery is subject to receipt of an approving legal opinion of Quarles & Brady LLP, Milwaukee, Wisconsin. DATE OF BONDS: December 20, 2018 MATURITY: December 1 as follows: Year Amount* Year Amount* Year Amount* 2021 $140, $165, $180, , , , , , , , , , ,000 MATURITY ADJUSTMENTS: * The Village reserves the right to increase or decrease the principal amount of the Bonds on the day of sale, in increments of $5,000 each. Increases or decreases may be made in any maturity. If any principal amounts are adjusted, the purchase price proposed will be adjusted to maintain the same gross spread per $1,000. TERM BONDS: See Term Bond Option herein. INTEREST: June 1, 2019 and semiannually thereafter. OPTIONAL REDEMPTION: Bonds maturing December 1, 2028 and thereafter are subject to call for prior redemption on December 1, 2027 and any date thereafter, at a price of par plus accrued interest. MINIMUM BID: $2,133,000. MAXIMUM BID: $2,289,600. GOOD FAITH DEPOSIT: A good faith deposit in the amount of $43,200 shall be made by the winning bidder by wire transfer of funds. PAYING AGENT: May be named by Issuer. BOND COUNSEL: Quarles & Brady LLP. MUNICIPAL ADVISOR: Ehlers and Associates, Inc. BOOK-ENTRY-ONLY: See Book-Entry-Only System herein (unless otherwise specified by the purchaser).

2 REPRESENTATIONS No dealer, broker, salesperson or other person has been authorized by the Village to give any information or to make any representation other than those contained in this Preliminary Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the Village. This Preliminary Official Statement does not constitute an offer to sell or a solicitation of an offer to buy any of the Bonds in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in such jurisdiction. This Preliminary Official Statement is not to be construed as a contract with the Syndicate Manager or Syndicate Members. Statements contained herein which involve estimates or matters of opinion are intended solely as such and are not to be construed as representations of fact. Ehlers and Associates, Inc. prepared this Preliminary Official Statement and any addenda thereto relying on information of the Village and other sources for which there is reasonable basis for believing the information is accurate and complete. Bond Counsel has not participated in the preparation of this Preliminary Official Statement and is not expressing any opinion as to the completeness or accuracy of the information contained therein. Compensation of Ehlers and Associates, Inc., payable entirely by the Village, is contingent upon the sale of the Bonds. COMPLIANCE WITH S.E.C. RULE 15c2-12 Certain municipal obligations (issued in an aggregate amount over $1,000,000) are subject to Rule 15c2-12 promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the Rule ). Preliminary Official Statement: This Preliminary Official Statement was prepared for the Village for dissemination to potential investors. Its primary purpose is to disclose information regarding the Bonds to prospective underwriters in the interest of receiving competitive proposals in accordance with the sale notice contained herein. Unless an addendum is posted prior to the sale, this Preliminary Official Statement shall be deemed nearly final for purposes of the Rule subject to completion, revision and amendment in a Final Official Statement as defined below. Review Period: This Preliminary Official Statement has been distributed to prospective bidders for review. Comments or requests for the correction of omissions or inaccuracies must be submitted to Ehlers and Associates, Inc. at least two business days prior to the sale. Requests for additional information or corrections in the Preliminary Official Statement received on or before this date will not be considered a qualification of a proposal received from an underwriter. If there are any changes, corrections or additions to the Preliminary Official Statement, interested bidders will be informed by an addendum prior to the sale. Final Official Statement: Copies of the Final Official Statement will be delivered to the underwriter (Syndicate Manager) within seven business days following the proposal acceptance. Continuing Disclosure: Subject to certain exemptions, issues in an aggregate amount over $1,000,000 may be required to comply with provisions of the Rule which require that underwriters obtain from the issuers of municipal securities (or other obligated party) an agreement for the benefit of the owners of the securities to provide continuing disclosure with respect to those securities. This Preliminary Official Statement describes the conditions under which the Village is required to comply with the Rule. CLOSING CERTIFICATES Upon delivery of the Bonds, the underwriter (Syndicate Manager) will be furnished with the following items: (1) a certificate of the appropriate officials to the effect that at the time of the sale of the Bonds and all times subsequent thereto up to and including the time of the delivery of the Bonds, this Preliminary Official Statement did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (2) a receipt signed by the appropriate officer evidencing payment for the Bonds; (3) a certificate evidencing the due execution of the Bonds, including statements that (a) no litigation of any nature is pending, or to the knowledge of signers, threatened, restraining or enjoining the issuance and delivery of the Bonds, (b) neither the corporate existence or boundaries of the Village nor the title of the signers to their respective offices is being contested, and (c) no authority or proceedings for the issuance of the Bonds have been repealed, revoked or rescinded. ii

3 TABLE OF CONTENTS INTRODUCTORY STATEMENT... 1 THE BONDS... 1 GENERAL... 1 OPTIONAL REDEMPTION... 1 AUTHORITY; PURPOSE... 2 ESTIMATED SOURCES AND USES... 2 SECURITY... 2 RATING... 3 CONTINUING DISCLOSURE... 3 LEGAL OPINION... 3 STATEMENT REGARDING BOND COUNSEL PARTICIPATION... 4 TAXABILITY OF INTEREST... 4 MUNICIPAL ADVISOR... 4 MUNICIPAL ADVISOR AFFILIATED COMPANIES... 4 INDEPENDENT AUDITORS... 4 RISK FACTORS... 5 VALUATIONS... 7 WISCONSIN PROPERTY VALUATIONS; PROPERTY TAXES... 7 CURRENT PROPERTY VALUATIONS EQUALIZED VALUE BY CLASSIFICATION... 8 TREND OF VALUATIONS... 8 LARGER TAXPAYERS... 9 DEBT DIRECT DEBT SCHEDULE OF GENERAL OBLIGATION DEBT SCHEDULE OF WATER REVENUE DEBT DEBT LIMIT OVERLAPPING DEBT DEBT RATIOS DEBT PAYMENT HISTORY FUTURE FINANCING TAX LEVIES AND COLLECTIONS TAX LEVIES AND COLLECTIONS PROPERTY TAX RATES LEVY LIMITS THE ISSUER VILLAGE GOVERNMENT EMPLOYEES; PENSIONS OTHER POST EMPLOYMENT BENEFITS LITIGATION MUNICIPAL BANKRUPTCY FUNDS ON HAND ENTERPRISE FUNDS SUMMARY GENERAL FUND INFORMATION GENERAL INFORMATION LOCATION LARGER EMPLOYERS BUILDING PERMITS U.S. CENSUS DATA EMPLOYMENT/UNEMPLOYMENT DATA FINANCIAL STATEMENTS...A-1 FORM OF LEGAL OPINION... B-1 BOOK-ENTRY-ONLY SYSTEM... C-1 FORM OF CONTINUING DISCLOSURE CERTIFICATE. D-1 NOTICE OF SALE... E-1 BID FORM iii

4 VILLAGE OF GREENDALE VILLAGE BOARD Term Expires James Birmingham Village President April 2021 Ronald A. Barbian Village Trustee April 2019 Sally A. Chadwick Village Trustee April 2021 Carl Genz Village Trustee April 2020 Vacant 1 Village Trustee April 2019 Donna Ouellette Village Trustee April 2020 Jason Cyborowski Village Trustee April 2021 ADMINISTRATION Todd Michaels, Manager Kristen Victory, Clerk/Treasurer PROFESSIONAL SERVICES John P. Macy, Village Attorney, Waukesha, Wisconsin Quarles & Brady LLP, Bond Counsel, Milwaukee, Wisconsin Ehlers and Associates, Inc., Municipal Advisors, Waukesha, Wisconsin (Other offices located in Roseville, Minnesota; Chicago, Illinois; and Denver, Colorado) 1 This board vacancy will remain vacant until the 2019 Spring Election. iv

5 INTRODUCTORY STATEMENT This Preliminary Official Statement contains certain information regarding the Village of Greendale, Wisconsin (the "Village") and the issuance of its $2,160,000* Taxable General Obligation Community Development Bonds, Series 2018C (the "Bonds"). Any descriptions or summaries of the Bonds, statutes, or documents included herein are not intended to be complete and are qualified in their entirety by reference to such statutes and documents and the form of the Bonds to be included in the resolution authorizing the issuance and sale of the Bonds ("Award Resolution") to be adopted by the Board of Trustees on December 4, Inquiries may be directed to Ehlers and Associates, Inc. ("Ehlers" or the "Municipal Advisor"), Waukesha, Wisconsin, (262) , the Village's Municipal Advisor. A copy of this Preliminary Official Statement may be downloaded from Ehlers web site at by connecting to the link to the Bond Sales and following the directions at the top of the site. THE BONDS GENERAL The Bonds will be issued in fully registered form as to both principal and interest in denominations of $5,000 each or any integral multiple thereof, and will be dated, as originally issued, as of December 20, The Bonds will mature on December 1 in the years and amounts set forth on the cover of this Preliminary Official Statement. Interest will be payable on June 1 and December 1 of each year, commencing June 1, 2019, to the registered owners of the Bonds appearing of record in the bond register as of the close of business on the 15th day (whether or not a business day) of the immediately preceding month. Interest will be computed upon the basis of a 360-day year of twelve 30- day months and will be rounded pursuant to rules of the Municipal Securities Rulemaking Board ("MSRB"). The rate for any maturity may not be more than 2.00% less than the rate for any preceding maturity. (For example, if a rate of 4.50% is proposed for the 2020 maturity, then the lowest rate that may be proposed for any later maturity is 2.50%.) All Bonds of the same maturity must bear interest from the date of issue until paid at a single, uniform rate. Each rate must be expressed in an integral multiple of 5/100 or 1/8 of 1%. Unless otherwise specified by the purchaser, the Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). (See "Book-Entry-Only System" herein.) As long as the Bonds are held under the book-entry system, beneficial ownership interests in the Bonds may be acquired in book-entry form only, and all payments of principal of, premium, if any, and interest on the Bonds shall be made through the facilities of DTC and its participants. If the book-entry system is terminated, principal of, premium, if any, and interest on the Bonds shall be payable as provided in the Award Resolution. The Village may select a bank or trust company to act as paying agent (the Paying Agent ). If a Paying Agent is selected, the Village will pay the charges for Paying Agent services. The Village reserves the right to remove the Paying Agent and to appoint a successor. OPTIONAL REDEMPTION At the option of the Village, the Bonds maturing on or after December 1, 2028 shall be subject to optional redemption prior to maturity on December 1, 2027 or any date thereafter, at a price of par plus accrued interest. *Preliminary, subject to change. 1

6 Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the selection of the amounts and maturities of the Bonds to be redeemed shall be at the discretion of the Village. If only part of the Bonds having a common maturity date are called for redemption, then the Village or Paying Agent, if any, will notify DTC of the particular amount of such maturity to be redeemed. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interest in such maturity to be redeemed. Notice of such call shall be given by sending a notice by registered or certified mail, facsimile or electronic transmission, overnight delivery service or in any other manner required by DTC, not less than 30 days nor more than 60 days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books. AUTHORITY; PURPOSE The Bonds are being issued pursuant to Section 67.04,Wisconsin Statutes, for the public purpose of providing financial assistance to community development projects under Section , Wisconsin Statutes, by paying project costs of the Village s Tax Incremental District No. 5. ESTIMATED SOURCES AND USES* Sources Par Amount of Bonds $2,160,000 Estimated Interest Earnings 500 Uses Total Sources $2,160,500 Total Underwriter's Discount (1.250%) $27,000 Costs of Issuance 45,150 Deposit to Capitalized Interest (CIF) Fund 83,990 Deposit to Project Construction Fund 2,000,000 Rounding Amount 4,360 Total Uses $2,160,500 *Preliminary, subject to change. SECURITY For the prompt payment of the Bonds with interest thereon and for the levy of taxes sufficient for this purpose, the full faith, credit and resources of the Village will be irrevocably pledged. The Village will levy a direct, annual, irrepealable tax on all taxable property in the Village sufficient to pay the interest on the Bonds when it becomes due and also to pay and discharge the principal on the Bonds at maturity, in compliance with Article XI, Section 3 of the Wisconsin Constitution. Such tax may, under current law, be levied without limitation as to rate or amount. 2

7 RATING General obligation debt of the Village, with the exception of any outstanding credit enhanced issues, is currently rated "Aa3" by Moody s Investors Service, Inc. ("Moody s"). The Village has requested a rating on the Bonds from Moody's Investors Service, and bidders will be notified as to the assigned rating prior to the sale. Such rating reflects only the views of such organization and explanations of the significance of such rating may be obtained from Moody's Investors Service. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that such rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by such rating agency, if in the judgment of such rating agency circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. Such rating is not to be construed as a recommendation of the rating agency to buy, sell or hold the Bonds, and the rating assigned by the rating agency should be evaluated independently. Except as may be required by the Disclosure Undertaking described under the heading CONTINUING DISCLOSURE neither the Village nor the underwriter undertake responsibility to bring to the attention of the owner of the Bonds any proposed changes in or withdrawal of such rating or to oppose any such revision or withdrawal. CONTINUING DISCLOSURE In order to assist the underwriters in complying with Rule 15c2-12 promulgated by the Securities and Exchange Commission, pursuant to the Securities Exchange Act of 1934, as amended (the "Rule"), the Village shall covenant to take certain actions pursuant to the Award Resolution adopted by the Board of Trustees by entering into a Continuing Disclosure Certificate (the Disclosure Undertaking ) for the benefit of holders, including beneficial holders. The Disclosure Undertaking requires the Village to provide electronically or in the manner otherwise prescribed certain financial information annually and to provide notices of the occurrence of certain events enumerated in the Rule. The details and terms of the Disclosure Undertaking for the Bonds are set forth in Appendix D to be executed and delivered by the Village at the time of delivery of the Bonds. Such Disclosure Undertaking will be in substantially the form attached hereto. In the previous five years, the Village believes it has not failed to comply in all material respects with its prior undertakings under the Rule. A failure by the Village to comply with any Disclosure Undertaking will not constitute an event of default on this issue or any issue outstanding. However, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. The Village will file its continuing disclosure information using the Electronic Municipal Market Access ( EMMA ) system or any system that may be prescribed in the future. Investors will be able to access continuing disclosure information filed with the MSRB at LEGAL OPINION An opinion as to the validity of the Bonds will be furnished by Quarles & Brady LLP, of Milwaukee, Wisconsin, bond counsel to the Village. The legal opinion will be issued on the basis of existing law and will state that the Bonds are valid and binding general obligations of the Village; provided that the rights of the owners of the Bonds and the enforceability of the Bonds may be limited by bankruptcy, insolvency, reorganization, moratorium, and other 3

8 similar laws affecting creditors' rights and by equitable principles (which may be applied in either a legal or equitable proceeding). STATEMENT REGARDING BOND COUNSEL PARTICIPATION Bond Counsel has not assumed responsibility for this Official Statement or participated in its preparation (except with respect to the section entitled "Taxability of Interest" in the Official Statement and the?form of Legal Opinion" found in the Appendix B) and has not performed any investigation as to its accuracy, completeness or sufficiency. TAXABILITY OF INTEREST Interest on the Bonds is included in gross income for present Federal income tax purposes. Interest on the Bonds is not exempt from present Wisconsin income or franchise taxes. MUNICIPAL ADVISOR Ehlers has served as municipal advisor to the Village in connection with the issuance of the Bonds. The Municipal Advisor cannot participate in the underwriting of the Bonds. The financial information included in this Preliminary Official Statement has been compiled by the Municipal Advisor. Such information does not purport to be a review, audit or certified forecast of future events and may not conform with accounting principles applicable to compilations of financial information. Ehlers is not a firm of certified public accountants. Ehlers is registered with the Securities and Exchange Commission and the MSRB as a Municipal Advisor. MUNICIPAL ADVISOR AFFILIATED COMPANIES Bond Trust Services Corporation ("BTSC") and Ehlers Investment Partners, LLC ("EIP") are affiliate companies of Ehlers. BTSC is chartered by the State of Minnesota and authorized in Minnesota, Wisconsin, Colorado, and Illinois to transact the business of a limited purpose trust company. BTSC provides paying agent services to debt issuers. EIP is a Registered Investment Advisor with the Securities and Exchange Commission. EIP assists issuers with the investment of bond proceeds or investing other issuer funds. This includes escrow bidding agent services. Issuers, such as the Village, have retained or may retain BTSC and/or EIP to provide these services. If hired, BTSC and/or EIP would be retained by the Village under an agreement separate from Ehlers. INDEPENDENT AUDITORS The basic financial statements of the Village for the fiscal year ended December 31, 2017 have been audited by Schenck, S.C., Sheboygan, Wisconsin, independent auditors (the "Auditor"). The report of the Auditor, together with the basic financial statements, component units financial statements, and notes to the financial statements are attached hereto as APPENDIX A FINANCIAL STATEMENTS. The Auditor has not been engaged to perform and has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that report. The Auditor also has not performed any procedures relating to this Preliminary Official Statement. 4

9 RISK FACTORS Following is a description of possible risks to holders of the Bonds without weighting as to probability. This description of risks is not intended to be all-inclusive, and there may be other risks not now perceived or listed here. Taxes: The Bonds are general obligations of the Village, the ultimate payment of which rests in the Village's ability to levy and collect sufficient taxes to pay debt service. In the event of delayed billing, collection or distribution of property taxes, sufficient funds may not be available to the Village in time to pay debt service when due. State Actions: Many elements of local government finance, including the issuance of debt and the levy of property taxes, are controlled by state government. Future actions of the state may affect the overall financial condition of the Village, the taxable value of property within the Village, and the ability of the Village to levy and collect property taxes. Future Changes in Law: Various State and federal laws, regulations and constitutional provisions apply to the Village and to the Bonds. The Village can give no assurance that there will not be a change in or interpretation of any such applicable laws, regulations and provisions which would have a material effect on the Village or the taxing authority of the Village. Ratings; Interest Rates: In the future, the Village's credit rating may be reduced or withdrawn, or interest rates for this type of obligation may rise generally, either possibility resulting in a reduction in the value of the Bonds for resale prior to maturity. Continuing Disclosure: A failure by the Village to comply with the Disclosure Undertaking for continuing disclosure (see "CONTINUING DISCLOSURE") will not constitute an event of default on the Bonds. Any such failure must be reported in accordance with the Rule and must be considered by any broker, dealer, or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. Book-Entry-Only System: The timely credit of payments for principal and interest on the Bonds to the accounts of the Beneficial Owners of the Bonds may be delayed due to the customary practices, standing instructions or for other unknown reasons by DTC participants or indirect participants. Since the notice of redemption or other notices to holders of these obligations will be delivered by the Village to DTC only, there may be a delay or failure by DTC, DTC participants or indirect participants to notify the Beneficial Owners of the Bonds. Depository Risk: Wisconsin Statutes direct the local treasurer to immediately deposit upon receipt thereof, the funds of the municipality in a public depository designated by the governing body. A public depository means a federal or state credit union, federal or state savings and loan association, state bank, savings and trust company, mutual savings bank or national bank in Wisconsin or the local government pooled investment fund operated by the State Investment Board. It is not uncommon for a municipality to have deposits exceeding limits of federal and state insurance programs. Failure of a depository could result in loss of public funds or a delay in obtaining them. Such a loss or delay could interrupt a timely payment of municipal debt. Economy: A combination of economic, climatic, political or civil disruptions or terrorist actions outside of the control of the Village, including loss of major taxpayers or major employers, could affect the local economy and result in reduced tax collections and/or increased demands upon local government. Real or perceived threats to the financial stability of the Village may have an adverse effect on the value of the Bonds in the secondary market. Secondary Market for the Bonds: No assurance can be given that a secondary market will develop for the purchase and sale of the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. The underwriters are not obligated to engage in secondary market trading or to repurchase any of the Bonds at the request 5

10 of the owners thereof. Prices of the Bonds as traded in the secondary market are subject to adjustment upward and downward in response to changes in the credit markets and other prevailing circumstances. No guarantee exists as to the future market value of the Bonds. Such market value could be substantially different from the original purchase price. Bankruptcy: The rights and remedies of the holders may be limited by and are subject to the provisions of federal bankruptcy laws, to other laws, or equitable principles that may affect the enforcement of creditors rights, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against local governments. The opinion of Bond Counsel to be delivered with respect to the Bonds will be similarly qualified. See MUNICIPAL BANKRUPTCY herein. Cybersecurity: The Village is dependent on electronic information technology systems to deliver services. These systems may contain sensitive information or support critical operational functions which may have value for unauthorized purposes. As a result, the electronic systems and networks may be targets of cyberattack. There can be no assurance that the Village will not experience an information technology breach or attack with financial consequences that could have a material adverse impact. 6

11 VALUATIONS WISCONSIN PROPERTY VALUATIONS; PROPERTY TAXES Equalized Value Section 70.57, Wisconsin Statutes, requires the Department of Revenue to annually determine the equalized value (also referred to as full equalized value or aggregate full value) of all taxable property in each county and taxation district. The equalized value is an independent estimate of value used to equate individual local assessment policies so that property taxes are uniform throughout the various subdivisions in the State. Equalized value is calculated based on the history of comparable sales and information about value changes or taxing status provided by the local assessor. A comparison of the State-determined equalized value and the local assessed value, expressed as a percentage, is known as the assessment ratio or level of assessment. The Department of Revenue notifies each county and taxing jurisdiction of its equalized value on August 15; school districts are notified on October 1. The equalized value of each county is the sum of the valuations of all cities, villages, and towns within its boundaries. Taxing jurisdictions lying in more than one municipality, such as counties, school districts, or special taxing districts, use the equalized value of the underlying units in calculating and levying their respective levies. Equalized values are also used to apportion state aids and calculate municipal general obligation debt limits. Assessed Value The "assessed value" of taxable property in a municipality is determined by the local assessor, except for manufacturing properties which are valued by the State. Each city, village or town retains its own local assessor, who must be certified by the State Department of Revenue. Assessed value is used by these municipalities to determine tax levy mill rates and to apportion levies among individual property owners. Each taxing district must assess property at full value at least once in every five-year period. The State requires that the assessed values must be within 10% of State equalized values at least once every four years. The local assessor values property as of January 1 each year and submits those values to each municipality by the second Monday in June. The assessor also reports any value changes taking place since the previous year, to the Department of Revenue, by the second Monday in June. 7

12 CURRENT PROPERTY VALUATIONS 2018 Equalized Value $1,513,716, Equalized Value Reduced by Tax Increment Valuation $1,402,643, Assessed Value $1,458,184, EQUALIZED VALUE BY CLASSIFICATION 2018 Equalized Value Percent of Total Equalized Value Residential $ 1,070,458, % Commercial 413,418, % Manufacturing 9,169, % Personal Property 20,670, % Total $ 1,513,716, % TREND OF VALUATIONS Year Assessed Value Equalized Value 1 Percent Increase/Decrease in Equalized Value 2014 $1,282,315,200 $1,314,167, % ,274,935,100 1,333,340, % ,337,618,500 1,356,408, % ,347,081,700 1,411,598, % ,458,184,100 1,513,716, % Source: Wisconsin Department of Revenue, Bureau of Equalization and Local Government Services Bureau. 1 Includes tax increment valuation. 8

13 LARGER TAXPAYERS Taxpayer Type of Business/Property 2017 Equalized Value 1 Percent of Village's Total Equalized Value Southridge Mall Mall $ 148,537, % BRE Rook SH Harbour Village Senior Living Facilities 25,658, % Wal-Mart Department Store 14,396, % CCRT Properties Apartments 11,217, % JC Penney Properties Department Store 12,265, % Macy s Department Store 10,978, % Southridge Plaza Strip Mall 9,224, % Dale Creek LLC Apartments 9,021, % gc JPD Greendale LLC Apartments 8,981, % Marcus Southridge Development Movie Theatre/Restaurant 7,545, % Total $ 257,827, % Village's Total 2017 Equalized Value 2 $1,411,598,600 Source: The Village. 1 Calculated by dividing the 2017 Assessed Values by the 2017 Aggregate Ratio of assessment for the Village. 2 Includes tax increment valuation. 9

14 DEBT DIRECT DEBT 1 General Obligation Debt (see schedules following) Total General Obligation Debt (includes the Bonds)* $ 24,480,000 Revenue Debt (see schedules following) Total revenue debt secured by water revenues $ 6,737,208 *Preliminary, subject to change. 1 Outstanding debt is as of the dated date of the Bonds. 10

15 Village of Greendale, WI General Obligation Debt (As of December 20, 2018) Taxable GO Community Development Bonds Series 2011A Taxable GO Community Development Bonds Series 2011B Taxable GO Community Development Bonds Series 2011C GO Corporate Purpose Bonds Series 2016A Taxable GO Community Development Bonds Series 2016B GO Comm Dev Bonds Series 2018B Taxable GO Community Development Bonds Series 2018C Dated Amount 8/23/2011 $2,150,000 8/23/2011 $13,200,000 11/22/2011 $2,155,000 5/11/2016 $7,760,000 12/29/2016 $1,295,000 7/10/2018 $1,665,000 12/20/2018 $2,160,000* Maturity 12/1 12/1 12/1 5/1 12/1 6/1 12/1 Fiscal Year Total Total Principal Principal Principal 2019 Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal* Interest* Principal* Interest* & Interest* Outstanding* %Paid* Year ,000 81,910 1,000, , ,000 47, , ,585 50,000 (1) 43,220 80,998 83,990 1,780, ,846 2,610,846 22,700, % ,000 78,060 1,040, , ,000 43, , ,285 55,000 (1) 42,145 65,000 57,276 88,670 1,915, ,579 2,677,579 20,785, % ,000 73,560 1,090, , ,000 38, , ,735 55,000 (1) 40, ,000 54, ,000 88,670 2,165, ,635 2,869,635 18,620, % ,000 68,560 1,140, , ,000 33, , ,985 60,000 (1) 39, ,000 51, ,000 83,840 2,240, ,693 2,876,693 16,380, % ,000 63,198 1,190, , ,000 27, ,000 93,085 60,000 (1) 37, ,000 48, ,000 78,693 2,310, ,148 2,873,148 14,070, % ,000 57,460 1,250, , ,000 21, ,000 82,985 60,000 (1) 35, ,000 45, ,000 73,400 2,400, ,628 2,884,628 11,670, % ,000 51,300 1,315, , ,000 14, ,000 72,685 65,000 (1) 33, ,000 42, ,000 67,510 2,500, ,703 2,899,703 9,170, % ,000 44,550 1,390,000 61, ,000 7, ,000 62,185 65,000 (1) 31, ,000 39, ,000 61,270 2,610, ,665 2,917,665 6,560, % ,000 36, ,000 51,485 65,000 (1) 29, ,000 35, ,000 54,670 1,040, ,295 1,248,295 5,520, % ,000 28, ,000 40,585 70,000 (1) 27, ,000 32, ,000 47,700 1,075, ,425 1,251,425 4,445, % ,000 19, ,000 29,435 70,000 (1) 24, ,000 (1) 28, ,000 40,230 1,100, ,055 1,243,055 3,345, % ,000 10, ,000 18,035 75,000 (1) 22, ,000 (1) 25, ,000 32,580 1,125, ,243 1,233,243 2,220, % ,000 6,143 75,000 (1) 19, ,000 (1) 21, ,000 24, ,000 71,668 1,011,668 1,280, % ,000 (1) 16, ,000 (1) 17, ,000 16, ,000 50, , , % ,000 (1) 13, ,000 (1) 13, ,000 8, ,000 35, , , % ,000 (1) 10, ,000 (1) 10, ,000 20, , , % ,000 (1) 7, ,000 (1) 6, ,000 13, , , % ,000 (1) 3, ,000 (1) 2, ,000 5, , % ,790, ,435 9,415,000 1,805,098 1,425, ,635 6,780, ,213 1,245, ,658 1,665, ,400 2,160, ,813 24,480,000 5,523,250 30,003,250 (1) Mandatory redemption amounts *Preliminary, subject to change. repared by Ehlers G O DEBT 11

16 Village of Greendale, WI Revenue Debt Secured by Water Revenues (As of December 20, 2018) Safe Water Drinking Fund Loan Safe Water Drinking Fund Loan Water Sytem Revenue Bonds Project Project Series 2018A Dated Amount 6/26/2013 5/28/2014 7/10/2018 $4,087,206 $669,648 $2,600,000 Maturity 5/1 5/1 5/1 Fiscal Year Total Total Principal Principal Principal Ending Principal Interest Principal Interest Principal Interest Principal Interest & Interest Outstanding %Paid* Year ,727 65,815 33,236 11, ,000 78, , , ,069 6,334, % ,668 61,836 33,876 10, ,000 73, , , ,000 5,921, % ,685 57,780 34,528 10, ,000 68, , , ,780 5,499, % ,779 53,647 35,193 9, ,000 63, , , ,409 5,067, % ,952 49,433 35,870 8, ,000 57, , , ,887 4,625, % ,205 45,139 36,560 8, ,000 52, , , ,140 4,168, % ,541 40,762 37,264 7, ,000 46, ,805 94, ,166 3,702, % ,959 36,301 37,982 6, ,000 40, ,941 83, ,042 3,225, % ,463 31,754 38,713 6, ,000 33, ,176 71, ,714 2,738, % ,053 27,119 39,458 5, ,000 27, ,511 59, ,995 2,235, % ,732 22,396 40,218 4, ,000 19, ,950 46, ,765 1,722, % ,501 17,581 40,992 3, ,000 12, ,493 33, ,089 1,199, % ,362 12,673 41,781 2, ,000 4, ,142 19, , , % ,316 7,672 42,585 2, ,901 9, , , % ,365 2,573 43,405 1, ,770 3, ,613 44, % , , , % 2034 TOTAL 3,521, , ,899 99,645 2,600, ,595 6,737,208 1,209,722 7,946,930 Prepared by Ehlers Revenue Debt 12

17 DEBT LIMIT The constitutional and statutory general obligation debt limit for Wisconsin municipalities, including towns, cities, villages, and counties (Article XI, Section 3 of the Wisconsin Constitution and Section 67.03, Wisconsin Statutes) is 5% of the current equalized value. Equalized Value $1,513,716,500 Multiply by 5% 0.05 Statutory Debt Limit $ 75,685,825 Less: General Obligation Debt (includes the Bonds)* (24,480,000) Unused Debt Limit* $ 51,205,825 *Preliminary, subject to change. OVERLAPPING DEBT 1 Taxing District 2018 Equalized Value % In Village Total G.O. Debt 2 Village's Proportionate Share Milwaukee County $ 64,065,615, % $ 596,238,212 $ 14,087,916 Milwaukee Area Technical College District 79,921,554, % 105,455,000 1,997,318 Milwaukee County Metro Sewerage District 62,864,827, % 900,207,515 21,676,097 Greendale School District 1,513,716, % 16,945,000 16,945,000 Village's Share of Total Overlapping Debt $54,706,331 1 Overlapping debt is as of the dated date of the Bonds. Only those taxing jurisdictions with general obligation debt outstanding are included in this section. 2 Outstanding debt based on information obtained on EMMA and the Municipal Advisor's records. 13

18 DEBT RATIOS G.O. Debt Debt/Equalized Value $1,513,716,500 Debt/ Per Capita 14,345 1 Total General Obligation Debt (includes the Bonds)* $ 24,480, % $ 1, Village's Share of Total Overlapping Debt 54,706, % 3, Total* $ 79,186, % $ 5, *Preliminary, subject to change. DEBT PAYMENT HISTORY The Village has no record of default in the payment of principal and interest on its debt. FUTURE FINANCING The Village has plans for additional financing in the next 12 months by taking out a State Trust Fund Loan for street work. 1 Estimated 2018 population. 14

19 TAX LEVIES AND COLLECTIONS TAX LEVIES AND COLLECTIONS Tax Year Levy for Village Purposes Only % Collected Levy/Equalized Value Reduced by Tax Increment Valuation in Dollars per $1, /14 $9,246, % $ /15 9,357, % /16 9,451, % /17 9,545, % /18 9,717, % 7.43 Property tax statements are distributed to taxpayers by the town, village, and city treasurers in December of the levy year. Current state law requires counties to pay 100% of the real property taxes levied to cities, villages, towns, school districts and other taxing entities on or about August 20 of the collection year. Personal property taxes, special assessments, special charges and special taxes must be paid to the town, city or village treasurer in full by January 31, unless the municipality, by ordinance, permits special assessments to be paid in installments. Real property taxes must be paid in full by January 31 or in two equal installments by January 31 and July 31. Alternatively, municipalities may adopt a payment plan which permits real property taxes to be paid in three or more equal installments, provided that the first installment is paid by January 31, one-half of the taxes are paid by April 30 and the remainder is paid by July 31. Amounts paid on or before January 31 are paid to the town, city or village treasurer. Amounts paid after January 31, are paid to the county treasurer unless the municipality has authorized payment in three or more installments in which case payment is made to the town, city or village treasurer. On or before January 15 and February 20 the town, city or village treasurer settles with other taxing jurisdictions for all collections through December and January, respectively. In municipalities which have authorized the payment of real property taxes in three or more installments, the town, city or village treasurer settles with the other taxing jurisdictions on January 15, February 20 and on the fifteenth day of each month following the month in which an installment payment is required. On or before August 20, the county treasurer must settle in full with the underlying taxing districts for all real property taxes and special taxes. Any county board may authorize its county treasurer to also settle in full with the underlying taxing districts for all special assessments and special charges. The county may then recover any tax delinquencies by enforcing the lien on the property and retain any penalties or interest on the delinquencies for which it has settled. Uncollected personal property taxes owed by an entity that has ceased operations or filed a petition for bankruptcy, or are due on personal property that has been removed from the next assessment roll are collected from each taxing entity in the year following the levy year. 15

20 PROPERTY TAX RATES Full value rates for property taxes expressed in dollars per $1,000 of equalized value (excluding tax increment valuation) that have been collected in recent years have been as follows: Year Levied/ Year Collected Schools 1 County Local Other 2 Total 2013/14 $14.80 $5.13 $7.84 $1.88 $ / / / / Source: Property Tax Rates were extracted from Statement of Taxes prepared by the Wisconsin Department of Revenue, Division of State and Local Finance. LEVY LIMITS Section of the Wisconsin Statutes, imposes a limit on property tax levies by cities, villages, towns and counties. No city, village, town or county is permitted to increase its tax levy by a percentage that exceeds its valuation factor (which is defined as a percentage equal to the greater of either the percentage change in the political subdivision's January 1 equalized value due to new construction less improvements removed between the previous year and the current or zero percent). The base amount in any year to which the levy limit applies is the actual levy for the immediately preceding year. In 2018, and in each year thereafter, the base amount is the actual levy for the immediately preceding year plus the amount of the payment from the State under Section of the Wisconsin Statutes (an amount equal to the property taxes formerly levied on certain items of personal property), and the levy limit is the base amount multiplied by the valuation factor, minus the amount of the payment from the State under Section of the Wisconsin Statutes. This levy limitation is an overall limit, applying to levies for operations as well as for other purposes. A political subdivision that did not levy its full allowable levy in the prior year can carry forward the difference between the allowable levy and the actual levy, up to a maximum of 1.5% of the prior year's actual levy. The use of the carry forward levy adjustment needs to be approved by a majority vote of the political subdivision's governing body (except in the case of towns) if the amount of carry forward levy adjustment is less than or equal to 0.5% and by a super majority vote of the political subdivision's governing body (three-quarters vote if the governing body is comprised of five or more members, two-thirds vote if the governing body is comprised of fewer than five members) (except in the case of towns) if the amount of the carry forward levy adjustment is greater than 0.5% up to the 1 The Schools tax rate reflects the composite rate of all local school districts and technical college district. 2 Includes the state reforestation tax which is apportioned to each county on the basis of its full value. Counties, in turn, apportion the tax to the tax districts within their borders on the basis of full value. It also includes taxes levied for special purpose districts such as metropolitan sewerage districts, sanitary districts, and public inland lake protection districts. Tax increment values are not included. State property taxes were eliminated in the State's budget act. 16

21 maximum increase of 1.5%. For towns, the use of the carry forward levy adjustment needs to be approved by a majority vote of the annual town meeting or special town meeting after the town board has adopted a resolution in favor of the adjustment by a majority vote if the amount of carry forward levy adjustment is less than or equal to 0.5% or by two-thirds vote or more if the amount of carry forward levy adjustment is greater than 0.5% up to the maximum of 1.5%. Beginning with levies imposed in 2015, if a political subdivision does not make an adjustment in its levy as described in the above paragraph in the current year, the political subdivision may increase its levy by the aggregate amount of the differences between the political subdivision s valuation factor in the previous year and the actual percent increase in a political subdivision s levy attributable to the political subdivision s valuation factor in the previous year, for the five years before the current year, less any amount of such aggregate amount already claimed as an adjustment in any of the previous five years. The calculation of the aggregate amount available for such adjustment may not include any year before 2014, and the maximum adjustment allowed may not exceed 5%. The use of the adjustment described in this paragraph requires approval by a two-thirds vote of the political subdivision s governing body, and the adjustment may only be used if the political subdivision s level of outstanding general obligation debt in the current year is less than or equal to the political subdivision s level of outstanding general obligation debt in the previous year. Special provisions are made with respect to property taxes levied to pay general obligation debt service. Those are described below. In addition, the statute provides for certain other exclusions from and adjustments to the tax levy limit. Among the items excluded from the limit are amounts levied for any revenue shortfall for debt service on a revenue bond issued under Section Among the adjustments permitted is an adjustment applicable when a tax increment district terminates, which allows an amount equal to the prior year's allowable levy multiplied by 50% of the political subdivision's percentage growth due to the district's termination. With respect to general obligation debt service, the following provisions are made: (a) If a political subdivision's levy for the payment of general obligation debt service, including debt service on debt issued or reissued to fund or refund outstanding obligations of the political subdivision and interest on outstanding obligations of the political subdivision, on debt originally issued before July 1, 2005, is less in the current year than in the previous year, the political subdivision is required to reduce its levy limit in the current year by the amount of the difference between the previous year's levy and the current year's levy. (b) For obligations authorized before July 1, 2005, if the amount of debt service in the preceding year is less than the amount of debt service needed in the current year, the levy limit is increased by the difference between the two amounts. This adjustment is based on scheduled debt service rather than the amount actually levied for debt service (after taking into account offsetting revenues such as sales tax revenues, special assessments, utility revenues, tax increment revenues or surplus funds). Therefore, the levy limit could negatively impact political subdivisions that experience a reduction in offsetting revenues. (c) The levy limits do not apply to property taxes levied to pay debt service on general obligation debt authorized on or after July 1, The Bonds were authorized after July 1, 2005 and therefore the levy limits do not apply to taxes levied to pay debt service on the Bonds. 17

22 THE ISSUER VILLAGE GOVERNMENT The Village is governed by a seven-member board with a President and six Trustees. All Board Members are elected to three-year terms. The appointed Village Manager and Clerk/Treasurer are responsible for administrative details and financial records. EMPLOYEES; PENSIONS The Village employs a staff of 99 full-time, 29 part-time, and 8 seasonal employees. All eligible employees in the Village are covered under the Wisconsin Retirement System ("WRS") established under Chapter 40 of the Wisconsin Statutes ("Chapter 40"). The WRS is a cost-sharing multiple-employer defined benefit pension plan. The Department of Employee Trust Funds ("ETF") administers the WRS. Required contributions to the WRS are determined by the ETF Board pursuant to an annual actuarial valuation in accordance with Chapter 40 and the ETF's funding policies. The ETF Board has stated that its funding policy is to (i) ensure funds are adequate to pay benefits; (ii) maintain stable and predictable contribution rates for employers and employees; and (iii) maintain inter-generational equity to ensure the cost of the benefits is paid for by the generation that receives the benefits. Village employees are required generally to contribute half of the actuarially determined contributions, and the Village generally may not pay the employees' required contribution. During the fiscal year ended December 31, 2015 ("Fiscal Year 2015"), the fiscal year ended December 31, 2016 ("Fiscal Year 2016") and the fiscal year ended December 31, 2017 ("Fiscal Year 2017"), the Village s portion of contributions to WRS (not including any employee contributions) totaled $613,354, $610,788 and $591,087 respectively. The Village implemented Governmental Accounting Standards Board Statement No. 68 ("GASB 68") for Fiscal Year GASB 68 requires calculation of a net pension liability for the pension plan. The net pension liability is calculated as the difference between the pension plan's total pension liability and the pension plan's fiduciary net position. The pension plan's total pension liability is the present value of the amounts needed to pay pension benefits earned by each participant in the pension plan based on the service provided as of the date of the actuarial valuation. In other words, it is a measure of the present value of benefits owed as of a particular date based on what has been earned only up to that date, without taking into account any benefits earned after that date. The pension plan's fiduciary net position is the market value of plan assets formally set aside in a trust and restricted to paying pension plan benefits. If the pension plan's total pension liability exceeds the pension plan's fiduciary net position, then a net pension liability results. If the pension plan's fiduciary net position exceeds the pension plan's total pension liability, then a net pension asset results. As of December 31, 2016, the total pension liability of the WRS was calculated as $93.4 billion and the fiduciary net position of the WRS was calculated as $92.6 billion, resulting in a net pension liability of $0.8 billion. Under GASB 68, each participating employer in a cost-sharing pension plan must report the employer's proportionate share of the net pension liability or net pension asset of the pension plan. Accordingly, for Fiscal Year 2017, the Village reported a liability of $515,942 for its proportionate share of the net pension asset of the WRS. The net pension liability was measured as of December 31, 2016 based on the Village s share of contributions to the pension plan relative to the contributions of all participating employers. The Village s proportion was % of the aggregate WRS net pension asset as of December 31,

23 The calculation of the total pension liability and fiduciary net position are subject to a number of actuarial assumptions, which may change in future actuarial valuations. Such changes may have a significant impact on the calculation of net pension liability of the WRS, which may also cause the ETF Board to change the contribution requirements for employers and employees. For more detailed information regarding the WRS and such actuarial assumptions, see "APPENDIX A - FINANCIAL STATEMENTS" attached hereto. Recognized and Certified Bargaining Units All eligible Village personnel are covered by the Municipal Employment Relations Act ("MERA") of the Wisconsin Statutes. Pursuant to that law, employees have rights to organize and collectively bargain with municipal employers. MERA was amended by 2011 Wisconsin Act 10 (the "Act") and by 2011 Wisconsin Act 32, which altered the collective bargaining rights of public employees in Wisconsin. As a result of the 2011 amendments to MERA, the Village is prohibited from bargaining collectively with municipal employees, other than public safety and transit employees, with respect to any factor or condition of employment except total base wages. Even then, the Village is limited to increasing total base wages beyond any increase in the consumer price index since 180 days before the expiration of the previous collective bargaining agreement (unless Village were to seek approval for a higher increase through a referendum). Ultimately, the Village can unilaterally implement the wages for a collective bargaining unit. Under the changes to MERA, impasse resolution procedures were removed from the law for municipal employees of the type employed by the Village, including binding interest arbitration. Strikes by any municipal employee or labor organization are expressly prohibited. As a practical matter, it is anticipated that strikes will be rare. Furthermore, if strikes do occur, they may be enjoined by the courts. Additionally, because the only legal subject of bargaining is the base wage rates, all bargaining over items such as just cause, benefits, and terms of conditions of employment are prohibited and cannot be included in a collective bargaining agreement. Impasse resolution for public safety employees and transit employees is subject to final and binding arbitration procedures, which do not include a right to strike. Interest arbitration is available for transit employees if certain conditions are met. The following bargaining units represent employees of the Village: Bargaining Unit Local No of the International Association of Firefighters The Greendale Professional Police Officers Association Local No. 309 Expiration Date of Current Contract December 31, 2018 December 31,

24 OTHER POST EMPLOYMENT BENEFITS The Village has obligations for some post-employment benefits for its employees. Accounting for these obligations is dictated by Governmental Accounting Standards Board Statements No. 74 and 75. The Village s most recent actuarial study of its OPEB obligations shows a Total OPEB liability of $7,092,930 as of December 31, 2017 and $7,676,951 as of December 31, Source: The Village's GASB 74 and 75 Disclosure dated August 7, LITIGATION There is no litigation threatened or pending questioning the organization or boundaries of the Village or the right of any of its officers to their respective offices or in any manner questioning their rights and power to execute and deliver the Bonds or otherwise questioning the validity of the Bonds. MUNICIPAL BANKRUPTCY Municipalities are prohibited from filing for bankruptcy under Chapter 11 (reorganization) or Chapter 7 (liquidation) of the U.S. Bankruptcy Code (11 U.S.C ) (the Bankruptcy Code ). Instead, the Bankruptcy Code permits municipalities to file a petition under Chapter 9 of the Bankruptcy Code, but only if certain requirements are met. These requirements include that the municipality must be specifically authorized under State law to file for relief under Chapter 9. For these purposes, State law may include, without limitation, statutes of general applicability enacted by the State legislature, special legislation applicable to a particular municipality, and/or executive orders issued by an appropriate officer of the State s executive branch. As of the date hereof, Wisconsin law contains no express authority for municipalities to file for bankruptcy relief under Chapter 9 of the Bankruptcy Code. Nevertheless, there can be no assurance (a) that State law will not change in the future, while the Bonds are outstanding, in a way that would allow the Village to file for bankruptcy relief under Chapter 9 of the Bankruptcy Code; or (b) even absent such a change in State law, that an executive order or other executive action could not effectively authorize the Village to file for relief under Chapter 9. If, in the future, the Village were to file a bankruptcy case under Chapter 9, the relevant bankruptcy court would need to consider whether the Village could properly do so, which would involve questions regarding State law authority as well as other questions such as whether the Village is a municipality for bankruptcy purposes. If the relevant bankruptcy court concluded that the Village could properly file a bankruptcy case, and that determination was not reversed, vacated, or otherwise substantially altered on appeal, then the rights of holders of the Obligations could be modified in bankruptcy proceedings. Such modifications could be adverse to holders of the Obligations, and there could ultimately be no assurance that holders of the Obligations would be paid in full or in part on the Obligations. Further, under such circumstances, there could be no assurance that the Obligations would not be treated as general, unsecured debt by a bankruptcy court, meaning that claims of holders of the Obligations could be viewed as having no priority (a) over claims of other creditors of the Village; (b) to any particular assets of the Village, or (c) to revenues otherwise designated for payment to holders of the Obligations. Moreover, if the Village were determined not to be a municipality for the purposes of the Bankruptcy Code, no representations can be made regarding whether it would still be eligible for voluntary or involuntary relief under Chapters of the Bankruptcy Code other than Chapter 9 or under similar federal or state law or equitable proceeding regarding insolvency or providing for protection from creditors. In any such case, there can be no assurance that the consequences described above for the holders of the Obligations would not occur. 20

25 FUNDS ON HAND (as of December 31, 2017) Fund Total Cash and Investments General $ 19,871,720 Equipment Replacement Fund 231,120 School Liason Fund 68,391 Debt Service Fund 208,677 Library Fund 398,433 Sewer Utility Fund 1,620,808 Storm Water Utility Fund 14,651 CDBG Fund 303 Capital Improvement Fund 212, Bonds 337,394 TIF 1 Fund 890,685 TIF 2 Fund 2,367,883 TIF 3 Fund 1,035,171 Special Revenue Fund 40,204 Recycle Fund 9,483 Water Utility 155,365 Total Funds on Hand $ 27,462,366 21

26 ENTERPRISE FUNDS Revenues available for debt service on the Village's enterprise funds have been as follows as of December 31 each year: Water Total Operating Revenues $ 2,113,500 $ 2,176,729 $ 2,170,324 Less: Operating Expenses (1,604,740) (1,635,043) (1,613,088) Operating Income $ 508,760 $ 541,686 $ 557,236 Plus: Depreciation 282, , ,081 Revenues Available for Debt Service $ 791,395 $ 840,542 $ 854,317 Sewer Total Operating Revenues $ 1,091,694 $ 1,160,865 $ 1,410,681 Less: Operating Expenses (1,210,546) (1,175,748) (1,220,672) Operating Income $ (118,852) $ (14,883) $ 190,009 Plus: Depreciation 106, , ,740 Revenues Available for Debt Service $ (11,914) $ 93,626 $ 317,749 Stormwater Total Operating Revenues $ 616,628 $ 619,478 $ 601,310 Less: Operating Expenses (411,906) (430,141) (683,910) Operating Income $ 204,722 $ 189,337 $ (82,600) Plus: Depreciation 110, , ,487 Revenues Available for Debt Service $ 314,740 $ 325,526 $ 56,887 22

27 SUMMARY GENERAL FUND INFORMATION Following are summaries of the revenues and expenditures and fund balances for the Village's General Fund. These summaries are not purported to be the complete audited financial statements of the Village, and potential purchasers should read the included financial statements in their entirety for more complete information concerning the Village. Copies of the complete audited financial statements are available upon request. See Appendix A for the Village's 2017 audited financial statements. FISCAL YEAR ENDING DECEMBER 31 COMBINED STATEMENT 2014 Audited 2015 Audited 2016 Audited 2017 Audited 2018 Adopted Budget 1 Revenues Taxes and special assessments $ 7,436,275 $ 7,391,131 $ 7,391,466 $ 7,790,248 $ 8,349,669 Intergovernmental 1,051,036 1,158,352 1,172,538 1,197,372 1,159,746 Licenses and permits 483, , , , ,300 Fines, forfeitures and penalties 511, , , , ,000 Public charges for services 596, , , , ,726 Investment income 95,820 73,378 62, ,000 Charges for Intergovernmental Services Miscellaneous general revenues 241, , , , ,957 Total Revenues $ 10,416,689 $ 10,417,621 $ 10,509,595 $ 11,042,034 $ 11,652,398 Expenditures Current: General government $ 1,374,844 $ 1,510,988 $ 1,621,846 $ 1,567,115 $ 1,535,953 Public safety 7,062,662 7,129,010 7,094,598 7,630,211 8,122,996 Public works 1,304,771 1,780,432 1,719,869 1,725,458 1,845,364 Health and human services 795, , , , ,678 Culture and recreation 116, , , , ,276 Library 26, Capital outlay Total Expenditures $ 10,680,542 $ 10,893,737 $ 10,893,383 $ 11,359,990 $ 12,034,267 Excess of revenues over (under) expenditures $ (263,853) $ (476,116) $ (383,788) $ (317,956) $ (381,869) Other Financing Sources (Uses) Proceeds from sale of capital assets 53, ,919 (33,000) 0 Operating transfers in 256, , , ,247 Operating transfers out 0 (15,720) 0 (16,388) Total Other Financing Sources (Uses) $ 309,693 $ 869,110 $ 277,213 $ 318,859 Excess of revenues and other financing sources over (under) expenditures and other financing uses $ 45,840 $ 392,994 $ (106,575) $ 903 General Fund Balance January 1 4,187,279 4,233,119 4,626,113 4,519,538 General Fund Balance December 31 $ 4,233,119 $ 4,626,113 $ 4,519,538 $ 4,520,441 DETAILS OF DECEMBER 31 FUND BALANCE Nonspendable 1,459, , , ,333 Restricted Committed 1,413, Assigned 365, , , ,869 Unassigned 994,480 3,432,415 3,432,303 3,453,239 Total $ 4,233,119 $ 4,626,113 $ 4,519,538 $ 4,520,441 1 The 2018 budget was adopted on November 21,

28 GENERAL INFORMATION LOCATION The Village, with a 2010 U.S. Census population of 14,046 and a current estimated population of 14,345, comprises an area of 5.57 square miles and is located approximately 12 miles south of Milwaukee. LARGER EMPLOYERS 1 Larger employers in the Village include the following: Firm Type of Business/Product Estimated No. of Employees Goodwill Regional administrative offices/training center 500 Greendale School District Elementary and secondary education 344 JC Penny Department stores 250 Walmart Retail 230 Macy s Department stores 200 Community Living Arrangements Nursing & convalescent homes 149 Village of Greendale Municipal government and services Marcus Bistroplex Theater & restaurant 130 Kinetic Manufacturer 90 Source: ReferenceUSA, written and telephone survey (May 2018), BizTimes, Wisconsin Manufacturers Register, and the Wisconsin Department of Workforce Development. 1 This does not purport to be a comprehensive list and is based on available data obtained through a survey of individual employers, as well as the sources identified above. Some employers do not respond to inquiries for employment data full-time, 29 part-time and 8 seasonal employees. 24

29 BUILDING PERMITS New Single Family Homes No. of building permits Valuation $695,000 $267,000 $618,500 $425,000 $320,000 New Multiple Family Buildings No. of building permits Valuation $0 $0 $10,000,000 $0 $10,700,000 New Commercial/Industrial No. of building permits Valuation $0 $0 $5,276,295 $0 $0 All Building Permits (including additions and remodelings) No. of building permits Valuation $13,125,317 $7,633,196 $27,955,153 $6,152,209 $23,239,712 Source: The Village. 1 As of November 15,

30 U.S. CENSUS DATA Population Trend: Village of Greendale 2000 U.S. Census 14, U.S. Census 14, Estimated Population 14,345 Percent of Change % Income and Age Statistics Village of Greendale Milwaukee County State of Wisconsin United States 2016 per capita income $33,344 $25,881 $29,253 $29, median household income $64,338 $45,263 $54,610 $55, median family income $85,158 $57,738 $69,925 $67, median gross rent $869 $821 $789 $ median value owner occupied units $200,300 $150,000 $167,000 $184, median age 44.6 yrs yrs yrs yrs. State of Wisconsin United States Village % of 2016 per capita income % % Village % of 2016 median family income % % Housing Statistics Village of Greendale Percent of Change All Housing Units 6,165 6, % Source: 2000 and 2010 Census of Population and Housing, and 2016 American Community Survey (Based on a five-year estimate), U.S. Census Bureau ( EMPLOYMENT/UNEMPLOYMENT DATA Rates are not compiled for individual communities with populations under 25,000. Average Employment Average Unemployment Year Milwaukee County Milwaukee County State of Wisconsin , % 5.4% , % 4.5% , % 4.0% , % 3.3% 2018, September 458, % 2.6% Source: Wisconsin Department of Workforce Development. 26

31 APPENDIX A FINANCIAL STATEMENTS Potential purchasers should read the included financial statements in their entirety for more complete information concerning the Village s financial position. Such financial statements have been audited by the Auditor, to the extent and for the periods indicated thereon. The Village has not requested the Auditor to perform any additional examination, assessments or evaluation with respect to such financial statements since the date thereof, nor has the Village requested that the Auditor consent to the use of such financial statements in this Official Statement. Although the inclusion of the financial statements in this Official Statement is not intended to demonstrate the fiscal condition of the Village since the date of the financial statements, in connection with the issuance of the Bonds, the Village represents that there have been no material adverse change in the financial position or results of operations of the Village, nor has the Village incurred any material liabilities, which would make such financial statements misleading. Copies of the complete audited financial statements for the past three years and the current budget are available upon request from Ehlers. A-1

32 Village of Greendale, Wisconsin ANNUAL FINANCIAL REPORT December 31, 2017 A-2 Schenck

33 Village of Greendale, Wisconsin DECEMBER 31, 2017 Table of Contents INDEPENDENT AUDITORS' REPORT MANAGEMENT'S DISCUSSION AND ANALYSIS 1 3 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet - Governmental Funds 14 Statement of Revenues, Expenditures and Changes in Fund Balances- Governmental Funds 17 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund 20 Statement of Net Position Proprietary Funds 21 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds 23 Statement of Cash Flows - Proprietary Funds 25 Notes to Basic Financial Statements 29 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Funding Progress - Other Postemployment Benefit Plan 56 Schedule of Employer Contributions Other Postemployment Benefit Plan 57 Schedule of Proportionate Share of Net Pension Liability (Asset) - Wisconsin Retirement System 58 Schedule of Contributions Wisconsin Retirement System 58 Notes to Required Supplementary Information SUPPLEMENTARY INFORMATION Combining Balance Sheet- Non major Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds ADDITIONAL INDEPENDENT AUDITORS' REPORT FOR BASIC FINANCIAL STATEMENTS Independent Auditors' 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 Schedule of Findings and Responses A-3

34 Schenck ADVISORY TAX ASSURANCE Independent auditors' report To the Village Board Village of Greendale, Wisconsin REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village of Greendale, Wisconsin (the "Vi llage") as of and for the year ended December 31, 2017, and the related notes to the financial statements, which collectively comprise the Village's basic financial statements as listed in the table of contents. MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. AUDITORS' RESPONSIBILITY Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Village's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Village's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. OPINIONS In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village as of December 31, 2017, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. schencksc.com Schenck SC A-4

35 OTHER MATTERS Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 3 through 1 O and the schedules relating to pensions and other postemployment benefits on pages 53 through 55 be presented to supplement the basic financial statements. Such information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Village's basic financial statements. The financial information listed in the table of contents as supplementary information is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary 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. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole. REPORT ON SUMMARIZED FINANCIAL INFORMATION We have previously audited the Village's 2016 financial statements, and our report dated May 25, 2017, expressed unmodified opinions on those respective financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2016, is consistent, in all material respects, with the audited financial statements from which it has been derived. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated May 11, 2018, 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 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. Certified Public Accountants Sheboygan, Wisconsin May 11, 2018 A-5

36 Village of Green dale, Wiscons in MANAGEMENT'S DISCUSSION ANO ANALYSIS (UNAUOITEOJ DECEMBER 31, 2017 As management of the Village of Greendale, we offer readers of the Village of Greendale's financial statements this narrative overview and analysis of the financial activities of the Village of Greendale for the fiscal year ended December 31, A comparison with prior year dat.a is also presented. Financial Highlights The assets and deferred outflows of resources of the Village of Greendale exceeded its liabilities and deferred inflows of resources as of December 31, 2016 by $28, (net position). Net position from governmental activities decreased by $1,450,002 due to a decrease in revenues and increases in public safety and conservation and development expense. Net position from business type activities decreased by $670,665. As of the close of the current fiscal year, the Village of Greendale"s governmental funds reported a combined ending fund balance of $7,833,316. At the end of the current yea r, unassigned fund balance for the general fund was $3,453,239 or approximately 30% of total general fund expenditures compared to $3,432,303 or approximately 32% at the end of general fund revenues were above budgeted amounts by S 1 13, general fund expenditures also came in below budget. The result was $903 increase in fund balance. The Village of Greendale had $22,390,000 in general obligation debt outstanding at year end. Overview of t he Fl nanclal Statements. This discussion and analysis are Intended to serve as an introduction to the Village of Greendale's basic financial statements. The Village of Greendale's basic financial statements comprise of three components: 1) government-wide Financial statements, 2) fund financial statements, 3) notes to the financial statements. This report also contains both required supplement.ary information and supplemental information in addition to the basic financial statements. Government-wide fina ncial statements. The government-wide financial statements are designed to provide readers with a broad overview of the Village of Greendale's finances, in a manner similar to a private sector business. The statement of net position presents information on all of the Village of Greendale"s assets, liabilities, and deferred innows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Village of Greendale is improving or deteriorating. The statement of activities presents information showing how the Village's net position changed during the most recent completed fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the ~ming of related cash flows. Thus, revenues and expenses are reported in this statement for some Items that will only result In cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave, etc.). Both of the government-wide financial st.atements distinguish functions of the Village of Greendale that are principally supported by taxes and intergovernment.al 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 government.al actmties of the Village of Greendale Include general government, public safety, public works, health and human services, culture and recreation, and conseniation and development The business-type activities of the Village of Greendale Include the Water Utility, Stormwater Utility, and Sewer UttUty. 3 Village of Greenda le, Wiscons in MANAG EMENT'S DISCUSSION ANO AN ALYSIS (UN AUOITEOJ DECEMBER 31, 2017 The government-wide financial statements include the activities of the Village of Greendale itself (known as the priftl<jry government?}. The Water, Sewer, and Stormwater Utilities, although legally separate, function For all practical purposes as departments of the Village of Greendale, and therefore have been Included as integral parts of the primary government The Government-wide financial statements can be found on pages Fund financial statements. A fund is a grouping of related accounts that is used to maint.ain control over resources that have been segregated for specific activities or objectives. The Village of Greendale, like other state and local governments. uses fund accounting to ensure and demonstrate compliance with Anance-related legal requirements. All of the funds of the Village of Greendale can be divided into two categories: governmental funds, and proprietary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide Financia l statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such Information may be useful In evaluating the Village's near-term financing requirements. Because the focus of governmental funds is narrower than that of government-wide financial statements, It is useful to compare information presented for governmental funds with sim ilar informatioo 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 gooernmental fund balance sheet and the governmental fund statement of revenues, expenditures, and cha nges in fund bala nces provide a reconciliation to facilitate this comparison between governmentof funds and governmental activities. The Village of Greendale maintains Fifteen individual governmental funds. lnfonmation is presented separately in the government.al fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in f und balances for the General Fund, Debt Service Fund, Tax Incremental District No. 2 Capital Projects Fund, and the 2016 Bond Fund Capital Projects Fund, all of which are considered to be major funds. Data from the other 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 this report The basic governmental fund financial statements can be found on pages Proprietary funds. The Village of Greendale maintains three different propriet.ary funds. Enterprise funds are used to report the same function presented as business-type activities In the government-wide financial statements. The Village of Greendale uses enterprise Funds to account for Its Water Utility, Sewer Utility, and Stormwater Utility. The basic proprietary fund financial statements can be found on pages Notes to the financial statements. The notes provide addit ional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages Required supplementary informatlon. A schedule of funding progress and a schedule of employer contri butions of the Village's other post-employment benefits are presented on pages S6-57. Additional information related to the Wisconsin Retirement System can be seen on page 58. Other Information. In addition to the basic financial st.atements and accompanying notes, this report also presents the combining statements referred to ea~ier in connection with non-major governmental funds and Is presented immediately following the notes to the financia l statements. Combining financial statements can be found on pages A-6

37 Village of Greendale, Wisconsin MANAGEMENT'S DISCUSSION AND ANA LYSIS (UNAU DITED) DEC EMBER 31, 2017 Government-wide Financial Analysis. As noted earlier, net position may serve over time as a useful Indicator of a government's financial position. In the case of the Village of Greendale, year-end 2017 assets and deferred outflow,; of resources exceeded liabilities and deferred inflow,; of resources by $28,865,590. Village of Greend1la's Net Posltion Governmenta.l Activities Buslness-1Y11 ACtlY!Ues Total Current and other asstts s ~.625,097 S 52.S s 2,018, ,716,584 S 48,644,080 $ 55,151,666 C pital aue(> , ,539 19,441,236 19,869,306 51,590,879 48,491,845 Total Assets 78,774,740 81,157,611 21,460,219 21,585, ,234, ,743.S11 Oefe-tt~ outflows of resotjrces 3,976,666 5,691,170 3,976,666 5,691, Lon9-term Babillties 30,162,724 31,348,792 4,370,677 4,599, ,948,528 26,697,826 27,507, Current li.!ibilt~ 26,376,167 26, ~ ~ Tot-,1 Liabilit~ 56, , ,692,336 5,147,342 61,231,227 64,456,092 OeferTed Inflows of rtsources 14, 114,808 13,993, ,1 14,808 13,993,432 Netpostion: Net investment in capital usets 23.1SO,S05 13, , ,169,570 38,121,064 38,582,250 Restricted 3,142,320 4,339, , ,475 3,663,499 4,856,627 UO<e>tricted (defd) (1 4,195,118! ( ) ~ 1,651,503 (1 3,018,973) (12,452,620) Total N4!'t Position 5 12, $ 30,986,157 ~ ~ ~ ~ ---- The largest portion of the Village of Greendale's net position reflects its net investment in capital assets (e.g., land, buildings, machinery, and equipment, less any related debt used to acquire those assets that is still outstanding). Although the Village of Greendale's net investment in capital assets is reported net of related deb~ It should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the Village of Greendale's net position represents resources that are subject to external restrictions on how they may be used. At the end of the current fiscal year, the Village of Greendale is able to report positive balances in all but one category of net position. Unrestricted net position Is negative as the Village has issued debt to provide incentives to developers. Future tax revenues generated by the developments will be used to repay the outstanding debt which will eliminate a portion of the deficit balance. The Village's net position decreased by $2, during the current year. 5 Vi llage of Greendale, Wiscons in MANAGEMENT'S DISCUSSION ANO ANALYSIS (UNAUDITED) DECEMBER 31, 2017 Changes In Net Position. Governmental activities decreased the Village of Greendate s net posltlon by S 1,450,002 and business type activities decreased net position by $670,665. Key elements of these changes are as follow,;; Revenues: Pr09ram revenues Charges for services Operating Qr ants & contributions. Capital grants&contributions Ceneral Revenues Ta,ces Intergovernmental revenues not restricted to specific programs Investment r.come MiK.ellaneous Total revenues Village or ~reend le's Change in Net Position Governmental Activities 2017 S , ,556 57, ,835, , , ,387 15,850, S 2,088, ,979 5,598 11,672, , ,685 15,160,060 Business-type Activities S. 182,315 S 3,957,072 10, , ,192,843 4, Total S 6,325,233 S 6,045, , ,979 57, ,240 11,835,216 11,672, , , , ,915 ~ 20,041,872 19,246,774 Expenses: Ceneral government Public safety Public works Health & human services Culture & rec.reatfon Conwvation & development Interest & fiscal char~e,s waterutny Sewer utility Stormwoter utility Total exdenses Change in net pos,;1ion before transfers Tran sfers 1,639,552 9, ,639, , ,11 4 1,77 1,860 n9,11s 18,560,278 (2,710,249) 1,260,247 1,906,382 8,828,070 3,107, ,784 1,465, , ,481,657 (2,321,597) 268,117 1,698,679 1, , ,175, , ,141 3,603,261 3,330, , (1,260,247) ) 1,639,552 1,906,382 9, , ,639,448 3,107, , , , ,784 1,771,860 1,465, , ,652 1,698,679 1,724,364 1,220,672 1,175, , ,141 22,163,539 20,811,910 (2,120,667) (1,565, 136) Net position January 1 Net position - December 31 13,547,709 15,601,189 17, ,950,204 30,986,257 32,551, , $13, ,767,883 $17.438,548 $28,865,590 $30,986,257 6 A-7

38 Vil lage of Green dale, Wisco nsin MANAGEMENT'S DISCUSSION ANO ANALYSIS (UNAUDITED) DECEMBER 31, 2017 Property ta receipts Increased by $162,287 due to the 1% levy increase. Ta,es continue to be the largest revenue source for the governmental activitres accounting for appro,imately 75% of total revenues. The net pension liability at December 31, 2017 totaled SSIS,942 compared to S 1,016,379 as of the prror year. Interest earnings Increased by S90, 137 due to hrgher Interest rates. Revenues by Source Operaling 1rants & contribut lon:s, 6% Charges for services, 14"' lnvhtm lflto Miscel laneous, 1% Intergovernmental not rutrcted. 3" Expenditures by Function Culture & Recreation 2% Consen.ratlon & lnleren & Fiscal Charges 4% General government 9% twattll & "" l'fvtt., Public Works 20% Vi llage of Greendale, Wisco nsin MANAGEMENT'S DISCUSSION ANO ANALYSIS (UNAUDITED) DECEMBER 31, 2017 Business-type activities. Business-type actmtles decreased the Village of Greendale's net position by $670,665. Key elements of this Increase are as follows. Net position in the Sewer Utility increased by S174, 1 BO due to the new rates set in place for Net posit,on in the Water Utility inc reased by $222,227 due to the purchased water adjustment of 3% and the rates. Net position in the Stormwater Utility decreased by 51,067,072 due to a transfer out of S99S,OOO. Busines s Type - Activities 2.~ ~ ,000,000 =.ooo II Waterutitl1v Sewer utulty Stormwaittt' utility ReYenues Expenses 8 A-8

39 Village of Greendale, Wisconsin MANAGEMENT'S DISCUSSION AND ANALYSIS [UNAUDITED) DECEMBER 31, 2017 Fund<. l's noted earlier. the Village of Greendale uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmenul funds. The focus of the Village of Greendale's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Village's financing requirements. In particular, unassigned fund balance may serve as a useful measure of government's net resources available for spending at the end of the flsc.al year. At the end of 2017, the combined fund balances for the Village's governmental funds was $7,833,316. Of this total, S696,145 is nonspendable, $3, is restricted. $53,971 is committed, and $543,746 is assigned. The balance of unassigned governmental f und balances is $3,322,286. The equipment replacement fund has a total fund balance of $142,621 all of which is assigned for equipment replacements identified to satisfy the Village's equipment replacement needs. Proprietary funds. The VIiiage of Greendale's proprietary funds provide the same type of information found in the government-wide Financial statements. but in more detail. Unrestrkted net position of the Water Utility at the end of the year amounted to a deficit of ($255,751), those For the Sewer Utility amounted to $1,464,324, and those for the Stormwater Utility amounted to a deficit of (S32.428). Other Fae.tors concerning the finances of these funds have already been addressed in the discussion of the Village of Greendale's business-type activities. General fund budgetary highlights. The general fund is the primary operating fund of t he Village. Actual revenues exceeded budgeted amounts by $113,955. Actual expenditures were under the budgeted amounts by $352,375. unassigned fund balance increased from $3.432,303 at December 31, 2016 to $3,453,239 at December 31, Capital Assets and Debt Administration Capital assets. Th e Village of Greendale's investment in capital assets For Its governmental and business-type activities as of December 31, 2017 amounts to $51,590,879 (net of accumulate<j depreciation). This investment in capital assets Includes land. construction in progress, buildings, and system improvements, machinery and equipment, parks facilities, roads and bridges. The total Increase in the Village cf Greendale's investment in capital assets for the current fiscal year was6.9%. Additional information on the Village of Greendale, capital assets can be Found in Note 3.C. on pages of this report Village of Greendale', Capital Assets (net of depreciation) Governmental Activities Buslnes5-lype Activities Total Non-depreclablecapltal assets Construction in progress Buildings and System Machn eryand Equipment Infrastructure $ 1,037,889 $ 1,037,889 s 999,391 $ 999,391 3,349, ,695,515 4,133, , , , 158 2,630, , ,783 18,309,081 17,470,569 17,616,446 17,941,243 $32,149, 643 $28,622,539 $19,441,236 $19,869, S 2,037,280 $ 2,037,280 3,353,278 11,010,225 4,463,967 2,617,847 3,225,508 35,925,527 35,411,812 $51,590,879 $48,491,845 9 Village of Greendale, Wisconsin MANAGEMENT'S DISCUSSION ANO ANALYSIS (UNAUOITEOJ DECEMBER 31, 2017 Long-term debt. At the end of the current f&al year, the Village of Greendale had $22,390,000 of bonde<j debt outstanding. The Vlllage maintains an "Aa3" rating from Moody's for general obligation debt The Water Utility also had $4,370,677 In outstanding Safe Water Drinking Loans. Village of Creendale's Outstanding Oebt General Obligation Bonds Revenue Debt Governmental Actlvles Buslness t~e Actlvles $22,390,000 $24, 100,000 s s ~ ~ ~ ~ 4,599,736 ~ Total $22,390,000 S24, 100,000 4,370,677 4,599,736 ~ $28,699,736 State Statutes limit the amount of general obligation debt a government entity may issue up to 5% of its total equalized valuation. The current debt limitation for the Village of Greendale is $70,579,930 whkh significantly exceeds the Village's current outstanding general obligation debt of $22,390,000. Additional information on the Village of Greendate s long-term debt can be found In Note 3.E on pages of this report Economic Factors and the 2018 Budget and Rates The 2018 Budget issupported by a tax levy of $9,717,455, which is an increase of 1.8% over the 2017 amount. The 2018 Budget anticipated a.70% increase in l'ssessed Value while increasing the tax levy by 1.8% from last year's total The combination increased the 2018 Budget Assessed Tax Rate by approximately 18-cents (2.29%) from S7.61 to $7.79 per $1,000 Assessed Value. Personnel Cost Increases - Includes increase for anticipated wage and benefit increases For Village personnel including General Governmen~ Health Department, Department of Public Works, Library, School-Pol.ice Fund, etc. and Police Department and Fire Department per union contracts. Street Rehabilitation Projects ($550,000)- The Village will continue its annual Street Rehabilitation Program. The Village create<j three (3) Tax Incremental Financing Districts in in the Southridge Business Improvement Distrkt, for which the Community Development Bonds in were issued. Tax Increments will continue to be realized during 2018 as projected. The Village created Tax Incremental Financing District No. 4 In 201 S, In the Southridge Business Improvement District, for which the Community Development Bonds of $1,295,000 were Issued in Tax Increments will continue to be realized during 2018 as projected. Requests for Information This financial report Is designed to provide a general overview of the Village of Greendale's finances for all those with an interest In the Village's finances. Questions concerning any of the Information provided in this report or requests for additional financial Information should be addressed to Kristen Victory, Clerk-Treasurer, Village of Greendale, 6500 Northway, Greendale. WI or kvktory@greendale.org. 10 A-9

40 Village of Greendale, Wisconsin STATEMENT OF NET POSITION DECEMBER 31, 2017 WITH SUMMARIZED FINANCIAL INFORMATION AS OF DECEMBER Governmental Business-type Totals Activities Activities ASSETS Cash and investments $ 25,671,542 $ 1,635,459 $ 27,307,001 $ 34,895,881 Receivables Taxes and special charges 19,570,602 74,338 19,644,940 18,715,387 Delinquent taxes 28,157 28,157 31,773 Accounts 458,308 1,011,223 1,469,531 1,266,779 Special assessments 18,900 18,900 18,900 Other 359 Internal balances 857,402 (857,402) Inventories and prepaid items 20,186 20, ,176 Restricted assets Cash and investments 155, , ,411 Capital assets, nondepreciable 1,037, ,391 2,037,280 5,390,558 Capital assets, depreciable ,553,599 43,101,287 Total assets ,460, ,234, ,743,511 DEFERRED OUTFLOWS OF RESOURCES Pension related amounts 3,976,666 3,976,666 5,692,270 LIABILITIES Accounts payable 1,167, ,390 1,461,734 2,260,812 Accrued and other current liabilities 168,309 12, , ,383 Due to other governments 24,926,921 24,926,921 24,951,294 Accrued interest payable 71,604 14,303 85, ,702 Special deposits 32,181 32,181 37,985 Unearned revenues 9,808 9,808 4,388 Long-term obligations Due within one year 1,810, ,469 2,044,328 1,875,844 Due in more than one year 21,556,535 4,137,208 25,693,743 28,316,250 Net pension liability 515, ,942 1,016,379 Other postemployment benefits 6,279,388 6,279,388 5,740,055 Total liabilities 56,538,891 4,692,336 61,231,227 64,456,092 DEFERRED INFLOWS OF RESOURCES Property taxes levied for subsequent year 12,471,468 12,471,468 11,835,216 Pension related amounts ,643,340 2,158,216 Total deferred inflows of resources ,993,432 NET POSITION Net investment in capital assets 23,150,505 15,070,559 38,221,064 38,582,250 Restricted 3,142, ,179 3,663,499 4,856,627 Unrestricted (14,195,118} (13,018,973} (12,452,620) Total net position $ $ $ $ The notes to the basic financial statements are an integral part of this statement. A-10

41 Village of Greendale, Wisconsin STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2017 WITH SUMMARIZED FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2016 Functions/Programs Program Revenues Operating Charges for Grants and Expenses services Contributions capital Grants and Contributions GOVERNMENTAL ACTIVITIES General government Public safety Public works Health and human services Culture and recreation Conservation and development Interest and fiscal charges $ 1,639,552 $ 741,397 $ 56,566 9,382,724 1,335, ,774 3,639,448 18, , ,462 28,167 86, ,114 19, ,298 1,771, $ 57,126 Total governmental activities 18,560, , BUSINESS-TYPE ACTIVITIES Water utility Sewer utility Stormwater utility 1,698,679 2,170,324 1,220,672 1,410, , Total business-type activities 3,603,261 4,182,31 S Total s 22,1!;i3,539 s 6 J,S 2JJ s 933,556 General revenues Taxes Property taxes Federal and state grants and other contributions not restricted to specific functions Interest and investment earnings Miscellaneous Transfers Total general revenues and transfers Change in net position Net position - January 1 Net position - December 31 s 57,126 The notes to the basic financial statements are an integral part of this statement. A-11

42 Net (Expense) Revenue and Changes in Net Position Governmental Business-type Totals Activities Activities $ (841,589) $ $ (841,589) $ (1,026,031) (7,936,610) (7,936,610) (7,545,221) (3,080,012) (3,080,012) (2,510,989) (816,248) (816,248) (751,671) (258,367) (258,367) (719,775) (1,714,734) (1,714,734) (1,459,986) (779,118) (779,118) (569,652) (15,426,678) (15,426,678) (14,583,325) 471, , , , ,009 (14,883) (82,600) (82,600) , ,461 (15,426,678) 579,054 (14,847,624) (13,826,864) 11,835,216 11,835,216 11,672, , , , , ,419 63, ,387 10, ,915 17,685 1,260,247 (1,260,247) 13,976,676 (1,249,719) 12,726,957 12,261,728 (1,450,002) (670,665) (2,120,667) (1,565,136) 13,547,709 17,438,548 30,986,257 32, $ 12,097,7Q7 $ 16,767,883 $ 28,865,590 $ 3Q,986,25Z A-12

43 Village of Greendale, Wisconsin BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2017 WITH SUMMARIZED FINANCIAL INFORMATION AS OF DECEMBER 31, 2016 Tax Incremental 2016 General Debt service District No. 2 Bond Fund ASSETS Cash and investments $ 19,871,720 $ 208,677 $ 2,367,883 $ 337,394 Receivables Taxes and special charges 17,238, ,414 1,069,654 Delinquent taxes 28,157 Accounts 397,646 Special assessments Due from other funds 710,171 49,425 Inventories and prepaid items Total assets s s s s LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities Accounts payable $ 557,842 $ $ $ 334, 1 so Accrued and other current liabilities 157,516 Due to other funds Due to other governments 24,926,921 Special deposits 32,181 Unearned revenues Total liabilities 25,684, so Deferred inflows of resources Property taxes levied for subsequent year 8,051, ,000 2,033,789 Special assessements Total deferred inflows of resources 8,051, ,000 2,033,789 Fund balances Nonspendable 685,333 Restricted 91 1,453,173 3,244 Committed Assigned 381,869 Unassigned 3,453,239 Total fund balances 4,520, ,453, Total liabilities, deferred inflows of resources, and fund balances $ 38, $ s 3,486,962 $ The notes to the basic financial statements are an integral part of this statement. A-13

44 other Governmental Totals Funds $ 2,885,868 $ 25,671,542 $ 32,806,314 1,030,824 19,570,602 18,689,906 28,157 60, , ,786 18,900 18,900 18, , , , s ~.20Z.066 s ~6.Z2Z.221 s S2.612,4Q9 $ 275,352 $ 1,167,344 $ 1,782,080 10, , , , ,194 84,327 24,926,921 24,951,294 32, ,946,610 12,471,468 11,835,216 15} , , ,949 1,760,660 3,217,168 8,831,498 53,971 53,971 32, , , ,032 ( ) , s ~ 2QZ Q66 s ~6.Z2Z,221 s S2.619,4Q9 A-14

45 Village of Greendale, Wisconsin BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2017 WITH SUMMARIZED FINANCIAL INFORMATION AS OF DECEMBER 31, 2016 RECONCILIATION TO THE STATEMENT OF NET POSITION Total fund balances as shown on previous page $ 7,833,316 $ 13,820,657 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported in the funds. 32,149,643 28,622,539 Other long-term assets are not available to pay current period expenditures and therefore are deferred in the funds. 15,750 18,900 Some deferred outflows and inflows of resources reflect changes in long-term liabilities and are not reported in the funds. Deferred outflows related to pensions 3,976,666 5,692,270 Deferred inflows related to pensions (1,643,340) (2,158,216) Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Bonds and notes payable (22,390,000) (24, 100,000) Premium on debt (137,718) (148,047) Capital lease (267,184) Compensated absences (839,676) (1,077,127) Net pension liability (515,942) (1,016,379) Other postemployment benefit (6,279,388) (5,740,055) Accrued interest on long-term obligations (71,604) (99,649) Net position of governmental activities as reported on the Statement of Net Position (see page 11) $ 12,097,ZQ7 $ 13!i47,7Q9 The notes to the basic financial statements are an integral part of this statement. A-15

46 Village of Greendale, Wisconsin STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2017 WITH SUMMARIZED FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2016 Tax incremental 2016 General Debt service District No. 2 Bond Fund REVENUES Taxes $ 7,790,248 $ 350,000 $ 1,660,213 $ Special assessments Intergovernmental 1,197,372 16,885 Licenses and permits 434,194 Fines and forfeits 476,832 Public charges for services 848,381 Miscellaneous Total revenues , EXPENDITURES Current General government 1,567,115 Public safety 7,630,211 Public works 1,725,458 Health and human services 289,078 Culture and recreation 148,128 Conservation and development 32,124 Debt service Principal 1,710, ,184 Interest and fiscal charges 817,492 Capital outlay 1,545,000 4,122,269 Total expenditures 11,359,990 2,527, ,389,453 Excess of revenues over (under) expenditures (317,956} {2,177,492} (4,389,453} OTHER FINANCING SOURCES (USES) Long-term debt issued Capital lease proceeds Premium on debt issued Proceeds from sale of capital assets Transfers in 335,247 1,983,392 Transfers out (16,388} (1,345,382l Total other financing sources (uses) 318,859 1,983,392 (1,345,382} Net change in fund balances 903 (194,100) (1,215,594) (4,389,453) Fund balances - January 1 4,519, ,668,767 4,392,697 Fund balances - December 31 $ $ 91 $ $ The notes to the basic financial statements are an integral part of this statement. A-16

47 Other Governmental Totals Funds $ 2,034,755 $ 11,835,216 $ 11,672,929 3,150 3,150 40, ,841 1,516,098 1,374, , , , , ,870 1,041, , , , ,973 2,740,942 15,839,888 15,332,212 1,567,115 1,632, ,309 7,744,520 7,200, ,261 2,009,719 2,026, , , , , , ,429 99, ,342 1,475,584 1,977,184 1,145, , ,763 1,957,490 7,624i159 4,472,612 3,246,708 23,100,767 19,722,048 (505,766) (7,260,879) (4,389,836) 9,055, , ,933 13,291 13,291 23, ,000 3,313,639 2,081,371 (691,622) (2,053,392) (1, ) 316,669 1,273,538 9,768,756 (189,097) (5,987,341) 5,378,920 2,045,464 13,820,657 8,441?37 s l,bs6,36z s Z,B33,3l6 s l3,b,q,6sz A-17

48 Village of Greendale, Wisconsin STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2017 WITH SUMMARIZED FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2016 RECONCILIATION TO THE STATEMENT OF ACTIVITIES Net change in fund balances as shown on previous page $ (5,987,341) $ 5,378,920 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 assets reported as capital outlay in governmental fund statements 5,910,019 4,303,776 Depreciation expense reported in the statement of activities (1,968,113) (1,892,382) Net book value of disposals (414,802) 147,784 Governmental funds do not present revenues that are not available to pay current obligations. In contrast, such revenues are reported in the statement of activities when earned. (3,150) (41,127) Debt issued provides current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Long-term debt issued (9,055,000) Capital leases issued (267,184) Premium on debt issued (154,933) Principal repaid 1,710,000 1,145,000 Capital leases paid 267,184 Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds: Accrued interest on long-term debt 28,045 (51,707) Amortization of debt premium 10,329 6,886 Compensated absences 237,451 (28,116) Net pension liability 500,437 (606,730) Deferred outflows of resources related to pensions (1,715,604) 637,929 Deferred inflows of resources related to pensions 514,876 (731,187) Other postemployment benefits { } { } Change in net position of governmental activities as reported in the statement of activities (see pages 12-13) s (l ~SQ QQZl s (l,zsz.2l Zl The notes to the basic financial statements are an integral part of this statement. A-18

49 Village of Greendale, Wisconsin STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - GENERAL FUND FOR THE YEAR ENDED DECEMBER 31, 2017 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2016 variance Final Budget- Budget Positive 2016 Original Final Actual (Negative) Actual REVENUES Taxes $ 7,790,248 $ 7,790,248 $ 7,790,248 $ $ 7,353,875 Special assessments 37,591 Intergovernmental 1,176,328 1,176,328 1,197,372 21,044 1,172,538 Licenses and permits 465, , ,194 (31,506) 529,464 Fines and forfeits 620, , ,832 (143,168) 556,107 Public charges for services 647, , , , ,648 Miscellaneous 228, Total revenues , ,042, ,955 10,509,595 EXPENDITURES Current General government 1,754,592 1,754,592 1,567, ,477 1,621,846 Public safety 7,756,690 7,756,690 7,630, ,479 7,094,598 Public works 1,675,257 1,675,257 1,725,458 (50,201) 1,719,869 Health and human services 353, , ,078 64, ,943 Culture and recreation 172, , , ,127 Total expenditures 11,712,365 11,712,365 11, ,375 10,893,383 Excess of revenues over (under) expenditures (784,286) (784,286) (317,956) (383,788) OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets (33,000) Transfers in 264, , ,247 71, ,213 Transfers out (16,388) (161388) Total other financing sources (uses) , ,859 54, ,213 Net change in fund balance (520,286) (520,286) ,189 (106,575) Fund balance - January 1 4,519,538 4, S ,626,113 Fund balance- December 31 $ 3, $ $ $ $ The notes to the basic financial statements are an integral part of this statement. A-19

50 Village of Greendale, Wisconsin STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2017 WITH SUMMARIZED FINANCIAL INFORMATION AS OF DECEMBER 31, 2016 ASSETS Current assets Cash and investments Receivables Taxes and special charges Customer accounts Other Due from other funds $ water sewer stormwater Utillty Utility Utility $ 1,620,808 $ 35,940 28, , ,892 14,651 9, ,688 Totals $ 1,635,459 $ 2,089,567 74,338 57,255 1,011, , ,802 Total current assets 487,583 2,048, ,195 2,721,020 3,411,975 Noncurrent assets Restricted assets Cash and investments 155, , ,411 Capital assets Non depreciable Depreciable 999,391 9,710,992 3,441,016 5,289, ,391 1,002,960 18,441,845 18,866,346 Total capital assets 10,710,383 3,441,016 5,289,837 19,441,236 19,869,306 Total assets 11,353,331 5,489,258 5,475,032 22,317,621 23,433,692 The notes to the basic financial statements are an integral part of this statement. A-20

51 Village of Greendale, Wisconsin STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2017 WITH SUMMARIZED FINANCIAL INFORMATION AS OF DECEMBER Totals water sewer stormwater Utility Utility Utility LIABILITIES Current liabilities Accounts payable $ 75,765 $ 202,333 $ 16,292 $ 294,390 $ 516,717 Accrued and other current liabilities 10,167 1,468 1,331 12,966 15,836 Accrued interest payable 14,303 14,303 15,053 Due to other funds 657, , , ,802 Current portion of long-term debt 233, , Total current liabilities , ,412,530 1, Long-term obligations, less current portion Revenue bonds 4, ,137,208 4,370,677 Total liabilities 5,128, , ,623 5, , NET POSITION Net investment in capital assets 6,339,706 3,441,016 5,289,837 15,070,559 15,269,570 Restricted 141, , , ,475 Unrestricted (255,751} 1,464,324 (32,428} 1,176,145 1,651,503 Total net position s 6.22S,Q17 s S,2BS.!S1 s S,2S7,~Q2 s 16,Z6Z,fUl3 s 1Z.~3S,S4B A-21

52 Village of Greendale, Wisconsin STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2017 WITH SUMMARIZED FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2016 water sewer Utility Utility OPERATING REVENUES Charges for services $ 2, $ OPERATING EXPENSES Operation and maintenance 1,316,007 1,092,932 Depreciation Total operating expenses 1, , Operating income (loss) 557, ,009 NONOPERATING REVENUES (EXPENSES) Interest and fiscal charges (85,591) Other nonoperating revenues (expenses) Total nonoperating revenues (expenses) (85,591} Income (loss) before contributions and transfers 471, ,009 Capital contributions Transfers out (249,418} (15,829} Change in net position 222, ,180 Net position - January 1 6, s, Net position- December 31 $ 6,225,017 $ 5,285,457 Stormwater Utility $ , ,910 (82,600} 10,528 10,528 (72,072) {995,000} (1,067,072) 6, $ 5 257,409 The notes to the basic financial statements are an integral part of this statement. A-22

53 Totals $ 4, $ 3, ,953,362 2,697, , (85,591) (89,321) (75,063) (89,321) 589, , ,642 (1, ) (268,117) (670,665) 488,344 17, , s l,z Z,883 s lz.~3a.s~a A-23

54 Village of Greendale, Wisconsin STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2017 WITH SUMMARIZED FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2016 water sewer Utility Utility CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 2,172,597 $ 1,295,514 Cash paid for employee wages and benefits (156,119) {92,355) Cash paid to suppliers (1,181,909) (1,197J99) Net cash provided by operating activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Due to/ from other funds (190,400) Miscellaneous revenues Transfer in (out) {249,418) {15,829) Net cash used by noncapital financing activities (439,818) (15,829) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from revenue bonds Acquisition of capital assets (102,300) Capital contributions Disposal of capital assets 629 3,569 Principal paid on long-term debt (229,059) Interest paid on long-term debt (86,341) Net cash provided (used) by capital and related financing activities (417,071) Change in cash and cash equivalents (22,320) {6,900) Cash and cash equivalents - January ,627J08 Cash and cash equivalents- December 31 $ 155,365 $ 1 620,808 stormwater Utility $ 603,092 (120,616) {429,604) ,802 10,527 (995,000) (436,671) {38,135) (38,135) (421,934) 436,585 $ 14,651 The notes to the basic financial statements are an integral part of this statement. A-24

55 Totals 2017 $ 4,071,203 $ (369,090) (2,809,31 2) ,933,653 (334,698) (2,397,804) ,402 10,527 (1,260,247) (892,318) (250,000) ( ) (518,117) (140,435) 4,198 (229,059) (86,341) (451,637) (451,154) 234,550 (749,404) 129,642 (224,267) (89,196) (698,675) (15,641) s 2,241,978 1,790,824 s 2,257, a A-25

56 Village of Greendale, Wisconsin STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2017 WITH SUMMARIZED FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER Water sewer Utility Utility RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss) $ 557,236 $ 190,009 Adjustments to reconcile operating income (loss) to net cash provided by operating activities Depreciation 297, ,740 Depreciation charged to sewer utility 35,280 (35,280) Change in operating assets and liabilities Accounts receivables (32,850) (79,887) Accounts payable (20,559) (195,853) Accrued and other current liabilities {1,462) (1,369) Special deposits {157} Net cash provided by operating activities $ 8;34,569 $ S J6Q Reconciliation of cash and cash equivalents to the statement of net position Cash and cash equivalents in current assets $ $ 1,620,808 Cash and cash equivalents in restricted assets 155,365 Total cash and cash equivalents $ 155,365 $ l Stormwater Utility $ (82,600) 139,487 1,782 (5,758) {39) $ si,81i $ 14,651 $ 14,651 Noncash capital and related financing activities None The notes to the basic financial statements are an integral part of this statement. A-26

57 Totals $ 66~645 $ 71t , ,554 (110,955) (61,341) (222,170) (13,038) (2,870) 15,836 (157} s 82Z,8Ql s 1,ZQ1,1 S1 $ 1,635,459 $ 2,089, , ,411 S l,z2q,8z4 S Z.Z41,ns A-27

58 Village of Greendale, Wisconsin NOTES TO BAS IC FINANCIAL STATEMENTS DECEMBER 31, 2017 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The basic financial statements of the Village of Greendale, Wisconsin (the "Village"), have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to government units. The Govemmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The significant accounting principles and policies utilized by the VIilage are described below: A. REPORTING ENTITY The Village is a municipal corporation governed by an elected seven member board. In accordance with GAAP. the basic financial statements are required to include the Village and any separate component units that have a significant operational or financial relationship with the Village. The Village has Identified the following component units that are required to be included in the basic financial statements in accordance with standards established by GASS Statement N0.61. VIilage of Greendale Community Oevelopment Authority The government-wide financial statements include the Village of Greendale Community Development Authority ("CDA") as a component unit The CDA is a legally separate organization. The board of the CDA is appointed by the Village board. Wisconsin Statutes provide for circumstances whereby the Village can impose Its will on the CDA. and also create a potential financial benefit to or burden on the Village. The CDA is part of the reporting entity of the Village of Greendale. However, the CDA had no financial transactions during 2017 which are material to t hese financial statements. Also. the CDA does not own any assets r,or Is It liable for any debt Therefore, no financial statements are presented In this report. The CDA does not issue separate financial statements. Business Improvement District of the VIilage of Greendale The government-wide financial statements include the Business Improvement District of the Village of Greendale ("BID") as a component unit. The BIO is a legally separate organization. The board of the BID Is appointed by the Village board. Wisconsin Statutes provide for circumstances whereby the Village can Impose Its will on the BID, and also create a potential financial benefit to or burden on the Village. The BID is part of the reporting entity of the Village. However, the 810 had no financial transactions during 2017 which are material to these financial statements. Also, the BIO does not own any assets nor is it liable for any debt Therefore, r,o financial statements are presented In this report The BID does not issue separate financial statements. B. GOVERNMENT-WIOE ANO FUND FINANCIAL STATEMENTS The government-wide financial statements Q.e., the statement of net position and the st."ltement of activities) report information on all of the nonfiduciary activities of the Village. For the most part, the effect of interfund activity has been removed from these statements. Govemmental activities, which are primarily supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for services. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are dearly identifiable with a specific fu nction or segment Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restri<:ted to meeting the operational or capital requirements of a particular function. Taxes and other Items not properly included among program revenues are reported instead as general revenues. 29 Village of Greendale, Wisconsin NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2017 Separate financial statements are provded for governmental funds and proprietary funds. Govemmentat funds include general, special revenue, debt service and capital projects funds. Proprietary funds include enterprise Funds. The Village has no internal service funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the Fund financial statements. The Village reports t he following major governmental funds: General Fund This is the VIilage's primary operating fund. It accounts for alt financial resources of the general government, except those accounted for in another f und. Debt Service Fund This fund accounts for the resources accumulated and payments made for principal and interest on tong-term general obligation debt of government funds. Tax Incremental District No. 2 Fund This f und is used to account for the project plan costs of the Village's Tax Incremental District No Bond Fund This fund Is used to account for financial resources that are restricted for the acquisition or construc~on of capit."11 facilities or equipment funded by the 2016 bond issuance. The Village reports the following major enterprise funds: Water Utility Fund This fund accounts for the provision o f water service to Village residents, public authorities, and business entities. Sewer Utility Fund This fund accounts for the provision of sewer service to Village residents, public authorities. and business entitles. Stormwater Utility Fund This f und accounts for the operations of t he Village's stormwater system. Additionally, t he Village reports the following fund types: Special revenue funds are used to account for the proceeds of specific revenue sources that are legally restricted for specific purposes. Capital projects funds account for financial resources t o be used for the acquisi~on or construction of major capital facilities or equipment other than t hose financed by proprietary funds. C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTI NG The government-wide nna ncial statements are reported using the economic resources measurement focusa nd the accrual basis of accounting. as are the proprietary fund fina ncial statements. Revenues are recorded when earned and e,penses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues In the year for which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requireme nts imposed by the provider have been met 30 A-28

59 Village of Greendale, Wisconsin NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2017 Govemmental fund financial statements are reported using the current finanda/ resources measurement focus and the modified accrual bas;s of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Village considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments. are recorded only when payment is due. Revenues susceptible to accrual include Intergovernmental grants, Intergovernmental charges for services, public charges for services and interest Other revenues such as licenses and permits, fines and forfeits and miscellaneous revenues are recognized when received in cash or when measurable and available. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the Village's water, sewer and stormwater functions and various other functions of the Village. Elimination of these charges would d istort the direct costs and progra m revenues reported for the various functions concemed. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, and fees and fines, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary f unds distinguish operating revenues and expenses from nanoperoting 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 proprietary funds are charges to customers for services. Operating expenses for proprietary funds Include the costs of services, administrative expenses, and depreciatjon on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the Village's policy to use restricted resources first, then unrestricted resources, as they are needed. D. ASSETS, LIA81UTIES, DEFERRED OUT~OWS/INFLOWS OF RESOURCES, ANO NET POSITION OR FUND BALANCE 1. Cash and Investments Cash and investments are combined in the financial statements. Cash deposits consist of demand and time deposits with financial institutions and are carried at cost. Investments are stated at fair value. Fair value is the price that would be received to sell an asset In an orderly transactjon between market participants at the measurement date. For purposes of the statement of cash flows, all cash deposits and highly liquid investments (Including restricted assets) with a maturity of three months or less from date of acquisition are considered to be cash equivalents. i. Property Taxes and Specia l Charges/Receivable Property taxes and special charges consist of taxes on real estat e and personal property and user charges assessed against Village properties. They are levied during December of the prior year and become an enforceable lien on property the following January 1. Property taxes are payable in various options depending on t he type and amount Personal property taxes and special charges are payable on or before January 31 In full. Real estate taxes are payable in f ull by January 31 or in three equal installments on or before January 31, April 30, and July 31. Rea l estate taxes not paid by July 31 are purchased by the County as part of the August tax settlement. Delinquent personal property taxes remain the collection responsibility of the Village. Special charges not paid by January 31 are held in trust by the County and remitted to the Village, including Interest, when collected by the County. 31 Village of Greendale, Wiscons in NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2017 In addition to its levy, the Village also levies and collects taxes for the Greendale School Oistric~ Milwaukee County, Milwaukee Area Technical College and the Milwaukee County Metro Sewer District Collections and remittances of taxes for other entitles are accounted for in the general fund. 3. Accounts Receivable Accounts receivable are recorded at gross amounts with uncollectjble amounts recognized under the direct w riteoff method. No allowance for uncollectible accounts has been provided since it is believed that the amount of such allowance would not be material to the basic financial statements. 4. lnterfund Receivables and Payables During the course of operations. numerous transactions occur between individual Funds for goods provided or services rendered. These receivables and payables are classified as "due from other f unds" and "due to other funds" in the fund financial statements. Noncurrent portions of the interfund rec.elvables for the governmental funds are offset by nonspendable fund balance since they do not constitute expendable available financial resources and therefore are not available for appropriation. The amount reported on the statement of net position for internal balances represents the residual balance outstanding between the govemmental and business-type activities. S. lnventorih Inventories are recorded at cost. which approximates marlcet, using t he first-in, first-out method. Inventories consist of expendable supplies held for consumption. The cost is recorded as an expenditure at the t ime individual inventory items are consumed rather than when purchased. Inventories of governmental funds in the fund financial statements are offset by nonspendable fund balance to Indicate that they do not represent spendable available financial resources. 6. Prepaid Items Payments made to vendors that w ill benefit periods beyond the end of the current fiscal year are recorded as prepaid Items and are accounted for on the consumption method. Prepaid items of govemmental funds in the fund financial statements are offset by nonspendable fund balance to Indicate that they do not represent spendable available financial resources. 7. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or bu.siness-type activities columns In the government-wide financial statements. Capital assets are defined by the Village as assets with an initial individual cost of $5,000 or higher and an estimated useful life in excess of a year. Such assets are recorded at historical cost or estima ted historical cost lf purchased or constructed. Donated capital assets are recorded at estimated acquisition value at the dat e of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. 32 A-29

60 Village of Greendale, Wisconsin NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2017 Capital assets of the Village are depreciated using the straight-line method over the following estimated useful lives: Assets Buildings and improvements Machinery and equipment Infrastructure Governmental Activities SO Years Business-type Activities Compen.sated Absences It is the Village's policy to permit employees to accumulate earned but unused vacation and sick leave benefits in accordance with employee handbook policies and/or bargaining unit agreements. All vacation and sick leave is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in the governmental funds in the fund financial statements only if they have matured, for exa mple, as a result of employee resignations and retirements. 9. Deferred Outflows/Inflows of Resources Deferred outflows of resources are a consumption of net position by the government that is applicable to a future reporting period. Deferred inflows of resources are an acquisition of net position by the government that is applicable to a future reporting period. The recognition of those outflows and inflows as expenses or expenditures and revenues are deferred until the future periods to which the outflows and inflows are applicable. Governmental funds may report deferred inflows of resources for unavailable revenues. The Village reports unavailable revenues for special assessments. These inflows are recognized as revenues in the government-wide financial statements. 10. Long-4:erm Obligations In the government-wide financial statements, and proprietary Funds in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities In the appllrable governmental activities, businesstype activities, or proprietary fund statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed as incurred. In the f und financial statements, governmental funds recognize bond premiums and discounts. as well as bond issuance costs, during the current period. The face amount of debt Issued is reported as other 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. 11. Pensions For purposes of measuring the net pension liability (asset), deferred outflows of resources and deferred Inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Wisconsin Retirement System (WRS) and additions to/deductions from WRS' fiduciary net position have been determined on the same basis as they are reported by WRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the beneat terms. Investments are reported at fair value. 33 Village of Greendale, Wisconsin NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, Fund Equity Governmental Fund Financial Statement.s Fund balance of governmental funds is reported in various categories based on the nature of any Umita~ons requiring the use of resources for specific purposes. The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used: Non spendable fund balance. Amounts that are not in spendable form (such as inventory, prepaid items, or long-term receivables) or are legally or contractually required to remain intact. Restricted fund balance. Amounts that are constrained for specif,c purposes by external parties (such as granter or bondholders), through constitutional provisions, or by enabling legislation. Committed fund balance. Amounts that are constrained for specif,c purposes by action of the Village Board. These constraints can only be removed or changed by the Village Board using the same action that was used to create them. Assigned fund balance. Amounts that are constrained for specific purposes by action of Village management. The Village Board, through adoption of the f und balance policy, has authorized the Clerk/Treasurer to assign fund balance. Residual amounts in any governmental fund, other than the General Fund, are also reported as assigned. Unassigned fund balance. Amounts that are available for any purpose. Positive unassigned amounts are only reported In the General Fund. The Village has not adopted a fund balance spend-down policy regarding the order in which fund balance will be utilized. When a policy does not specify the spend-down policy, GASB Statement No. S4 indirates that restricted funds would be spent first, followed by committed funds, and then assigned funds. Unassigned funds would be spent last. Covernment-Wide and Proprietary Fund Statements Equity is classified as net position and displayed in three components: Net investment In capital assets. Amount of capital assets, net of accumulated depreciation, and rapltal related deferred outflows of resources less outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets and any capital related deferred inflows of resources. Restricted net position. Amount o f net position that is subject to restrictions that are lmposed by 1) external groups, such as creditors, granters, contributors or laws or regulations of other governments or 2) law through constitutional provisions or enabling legislation. " Unrestricted net position. Net position that is neither classified as restricted nor as net investment in capital assets. E. USE OF ESTIMATES The preparation of financial statements In conformity with accoun~ng principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported In the financial statements and accompanying notes. Actual results could differ from those estimates. 34 A-30

61 Village of Greendale, Wisconsin NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2017 F. PRIOR YEAR INFORMATION Comparative amounts for the prior year have been presented in the basic financial statements to provide an understanding of changes in the Village's financial position and operations. The comparative amounts may be summarized in total and not at the level of detail required for a presentation in conformity with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the government's financial statements for the year ended December 31, 2016, from which the summarized Information was derived. G. RECLASSIFICATIONS Certain amounts in the prior year financial statements have been reclassified to conform with the presentation in the current year financial statements with no change In previously reported net position, cha nges in net posit ion, fund balance or changes in fund balance. NOTE 2: STEWARDSHIP ANO COMPLIANCE A. BUDGETS AND BUDGETARY ACCOUNTI NG The Village follows these procedures In establishing the budgetary data reflected in the basic financial statements: 1. Prior to November, Village management submits to the Village Board a proposed operating budget for the calendar year commencing the following January 1. The operating b udget Includes proposed expendit ures and the means of financing them. After submission to the governing body, public hearings are held to obtain taxpayer comments. Following the public hearings, the proposed budget. including authorized addit ion.sand deletions, is legally enacted by Village Board action. 2. Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for t he general, certain special revenue and capital project, and debt service funds. Budget Is defined as t he originally approved budget plus or minus approved amendments. Individual amendments throughout the year were not material in relation to the original budget. Budget appropriat ions not expended during the year are closed to fund balance unless authorized by the governing body to be forwarded into the succeeding year's budget. 3. During the year, format budgetary Integration Is employed as a management control device for the general fund, equipment replacement fund, School D.A.R.E fund, debt service fund, 2016 bond t\md, recycling fund, library fund, community development block grant fund, and the capital improvement fund. Amendments to the budget during t he year are initially reviewed by management and are subsequently authorized by the Village Board. Management does not have authority to amend the legally adopted budget Supplemental amendments were necessary during the year, but were no t material relation to the original appropriation. 4. The budget as enacted includes total expenditures at the organization level. An organization can be a department. division, fund or other activity. E><penditures cannot legally exceed appropriations at this level The Village did not have any material violation of legal or contractual provisions for the fiscal year endod December 31, DEFICIT FUND EQUITY The following funds had d efklt fund balance a.s of December 31, 2017: Funds Recycling Tax rncrement District No. 4 Deficit Fund Balance -s --3-o-;-a1a 100,135 The Village anticipates funding t he above deficits from future revenues of the funds. 3S Village of Greendale, Wisconsin NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2017 C. PROPERTY TAX LEVY LJM JT Wisconsin state statutes provide for a limit on the property tax levies for all Wisconsin cities, villages, towns and counties. For the 2017 and budget year,;, Wisconsin Statutes limit the increase in the maximum allowable tax levy to the change in the Village's January 1 equalized value as a result of net new construction. The actual limit for the Village for the 2017 budget was.01s7%. The actual limit for t he Village for the 2018 budget w as 0.43S%. Debt service for debt authorized after July 1, 2005 Is exempt from the levy limit. In addition, Wisconsin statutes allow the limit to be adjusted for the Increase in debt service authorized prior to July 1, 200S and in certain other situations. NOTE 3: DETAILED NOTES ON ALL FUNDS A. CASH AND INVESTMENTS The Village maintains various cash and investment accounts, Including pooled funds that are available for use by alt f unds. Each fund's portion of these accounts Is displayed on the financial statements as cash and investments. Invested cash consists of deposits and investments that are restricted by Wisconsin Statutes to the following: Time deposits; repurchase agreements: securities issued by federal, state and local governmental entities: statutorily authorized commercial paper and corporate securities; and the Wisconsin local government invest ment pool. The carrying amount of the Village's cash and investments totalod $27,462,366 on December 31, 2017 as summarized below: Petty cash and cash on hand De posh with financial JnstitutiOns tnvestments Federal National Mortgage Association Federal Farm Cred~ Bank l\o\jnicipat bonds Wisconsin Investment Series Cooperative Local Government Investment Pool Cerafoc.ates of deposit 8,199 7,926,81 8 1,243, ,632 1,801,933 14,632, , ,575 $ 27,462,366 Reconciiation to the basic financial statements: Government-wide Statement of Net Position Cash and Investments Restricted cash and investments S 27,307,001 1 SS,36S ~66 36 A-31

62 Village of Greendale,. Wisconsin NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2017 Fair Value Measurements 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 obseivable inputs; level 3 inputs are significant unobservable inputs. The Village has the following fair value measurements as of December 31, 2017: Investments Federal National Mortgage Association Federal Farm Credit Bank Municipal bonds Certif,cates of deposit $ s Fair value Measurements usl~: Level 1 Level 2 Level $ 1,243,288 $ 245,632 1,801, ,575 s 4,284,428 Deposits and investments of the Village are subject to various risks. Presented below is a discussion of t he Village's deposits and investments and the related risks. Custodial credit Risk Custodial credit risk for deposit:5 is the risk that. in t he event of the failure of a depository financial institution, a government will not be able to recover Its deposits or will not be able to recover collateral securities that are In the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of Its Investment or collateral securities t hat are in the possession o f another party. Wisconsin statute.s require repurchase agreements to be fully collateralized by bonds or securities Issued or guaranteed by the federal government or its Instrumentalities. The Village does not have an additional custodial credit policy. Deposits with financial Institutions within the State of Wisconsin are insured by the Federal Depositlnsurance Corporation (FDIQ in the amount of $250,000 for the combined amount of all time and savings deposits and $250,000 for Interest-bearing and noninterest-bearing demand deposits per official custodian per insured depository Institution. Deposits with flnanclal Institutions located outside the State of Wisconsin are insuro>d by the FDIC in the amount of $250,000 for the combined amount of all deposit accounts per official custodian per depository Institution. Deposits with credit unions are insured by the National Credit Union Share Insurance Fund (NCUSIF) in the amount of $250,000 per credit union member. Also, the State of Wisconsin has a State Guarantee Fund which provides a maximum of $400,000 per public depository above the amount provided by an agency of t he U.S. Government However, due to the relatively small size of the State Guarantee f und in relation to the Fund's total coverage, total recovery of Insured losses may not be available. This coverage has been considered in determining custodial credit risk. Asof December 31, 2017, $6,0Sl,877 of t he Village's deposits with Anancial institutions were in excess of federal and state depository insurance limits. $6,051,877 was collateralized with securities held by the pledging financial institution or its trust department or agent but not in the Village's name. 37 Village of Greendale, Wisconsin NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2017 Credit Risk Generally, credit risk is the risk t hat an issuer of an Investment will not fulfill its obligation to t he holder of the investment. This Is measured by the assignment of a rating by a nationally recognized statistical rating organization. Wisconsin statutes limit Investment in securities to t he top two ratings assigned by nationally recognized statistical rating organizations. Presented below Is the actual rating as of the year-end for each Investment type. EXempt from Not investment 1YPe Amount DISCiosure AAA Aa Rated federal National Mortgage Association S 1,243,288 s $ 1,243,288 s Federal Farm Credit Sank 245, ,632 Municipal bonds 1,801, , , ,925 Wisconsin l.nvestmer.t Securities Cooperative 14,632,084 14,632,084 CertiFic.,tes of depos~ 993, S,390 Wisconsin local government investment pool 610, ,837 Totals $19,527,349 S 16,868,054 s 555,143 J.2:104,152 - Interest Rate Risk Interest rate risk Is the risk that changes in market Interest rates witl adversely affect the fair value of an Investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its f air value to changes In market interest rates. In accordance with Its investment policy, to the extent possible, the Village will attempt to match its investments with anticipated cash flow liquidity requirements. Unless matched to a specific cash flow, the Village will not invest in securities maturing more t han s years from the date of purchase. Reserve funds may be invested In securities exceeding 5 years If the maturity of such investment Is made to coincide as nearly as practicable with the expected use of funds. In no event will the Village invest in securities wit h maturities exceeding 7 years. Because of the inherent difficulties in accurately forecasting cash flow requirements, a portion of the portfolio should be continuously invested in readily available funds such as Local Government Investment Pools, money market f unds or overnlght repurchase agreements to ensure that appropriate liquidity is maintained to meet ongoing obligations. Information about the sensitivity of the fair values of the Village's investments to market interest rate fluctuations Is provided by the following table that shows the distribution of the Village's investments by maturity: Remalnlng Maturity (In Months) 12 Month.s More Than investment TYPe Amount or Less Months Months 60 Months Federal National Mortgage Association $ 1,243,288 $ 499,585 $ 495,720 $ 247,983 $ Federal Farm Credit Bank 245, ,632 Municipal bonds 1,801,933 1,303, ,865 Wisconsin Investment Securities cooperative 14, ,632,084 CertlRcates of deposit 993, , ,185 Wisconsin local government Investment pool 610, ,837 Totals $ 19,527,349 $ ,574 $ 1,241,110 $ 1, A-32