Village of Skokie, Illinois. Comprehensive Annual Financial Report

Transcription

1 Village of Skokie, Illinois Comprehensive Annual Financial Report Year Ending April 30, 2011

2 COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended April 30, 2011 Prepared by the Finance Department Robert J. Nowak, Director of Finance Sandra Collins, Assistant Director of Finance

3 TABLE OF CONTENTS April 30, 2011 Page(s) INTRODUCTORY SECTION Principal Officers and Officials... Organization Chart... Certificate of Achievement for Excellence in Financial Reporting... Letter of Transmittal... i ii iii iv-ix FINANCIAL SECTION INDEPENDENT AUDITOR S REPORT GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS Management s Discussion and Analysis... MD&A 1-8 Basic Financial Statements Government-Wide Financial Statements Statement of Net Assets... 3 Statement of Activities Fund Financial Statements Governmental Funds Balance Sheet Reconciliation of Fund Balances of Governmental Funds to the Governmental Activities in the Statement of Net Assets... 8 Statement of Revenues, Expenditures and Changes in Fund Balances Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Governmental Activities in the Statement of Activities... 11

4 TABLE OF CONTENTS (Continued) April 30, 2011 Page(s) FINANCIAL SECTION (Continued) GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS (Continued) Basic Financial Statements (Continued) Fund Financial Statements (Continued) Proprietary Funds Statement of Net Assets Statement of Revenues, Expenses and Changes in Net Assets Statement of Cash Flows Fiduciary Funds Statement of Fiduciary Net Assets Statement of Changes in Fiduciary Net Assets Notes to Financial Statements Required Supplementary Information Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Economic Development Fund Schedule of Funding Progress Illinois Municipal Retirement Fund Sheriff s Law Enforcement Personnel Police Pension Fund Firefighters Pension Fund Other Postemployment Benefit Plan... 83

5 TABLE OF CONTENTS (Continued) April 30, 2011 Page(s) FINANCIAL SECTION (Continued) GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS (Continued) Required Supplementary Information (Continued) Schedule of Employer Contributions Illinois Municipal Retirement Fund Sheriff s Law Enforcement Personnel Police Pension Fund Firefighters Pension Fund Other Postemployment Benefit Plan Notes to Required Supplementary Information COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES MAJOR GOVERNMENTAL FUNDS General Fund Schedule of Revenues - Budget and Actual Schedule of Expenditures - Budget and Actual Schedule of Detailed Expenditures - Budget and Actual Capital Projects Funds Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Building and Equipment Fund NONMAJOR GOVERNMENTAL FUNDS Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances

6 TABLE OF CONTENTS (Continued) April 30, 2011 Page(s) FINANCIAL SECTION (Continued) COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES (Continued) NONMAJOR GOVERNMENTAL FUNDS (Continued) Nonmajor Special Revenue Funds (Continued) Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Motor Fuel Tax Fund Local Fuel Tax Fund Community Development Block Grant Fund Illinois Municipal Retirement Fund Visitor s Bureau Fund Nonmajor Debt Service Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 1991 IEPA Notes Fund IEPA Notes Fund SWANCC Debt Fund Special Service Area # 1 Debt Fund Special Service Area # 2 Debt Fund Special Service Area # 3 Debt Fund Special Service Area # 4 Debt Fund Special Service Area # 5 Debt Fund Special Service Area # 6 Debt Fund Special Service Area # 8 Debt Fund Special Service Area # 9 Debt Fund A General Obligation Refunding Bonds Fund B General Obligation Refunding Bonds Fund General Obligation Refunding Bonds Fund General Obligation Refunding Bonds Fund A General Obligation Refunding Bonds Fund B General Obligation Bonds Fund General Obligation Refunding Bonds Fund

7 TABLE OF CONTENTS (Continued) April 30, 2011 Page(s) FINANCIAL SECTION (Continued) COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES (Continued) NONMAJOR GOVERNMENTAL FUNDS (Continued) Nonmajor Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Centre East Development Fund MAJOR ENTERPRISE FUNDS Schedule of Operating Expenses - Budget and Actual - Water and Sewer Fund FIDUCIARY FUNDS PENSION TRUST FUNDS Combining Statement of Fiduciary Net Assets Combining Statement of Changes in Net Assets Schedule of Changes in Net Assets - Budget and Actual Police Pension Fund Firefighters Pension Fund AGENCY FUNDS Combining Statement of Fiduciary Net Assets Combining Statement of Changes in Assets and Liabilities

8 TABLE OF CONTENTS (Continued) April 30, 2011 Page(s) STATISTICAL SECTION Financial Trends Schedule of Net Assets Schedule of Changes in Net Assets Program Revenues by Function/Program Fund Balances - Governmental Funds Changes in Fund Balances - Governmental Funds Revenue Capacity Tax Revenues by Source - Governmental Funds Assessed Value and Actual Value of Taxable Property Direct and Overlapping Property Tax Rates Principal Property Taxpayers Property Tax Levies and Collections Sales Tax by Category Direct and Overlapping Sales Tax Rates Debt Capacity Ratios of Outstanding Debt by Type Ratios of Net General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Information Demographic and Economic Information Demographic and Economic Statistics Principal Employers Operating Information Full-Time Equivalent Village Government Employees by Function/Program Operating Indicators by Function/Program Capital Asset Statistics by Function/Program

9 INTRODUCTORY SECTION

10 PRINCIPAL OFFICERS AND OFFICIALS APRIL 30, 2011 LEGISLATIVE George Van Dusen, Mayor Michele L Bromberg, Trustee Donald P. Perille, Trustee Edie Sue Sutker, Trustee Michael M. Lorge, Trustee Pramod C. Shah, Trustee Randall E. Roberts, Trustee Marlene Williams, Clerk ADMINISTRATION Albert J. Rigoni, Village Manager John T. Lockerby, Assistant Village Manager J. Patrick Hanley, Corporation Counsel Robert J. Nowak, Director of Finance Max L. Slankard Jr., Public Works Director Peter Peyer, Community Development Director Sandra Collins, Assistant Director of Finance Barry P. Silverberg, Police Chief Ralph E. Czerwinski, Fire Chief Dr. Catherine A. Counard, Director of Health Christa C. Ballowe, Personnel Director Maureen M. DiFrancesca, Human Services Director - i -

11

12

13

14

15

16

17

18

19 FINANCIAL SECTION

20

21

22 GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS

23 MANAGEMENT S DISCUSSION AND ANALYSIS April 30, 2011 The Village of Skokie s (the Village) management discussion and analysis (MD&A) is designed to (1) assist the reader in focusing on significant financial issues, (2) provide an overview of the Village s financial activity, (3) identify changes in the Village s financial position (its ability to address the next and subsequent years challenges), (4) identify any material deviations from the financial plan (the approved budget), and (5) identify individual fund issues or concerns. Since the MD&A is designed to focus on the current year s activities, resulting changes, and currently known facts, please read it in conjunction with the Transmittal Letter (beginning on page iv) and the Village s financial statements (beginning on page 3). USING THE FINANCIAL SECTION OF THIS COMPREHENSIVE ANNUAL REPORT The financial statements of the Village of Skokie focus on both the Village as a whole (government-wide) and on the major individual funds. Both perspectives (government-wide and major funds) allow the user to address relevant issues, broaden a basis for comparison, and enhance the Village s accountability. The Village s financial reporting includes the funds of the Village (primary government) and, additionally, organizations for which the Village is accountable (component units Skokie Public Library and the Centre East Exposition Authority). Government-Wide Financial Statements The government-wide financial statements (see pages 3-5) are designed to emulate the corporate sector in that all governmental and business-type activities are consolidated into columns which add to a total for the Primary Government. The focus of the Statement of Net Assets (the Unrestricted Net Assets ) is designed to be similar to bottom line results for the Village and its governmental and business-type activities. This statement combines and consolidates the governmental funds current financial resources (short-term spendable resources) with capital assets and long-term obligations using the accrual basis of accounting and economic resources measurement focus. The Statement of Activities (see pages 4-5) is focused on both the gross and net cost of various activities (including governmental and business-type), which are supported by the government s general taxes and other resources. This is intended to summarize and simplify the user s analysis of the cost of various governmental services and/or subsidy to various business-type activities. The governmental activities reflect the Village s basic services, including administration, health, fire, police, and public works. Shared state revenues (income, use, and replacement taxes) and other tax revenue from sales (municipal and home rule), local utility, real estate transfer, etc., finance the majority of these services. The business-type activities reflect private sector type operations (water and sewer and a transit-related parking facility (Skokie/Edison Lot)), where the fees for services typically are intended to cover all or most of the cost of operations, including depreciation. Fund Financial Statements Traditional users of governmental financial statements will find the fund financial statements presentation to be more familiar. The governmental major funds (see pages 6-7 and 9-10) presentation is presented on a sources and uses of current resources basis. This is the manner in which the financial plan (the budget) is typically developed. The flow and availability of current resources is a clear and appropriate focus of any analysis of a government. Funds are established for various purposes, and the fund financial statements allow the demonstration of sources and uses and/or budgeting compliance associated therewith. (See independent auditor s report) MD&A 1

24 The fund financial statements also allow the government to address its Fiduciary Funds (Police and Firefighters Pension, see pages 16-17). While these Funds represent trust responsibilities of the government, these assets are restricted in purpose and do not represent discretionary assets of the government. Therefore, these assets are not presented as part of the Government-Wide Financial Statements. While the business-type activities column on the business-type fund financial statements (see pages 12-15) is the same as the business-type column on the government-wide financial statements, the governmental major funds total column requires a reconciliation because of the different measurement focus (current financial resources versus total economic resources) which is reflected on the page following each statement (see pages 8 and 11). The flow of current financial resources will reflect bond proceeds and interfund transfers as other financial sources as well as capital expenditures and bond principal payments as expenditures. The reconciliation will eliminate these transactions and incorporate the capital assets and long-term obligation (bonds and others) into the governmental activities column (in the government-wide financial statements). Infrastructure Assets Historically, a government s largest group of assets (infrastructure roads, bridges, storm sewers, etc.) have not been reported nor depreciated in governmental financial statements. The Governmental Accounting Standards Board Statement No. 34 (GASB 34) requires that these assets be valued and reported within the Governmental Activities column of the Government-wide Financial Statements. Additionally, the government must elect to either (1) depreciate these assets over their estimated useful lives or (2) develop a system of asset management designed to maintain the service delivery potential to near perpetuity. If the government develops the asset management system (the modified approach) which periodically (at least every third year), by category, measures and demonstrates its maintenance of locally established levels of service standards, the government may record its cost of maintenance in lieu of depreciation. The Village has chosen to depreciate assets over their useful lives. If a road project is considered maintenance a recurring cost that does not extend the road s original useful life or expand its capacity the cost of the project will be expensed. An overlay of a road will be considered maintenance whereas a rebuild of a road will be capitalized. Financial Analysis of the Village as a Whole The fiscal year ending April 30, 2011, as herein presented, is in accordance with GASB 34 and contains a comparative analysis of government-wide information to the immediately preceding fiscal year. Please note that the tables contained in this report will reflect the dollar amounts as contained in the detailed financial statements. However, the discussions of the changes from one fiscal year to the other are generally noted in millions of dollars. GOVERNMENT-WIDE FINANCIAL STATEMENTS Statement of Net Assets Net assets may serve over time as a useful indicator of a government s financial position. In the case of the Village, assets exceeded liabilities by $180.7 million as of April 30, This represents an increase of $3.1 million or 1.7% over last year s net assets of $177.6 million. A significant portion of the Village s net assets (governmental activities) (77.4%) reflects its investment in capital assets (i.e., land, streets and bridges, storm sewers, water mains, buildings and vehicles), less any related outstanding debt that was used to acquire those assets. The Village uses these capital assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the Village s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. (See independent auditor s report) MD&A 2

25 Table 1 Statement of Net Assets As of April 30 Governmental Activities Business-Type Activities Total Primary Government Current Assets $ 57,804,174 $ 61,941,125 $ 7,358,239 $ 5,950,649 $ 65,162,413 $ 67,891,774 Non Current Assets 188,079, ,863,405 20,966,492 20,756, ,046, ,619,697 Total Assets $ 245,884,171 $ 242,804,530 $ 28,324,731 $ 26,706,941 $ 274,208,902 $ 269,511,471 Current Liabilities $ 32,496,764 $ 25,406,183 $ 602,213 $ 577,336 $ 33,098,977 $ 25,983,519 Non Current Liabilities 58,705,409 63,953,059 1,775,350 1,984,448 60,480,759 65,937,507 Total Liabilities $ 91,202,173 $ 89,359,242 $ 2,377,563 $ 2,561,784 $ 93,579,736 $ 91,921,026 Net Assets: Invested in Capital Assets Net of Related Debt $ 120,700,803 $ 108,142,967 $ 19,051,206 $ 18,632,182 $ 139,752,009 $ 126,775,149 Restricted 19,931,143 22,589,827 19,931,143 22,589,827 Unrestricted 14,050,052 22,712,494 6,895,962 5,512,975 20,946,014 28,225,469 Total Net Assets $ 154,681,998 $ 153,445,288 $ 25,947,168 $ 24,145,157 $ 180,629,166 $ 177,590,445 For more detailed information see the Statement of Net Assets (page 3). The Village s combined net assets (which is the Village s bottom line) increased to $180.7 million from $177.6 million generally as a result of the construction of the new Police Station. Net assets of the Village s governmental activities were $154.7 million at year-end, which was up $1.3 million from the prior year. The Village s unrestricted net assets for governmental activities, the part of net assets that can be used to finance day-to-day operations, was $12.9 million. The net assets of business-type activities increased to $25.9 million from $24.1 million. The increase is the result of a combination of increased water revenues and increased operating expenses. The Village can use the unrestricted net assets of $6.9 million to finance the continuing operation of its water and sewer system. Normal Impacts Statement of Net Assets There are six basic (normal) transactions that will affect the comparability of the Statement of Net Assets summary presentation. Net Results of Activities which will impact (increase/decrease) current assets and unrestricted net assets. Borrowing for Capital which will increase current assets and long-term debt. Spending Borrowed Proceeds on New Capital which will reduce current assets and increase capital assets. There is a second impact, an increase in invested in capital assets and an increase in related net debt, which will not change the invested in capital assets, net of debt. Spending of Non-borrowed Current Assets on New Capital which will (a) reduce current assets and increase capital assets and (b) will reduce unrestricted net assets and increase invested in capital assets, net of debt. Principal Payment on Debt which will (a) reduce current assets and reduce long-term debt and (b) reduce unrestricted net assets and increase invested in capital assets, net of debt. Reduction of Capital Assets through Depreciation which will reduce capital assets and invested in capital assets, net of debt. (See independent auditor s report) MD&A 3

26 Current Year Impacts The Village s total net assets increased $3.1 million in Fiscal The Village realized increases in certain revenue sources as well as both completion of a major capital project (new Police Station) and the beginning of a new major capital project (commuter transit station). Changes in Net Assets The following chart compares the revenue and expenses for the two most recent fiscal years. Table 2 Changes in Net Assets For the Fiscal Year Ending April 30 Governmental Activities Business-Type Activities Total Primary Government REVENUES Program Revenues Charges for Services $ 7,624,535 $ 7,804,296 $ 9,906,429 $ 9,576,948 $ 17,530,964 $ 17,381,244 Operating Grants 3,539,299 3,723,535 3,539,299 3,723,535 Capital Grants 6,467,171 2,290,871 6,467,171 2,290,871 General Revenues Property Taxes $ 20,370,681 $ 21,132,452 20,370,681 21,132,452 Sales Taxes 22,095,373 20,738,083 22,095,373 20,738,083 Other Taxes 17,410,295 13,090, ,982 17,894,277 13,090,115 Other 1,014,084 1,090,015 3,641 2,392 1,017,725 1,092,407 Total Revenues $ 78,521,438 $ 69,869,367 $ 10,394,052 $ 9,579,340 $ 88,915,490 $ 79,448,707 EXPENSES General Government $ 16,327,861 $ 14,578,398 $ 16,327,861 $ 14,578,398 Health & Welfare 2,174,274 1,884,686 2,174,274 1,884,686 Public Safety 34,598,817 27,686,386 34,598,817 27,686,386 Public Works 21,719,256 19,081,862 8,444,713 7,578,156 30,163,969 26,660,018 Culture - - Interest Expense 2,611,848 2,590,035 2,611,848 2,590,035 Total Expenses $ 77,432,056 $ 65,821,367 $ 8,444,713 $ 7,578,156 $ 85,876,769 $ 73,399,523 Excess of Revenues over Expenses before transfers 1,089,382 4,048,000 1,949,339 2,001,184 3,038,721 6,049,184 Transfers 147, ,242 (147,328) (131,242) - - CHANGE IN NET ASSETS $ 1,236,710 $ 4,179,242 $ 1,802,011 $ 1,869,942 $ 3,038,721 $ 6,049,184 BEGINNING NET ASSETS 153,445, ,266,046 24,145,157 22,275, ,590, ,541,261 ENDING NET ASSETS $ 154,681,998 $ 153,445,288 $ 25,947,168 $ 24,145,157 $ 180,629,166 $ 177,590,445 (See independent auditor s report) MD&A 4

27 The Village s total revenues increased $9.4 million or 11.9% from the prior year. The increase is due primarily to higher sales tax revenues, revenue from a newly adopted municipal utility tax on natural gas and electric utilities, and a capital grant for construction of a new commuter transit station. The Village s total expenses increased $12.5 million or 17.0% from the prior year. The increase is due to two major factors. First, the Village completed construction of its new Police Station which opened in October The second factor was that the Village began construction of a new commuter transit station located on Oakton Street near Skokie Boulevard. There are eight basic impacts on revenues and expenses as reflected below: Normal Impacts Statement of Changes in Net Assets There are eight basic (normal) transactions that will affect the Statement of Changes in Net Assets. There are four each for revenues and expenses. Revenues: Economic Condition which can reflect a declining, stable, or growing economic environment and has a substantial impact on state income, sales, and utility tax revenue as well as public spending habits for building permits, elective user fees, and volumes of consumption. Increase/Decrease in Village Board approved rates while certain tax rates are set by statute, the Village Board has significant authority to impose and periodically increase/decrease rates (water, wastewater, impact fee, building fees, home rule sales tax, etc.) Changing Patterns in Intergovernmental and Grant Revenue (both recurring and nonrecurring) certain recurring revenues (state shared revenues, etc.) may experience significant changes periodically while nonrecurring (or one-time) grants are less predictable and often distorting in their impact on year-to-year comparisons. Market Impacts on Investment income the Village s investment portfolio is managed using a similar average maturity to most governments. Market conditions may cause investment income to fluctuate. Expenses: Introduction of New Programs within the functional expense categories (Public Safety, Public Works, General Government, etc.) individual programs may be added or deleted to meet changing community needs. Increase in Authorized Personnel changes in service demand may cause the Village Board to increase/decrease authorized staffing. Staffing costs (salary and related benefits) represent 80% of the Village s operating costs. Salary Increases (annual adjustments and merit) the ability to attract and retain human and intellectual resources requires the Village to strive to approach a competitive salary range position in the marketplace. Inflation while overall inflation appears to be reasonably modest, the Village is a major consumer of certain commodities such as supplies, fuels, and parts. Some functions may experience unusual commodity-specific increases. (See independent auditor s report) MD&A 5

28 Current Year Impacts Revenues: For the fiscal year ended April 30, 2011, revenues from all activities totaled $88.9 million. This represents an increase in revenues of 11.9% or $9.5 million from last fiscal year. The Village has a very diversified revenue structure and depends on several key revenue sources to help pay for the services the Village provides. Among the diverse revenue sources, the increase is highlighted by several factors. First, the Village adopted a municipal utility tax that became effective on May 1, This new source realized total revenue of $5.5 million in its first year. Second, as the economy has been improving throughout the fiscal year, the Village realized higher sales tax revenue of $1.5 million which was up 7.4% from last year. Third, grant revenue increased $3.9 million as a result of a grant received for the new commuter transit station. Other tax revenue sources that improved were the use tax (up 19.2% or $.15 million), the replacement tax (up 11.2% or $.13 million), and the hotel/motel tax (up 10.2% or $.1 million). While the majority of tax revenue sources realized increases, declines continued for the income tax (down 1.8% or $.1 million) and the real etate transfer tax (down 14.8% or $.1 million). The diversity of revenue sources that are available to the Village has permitted the Village to maintain a property tax freeze that began with the 1991 property tax levy. Thus, for twenty consecutive years, the Village has adopted a property tax levy that was equal to or less than the 1990 property tax levy. The Village raised its water rates in Fiscal 2011 by 2.0%. This resulted in increased revenue of $.3 million. In spite of the increase, the Village has the second lowest water rate in the area. Expenses: The Village s total expenses for all activities for the year ended April 30, 2011 were $85.9 million. This represents an increase of 17.0% or $12.5 million from last fiscal year. The increase is due primarily to two large capital improvements. Results of Operations: As a result of the aforementioned factors, the Village experienced an increase in net assets amounting to $3.1 million. However, the Village continues its philosophy of budgeting on a conservative basis. Diverse revenue sources and significant fund balances will also position the Village to absorb adverse impacts of economic downturns. Governmental Funds FINANCIAL ANALYSIS OF THE VILLAGE S FUNDS At April 30, 2011, the governmental funds (as presented on the balance sheet on pages 6-7) reported a combined fund balance of $29.1 million. Expenditures exceeded revenues and other financing sources (uses) in 2011 by $13.1 million (as presented on pages 9-10) due primarily to increased capital outlays. The General Fund realized a decrease in unreserved fund balance of $1.3 million in addition to the impact of a prior period adjustment of $.6 million for a combined decrease in fund balance of $1.9 million. The Downtown TIF Fund realized a decrease in fund balance of $.1 million as a result of higher expenditures. The Science and Technology TIF realized an increase in fund balance of $.2 million due to increased incremental property taxes in the District. The Economic Development Fund realized a decrease in fund balance of $1.2 million primarily as a result of the funding of various capital projects. The Building and Equipment Fund realized an decrease in fund balance of $11.6 million due the new Police Station and the costs associated with the commuter transit station. Finally, the Nonmajor Governmental Funds realized an increase in fund balance of $1.0 million primarily as a result the impact of the funding of debt service for the Series 2010 Series bonds. (See independent auditor s report) MD&A 6

29 General Fund Budgetary Highlights Actual General Corporate Fund revenues came in $4.5 million over budget for Fiscal The predominant reason for exceeding budgeted revenues is that it is required that certain revenue sources for the Fire and Police Pension Funds be reported originally as revenues in the General Fund. These revenue sources include property, replacement and municipal utility taxes. These tax revenue sources are then treated as contributions by the General Fund to the two pension funds. These three revenue sources are not budgeted revenue in the General Fund. Fiscal 2011 revenue attributable to this GASB requirement was $4,725,253. On the expenditure side, inclusive of the aforementioned GASB requirement for the General Fund to make an employer contribution to the Fire and Police Pension Funds (which is an unbudgeted expense amounting to $4,725,253) and funding of the Village s Self-Insurance Fund in the amount of $1,573,755, the General Fund was over budget by $4,975,055. Removing the effect of the aforementioned items, the General Fund would have been under budget by $1,323,953. Capital Assets At the end of the Fiscal Year 2011, the Village had a combined total of capital assets of $187.5 million invested in a broad range of capital assets including land, buildings, vehicles, streets, bridges, water mains, and sewer lines. (See Table 3 below). This amount represents a net increase (including additions and deletions) of $8.0 million. The major addition to capital assets is the result of the completion of construction of the new Police Station. Table 3 Total Capital Assets at Year End Net of Depreciation Balance Net Additions/ Balance April 30, 2010 Deletions April 30, 2011 Land $ 37,834,494 $ 1,166,258 $ 39,000,752 Construction in Progress 22,326,228 (21,320,836) 1,005,392 Land Improvements 510,505 (177,346) 333,159 Buildings 13,690,855 28,026,514 41,717,369 Vehicles & Equipment 6,903,554 1,452,174 8,355,728 Streets & Improvements 78,357,504 (1,483,455) 76,874,049 Water & Sewer System 19,899, ,871 20,208,204 $ 179,522,473 $ 7,972,180 $ 187,494,653 For further information on capital assets, please refer to the Notes to the Financial Statements. (pages 37-38) Debt Outstanding As was noted in the transmittal letter, Skokie s philosophy is to provide funding from existing revenue sources, where possible. However, large projects often require the issuance of debt. Because the Village prepares a five-year capital plan, the identification of financing needs is made early in a project s planning process, which allows sufficient time to issue any debt that may be required. Where possible, debt for several projects will be combined to afford an economy of scale with regard to bond issuance and other costs. At April 30, 2011, the Village had total debt obligations open and outstanding in the amount of $62.76 million. The Village s debt is rated AAA by Fitch and Aaa by Moody s Investors Services. The Village, under its home rule authority, does not have a legal debt limit. For further information on outstanding debt, please refer to the Notes to the Financial Statements. (pages 42-51) (See independent auditor s report) MD&A 7

30 Economic Factors As was noted earlier in the MD&A under Revenues, the Village has experienced increases in taxes that are generally indicative of economic stability and growth. The increases in sales, use, replacement, and hotel/motel taxes note that Skokie s economy began its recovery during Fiscal Economic development efforts in Skokie s downtown area, including the Science + Technology Park, will permit more economic development which is critical to the Village s future. The Village will carefully monitor economic conditions throughout the upcoming fiscal year to assure a continued stable financial condition. CONTACTING THE VILLAGE S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, customers, investors, and creditors with a general overview of the Village s finances and to demonstrate the Village s accountability for the money it receives. Questions concerning this report or requests for additional financial information should be directed to Robert J. Nowak, Director of Finance, Village of Skokie, 5127 Oakton Street, Skokie, IL (See independent auditor s report) MD&A 8

31 STATEMENT OF NET ASSETS April 30, 2011 Primary Government Component Units Centre East Metropolitan Exposition, Auditorium and Skokie Governmental Business-Type Office Building Public Activities Activities Total Authority Library ASSETS Cash and cash equivalents $ 19,358,040 $ 4,989,914 $ 24,347,954 $ 834,952 $ 9,491,138 Investments 19,682,556-19,682, ,792 - Receivables (net, where applicable, of allowances for uncollectibles) Property taxes 8,149,991-8,149,991-6,239,392 Other taxes 7,856,566 34,998 7,891, Accounts 798,875 2,146,807 2,945,682 92,778 - Notes 465, , Accrued interest 12,274-12, Other 233, , Prepaid expenses 10,000-10,000 49,616 - Inventory 67, , , Due from other governments 1,169,934-1,169,934-64,826 Unamortized bond issuance costs 402, ,841-97,915 Net pension asset 21,148,994-21,148, Capital assets not being depreciated 39,920,905 85,239 40,006,144 1,858,026 1,488,336 Capital assets being depreciated (net of accumulated depreciation) 126,607,257 20,881, ,488,510 11,813,364 19,029,571 Total assets 245,884,171 28,324, ,208,902 15,070,528 36,411,178 LIABILITIES Accounts payable 5,755, ,521 6,103,416 1,336,207 74,125 Accrued payroll 362,964 22, ,183-97,362 Deposits 501, , Due to fiduciary funds 246, , Accrued interest payable 1,050,735 25,102 1,075, ,989 Unearned revenues 16,850,689-16,850,689-6,019,887 Claims payable 2,021,643-2,021, Other payables 37,350-37, Noncurrent liabilities Due within one year 5,668, ,371 5,876,216-1,251,850 Due in more than one year 58,705,409 1,775,350 60,480,759-10,143,565 Total liabilities 91,202,173 2,377,563 93,579,736 1,336,207 17,752,778 NET ASSETS Invested in capital assets, net of related debt 120,700,803 19,051, ,752,009 13,671,390 10,092,830 Restricted for Public safety 461, , Public works 374, , Economic development 10,064,109-10,064, Employee retirement 828, , Debt service 8,202,873-8,202, ,780 Culture, recreation and education ,931 12,020 Unrestricted 14,050,052 6,895,962 20,946,014-8,184,770 TOTAL NET ASSETS $ 154,681,998 $ 25,947,168 $ 180,629,166 $ 13,734,321 $ 18,658,400 See accompanying notes to financial statements

32 STATEMENT OF ACTIVITIES For the Year Ended April 30, 2011 Program Revenues Operating Capital Charges Grants and Grants and FUNCTIONS/PROGRAMS Expenses for Services Contributions Contributions PRIMARY GOVERNMENT Governmental Activities General government $ 16,327,861 $ 6,918,416 $ 760,181 $ 1,228,440 Health and welfare 2,174, Public safety 34,598, , ,834 - Public works 21,719, ,150,284 5,238,731 Interest 2,611, Total governmental activities 77,432,056 7,624,535 3,539,299 6,467,171 Business-Type Activities Water and sewer 8,195,533 9,834, Parking 249,180 71, Total business-type activities 8,444,713 9,906, TOTAL PRIMARY GOVERNMENT $ 85,876,769 $ 17,530,964 $ 3,539,299 $ 6,467,171 COMPONENT UNITS Skokie Public Library $ 11,407,286 $ 216,931 $ 87,732 $ 10,100 Centre East Metropolitan Exposition, Auditorium and Office Building Authority $ 1,897,762 $ 1,054,247 $ 280,000 $

33 Net (Expense) Revenue and Change in Net Assets Primary Government Component Units Centre East Metropolitan Exposition, Auditorium and Skokie Governmental Business-Type Office Building Public Activities Activities Total Authority Library $ (7,420,824) $ - $ (7,420,824) $ - $ (10,814,640) (2,174,274) - (2,174,274) - - (33,264,027) - (33,264,027) - - (14,330,078) - (14,330,078) - - (2,611,848) - (2,611,848) - (277,883) (59,801,051) - (59,801,051) - (11,092,523) - 1,639,061 1,639, (177,345) (177,345) ,461,716 1,461, (59,801,051) 1,461,716 (58,339,335) - (11,092,523) (11,092,523) (563,515) - General Revenues Taxes Property 20,370,681-20,370,681-12,117,607 Personal property replacement 1,255,680-1,255, ,422 Home rule sales 9,875,432-9,875, Sales 12,219,941-12,219, Use 904, , Income 4,939,032-4,939, Hotel/motel 1,022,917-1,022,917 82,965 - Real estate transfer tax 542, , Telecommunications 3,455,213-3,455, Utility tax 4,251, ,982 4,735,720 - Other tax 1,038,353-1,038, Investment income 102,509 3, ,150 2,474 12,881 Miscellaneous 161, ,910 7, ,985 Gain on disposal of capital assets 749, , Transfers in (out) 147,328 (147,328) Total 61,037, ,295 61,378,056 92,818 12,612,895 CHANGE IN NET ASSETS 1,236,710 1,802,011 3,038,721 (470,697) 1,520,372 NET ASSETS, MAY 1 153,445,288 24,145, ,590,445 14,205,018 17,138,028 NET ASSETS, APRIL 30 $ 154,681,998 $ 25,947,168 $ 180,629,166 $ 13,734,321 $ 18,658,400 See accompanying notes to financial statements

34 GOVERNMENTAL FUNDS BALANCE SHEET April 30, 2011 Downtown Science and General TIF Technology TIF ASSETS Cash and cash equivalents $ 3,950,326 $ 2,485,694 $ 1,484,703 Investments 10,093 6,029,178 - Receivables (net, where applicable, of allowances for uncollectibles) Property taxes 5,090, ,700 35,150 Other taxes 7,283, Accounts 73, Notes 465, Accrued interest 12, Other receivables 216, Inventory 67, Prepaid items Due from other funds 159, Due from other governments 425, Advance to other funds 1,550, TOTAL ASSETS $ 19,303,534 $ 8,619,685 $ 1,519,879 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable $ 1,165,958 $ 55,922 $ 5,763 Accrued payroll 347, Deposits 501, Deferred property taxes 4,905, Unearned revenues 2,073, Due to other funds 9,639 13,770 - Due to fiduciary funds 246, Other payables 17, Advances from other funds Total liabilities 9,267,654 69,692 5,763 FUND BALANCES Reserved for inventory 67, Reserved for prepaids Reserved for notes receivable 435, Reserved for advances 1,550, Reserved for public safety 461, Reserved for public works Reserved for economic development - 8,549,993 1,514,116 Reserved for debt service Reserved for employee retirement Unreserved - undesignated General Fund 7,521, Special Revenue Funds Capital Project Funds Total fund balances (deficit) 10,035,880 8,549,993 1,514,116 TOTAL LIABILITIES AND FUND BALANCES $ 19,303,534 $ 8,619,685 $ 1,519,

35 Economic Building and West Dempster Development Equipment TIF Nonmajor Total $ - $ - $ - $ 9,154,910 $ 17,075,633-12,871, ,413 19,682, ,278-2,061,084 8,026, ,461 7,792, , , , , , , ,268-10, ,000 5, , , , , ,706 1,169,934 2,000, ,550,000 $ 2,005,135 $ 15,184,206 $ - $ 12,956,095 $ 59,588,534 $ 16,792 $ 3,960,729 $ 150 $ 459,020 $ 5,664, , , , ,557-1,960,249 7,574,335-9,631, ,572 11,866, , , , , ,935 19, , ,550,000-3,550, ,336 14,463,654 3,550,150 2,709,894 30,509, ,268-10, , ,000 2,000, ,550, , , , ,064, ,202,873 8,202, , , ,521,944 (437,201) , , ,552 (3,550,150) 194,750 (2,644,848) 1,562, ,552 (3,550,150) 10,246,201 29,079,391 $ 2,005,135 $ 15,184,206 $ - $ 12,956,095 $ 59,588,534 See accompanying notes to financial statements

36 RECONCILIATION OF FUND BALANCES OF GOVERNMENTAL FUNDS TO THE GOVERNMENTAL ACTIVITIES IN THE STATEMENT OF NET ASSETS April 30, 2011 FUND BALANCES OF GOVERNMENTAL FUNDS $ 29,079,391 Amounts reported for governmental activities in the statement of net assets are different because: Certain revenues that do not meet the Village's revenue recognition criteria are not recognized in the governmental funds 2,590,321 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the governmental funds 166,528,162 Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds Bonds payable (60,894,597) Unamortized premium on bonds (857,877) Unamortized discount on bonds 30,566 Unamortized loss on refunding of bonds 217,720 Compensated absences payable are not due and payable in the current period and, therefore, are not reported in governmental funds (2,101,484) Unamortized bond issuance costs are reported as an asset on the statement of net assets 402,841 Accrued interest on long-term liabilities is reported as a liability on the statement of net assets (1,050,735) The net pension assets of the pension funds are included in the governmental activities in the statement of net assets 21,148,994 Net pension obligation is not due and payable in the current period and, therefore, is deferred in the governmental funds (470,883) Net other postemployment benefits obligation is not due and payable in the current period and, therefore, is deferred in the governmental funds (297,699) The net assets of the internal service funds are included in the governmental activities in the statement of net assets 357,278 NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 154,681,998 See accompanying notes to financial statements

37 GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES For the Year Ended April 30, 2011 Downtown Science and General TIF Technology TIF REVENUES Property taxes $ 10,677,321 $ 2,252,163 $ 2,201,793 Other taxes 31,996, Licenses and permits 2,891, Fines 1,339, Charges for services 2,703, Intergovernmental 1,003, Investment income - 30,418 1,194 Other income 349, Total revenues 50,961,413 2,282,581 2,202,987 EXPENDITURES Current General government 11,587,922-59,826 Health and welfare 1,169, Public safety 28,866, Public works 10,362, Capital outlay - 1,640,759 - Debt service Principal retirement Interest and fiscal charges Total expenditures 51,985,808 1,640,759 59,826 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (1,024,395) 641,822 2,143,161 OTHER FINANCING SOURCES (USES) Issuance of refunding bonds Bond premium Payment to refunded bond escrow Proceeds from the sale of capital assets 90, Transfers in 367, Transfers (out) (771,377) (734,329) (1,929,346) Total other financing sources (uses) (313,712) (734,329) (1,929,346) NET CHANGE IN FUND BALANCES (1,338,107) (92,507) 213,815 FUND BALANCES (DEFICIT), MAY 1 12,000,036 8,642,500 1,300,301 Prior period adjustment (626,049) - - FUND BALANCES (DEFICIT), MAY 1, RESTATED 11,373,987 8,642,500 1,300,301 FUND BALANCES (DEFICIT), APRIL 30 $ 10,035,880 $ 8,549,993 $ 1,514,

38 Economic Building and West Dempster Development Equipment TIF Nonmajor Total $ - $ 865,359 $ - $ 4,374,045 $ 20,370, ,870 2,051,135-5,096,111 39,505, ,706 3,082, ,339, ,492 3,024,671-5,727,897-2,566,063 9,297,775 9,337 54,511-7, ,509 5, , , ,207 9,196,682-12,555,466 77,575, ,806 1,990, ,153,783 15,205, ,002,881 2,172, ,897 29,806, ,775 11,303,463-21,505,084-1,441,370 24,587, ,696,525 5,696, ,806,443 2,806, ,806 23,496, ,982,674 91,578,027 (36,599) (14,299,322) (150) (1,427,208) (14,002,691) ,924,255 3,924, , , (4,341,689) (4,341,689) - 659, ,665-4,081,033-3,576,294 8,024,827 (1,140,090) (2,018,210) - (1,284,147) (7,877,499) (1,140,090) 2,722,323-2,333, ,352 (1,176,689) (11,576,999) (150) 906,298 (13,064,339) 2,739,488 12,297,551 (3,550,000) 9,339,903 42,769, (626,049) 2,739,488 12,297,551 (3,550,000) 9,339,903 42,143,730 $ 1,562,799 $ 720,552 $ (3,550,150) $ 10,246,201 $ 29,079,391 See accompanying notes to financial statements

39 RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE GOVERNMENTAL ACTIVITIES IN THE STATEMENT OF ACTIVITIES For the Year Ended April 30, 2011 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ (13,064,339) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlay as expenditures; however, they are capitalized and depreciated in the statement of activities 11,131,785 Contributions of capital assets 196,437 The issuance of long-term debt is reported as an other financing source in governmental funds but as an increase of principal outstanding in the statement of activities (3,924,255) The repayment of the principal portion of long-term debt is reported as an expenditure when due in governmental funds but as a reduction of principal outstanding in the statement of activities 9,966,608 The premium on bonds issued is reported as an other financing source in the governmental funds, but as an increase in principal outstanding on the statement of activities (458,793) The amortization of premium on long-term debt issued is reported as a reduction of expense on the statement of activities 112,617 The amortization of discount on long-term debt is reported as an expense on the statement of activities (1,910) The loss on refunding from long-term debt is reported only in the statement of activities 77,904 The amortization of the loss on refunding is reported as an expense on the statement of activities (28,068) The amortization of the gain on refunding is reported as an expense on the statement of activities 56,046 Bond issuance costs are reported as expenditures in the governmental funds, but as a deferred charge on the statement of activities 41,359 The amortization of bond issuance costs is reported as an expense on the statement of activities (93,709) The change in the accrual of interest on long-term debt is reported as an expense on the statement of activities 101,962 The gain on disposal of capital assets is recorded on the statement of activities as general revenues (330,785) Some expenses in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds Depreciation (3,235,456) Change in compensated absences liability (6,167) Change in net pension asset (493,039) Net pension obligations (342,905) Net other postemployment benefits obligations (99,614) The change in net assets of internal service funds is reported in governmental activities 1,631,032 CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 1,236,710 See accompanying notes to financial statements

40 PROPRIETARY FUNDS STATEMENT OF NET ASSETS April 30, 2011 Governmental Business-Type Activities Activities Water Nonmajor Internal and Sewer Enterprise Total Service ASSETS Current assets Cash and cash equivalents $ 4,973,164 $ 16,750 $ 4,989,914 $ 2,282,407 Receivables Property taxes ,883 Other taxes 34,998-34,998 64,181 Accounts, net 2,146,807-2,146,807 - Interest Inventory 186, ,520 - Total current assets 7,341,489 16,750 7,358,239 2,470,482 Noncurrent assets Capital assets Nondepreciable capital assets 85,239-85,239 - Depreciable capital assets 40,229,822 3,546,909 43,776,731 - Accumulated depreciation (19,681,730) (3,213,748) (22,895,478) - Net capital assets 20,633, ,161 20,966,492 - Total assets 27,974, ,911 28,324,731 2,470,482 LIABILITIES Current liabilities Accounts payable 330,934 16, ,521 91,561 Accrued payroll 22,219-22,219 - Accrued interest 25,102-25,102 - Compensated absences payable 3,648-3,648 - Claims and judgments payable ,010,821 General obligation bonds and notes payable 203, ,723 - Total current liabilities 585,626 16, ,213 1,102,382 LONG-TERM LIABILITIES Compensated absences payable 63,787-63,787 - Claims and judgments payable ,010,822 General obligation bonds and notes payable 1,711,563-1,711,563 - Total long-term liabilities 1,775,350-1,775,350 1,010,822 Total liabilities 2,360,976 16,587 2,377,563 2,113,204 NET ASSETS Invested in capital assets, net of related debt 18,718, ,161 19,051,206 - Unrestricted 6,895, ,895, ,278 TOTAL NET ASSETS $ 25,613,844 $ 333,324 $ 25,947,168 $ 357,278 See accompanying notes to financial statements

41 PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS For the Year Ended April 30, 2011 Governmental Business-Type Activities Activities Water Nonmajor Internal and Sewer Enterprise Total Service OPERATING REVENUES Charges for services $ 9,834,594 $ 71,835 $ 9,906,429 $ 2,481,581 Total operating revenues 9,834,594 71,835 9,906,429 2,481,581 OPERATING EXPENSES Operations Personnel services ,476 Professional services ,488 Purchased services ,609,321 Land and building rental - 71,835 71,835 - Water and sewerage 6,507,395-6,507,395 - Water meters 589, ,405 - Flood control 500, ,174 - Depreciation 537, , ,234 - Total operating expenses 8,134, ,180 8,384,043 1,879,285 OPERATING INCOME (LOSS) 1,699,731 (177,345) 1,522, ,296 NONOPERATING REVENUES (EXPENSES) Property taxes ,808 Utility taxes 483, , ,319 Investment income 3,641-3,641 3,609 Interest expense and fiscal charges (60,670) - (60,670) - Total nonoperating revenues (expenses) 426, ,953 1,028,736 NET INCOME (LOSS) BEFORE TRANSFERS 2,126,684 (177,345) 1,949,339 1,631,032 TRANSFERS Transfers (out) (147,328) - (147,328) - CHANGE IN NET ASSETS 1,979,356 (177,345) 1,802,011 1,631,032 NET ASSETS (DEFICIT), MAY 1 23,634, ,669 24,145,157 (1,273,754) NET ASSETS, APRIL 30 $ 25,613,844 $ 333,324 $ 25,947,168 $ 357,278 See accompanying notes to financial statements

42 PROPRIETARY FUNDS STATEMENT OF CASH FLOWS For the Year Ended April 30, 2011 Business-Type Activities Water Nonmajor Internal and Sewer Enterprise Total Service CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users $ 9,700,979 $ 71,835 $ 9,772,814 $ 2,502,684 Payments to suppliers (6,234,479) (95,127) (6,329,606) (1,661,257) Payments to employees (1,327,120) - (1,327,120) - Net cash from operating activities 2,139,380 (23,292) 2,116, ,427 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Interfund balances (162,519) - (162,519) (32,931) Property taxes ,175 Utility taxes 448, , ,138 Net cash from noncapital financing activities 286, , ,382 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets purchased (925,433) - (925,433) - Principal paid on general obligation bonds (208,824) - (208,824) - Interest paid on bonds (63,740) - (63,740) - Net cash from capital and related financing activities (1,197,997) - (1,197,997) - CASH FLOWS FROM INVESTING ACTIVITIES Sale of investments ,303 Interest received 3,640-3,640 3,605 Net cash from investing activities 3,640-3, ,908 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,231,488 (23,292) 1,208,196 2,127,717 CASH AND CASH EQUIVALENTS, MAY 1 3,741,676 40,042 3,781, ,690 CASH AND CASH EQUIVALENTS, APRIL 30 $ 4,973,164 $ 16,750 $ 4,989,914 $ 2,282,407 (This statement is continued on the following page.)