VILLAGE OF PINGREE GROVE, ILLINOIS COMPREHENSIVE ANNUAL FINANCIAL REPORT

Transcription

1 VILLAGE OF PINGREE GROVE, ILLINOIS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED APRIL 30, 2016

2 COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED APRIL 30, 2016 Prepared by: Finance Department

3 TABLE OF CONTENTS PAGE INTRODUCTORY SECTION List of Principal Officials... i Organizational Chart... ii Transmittal Letter... iii - vi Certificate of Achievement for Excellence in Financial Reporting... vii FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT MANAGEMENT S DISCUSSION AND ANALYSIS... MD&A 1-11 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Position Statement of Activities Fund Financial Statements Balance Sheet Governmental Funds Reconciliation of Total Governmental Fund Balance to Net Position of Governmental Activities... 9 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Reconciliation of the Statement of Revenues Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities...12 Statement of Net Position Proprietary Funds...13 Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds...14 Statement of Cash Flows Proprietary Funds...15 Statement of Fiduciary Net Position...16 Notes to Financial Statements

4 TABLE OF CONTENTS PAGE FINANCIAL SECTION Continued REQUIRED SUPPLEMENTARY INFORMATION Schedule of Employer Contributions Illinois Municipal Retirement Fund...44 Schedule of Changes in the Employer s Net Pension Liability Illinois Municipal Retirement Fund...45 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual General Fund...46 OTHER SUPPLEMENTARY INFORMATION Schedule of Revenues Budget and Actual General Fund Schedule of Expenditures Budget and Actual General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Capital Improvement Capital Projects Fund...53 Schedule of Expenditures Budget and Actual Capital Improvement Capital Projects Fund...54 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Special Service Area #4 Capital Projects Fund...55 Combining Balance Sheet Nonmajor Governmental Funds...56 Combining Statement of Revenues, Expenditures and Changes in Fund Balance Nonmajor Governmental Funds...57 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Motor Fuel Special Revenue Fund...58 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Tax Increment Financing Bell-Harris Special Revenue Fund...59 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Special Service Area #9 Capital Projects Fund...60 Schedule of Revenues, Expenses and Changes in Net Position Budget and Actual Water and Sewer Enterprise Fund...61 Schedule of Operating Expenses Budget and Actual Water and Sewer Enterprise Fund Combining Statement of Changes in Assets and Liabilities Special Service Areas Agency Fund...65

5 TABLE OF CONTENTS PAGE STATISTICAL SECTION (Unaudited) Net Position by Component Last Ten Fiscal Years Changes in Net Position Last Ten Fiscal Years Fund Balances of Governmental Funds Last Ten Fiscal Years Changes in Fund Balances for Governmental Funds Last Ten Fiscal Years Assessed Value and Actual Value of Taxable Property Last Ten Fiscal Years Direct and Overlapping Property Tax Rates Last Ten Fiscal Years Principal Property Tax Payers Current Fiscal Year and Nine Fiscal Years Ago...78 Property Tax Levies and Collections Last Ten Fiscal Years...79 Ratios of Outstanding Debt by Type Last Ten Fiscal Years...80 Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years...81 Schedule of Direct and Overlapping Governmental Activities Debt...82 Schedule of Legal Debt Margin Last Ten Fiscal Years Pledged-Revenue Coverage Last Ten Fiscal Years...85 Demographic and Economic Statistics Last Ten Fiscal Years...86 Principal Employers Current Fiscal Year and Nine Fiscal Years Ago...87 Full-Time Equivalent Village Government Employees by Function Last Ten Fiscal Years...88 Operating Indicators by Function/Program Last Ten Fiscal Years Capital Asset Statistics by Function/Program Last Ten Fiscal Years...91

6 INTRODUCTORY SECTION This section includes miscellaneous data regarding the Village of Pingree Grove, Illinois including the List of Principal Officials, Organizational Chart, Transmittal Letter, and Certificate of Achievement for Excellence in Financial Reporting.

7 List of Principal Officials April 30, 2016 Title Name Term Expires Village President Steve Wiedmeyer May, 2019 Trustee Robert Spieker May, 2019 Trustee Nick Campbell May, 2017 Trustee Brian Paszkiewicz May, 2019 Trustee Bernard Thomas May, 2019 Trustee Charles Pearson May, 2017 Trustee Ray LaMarca May, 2017 Village Attorney, Dean Frieders Village Clerk, Dawn R. Grivetti Finance Director, Thomas G. Walter Public Works Director, Joseph Caveny i

8 VILLAGE OF PINGRFE GROVE ORGANIZATIONAL CHART RESIÞËNTS OF PINGRHE GROVE Contract Positions VILI-AGE ATTORNEY VILLAGE PLANNER VILI.AGE VILLAGE PRE$DENT OF TRUSTEES commrsslons DËPARTMENT DEPARTMËNT E ADMINISTRATIVE DEPARTMENT WATER DEPARTMENT SEWER ÞEPARTMENT 1l

9 INGRÊË 1907 EROVÊ November ll,2016 To The Village President, Members of the Village Board of Trustees, and the Citizens of the Village of Pingree Grove: The Comprehensive Annual Financial Report (CAFR) for the Village of Pingree Grove, for the year ending April 30, 2016 is hereby submitted. The CAFR is the management's annual report to its taxpayers, goveming board, oversight bodies, investors and creditors. Village Management is responsible for all financial transactions for the Village of Pingree Grove and for the contents of this Comprehensive Annual Financial Report. We believe the data, as presented, is accurate in all material aspects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds of the Village. All disclosures necessary to enable the reader to gain an understanding of the Village of Pingree Grove financial activities have been included. The Comprehensive Annual Financial Report consists of the Village's representations concerning the finances of the Village. Management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management has continued to focus on the internal controls that are designed to protect the Village's assets from loss, theft or misuse and to compile sufhciently reliable information for the preparation of the Village's financial statements in conformity with GAAP. Because the cost of a control should not exceed the benefits to be derived, the objective is to provide reasonable, rather than absolute assurance, that the financial statements are free of any material misstatements. Management continues to revise processes, implement internal controls, and establish new financial policies that allow us to successfully address the prior years' accounting issues and meet the required deadline for the issuance of this f,rscal year's report. Management asserts that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. Fiscal Management Annually the Village adopts a budget that defines its legal spending authority. In January the Departments are given budgetary information, and in February the departments submit their requests to the Finance Director who prepares a budget by fund, department, function and activity. The budget is presented to the Village Board for review. The Village Board holds a public hearing and makes adjustments to the requested budgeted amounts. The Village's budget is approved by the Village Board by May 1't. lll 14N042 Reinking Road. Pingree Crove, lllinois Phone: (847) Fax: (847)

10 State statutes require an annual audit by independent Certified Public Accountants. The Village of Pingree Grove selected the accounting firm of Lauterbach & Amen, LLP to conduct the annual audit. The auditor's report on the general-purpose financial statements and combining and individual fund statements and schedules is included in the financial section of this report. Fiscal Report Lauterbach & Amen, LLP has concluded that there was a reasonable basis for rendering an unmodified opinion that the Village of Pingree Grove s financial statements for the fiscal year ended April 30, 2016, are presented fairly, in conformity with GAAP. The independent auditor s report is located at the front of the financial section of this report. GAAP requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and is meant to be read in conjunction with it. The Village s MD&A can be found immediately following the report of the independent auditors. Local Economy ECONOMIC CONDITION AND OUTLOOK The Village of Pingree Grove was incorporated in The Village is a non-home rule community governed by a Village President (Mayor) and a six member Board of Trustees, elected for overlapping four-year terms. The Board now appoints a Police Chief, Finance Director, Public Works Director, Attorney and Engineer. The Village of Pingree Grove is located in Kane County, Illinois and lies approximately 48 miles northwest of the City of Chicago. The Village of Pingree Grove covers an area of approximately 5.35 square miles. Located within commuting distance of Chicago and its suburbs, the Village of Pingree Grove has experienced a decline in equalized assessed valuation despite new residential construction. This anomaly is explained by the fact that all taxes are one year in arrears. During the next fiscal year increases are forecasted. According to the 2010 Census, the Village of Pingree Grove has a population of 4,532. It is estimated that the population now exceeds 5,000. This population increase will also impact the need to establish a police pension as defined by state law after the next census in Data Regarding Major Industry Affecting the Local Economy The largest employer in Pingree Grove is the Charter School. The major businesses located in the Village of Pingree Grove are: Minuteman International, a manufacturer of industrial cleaning equipment and supplies with approximately 100 employees; Elgin Die Mold, a contract die mold manufacturer with 70 employees; Kindred at Home, providing home health services with 56 employees; MAS Supply, a manufacturer of custom kitchen cabinets with 15 employees; the Outpost, a bar/restaurant with 9 employees; Lazar Brothers BP Gas and Mini Mart has 9 employees; and Crossroads Veterinary Clinic, a provider of veterinary services, has 6 employees. iv

11 Economic Condition and Outlook The Village s past fiscal year has continued to experience variable economic conditions resulting in no significant increases in anticipated revenue sources. For the third year in a row the Village has seen an increase in building permits which reflected a slight increase in revenue. While the Village is pleased with the increase in building permits, the Village continues to be fiscally conservative in the revenue projections for next fiscal year due to restrictions in state funding. The increase in building impacts water and sewer services which is causing the Village to review it service rates. Overall, the Village has maintained a steady course in keeping expenses down and holding at current revenue sources. With increasing population the Village continues to research revenue enhancements and cost containments in order to meet future obligations of Village operations. For the Year MAJOR INITIATIVES In Fiscal Year 2016, the Village achieved the following goals: Enhanced Internal Controls; Itemized all Capital Fund projects to properly encumber funds; Continue to support engineering for road improvements on State Routes 20 and 47; Reviewed staffing levels to insure cost effective and efficient staffing; Updated all permit fees for all Village services; Inspected and repainted the water tower; Acquired new police vehicles. For the Future Major projects planned for Fiscal Year 2017 include: Create Public Works Inventory and Service Schedules for Water & Sewer Equipment; Police vehicles needs assessment; Continuation of development at Starks Crossing mixed use retail/office building along Route 20; Prepare a long term Strategic Plan outlining Future Village Growth; Continue discussion for Village Hall and Public Works building. AWARDS Since 2008 the Village has received the Government Finance Officers Certificate of Achievement for Excellence in Financial Reporting. The Village will once again this year apply for this Certificate, and the Village is confident it will meet the Certificate of Achievement Program s requirements for the award. v

12 ACKNOWLEDGMENTS The preparation of the Comprehensive Annual Financial Report on a timely basis was made possible by the dedicated services of the entire staff of the Village. The members of the Village Staff who assisted with this audit and the financial statements are: Juliet Gaber, Tom Walter, Katen Plaza, Shawn Beane, Sheny Miscevich, Mary Brandes, Dawn Grivetti and Joe Caveny; they have our gratitude for their contributions made in the preparation of this report. In addition, the Village of Pingree Grove wishes to recognize the staff of the firm of Lauterbach & Amen LLP; their professionalism and cooperation is greatly appreciated by the Village of Pingree Grove. The dedication of the Village of Pingree Grove staff, in cooperation with the staff of Lauterbach & Amen, provided the cooperative working relationship necessary for the completion of this document. In closing, we would like to thank the Village President and the Village Board of Trustees for their interest and support in planning and conducting the financial operations of the Village of Pingree Grove in a responsible and conservative manner. Without their leadership and ongoing support, preparation of this report would not have been possible. Sincerely, \ Steve Wiedmeyer Village President vt

13 (þ Government Finance Officers As sociation Certificate of Achievement for Excellence in Financial Reporting Presented to Vitlage of Pingree Groye Illinois For its Comprehensive Annual Financial Report for the Fiscal Year Ended April 30, 20L5 ffiþêtu- Executive Director/CEO vll

14 FINANCIAL SECTION This section includes: Independent Auditors Report Management s Discussion and Analysis Basic Financial Statements Required Supplementary Information Combining and Individual Fund Financial Statements and Schedules

15 INDEPENDENT AUDITORS REPORT This section includes the opinion of the Village s independent auditing firm.

16 Lauterbach &, Amen, LLP CERÏIFIED PUBLIC ACCOUNTANTS 27W457 WARRENVILLE RD.. WARRENVILLE, ILLINOIS PHONE FAX INDEPENDENT AU DITORSI REPORT November lï,2016 The Honorable Village President Members of the Board of Trustees Village of Pingree Grove,Illinois 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 Pingree Grove, Illinois, as of and for the year ended April 30, 2016, 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 accordarice 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 effof. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Frnancial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures rn the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of risks of material misstatement of tlre financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Village's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the pu{pose of expressing an opinion on the effectiveness of the Village's internal control. Accordingly, w 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. W'e 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 of Pingree Grove, Illinois, as of April 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. I

17 Village of Pingree Grove, Illinois November 11, 2016 Page 2 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis as listed in the table of contents and budgetary information reported in the required supplementary information as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Village of Pingree Grove, Illinois, basic financial statements. The introductory section, combining and individual fund financial statements and budgetary comparison schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual fund financial statements and budgetary comparison schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the 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 combining and individual fund financial statements and budgetary comparison schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. LAUTERBACH & AMEN, LLP 2

18 MANAGEMENT S DISCUSSION AND ANALYSIS

19 Management s Discussion and Analysis April 30, 2016 Our discussion and analysis of the Village of Pingree Grove s (Village) financial performance provides an overview of the Village s financial activities for the fiscal year ended April 30, Please read it in conjunction with the transmittal letter which begins on page iii and the Village s financial statements, which begin on page 3. FINANCIAL HIGHLIGHTS The Village s net position decreased as a result of this year s operations. Net position of the governmental activities decreased by $382,190 or 2.1 percent and net position of businesstype activities decreased by $208,426, or less than one percent. During the year, government-wide revenues for the primary government totaled $4,809,853, while expenses totaled $5,400,469, resulting in a decrease to net position of $590,616. The Village s net position totaled $51,828,667 on April 30, 2016, which includes $42,857,100 net investment in capital assets, $801,274 subject to external restrictions, and $8,170,293 unrestricted net position that may be used to meet the ongoing obligations to citizens and creditors. The General Fund reported a surplus in the current year of $332,119, which includes transfers in of $810,007 from other funds, resulting in ending fund balance of $1,892,504, an increase of 21.3 percent. USING THIS ANNUAL REPORT This annual report consists of a series of financial statements. The Statement of Net Position and the Statement of Activities (on pages 3-6) provide information about the activities of the Village as a whole and present a longer-term view of the Village s finances. Fund financial statements begin on page 7. For governmental activities, these statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the Village s operations in more detail than the government-wide statements by providing information about the Village s most significant funds. The remaining statements provide financial information about activities for which the Village acts solely as a trustee or agent for the benefit of those outside of the government. Government-Wide Financial Statements The government-wide financial statements provide readers with a broad overview of the Village s finances, in a matter similar to a private-sector business. The government wide financial statements can be found on pages 3-6 of this report. The Statement of Net Position reports information on all of the Village s assets/deferred outflows and liabilities/deferred inflows, with the difference between the two 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 is improving or deteriorating. Consideration of other nonfinancial factors, such as changes in the Village s property tax base and the condition of the Village s infrastructure, is needed to assess the overall health of the Village. MD&A 1

20 Management s Discussion and Analysis April 30, 2016 USING THIS ANNUAL REPORT Continued Government-Wide Financial Statements Continued The Statement of Activities presents information showing how the government s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing 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). Both of the government-wide financial statements distinguish functions of the Village that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the Village include general government, public safety, and highways and streets. The business-type activities of the Village include water and sewer operations. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Village, like other local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Village can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, 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 the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate the comparison between governmental funds and governmental activities. The Village maintains eight individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General, Capital Improvements, Special Service Area #2, Special Service Area #4, and Special Service Area #7 Funds, all of which are considered major funds. Data from the other three governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. MD&A 2

21 Management s Discussion and Analysis April 30, 2016 USING THIS ANNUAL REPORT Continued Fund Financial Statements Continued Governmental Funds Continued The Village adopts an annual appropriated budget for all of the governmental funds, except the Special Service Area #2 and Special Service Area #7 Funds. A budgetary comparison schedule for the remaining funds has been provided to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 7-12 of this report. Proprietary Funds The Village maintains one proprietary fund type: enterprise funds. Enterprise funds are used to report the same functions presented as business-type activities in the government wide financial statements. The Village utilizes enterprise funds to account for its water and sewer operations. Proprietary fund financial statements provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water and Sewer Fund, which is considered to be a major fund of the Village. The basic proprietary fund financial statements can be found on pages of this report. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the Village s own programs. The accounting use for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on page 16 of this report. Notes to the Financial Statements The notes provide additional 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 of this report. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the Village s I.M.R.F. employee pension obligation and the budgetary comparison schedule for the General Fund. Required supplementary information can be found on pages of this report. The combining statements referred to earlier in connection with non-major governmental funds are presented immediately following the required supplementary information on pensions. Combining and individual fund statements and schedules can be found on pages of this report. MD&A 3

22 Management s Discussion and Analysis April 30, 2016 GOVERNMENT-WIDE FINANCIAL ANALYSIS Net position may serve over time as a useful indicator of a government s financial position. The following tables show that in the case of the Village, assets/deferred outflows exceeded liabilities/deferred inflows by $51,828,667. Net Position Governmental Business-Type Activities Activities Total Current and Other Assets $ 7,784,146 7,615,879 2,638,173 1,954,008 10,422,319 9,569,887 Capital Assets 13,331,154 13,984,485 32,468,469 33,352,092 45,799,623 47,336,577 Deferred Outflows 252, ,616 - Total Assets/Deferred Outflows 21,367,916 21,600,364 35,106,642 35,306,100 56,474,558 56,906,464 Long-Term Debt 2,133,208 1,808,307 1,137,422 1,217,219 3,270,630 3,025,526 Other Liabilities 421, , , , , ,935 Deferred Inflows 701, , , ,081 Total Liabilities/Deferred Inflows 3,256,355 2,951,974 1,389,536 1,380,568 4,645,891 4,332,542 Net Position Net Investment in Capital Assets 11,599,785 12,128,714 31,257,315 32,062,494 42,857,100 44,191,208 Restricted 801, , , ,583 Unrestricted 5,710,502 5,824,093 2,459,791 1,863,038 8,170,293 7,687,131 Total Net Position 18,111,561 18,648,390 33,717,106 33,925,532 51,828,667 52,573,922 A large portion of the Village s net position, $42,857,100 or 82.7 percent, reflects its investment in capital assets (for example, land, buildings, machinery, and equipment), less any related debt used to acquire those assets that is still outstanding. The Village uses these capital assets to provide services to 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. An additional portion, $801,274 or 1.5 percent, of the Village s net position represents resources that are subject to external restrictions on how they may be used. The remaining 15.8 percent, or $8,170,293, represents unrestricted net position and may be used to meet the government s ongoing obligations to citizens and creditors. MD&A 4

23 Management s Discussion and Analysis April 30, 2016 GOVERNMENT-WIDE FINANCIAL ANALYSIS Continued Changes in Net Position Governmental Business-Type Activities Activities Total Revenues Program Revenues Charges for Services General Government $ 526, , , ,715 Public Safety 48,684 50, ,684 50,074 Water and Sewer - - 2,265,168 1,482,508 2,265,168 1,482,508 Capital Grants/Contrib. 115, ,842-2,040, ,923 2,187,288 General Revenues Property Taxes 667, , , ,913 Municipal Utility Taxes 317, , , ,609 Replacement Taxes Use Taxes 103,435 93, ,435 93,473 Sales Taxes 138, , , ,802 Income Taxes 464, , , ,580 Other General Revenues 160, ,392 1,641 1, , ,607 Total Revenues 2,543,044 2,568,609 2,266,809 3,524,169 4,809,853 6,092,778 Expenses General Government 1,080,829 1,132, ,080,829 1,132,351 Public Safety 1,020, , ,020, ,417 Highways and Streets 1,246,304 1,041, ,246,304 1,041,053 Interest on Long-Term Debt 35,501 41, ,501 41,276 Water and Sewer - - 2,017,693 2,393,622 2,017,693 2,393,622 Total Expenses 3,382,776 3,193,097 2,017,693 2,393,622 5,400,469 5,586,719 Changes in Net Position Prior to Transfers (839,732) (624,488) 249,116 1,130,547 (590,616) 506,059 Transfers 457,542 56,718 (457,542) (56,718) - - Change in Net Position (382,190) (567,770) (208,426) 1,073,829 (590,616) 506,059 Net Position-Beginning as Restated 18,493,751 19,216,160 33,925,532 32,851,703 52,419,283 52,067,863 Net Position-Ending 18,111,561 18,648,390 33,717,106 33,925,532 51,828,667 52,573,922 Net position was restated in the current year for governmental activities due to the implementation of GASB Statement No. 68 which requires net pension liability for IMRF to be recorded on the financial statements. Beginning net position decreased $154,639 from prior year due to this restatement. MD&A 5

24 Management s Discussion and Analysis April 30, 2016 GOVERNMENT-WIDE FINANCIAL ANALYSIS Continued Net position of the Village s governmental activities decreased by 2.1 percent ($18,493,751 restated in 2015 compared to $18,111,561 in 2016). Unrestricted net position, the part of net position that can be used to finance day-to-day operations without constraints, totaled $5,710,502 at April 30, Net position of business-type activities decreased by 0.6 percent ($33,925,532 in 2015 compared to $33,717,106 in 2016). Governmental Activities Revenues for governmental activities totaled $2,543,044, while the cost of all governmental functions totaled $3,382,776. This results in a deficit of $839,732 prior to transfers in of $457,542. The Village saw revenues decrease $25,565, or 1.0 percent due to decreases in permit revenue. The expenses for governmental activities increased $189,679 or 5.9 percent due to increased expenses in public works activities. The following table graphically depicts the major revenue sources of the Village. It depicts very clearly the reliance of charges for services, property taxes, and income taxes to fund governmental activities. It also clearly identifies the less significant percentage the Village receives from municipal utility taxes and sales taxes. Revenues by Source - Governmental Activities Replacement Taxes, 0% Use Taxes, 4% Other General Revenues, 6% Charges for Services, 23% Income Taxes, 18% Municipal Utility Taxes, 13% Capital Grants/Contrib., 5% Sales Taxes, 5% Property Taxes, 26% MD&A 6

25 Management s Discussion and Analysis April 30, 2016 GOVERNMENT-WIDE FINANCIAL ANALYSIS Continued Governmental Activities Continued The Expenses and Program Revenues Table identifies those governmental functions where program expenses greatly exceed revenues. Business-Type Activities Business-Type activities posted total revenues of $2,266,809, while the cost of all business-type activities totaled $2,017,693, which includes non-cash depreciation expense of $1,346,873. This results in an increase of $249,116, prior to transfers out of $457,542. The above graph compares program revenues to expenses for utility operations. MD&A 7

26 Management s Discussion and Analysis April 30, 2016 FINANCIAL ANALYSIS OF THE GOVERNMENT S FUNDS As noted earlier, the Village uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. Governmental Funds The focus of the Village s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. In particular, unassigned fund balance may serve as a useful measure of a government s net resources available for spending at the end of the fiscal year. The Village s governmental funds reported combining ending fund balances of $6,804,566, which is $182,040, or 2.7 percent, higher than last year s total of $6,622,526. Of the $6,804,566 total, $6,003,292, or 88.2 percent, of the fund balance constitutes unrestricted fund balance. The General Fund reported a surplus in fund balance for the year of $332,119, an increase of 21.3 percent. This is due primarily to the fact that budgeted transfers from the Special Service Areas were made. The General Fund is the chief operating fund of the Village. At April 30, 2016, unassigned fund balance in the General Fund was $1,870,025, which represents 98.8 percent of the total fund balance. As a measure of the General Fund s liquidity, it may be useful to compare unassigned fund balance to total fund expenditures. Unassigned fund balance in the General Fund represents approximately 74.7 percent of total General Fund expenditures. In the prior fiscal year, this percentage was 76.8 percent. The Capital Improvements Fund reported a deficit for the year of $256,350. The Village no longer collects impact fees, so the deficit arises from spending for budgeted capital items and projects. The Special Service Area #2, Fund reported a surplus in fund balance of $7,314 as a result of decreased expenditures in the special service areas resulting from the refinancing of the Series Bonds. The Special Service Area #4 Funs reported a deficit in fund balance of $8,875 as a result of increased expenditures in the special service areas. The Special Service Area #7 Fund reported a surplus in fund balance of $8,135 as a result of decreased expenditures in the special service areas resulting from the refinancing of the Series Bonds. MD&A 8

27 Management s Discussion and Analysis April 30, 2016 FINANCIAL ANALYSIS OF THE GOVERNMENT S FUNDS Continued Proprietary Funds The Village s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The Village reports the Water and Sewer as a major proprietary fund, which accounts for all of the operations of the municipal water and sewer system. The spread between purchase and sale rates is intended to finance the operations of the utility system, including labor costs, supplies, and infrastructure maintenance. The Village intends to run the fund at a breakeven rate. Periodically, there will be an annual surplus or draw down due to timing of capital projects. The deficit in the Water and Sewer Fund during the current fiscal year was $208,426. Depreciation expense accounts for $1,346,873 of the total fund s operating expenses of $1,983,891, or 67.9 percent. GENERAL FUND BUDGETARY HIGHLIGHTS The General Fund actual revenues for the year totaled $2,025,056 compared to budgeted revenues of $1,845,786. The Village saw increases in sales taxes, municipal utility taxes, and franchise fees, due to the continued modest economic upturn. Miscellaneous income was $11,000 greater than budgeted. These increases contributed to the surplus of revenues for the year. The General Fund actual expenditures for the year were $657,058 higher than budgeted ($2,502,944 actual compared to $1,845,886 budgeted). This was primarily due to the understatement of the budget for Highways and Streets. This was offset by the Transfer in from Special Service Areas in the amount of $805,643. The Finance Department and the Police Department were under budget due to lower than anticipated wages and benefits resulting from lower overtime costs and open positions. Central Services was under budget due to lower than expected Unemployment Compensation and Engineering Fees. MD&A 9

28 Management s Discussion and Analysis April 30, 2016 CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The Village s investment in capital assets for its governmental and business type activities as of April 30, 2016, was $45,799,623 (net of accumulated depreciation). This investment in capital assets includes land, buildings, equipment, and water and sewer system improvements. Capital Assets - Net of Depreciation Governmental Business-type Activities Activities Total Land $ 372, ,341 11,834,312 11,834,312 12,206,653 12,206,653 Buildings 2,527,728 2,673,173 9,087,165 9,677,652 11,614,893 12,350,825 Machinery and Equipment - 24, , , , ,234 Water Distribution System - - 7,789,410 7,787,473 7,789,410 7,787,473 Sewer System - - 3,579,903 3,786,137 3,579,903 3,786,137 Infrastructure 10,431,085 10,914, ,431,085 10,914,255 Total 13,331,154 13,984,485 32,468,469 33,352,092 45,799,623 47,336,577 Capital asset additions for the year included: Water Distribution System $ 463,250 Additional information on the Village s capital assets can be found in note 3 on pages of this report. MD&A 10

29 Management s Discussion and Analysis April 30, 2016 CAPITAL ASSETS AND DEBT ADMINISTRATION Continued Debt Administration At year-end, the Village had total outstanding debt of $2,942,523. The following is a comparative statement of outstanding debt: Long-Term Debt Outstanding Governmental Business-type Activities Activities Total General Obligation Bonds $ 1,731,369 1,855, ,731,369 1,855,771 IEPA Loan Payable - - 1,211,154 1,289,598 1,211,154 1,289,598 Total 1,731,369 1,855,771 1,211,154 1,289,598 2,942,523 3,145,369 There were no significant additions to the Village s outstanding debt in this fiscal year. Additional information on the Village s long-term debt can be found in Note 3 on pages of this report. ECONOMIC FACTORS AND NEXT YEAR S BUDGET AND RATES The Village s elected and appointed officials considered many factors when setting the fiscal year 2017 budget, including tax rates, and fees that will be charged for its various activities. One of those factors is the economy. The Village is faced with a similar economic environment as many of the other local municipalities are faced with, including inflation, unemployment rates, and a slow residential housing market. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the Village of Pingree Grove s finances for all those with an interest in the government s finances. Questions concerning any of the information provided in this report or requests for additional information should be directed to Office of the Finance Director, 14N042 Reinking Rd., Pingree Grove, Illinois MD&A 11

30 BASIC FINANCIAL STATEMENTS The basic financial Statements include integrated sets of financial statements as required by the GASB. The sets of statements include: Government-Wide Financial Statements Fund Financial Statements Governmental Funds Proprietary Fund Fiduciary Funds In addition, the notes to the financial statements are included to provide information that is essential to a user s understanding of the basic financial statements.

31 Statement of Net Position April 30, 2016 See Following Page

32 Statement of Net Position April 30, 2016 Governmental Activities Business-Type Activities Totals ASSETS Current Assets Cash and Investments $ 4,819,028 2,235,409 7,054,437 Receivables - Net of Allowances 1,132, ,974 1,529,949 Prepaids/Inventory - Land Held for Resale 1,832,143 5,790 1,837,933 Total Current Assets 7,784,146 2,638,173 10,422,319 Noncurrent Assets Capital Assets Nondepreciable 372,341 11,834,312 12,206,653 Depreciable 18,390,711 32,388,009 50,778,720 18,763,052 44,222,321 62,985,373 Accumulated Depreciation (5,431,898) (11,753,852) (17,185,750) Total Noncurrent Assets 13,331,154 32,468,469 45,799,623 Total Assets 21,115,300 35,106,642 56,221,942 DEFERRED OUTFLOWS OF RESOURCES Deferred Items - IMRF 252, ,616 Total Assets and Deferred Outflows of Resources 21,367,916 35,106,642 56,474,558 The notes to the financial statements are an integral part of this statement. 3

33 Governmental Activities Business-Type Activities Totals LIABILITIES Current Liabilities Accounts Payable $ 208, , ,552 Accrued Salaries Payable 18,962 2,234 21,196 Deposits Payable 51,107-51,107 Accrued Interest Payable 3,115 6,803 9,918 Current Portion of Long-Term Debt 140,452 81, ,105 Total Current Liabilities 421, , ,878 Noncurrent Liabilities Compensated Absences Payable 53,368 6,337 59,705 Net Pension Liability - IMRF 475, ,581 General Obligation Bonds 1,604,259-1,604,259 IEPA Loan Payable - 1,131,085 1,131,085 Total Noncurrent Liabilities 2,133,208 1,137,422 3,270,630 Total Liabilities 2,554,972 1,389,536 3,944,508 DEFERRED INFLOWS OF RESOURCES Property Taxes 701, ,383 Total Liabilities and Deferred Inflows of Resources 3,256,355 1,389,536 4,645,891 NET POSITION Net Investment in Capital Assets 11,599,785 31,257,315 42,857,100 Restricted Property Tax Levies Special Service Areas 143, ,740 Tax Increment Financing 3,429-3,429 Motor Fuel Tax 654, ,105 Unrestricted 5,710,502 2,459,791 8,170,293 Total Net Position 18,111,561 33,717,106 51,828,667 The notes to the financial statements are an integral part of this statement. 4

34 Statement of Activities For the Fiscal Year Ended April 30, 2016 Expenses Program Revenues Charges Capital for Grants/ Services Contributions Governmental Activities General Government $ 1,080, ,155 - Public Safety 1,020,142 48,684 - Highways and Streets 1,246, ,923 Interest on Long-Term Debt 35, Total Governmental Activities 3,382, , ,923 Business-Type Activities Water and Sewer 2,017,693 2,265,168 - Total Primary Government 5,400,469 2,840, ,923 General Revenues Taxes Property Taxes Municipal Utility Taxes Use Taxes Intergovernmental - Unrestricted Sales Taxes Income Taxes Replacement Taxes Interest Income Miscellaneous Transfers - Internal Activity Change in Net Position Net Position - Beginning as Restated Net Position - Ending The notes to the financial statements are an integral part of this statement. 5

35 Net (Expenses)/Revenues Primary Government Governmental Business-Type Activities Activities Totals (554,674) - (554,674) (971,458) - (971,458) (1,130,381) - (1,130,381) (35,501) - (35,501) (2,692,014) - (2,692,014) - 247, ,475 (2,692,014) 247,475 (2,444,539) 667, , , , , , , , , , ,796 1,641 7, , , ,542 (457,542) - 2,309,824 (455,901) 1,853,923 (382,190) (208,426) (590,616) 18,493,751 33,925,532 52,419,283 18,111,561 33,717,106 51,828,667 The notes to the financial statements are an integral part of this statement. 6

36 Balance Sheet - Governmental Funds April 30, 2016 See Following Page

37 Balance Sheet - Governmental Funds April 30, 2016 General Capital Improvements ASSETS Cash and Investments $ 1,710,936 2,301,124 Receivables - Net of Allowances Taxes 587,758 - Accounts 190,469 - Due from Other Governments - - Prepaids 22,479 - Inventory - Land Held for Resale - 1,801,620 Total Assets 2,511,642 4,102,744 LIABILITIES Accounts Payable 192,120 - Accrued Salaries 18,962 - Deposits Payable 51,107 - Total Liabilities 262,189 - DEFERRED INFLOWS OF RESOURCES Property Taxes 356,949 - Total Liabilities and Deferred Inflows of Resources 619,138 - FUND BALANCES Nonspendable 22,479 1,801,620 Restricted - - Committed - 2,301,124 Unassigned 1,870,025 - Total Fund Balances 1,892,504 4,102,744 Total Liabilities, Deferred Inflows of Resources and Fund Balances 2,511,642 4,102,744 The notes to the financial statements are an integral part of this statement. 7

38 Capital Projects Special Special Special Service Service Service Area No. 2 Area No. 4 Area No. 7 Nonmajor Totals 7, ,443 22, ,345 4,819, ,689-4, , , ,314 10, ,044 30, ,801,620 7, ,132 22, ,448 7,784,146-15, , , ,107-15, , ,689-4, , ,490-4, , ,044 1,832,143 7, ,642 22, , , ,301, ,870,025 7, ,642 22, ,496 6,804,566 7, ,132 22, ,448 7,784,146 The notes to the financial statements are an integral part of this statement. 8

39 Reconciliation of Total Governmental Fund Balance to Net Position of Governmental Activities April 30, 2016 Total Governmental Fund Balances $ 6,804,566 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not financial resources and therefore, are not reported in the funds. 13,331,154 Deferred outflows (inflows) of resources related to the pensions not reported in the funds. Deferred Items - IMRF 252,616 Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. Compensated Absences Payable (66,710) Net Pension Liability - IMRF (475,581) General Obligation Bonds Payable (1,731,369) Accrued Interest Payable (3,115) Net Position of Governmental Activities 18,111,561 The notes to the financial statements are an integral part of this statement. 9