RIVERSIDE PUBLIC SCHOOL DISTRICT NO. 96 COOK COUNTY, ILLINOIS ANNUAL FINANCIAL REPORT

Transcription

1 COOK COUNTY, ILLINOIS ANNUAL FINANCIAL REPORT JUNE 30, 2015

2 TABLE OF CONTENTS JUNE 30, 2015 PAGE INDEPENDENT AUDITOR S OPINION 1 INDEPENDENT AUDITOR S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 4 REQUIRED SUPPLEMENTARY INFORMATION Management s Discussion and Analysis 6 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 13 Statement of Activities 14 Fund Financial Statements Balance Sheet Governmental Funds 15 Reconciliation of the Balance Sheet to the Statement of Net Position 16 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds 17 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 18 Statement of Fiduciary Assets and Liabilities 19 Notes to Financial Statements 20 REQUIRED SUPPLEMENTARY INFORMATION Illinois Municipal Retirement Fund Schedule of Changes in the Employer s Net Pension Liability and Related Ratios 45 Illinois Municipal Retirement Fund Schedule of Employer Contribution 46 Teachers Retirement System of the State of Illinois Schedule of the Employer s Proportionate Share of the Net Pension Liability 47 Teachers Retirement System of the State of Illinois Schedule of Employer Contribution 48 Retiree Insurance Plan Schedule of Funding Progress 49

3 TABLE OF CONTENTS JUNE 30, 2015 REQUIRED SUPPLEMENTARY INFORMATION (Continued) PAGE Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual General Fund 50 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Special Revenue Fund Operations and Maintenance Fund 55 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Special Revenue Fund Transportation Fund 54 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Special Revenue Fund Illinois Municipal Retirement/Social Security Fund 57 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Tort Fund 59 Notes to Required Supplementary Information 60 SUPPLEMENTAL FINANCIAL INFORMATION Combining Balance Sheet General Fund 61 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances General Fund 62 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual General Fund Educational Fund 63 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual General Fund Working Cash Fund 68 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Debt Services Fund 69 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Capital Projects Fund 70 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Capital Projects Fund Fire Prevention and Safety Fund 71 Schedule of Changes in Fiduciary Assets and Liabilities Agency Funds 72 Computation of Operating Expense Per Pupil and Per Capita Tuition Charge 73

4 TABLE OF CONTENTS JUNE 30, 2015 SUPPLEMENTAL FINANCIAL INFORMATION (Continued) PAGE Demographic and Miscellaneous Statistics 74 Equalized Assessed Valuation and Estimated Actual Value of Taxable Property 75 New Construction Values 76 Calculation of Equalized Assessed Valuation 77 Ratio of General Bonded Debt to Assessed Valuation 78 Demographic and Miscellaneous Statistics Enrollment Data 79 Demographic and Miscellaneous Statistics Number of Full-Time Employees 80 Demographic and Miscellaneous Statistics Instructional Statistics 81

5 To the Board of Education Riverside Public School District No. 96 Riverside, Illinois Report on the Financial Statements INDEPENDENT AUDITOR S OPINION We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Riverside Public School District No. 96 as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the District s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Page 1

6 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Riverside Public School District No. 96 as of June 30, 2015, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Change in Accounting Principle As discussed in Note 19 to the financial statements, the District implemented GASB Statement No. 34, Basic Financial Statements and Management s Discussion and Analysis for State and Local Governments, GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management s Discussion and Analysis, Schedule of Changes in the Employer s Net Pension Liability and Related Ratios, Schedules of Employer Contribution, Schedule of the Employer s Proportionate Share of the Net Pension Liability, and budgetary comparison information on pages 6 through 12 and 45 through 60 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District s basic financial statements. The supplemental information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements. The supplemental information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information, except for the average daily attendance figure included in the computation of operating expense per pupil and per capita tuition charges, has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental information is fairly stated in all material respects in relation to the basic financial statements as a whole. Page 2

7 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 11, 2015 on our consideration of Riverside Public School District No. 96 s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Riverside Public School District No. 96 s internal control over financial reporting and compliance. McHenry, Illinois December 11, 2015 EDER, CASELLA & CO. Certified Public Accountants Page 3

8 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Education Riverside Public School District No. 96 Riverside, Illinois We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Riverside Public School District No. 96 as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise Riverside Public School District No. 96 s basic financial statements, and have issued our report thereon dated December 11, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Riverside Public School District No. 96 s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Riverside Public School District No. 96 s internal control. Accordingly, we do not express an opinion on the effectiveness of Riverside Public School District No. 96 s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were not identified. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiency described in the separately issued management letter to be a material weakness. Page 4

9 Compliance and Other Matters As part of obtaining reasonable assurance about whether Riverside Public School District No. 96 s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain other matters that we reported to management of Riverside Public School District No. 96 in a separate letter dated December 11, Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. McHenry, Illinois December 11, 2015 EDER, CASELLA & CO. Certified Public Accountants Page 5

10 REQUIRED SUPPLEMENTARY INFORMATION

11 RIVERSIDE PUBLIC SCHOOL DISTRICT NO. 68 MANAGEMENT S DISCUSSION AND ANALYSIS JUNE 30, 2015 The Management s Discussion and Analysis of Riverside Public School District No. 96 s (District) financial performance provides an overall review of the District s financial activities for the year ended June 30, The management of the District encourages readers to consider the information presented herein in conjunction with the basic financial statements to enhance their understanding of the District s financial performance. FINANCIAL HIGHLIGHTS The assets and deferred outflows of resources of the District exceeded its liabilities and deferred inflows of resources at June 30, 2015 by $46,289,595 (net position). The District s total net position increased by $3,262,574. At June 30, 2015, the District reported combined ending fund balances of $32,074,917, an increase of $3,151,525 in comparison with the prior year. At June 30, 2015, the unassigned fund balance for the General Fund was $18,096,938 or 74 percent of total General Fund expenditures. The District s total long-term debt decreased by $945,000 during the year ended June 30, 2015 due to a regularly scheduled payment made on existing long-term debt. The District s financial status continues to reflect a favorable balance of revenues and expenditures in the Operating Funds: the combined Educational, Liability, Operations and Maintenance, Transportation, and Illinois Municipal/Social Security Retirement Funds. The fiscal year balance of revenues minus expenditures for the Operating Funds was $4,311,695, excluding inter-fund transfers. Operating revenues for FY totaled $26,778,039, while expenditures were $22,466,344 (excluding On-Behalf Retirement Contributions, which are equal inflows and outflows, and represent the State of Illinois responsibility to provide funding for the Teachers Retirement System). Revenues were $1.173 million more than budgeted, and expenditures were $1.944 million less than budgeted. The budget anticipated a favorable balance of revenues minus expenditures of $1.142 million, while the actual results were a much more favorable balance of $4.259 million. Three factors, in particular, account favorably for the large portion of the difference: (1) property taxes were $1.368 million more than budgeted, (2) purchased services were $865,000 less than budgeted, and (3) Salaries were $609,000 less than budgeted. Property tax refunds were low by historical comparisons for the past two fiscal years, $356,000 in FY and $154,000 in FY In a relatively recent year, FY , property tax refunds totaled $1.466 million. Refunds in FY totaled $736,000. Property and replacement taxes totaling $23,319,754, comprised 87.1% of total revenue for operating funds of $26,778,039. State and federal aid revenue, totaling $2,869,911, comprised 10.7% of operating revenue. The major sources of non-tax operating local revenues were earnings from investments, $177,390; and cafeteria/vending sales, $120,880. The District s cumulative fund balance for operating funds decreased during FY , from $27,771,291 to $24,415,159, a decrease of $3,356,132. This decrease included $7,667,827 of fund balance being transferred to the Debt Services Fund, which will be used for future payments of long-term debt. This transfer, essentially, reclassified a portion of the District operating cash reserves as non-operating/reserved, to recognize that the funds will be required for future debt payments. Among the most significant cost-control challenges for the District is containing the growth in employee benefits costs despite national trends. In the past, the District provided medical benefits to employees using conventional medical insurance. Near the end of FY , the District began a process to join the Educational Benefits Cooperative, a cooperative formed in 1984 that currently provides services to 96 school districts. Due to the moderate claims activity in FY as compared to FY , benefits costs in the Educational Fund increased by 2.6%, from $2.508 million to $2.573 million in the current fiscal year. Page 6

12 Over the past six fiscal years, from FY to FY , total benefits costs have increased at an average growth rate of 7.8%, $2.471 million in FY to $3.431 in FY A significant portion of the increase is due to increased numbers of staff members. In FY , the District employed 178 staff members. In FY , the District employed 219 staff members, an increase of 41, or 4.6% per year. Energy costs have increased over the past two years, partly as a result of air conditioning being newly installed in many areas. In FY , the District spent $173,000 for energy-related expenses, and in FY , the cost was $264,000, an increase of 53% or $91,000. Tuition costs for out-placed, primarily special education, students plus costs for additional services from the LaGrange Area Department of Special Education (LADSE) have been increasing substantially in recent years; however, FY posted a decrease of $836,000, from $2,358,269 to $1,522,095. The District was able to, in more cases, provide services in-house, using District 96 faculty members as a means of meeting the needs of students with Individualized Educational Plans. OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the District s basic financial statements. The basic financial statements comprise three components: Government-wide financial statements, Fund financial statements, and Notes to the financial statements This Management's Discussion and Analysis is intended to explain the significant changes in financial position and differences in operation between the current and prior years. To be an accurate presentation, the prior year would have to be restated to the new reporting format required under the implementation of GASB 34 accounting standards. The District has chosen to not restate the prior year. Nevertheless, when possible, significant changes from the prior year are explained in the following paragraphs. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements - The government-wide financial statements are designed to provide readers with a broad overview of the District s finances, in a manner similar to a private-sector business. The Statement of Net Position presents information on all of the District s assets and deferred outflows of resources, less its liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. The Statement of Activities presents information showing how the District 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 the 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., intergovernmental receivables). Both of the government-wide financial statements distinguish functions of the District that are principally supported by taxes and intergovernmental revenues (governmental activities). Governmental activities include instruction, support services, operations and maintenance, student transportation, food services, and certain other activities and expenses such as payments to other districts and governmental units, interest and fees, and unallocated depreciation. The government-wide financial statements can be found on pages 13 and 14 of this report. 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 District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the District can be divided into two categories: governmental funds and fiduciary funds. Page 7

13 Governmental Funds - Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government 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 District s near-term financing decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The District 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, Operations and Maintenance, Debt Services, Transportation, Illinois Municipal Retirement/Social Security, Capital Projects, Tort, and Fire Prevention and Safety Funds, all of which the District considers to be major funds. The District adopts an annual budget for each of the funds listed above. A budgetary comparison statement, which is required supplementary information, has been provided for the General Fund and each major special revenue fund to demonstrate compliance with this budget. The basic fund financial statements can be found on pages 15 through 18 and the required supplementary information can be found on pages 45 through 60 of this report. Fiduciary Funds - Fiduciary funds are used to account for assets held for others, such as student activity funds. Fiduciary funds are not reflected in the government-wide financial statements because the assets of these funds are not available to support the District s operations. The basic fiduciary fund financial statement can be found on page 19 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 20 through 44 of this report. Other Information - In addition to the basic financial statements, accompanying notes, and required supplementary information, this report also presents certain supplementary information concerning the District s progress in meeting its obligation to provide fully adequate educational services and extracurricular activities to all of its resident s students. Supplemental financial information can be found on pages 61 through 81 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve over time as a useful indicator of a government s financial position. In the case of the District, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $46,289,595 at June 30, The following table presents a summary of the District s net position for the year ended June 30, 2015: Page 8

14 Riverside Public School District No. 96's Net Position Governmental Activities 6/30/2015 Assets Current and Other Assets $ 44,134,688 Capital Assets 23,110,857 Total Assets $ 67,245,545 Deferred Outflows of Resources Pension Expense/Revenue $ 868,416 Total Deferred Outflows of Resources $ 868,416 Liabilities Long-Term Liabilities Outstanding $ 9,649,798 Other Liabilities 527,828 Total Liabilities $ 10,177,626 Deferred Inflows of Resources Unavailable Revenue - Property Taxes $ 11,562,730 Pension Expense/Revenue 84,010 Total Deferred Inflows of Resources $ 11,646,740 Net Position Net Investment In Capital Assets $ 15,825,857 Restricted 6,890,750 Unrestricted 23,572,988 Total Net Position $ 46,289,595 A portion of the District s net position (34 percent) reflects its investment in capital assets (e.g., land, buildings, equipment, etc.); less any related debt used to acquire those assets that is still outstanding. The District uses these assets to provide educational services and extracurricular activities for the students of the local community; consequently, these assets are not available for future spending. Although the District s investment in 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. The following table presents a summary of changes in net position for the year ended June 30, 2015: Riverside Public School District No. 96's Change in Net Position Governmental Activities 2015 Revenues Program Revenues Charges for Services $ 344,662 Operating Grants and Contributions 7,237,148 General Revenues Property Taxes 23,018,060 Other Payments in Lieu of Taxes 418,731 Grants and Contributions not Restricted to Specific Activities 726,871 Unrestricted Investment Earnings 193,402 Other 635 Total Revenues $ 31,939,509 Expenses Instruction $ 14,197,171 Support Services 7,851,685 Community Services 20,372 Payments to Other Districts and Governmental Units 777,970 Interest and Fees on Long-Term Debt 195,194 On-Behalf Retirement Contributions 5,028,423 Depreciation - Unallocated 606,120 Total Expenses $ 28,676,935 Change in Net Position $ 3,262,574 Net Position - Beginning of Fiscal Year 40,295,102 Net Position Adjustment 2,731,919 Net Position - End of Fiscal Year $ 46,289,595 Page 9

15 FINANCIAL ANALYSIS OF THE DISTRICT S FUNDS As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The focus of the District s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the District s financing requirements. In particular, unassigned fund balance may serve as a useful measure of the District s net resources available for spending at the end of the fiscal year. As of June 30, 2015, the District funds reported combined ending fund balances of $32,074,917, an increase of $3,151,525 in comparison with the prior year. The General Fund is the chief operating fund of the District. At June 30, 2015, total fund balance was $18,096,938. As a measure of the General Fund s liquidity, it may be useful to compare total fund balance to total fund expenditures. Total fund balance represents 74 percent of total General Fund expenditures. Other significant highlights in the governmental funds for the year ended June 30, 2015 are outlined below: The Debt Services Fund fund balance increased by $6,534,414 due to a large transfer from the Educational Fund that will be used to make required future bond payments. The Operations and Maintenance Fund fund balance increased by $796,493 due to lower than anticipated expenditures in the current period. The remaining funds experienced relatively similar net revenues and expenditures. GENERAL FUND BUDGETARY HIGHLIGHTS Actual revenues exceeded budgeted revenues by $5,222,874. The difference is largely due to On-Behalf Payments that were not budgeted for in the current fiscal year. Actual expenditures exceeded budgeted expenditures by $4,058,093. The difference is largely due to On-Behalf Payments that were not budgeted for and higher than anticipated Instruction expenditures, offset by lower than expected Support Service and Payments to Other Districts and Governmental Units expenditures. CAPITAL ASSET AND DEBT ADMINISTRATION Capital assets The District s investment in capital assets as of June 30, 2015 amounts to $23,110,857 (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements other than buildings, and equipment. During the three fiscal years, , and , the District spent $ million for a large-scale capital improvement program. Estimated costs for the most costly improvements were: $8.0 million for HVAC/heating-ventilation-air-conditioning, $3.8 million for electrical systems, $2.9 million for plumbing systems, $2.5 million for asbestos abatement, $1.5 million for technology infra-structure, $1.8 million for fire protection systems and $1.3 million for remodeling to create classroom spaces. The remaining expenditures were for general remodeling, building security and Americans with Disabilities Act-related improvements. Working closely with the school architect, the Board of Education is in the process of developing long range facilities improvement plans. Major capital asset events during the year ended June 30, 2015 include the following: Increase in equipment of $238,415, which included $116,283 in Apple computer equipment. The following table presents a summary of capital assets for the years ended June 30, 2015 and 2014: Page 10

16 Riverside Public School District No. 96's Capital Assets (net of depreciation) Governmental Activities * Land $ 168,800 $ 168,800 Buildings 21,835,548 22,382,039 Improvements Other than Buildings 194, ,241 Equipment 911, ,931 Total $ 23,110,857 $ 23,702,011 *Restated Further detail of the District s capital assets can be found in Note 3 on page 27 of this report. Long-term debt At June 30, 2015, the District had total debt outstanding of $7,285,000. The Board of Education has no lawful authority to issue non-referendum debt. Nearly all other school districts subject to the Property Tax Extension Limitation Law, PTELL (mainly Suburban Cook and Chicagoland Collar Counties) have access to a Debt Service Extension Base. Consequently, District 96 faces a challenge of funding any capital improvement program projects out of regular operating sources of revenue. There are currently $7.285 million of bonds payable, from a $10 million issuance in The bonds are scheduled to be paid by the end of fiscal year The District has property tax revenues that can fund future facilities improvements from the Operations and Maintenance Fund or the Capital Projects Fund (subsequent to transfer). Planning for large-scale improvements is anticipated to be accomplished, which will utilize the debt service capacity that becomes available FY The bond issue in 2011 was rated by Moody s at Aa1, one step below the highest possible Aaa rating. The following table presents a summary of outstanding debt for the years ended June 30, 2015 and 2014: Riverside Public School District No. 96's Outstanding Debt Governmental Activities Debt Certificates $ 7,285,000 $ 8,230,000 Total $ 7,285,000 $ 8,230,000 Major debt transactions during the year ended June 30, 2015 include the following: Principal payments on debt certificates were $945,000. Further detail of the District s debt obligations can be found in Note 4 on page 28 of this report. ECONOMIC FACTORS AND NEXT YEAR S BUDGETS AND RATES Riverside School has historically improved from facing financial difficulty and requiring passage of a referendum, which did take place in 2004, to, in recent years and currently, maintaining an excellent financial condition, based on strong accumulated fund balances and balanced budgets. Factors that will have a bearing on the District s future include: Local revenues account for approximately 88% of all direct revenue with the majority of the programs supported by local property taxes. District reliance upon local property taxes makes the impact of changes in those revenues critical, including the following factors: o o The District s tax base decreased from $690 million in tax year 2008 to $458 million in 2014, a decrease of $232 million, equating to an average decrease of 5.6% per year. In tax year 2013, the District s tax levy reached legal maximums in the Educational, Special Education and Working Cash Funds. Levies were restructured and some expenditure categories were reallocated so that this problem was avoided with the 2014 tax levy. Page 11

17 o The tax cap restricts property tax revenue increases to the National Consumer Price Index (CPI). The most recent three years of CPI increases were 1.7%, 1.5% and 0.8%. These increases are less than increases for salaries and benefits, which are impacted by growing enrollments as well as inflation. o New property amounts have averaged $2.5 million per year over the past eight tax years; however, excluding 2014, the average new property has been $2.2 million. This magnitude of new property provides approximately 0.5% of an additional increase, which combined with the CPI is still less than the anticipated growth in salaries and benefits. Enrollment has increased from 1,551 in to 1,665 in , averaging 1.8% per year. The District engaged a professional demographer and enrollment projections indicate a low extent of future growth in enrollments, occurring at a rate of less than 0.4% through Reallocations of state funding among Illinois school districts that are being considered by legislators, and the proposed shifting of pension obligations to school districts are significant concerns. Without a plan to fill the resulting revenue gaps, such legislative actions would negatively impact the financial condition of District 96. Property tax refunds resulting from appeals and court settlements are an ongoing potential disruption to the District s financial condition. Budget management under conditions of revenue uncertainty remains a substantial challenge. A collective bargaining agreement was settled with base salary increases being limited to 80% of the Tax Cap CPI. The agreement includes a minimum increase of 1% and a maximum of 2.8%. Having a direct linkage between the District s primary revenue source and its largest cost category is very favorable for the financial management of the District. The District is proactive in its efforts to contain health insurance costs. Employee contributions were increased from 5%/single-15%/family to 8%/single-18%/family beginning with FY District 96 remains among the highest quality school districts, which are financially capable of offering students comprehensive educational programs and curriculum. The foreseeable economic prospects indicate a strong capability for District 96 to continue building upon its proud 144-year tradition of excellence. REQUESTS FOR INFORMATION This financial report is designed to provide citizens, taxpayers, parents, students, investors, and creditors with a general overview of the District s finances and to demonstrate its accountability for the money it receives. If there are questions about this report or additional information is needed please contact the District at the following address: Riverside Public School District No Woodside Road Riverside, IL Page 12

18 BASIC FINANCIAL STATEMENTS

19 GOVERNMENT-WIDE FINANCIAL STATEMENTS STATEMENT OF NET POSITION JUNE 30, 2015 Governmental Activities ASSETS Cash and Cash Equivalents $ 31,676,178 Property Taxes Receivable, net of allowance of $359,351 11,932,192 Due from Other Governments, net of allowance of $0 526,318 Capital Assets (Note 3): Land 168,800 Depreciable Buildings, Property, and Equipment, net of depreciation 22,942,057 Total Assets $ 67,245,545 DEFERRED OUTFLOWS OF RESOURCES Pension Expense/Revenue - IMRF $ 390,571 Pension Expense/Revenue - TRS 477,845 Total Deferred Outflows of Resources $ 868,416 LIABILITIES Accounts Payable and Accrued Expenses $ 326,044 Accrued Payroll and Payroll Liabilities 46,806 Deferred Revenue 54,550 Due to Activity Fund Organizations 100,428 Net OPEB Obligation 6,045 Net Pension Liability - IMRF 677,194 Net Pension Liability - TRS 1,671,584 Long-Term Liabilities Due Within One Year 965,000 Due in More Than One Year 6,329,975 Total Liabilities $ 10,177,626 DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Property Taxes $ 11,562,730 Pension Expense/Revenue - TRS 84,010 Total Deferred Inflows of Resources $ 11,646,740 NET POSITION Net Investment in Capital Assets $ 15,825,857 Restricted for: Operations and Maintenance 3,987,198 Transportation 886,629 Retirement 223,280 Future Capital Projects 987,770 Tort 688,836 Fire Prevention and Safety 117,037 Unrestricted/(Deficit) 23,572,988 Total Net Position $ 46,289,595 Page 13 The Notes to Financial Statements are an integral part of this statement.

20 GOVERNMENT-WIDE FINANCIAL STATEMENTS STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2015 Net (Expense) Revenue and Changes Program Revenues in Net Position Operating Charges for Grants and Governmental Expenses Services Contributions Activities Functions/Programs Governmental Activities Instruction Regular Programs $ 9,594,708 $ 207,219 $ 125,344 $ (9,262,145) Special Education Programs 3,209,638-1,314,378 (1,895,260) Other Instructional Programs 1,392,825 6,840 9,683 (1,376,302) Support Services Pupils 1,105,220-91,960 (1,013,260) Instructional Staff 1,163, (1,163,836) General Administration 1,119, (1,119,120) School Administration 1,295, (1,295,969) Business 281, (281,145) Facilities Acquisition and Construction 171, (171,308) Operations and Maintenance 1,944,797 9,723 6,751 (1,928,323) Transportation 528, ,441 (5,888) Food Services 240, ,880 79,233 (40,701) Other Support Services 1, (1,147) Community Services 20, (20,372) Payments to Other Districts and Governmental Units 777,970-58,935 (719,035) Interest and Fees on Long-Term Debt 195, (195,194) On-Behalf Retirement Contributions 5,028,423-5,028,423 - Depreciation - Unallocated 606, (606,120) Total Governmental Activities $ 28,676,935 $ 344,662 $ 7,237,148 $ (21,095,125) General Revenues Taxes Property Taxes, Levied for General Purposes $ 23,018,060 Other Payments in Lieu of Taxes 418,731 Grants and Contributions not Restricted to Specific Activities 726,871 Unrestricted Investment Earnings 193,402 Miscellaneous Income 635 Total General Revenues $ 24,357,699 Change in Net Position $ 3,262,574 Net Position - July 1, ,295,102 Net Position Adjustment (Note 17) 2,731,919 Net Position - June 30, 2015 $ 46,289,595 Page 14 The Notes to Financial Statements are an integral part of this statement.

21 FUND FINANCIAL STATEMENTS BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2015 Illinois Municipal Operations and Retirement/ Capital Fire Prevention Total General Maintenance Debt Transportation Social Security Projects Tort and Safety Governmental Fund Fund Services Fund Fund Fund Fund Fund Fund Funds ASSETS Cash and Cash Equivalents $ 17,920,143 $ 4,158,341 $ 6,548,802 $ 749,259 $ 500,326 $ 993,903 $ 691,195 $ 114,209 $ 31,676,178 Property Taxes Receivable, net of allowance of $359,351 8,895,640 1,268,216-1,111, ,134-73, ,169 11,932,192 Due from Other Governments, net of allowance of $0 399, , ,318 Total Assets $ 27,214,801 $ 5,426,557 $ 6,548,802 $ 1,987,633 $ 971,460 $ 993,903 $ 765,154 $ 226,378 $ 44,134,688 LIABILITIES Accounts Payable and Accrued Expenses $ 283,434 $ - $ - $ 11,823 $ - $ - $ - $ - $ 295,257 Accrued Payroll and Payroll Liabilities 42,802 4, ,806 Deferred Revenue 54,550 54,550 Due to Activity Fund Organizations 100, ,428 Total Liabilities $ 481,214 $ 4,004 $ - $ 11,823 $ - $ - $ - $ - $ 497,041 DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Property Taxes $ 8,636,649 $ 1,202,571 $ - $ 1,082,910 $ 459,191 $ - $ 72,084 $ 109,325 $ 11,562,730 Total Deferred Inflows of Resources $ 8,636,649 $ 1,202,571 $ - $ 1,082,910 $ 459,191 $ - $ 72,084 $ 109,325 $ 11,562,730 FUND BALANCES Restricted Operations and Maintenance $ - $ 3,987,198 $ - $ - $ - $ - $ - $ - $ 3,987,198 Transportation , ,629 Illinois Municipal Retirement , ,686 Social Security/Medicare , ,218 Capital Projects , ,770 Tort , ,836 Fire Prevention and Safety , ,037 Assigned Operations and Maintenance - 232, ,784 Debt Service - - 6,548, ,548,802 Transportation , ,271 Illinois Municipal Retirement , ,365 Capital Projects , ,133 Unassigned 18,096, , ,101,188 Total Fund Balances $ 18,096,938 $ 4,219,982 $ 6,548,802 $ 892,900 $ 512,269 $ 993,903 $ 693,070 $ 117,053 $ 32,074,917 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 27,214,801 $ 5,426,557 $ 6,548,802 $ 1,987,633 $ 971,460 $ 993,903 $ 765,154 $ 226,378 $ 44,134,688 Page 15 The Notes to Financial Statements are an integral part of this statement.

22 FUND FINANCIAL STATEMENTS RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30, 2015 Total Fund Balances - Governmental Funds $ 32,074,917 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. Capital Assets $ 35,817,576 Accumulated Depreciation on Capital Assets (12,706,719) 23,110,857 Deferred pension costs in governmental activities are not financial resources and therefore are not reported in the funds. Pension Expense/Revenue - Illinois Municipal Retirement Fund $ 390,571 Pension Expense/Revenue - Teachers' Retirement System 393, ,406 Net OPEB Obligation is not included in the governmental funds. (6,045) Some liabilities are not due and payable in the current period and therefore are not reported in the funds. Bonds Payable $ (7,285,000) Accrued Interest on Long-Term Debt (30,787) Compensated Absences (9,975) Net Pension (Liability)/Asset - Illinois Municipal Retirement Fund (677,194) Net Pension (Liability)/Asset - Teacher's Retirement System (1,671,584) (9,674,540) Net Position of Governmental Activities $ 46,289,595 Page 16 The Notes to Financial Statements are an integral part of this statement.

23 FUND FINANCIAL STATEMENTS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2015 Illinois Municipal Operations and Retirement/ Capital Fire Prevention Total General Maintenance Debt Transportation Social Security Projects Tort and Safety Governmental Fund Fund Services Fund Fund Fund Fund Fund Fund Funds REVENUES Property Taxes $ 17,871,520 $ 2,416,470 $ - $ 1,650,033 $ 892,483 $ - $ 70,517 $ 117,037 $ 23,018,060 Payments in Lieu of Taxes 200, , , ,731 Tuition 13, ,895 Earnings on Investments 141,994 22,525 9,862 6,271 2,366 6,134 4, ,402 Food Service 120, ,880 District/School Activity Income 6, ,840 Textbooks 193, ,324 Other Local Sources 66,322 9, ,045 State Aid 1,997, , ,520,324 Federal Aid 349, ,587 On-Behalf Payments 5,028, ,028,423 $ 25,991,205 $ 2,649,255 $ 9,862 $ 2,178,745 $ 912,506 $ 6,134 $ 74,751 $ 117,053 $ 31,939,511 EXPENDITURES Current Instruction Regular Programs $ 9,246,772 $ - $ - $ - $ 104,356 $ - $ - $ - $ 9,351,128 Special Education Programs 2,965, , ,151,203 Other Instructional Programs 1,355, , ,369,331 Support Services Pupils 1,033, , ,088,242 Instructional Staff 1,092, , ,106,274 General Administration 963, , ,923-1,099,610 School Administration 1,208, , ,262,650 Business 260, , ,044 Facilities Acquisition and Construction - 39, , ,672 Operations and Maintenance - 1,766, , ,915,280 Transportation , ,329 Food Services 205, , ,194 Other Support Services 1, ,147 Community Services 20, ,247 Payments to Other Districts and Governmental Units 777, ,970 Debt Service Principal , ,000 Interest and Fees , ,275 Capital Outlay 206,091 46, , ,967 On-Behalf Payments 5,028, ,028,423 $ 24,364,864 $ 1,852,762 $ 1,143,275 $ 528,329 $ 643,889 $ 149,944 $ 104,923 $ - $ 28,787,986 EXCESS OR (DEFICIENCY) OF REVENUES OVER EXPENDITURES $ 1,626,341 $ 796,493 $ (1,133,413) $ 1,650,416 $ 268,617 $ (143,810) $ (30,172) $ 117,053 $ 3,151,525 OTHER FINANCING SOURCES (USES) Interfund Transfers (6,134,203) - 7,667,827 (1,533,624) NET CHANGE IN FUND BALANCES $ (4,507,862) $ 796,493 $ 6,534,414 $ 116,792 $ 268,617 $ (143,810) $ (30,172) $ 117,053 $ 3,151,525 FUND BALANCES - JULY 1, ,494,102 3,425,594 14, , ,483 1,137, ,242-28,806,630 FUND BALANCE ADJUSTMENT (Note 17) 110,698 (2,105) - - 8, ,762 FUND BALANCES - JUNE 30, 2015 $ 18,096,938 $ 4,219,982 $ 6,548,802 $ 892,900 $ 512,269 $ 993,903 $ 693,070 $ 117,053 $ 32,074,917 Page 17 The Notes to Financial Statements are an integral part of this statement.

24 FUND FINANCIAL STATEMENTS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2015 Net Change in Fund Balances - Total Governmental Funds $ 3,151,525 Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay exceeds depreciation expense in the current period. Depreciation Expense $ (863,121) Capital Outlays 271,967 (591,154) The change in the Net OPEB Obligation is not included in the governmental funds. (6,045) Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Accrued Interest on Long-Term Debt $ 3,081 Compensated Absences (9,975) Pension Expense (598,044) (604,938) Employer Pension Contributions are expensed in the fund financial statements but are treated as a reduction in the Net Pension Liability on the government-wide financial statements. Illinois Municipal Retirement Fund Contributions $ 271,143 Teachers' Retirement System Contributions 97, ,186 Repayment of long-term debt requires the use of current financial resources of governmental funds and is therefore shown as an expenditure in the Statement of Revenues, Expenditures, and Changes in Fund Balances, but the repayment reduces long-term liabilities in the Statement of Net Position and is therefore not reported in the Statement of Activities. Repayment of Long-Term Debt 945,000 Change in Net Position of Governmental Activities $ 3,262,574 Page 18 The Notes to Financial Statements are an integral part of this statement.