G R A 44 N. Walkup Ave. Crystal Lake, IL 60014 T: 815-459-0700 GRA-CPA.COM Accounting Auditing Consulting Rosemont Park District, Illinois Annual Financial Report For the Year Ended April 30, 2016
ROSEMONT PARK DISTRICT Contents Year Ended April 30, 2016 Pages Independent Auditor s Report 1-2 Required Supplementary Information: Management s Discussion and Analysis - Unaudited 3-11 Financial Statements: Government-wide Statement of Net Position 12 Government-wide Statement of Revenue, Expenditures, and Changes in Net Position 13 Governmental Funds Balance Sheet 14 Governmental Funds Combined Statement of Revenue, Expenditures, and Changes in Fund Balance 15 Reconciliations of the Governmental Funds to the Statement of Net Position and the Statement of Activities and Changes 16 Notes to Financial Statements 17-33 Required Supplementary Information: Multi-Year Schedule of Changes in Net Pension Liability and Related Ratios 34 Multi-Year Schedule of Contributions 35 Corporate Fund - Statement of Revenue and Expenditures and Comparison with Appropriations 36-38 Recreation Fund - Statement of Revenue and Expenditures and Comparison with Appropriations 39-40
ROSEMONT PARK DISTRICT Contents (concluded) Year Ended April 30, 2016 Audit Fund - Statement of Revenue and Expenditures and Comparison with Appropriations 41 Bond and Interest Fund - Statement of Revenue and Expenditures and Comparison with Appropriations 42 Capital Projects Fund - Statement of Revenue and Expenditures and Comparison with Appropriations 43 Notes to Required Supplementary Information 44 Pages
G R A Accounting Auditing Consulting Accounting Auditing Consulting 44 N. Walkup Ave. Crystal Lake, IL 60014 T: 815-459-0700 GRA-CPA.com INDEPENDENT AUDITOR S REPORT To the President and Members of the Board of Trustees Rosemont Park District, Rosemont, Illinois Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Rosemont Park District, Rosemont, Illinois as of and for the year ended April 30, 2016, which collectively comprise the Park District s basic financial statements as listed in the accompanying 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the 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 entity 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 entity 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 financial statement 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. 1
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 the Rosemont Park District as of April 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis and other required supplementary information 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. George Roach & Associates, P.C. Crystal Lake, Illinois September 6, 2016 2
REQUIRED SUPPLEMENTARY INFORMATION MANAGEMENT DISCUSSION AND ANALYSIS UNAUDITED
ROSEMONT PARK DISTRICT, ILLINOIS Management s Discussion and Analysis Year Ended April 30, 2016 As management of the Rosemont Park District (District), we offer readers of the District s statements this narrative overview and analysis of the financial activities of the District for the fiscal year ended April 30, 2016. FINANCIAL HIGHLIGHTS The assets of the District exceeded its liabilities at April 30, 2016 by $4,858,424 (net position). Of this amount, $1,391,752 (unrestricted net position) may be used to meet the District's ongoing obligations to citizens and creditors. The District's total net position increased by $1,277,018 during the fiscal year, after the restatement of beginning net position from pensions. At April 30, 2016, the District's governmental funds reported combined ending fund balances of $2,376,306, an increase of $961,212 from the prior year. At April 30, 2016, the fund balance for the General Fund was $1,551,425. The District's total fixed assets decreased by $20,796 during the year ended April 30, 2016. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the District's basic financial statements. The District's basic financial statements comprise three components: 1) governmentwide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains required 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 liabilities, 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 District is improving or deteriorating. The Statement of Activities and Changes in Net Position 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 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). 3
ROSEMONT PARK DISTRICT, ILLINOIS Management s Discussion and Analysis Year Ended April 30, 2016 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. 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 Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. Notes to the financial statements Notes to the financial statements provide additional information that is essential to a full understanding of the information provided in the basic financial statements. Required supplementary information consists of more detailed data on budget to actual revenues and expenditures. Other information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the District's progress in meeting its obligation to provide as fully adequate as possible services to its residents. The District adopts an annual budget for all funds. A budgetary comparison statement has been provided for the Corporate Fund and other governmental funds to demonstrate compliance with the budget. 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 exceeded liabilities and deferred inflows by $4,858,424 at fiscal year ending April 30, 2016. 4
ROSEMONT PARK DISTRICT, ILLINOIS Management s Discussion and Analysis Year Ended April 30, 2016 Of the District's net position, $2,641,791 reflects its investment in capital assets (e.g., land, construction in progress, buildings, systems and equipment); less any related outstanding debt used to acquire those assets. The District uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the District'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. Current and Other Assets $ 3,036,299 $ 2,043,804 Fixed Assets 3,339,791 3,360,587 Total Assets $ 6,376,090 $ 5,404,391 Deferred Inflows - Pensions $ 80,418 $ - Liabilities Bonds Payable $ 698,000 $ 937,000 Pension Liability 240,091 - Other Liabilities 8,782 46,311 Total Liabilities 946,873 983,311 Deferred Inflows - Property Taxes 651,211 582,399 Net Position Net Investment in Capital Assets 2,641,791 2,423,587 Restricted - Net Position 824,881 901,277 Unrestricted - Net Position 1,391,752 513,817 Total Net Position $ 4,858,424 $ 3,838,681 An additional portion of the District's net position represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position ($1,391,752) may be used to meet the District's ongoing obligations to citizens and creditors. At April 30, 2016, the District is able to report positive balances in all three categories of net position. The District's net position increased by $1,277,018 during the year ended April 30, 2016. 5
ROSEMONT PARK DISTRICT, ILLINOIS Management s Discussion and Analysis Year Ended April 30, 2016 Governmental activities Governmental activities increased the District's net position by $1,277,018. Key elements of the increases to net position by governmental activities are as follows: Rosemont Park District's Statement of Activities and Changes in Net Position 4/30/2016 4/30/2015 Revenues Program Revenues $ 219,273 $ 170,909 General Revenues: Property Taxes 1,564,159 1,139,499 Replacement Taxes 63,147 62,339 Investment Income 1,964 - Sale of Land 588,788 113,523 Other Income 211,793 650 Total Revenue 2,649,124 1,486,920 Expenses General Government 1,031,669 1,056,516 Program and Recreation 326,262 343,577 Debt Services 14,175 31,406 Total Expenses 1,372,106 1,431,499 Increase/(Decrease) in Net Position 1,277,018 55,421 Net Position - Beginning of Year 3,581,406 3,783,260 Net Position - End of Year $ 4,858,424 $ 3,838,681 6
ROSEMONT PARK DISTRICT, ILLINOIS Management s Discussion and Analysis Year Ended April 30, 2016 2016 REVENUES ROUND TO NEAREST PERCENT Sale of land, $588,788, 22% Other Income, $211,793, 8% Interest, $1,964, 0% Program Revenues, $219,273, 8% Replacement Taxes, $63,147, 3% Property Taxes, $1,564,159, 59% 2016 EXPENSES ROUND TO NEAREST PERCENT Debt Service, $14,175, 1% Program and Recreation, $326,262, 20% General Government, $1,288,944, 79% 7
ROSEMONT PARK DISTRICT, ILLINOIS Management s Discussion and Analysis Year Ended April 30, 2016 FINANCIAL ANALYSIS OF THE DISTRICT'S FUNDS As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. Governmental funds 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, unreserved fund balance may serve as a useful measure of the District's net resources available for spending at the end of the fiscal year. At April 30, 2016, the District's governmental funds reported combined ending fund balances of $2,376,306, an increase of $961,212 in comparison with the prior year. The Corporate Fund is the chief operating fund of the District. At April 30, 2016, the fund balance of the Corporate Fund was $1,551,425. This represents an increase of $1,037,608 compared to the prior fiscal year. Corporate Fund Budgetary Highlights There were no differences between the original budget and the final budget for the year ended April 30, 2016. Total differences between the final amended budget and the actual revenues and expenditures are summarized as follows: 1. The Corporate Fund actual revenues exceeded the estimated revenues by $1,005,107. 2. The Corporate Fund estimated expenditures exceeded the actual expenditures $371,929. 8
ROSEMONT PARK DISTRICT, ILLINOIS Management s Discussion and Analysis Year Ended April 30, 2016 FIXED ASSETS The District's fixed assets for its governmental activities as of April 30, 2016 amounts to $3,339,791 (net of accumulated depreciation). This investment in fixed assets includes land, land improvements, buildings and improvements, vehicles, and other equipment. Major fixed asset events during the current fiscal year included the following: Balance Balance May 1, 2015 Acquisitions April 30, 2016 Buildings and Improvements $ 2,797,534 $ 151,697 $ 2,949,231 Other Equipment 989,868 38,495 1,028,363 Vehicles 108,913-108,913 Land Improvements 2,285,932-2,285,932 CIP - 6,293 6,293 Land 897,450-897,450 Total 7,079,697 $ 196,485 7,276,182 Less: Accumulated Depreciation (3,719,110) (3,936,391) Net Assets $ 3,360,587 $ 3,339,791 CAPITAL ASSETS Land, $897,450 CIP, $6,293 Buildings and Improvements, $2,949,231 Land Improvements, $2,285,932 Vehicles, $108,913 Other Equipment, $1,028,363 9
ROSEMONT PARK DISTRICT, ILLINOIS Management s Discussion and Analysis Year Ended April 30, 2016 ECONOMIC FACTORS AND PROPERTY TAXES The equalized assessed valuation (EAV) of the District for 2015 is $414,287,205. That represents an increase in EAV of $147,365,758 over the prior year's EAV. Taxes recorded in these financial statements are from the 2014 and 2015 levies. A summary of the assessed valuations and extensions for tax years 2015, 2014, and 2013 is as follows: ASSESSED VALUATIONS, EXTENDED TAX RATES PERCENTAGE ALLOCATIONS AND AMOUNTS BY FUNDS Tax Levy Year 2015 2014 2012 Assessed Valuation Cook County $ 414,287,205 $ 266,921,447 $ 268,223,090 Tax Rates and Percentage Allocation by Fund Funds Rate Percentage Rate Percentage Rate Percentage Corporate 0.2418 55.9334 0.2144 47.8038 0.2108 48.2932 Auditing 0.0045 1.0409 0.005 1.1148 0.005 1.1455 Liability Insurance 0.0124 2.8684 0.017 3.7904 0.0154 3.5281 Recreation 0.1044 24.1499 0.1064 23.7236 0.1038 23.7801 Workmen's Compensation 0.0044 1.0178 0.0052 1.1594 0.0046 1.0538 Limited Bonds 0.0648 14.9896 0.1005 22.408 0.0969 22.1993 Totals 0.4323 100.00 0.4485 100.00 0.4365 100.00 Funds 2015 2014 2013 Corporate $ 1,001,912 $ 572,166 $ 565,295 Auditing 18,540 13,429 13,411 Liability Insurance 51,500 45,320 41,200 Recreation 432,451 283,947 278,356 Workmen's Compensation 18,025 13,905 12,360 Limited Bonds 268,283 268,177 259,838 Totals $ 1,790,711 $ 1,196,944 $ 1,170,460 10
ROSEMONT PARK DISTRICT, ILLINOIS Management s Discussion and Analysis Year Ended April 30, 2016 Description of Current or Expected Conditions Currently, management is not aware of any other significant changes in conditions that could have a significant effect on the financial position or results of activities of the District in the near future. However, management continues to monitor items that may impact future receipts, especially noting a potential decline in state funds as well as losses due to the tax cap. Requests for Information This financial report is designed to provide a general overview of the District s finances for all those with an interest in its finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Director of Parks, Rosemont Park District, 6140 North Scott Street, Rosemont, Illinois, 60018. 11
BASIC FINANCIAL STATEMENTS
ROSEMONT PARK DISTRICT, ILLINOIS Government-wide Statement of Net Position - Unaudited Year Ended April 30, 2016 Assets Cash and cash equivalents, at cost $ 2,385,088 Property tax receivable 651,211 Fixed assets, net of depreciation 3,339,791 Total Assets $ 6,376,090 Deferred Outflows - pension $ 80,418 Liabilities Accounts Payable $ 4,362 Accrued Interest Payable 4,420 Bonds Payable - Current Portion 245,000 Total Current Liabilities 253,782 Noncurrent Bonds Payable 453,000 Pension Liability 240,091 Total Liabilities 946,873 Deferred Inflows - property taxes 651,211 Net Position Net Investment in Capital Assets 2,641,791 Restricted - Recreation Fund 406,910 Restricted - Audit Fund 17,572 Restricted - Bond & Interest Fund 133,599 Restricted - Capital Projects Fund 266,800 Unrestricted 1,391,752 Total Net Position $ 4,858,424 The accompanying notes are an integral part of these financial statements. 12
ROSEMONT PARK DISTRICT, ILLINOIS Government-wide Statement of Revenues, Expenditures, and Changes in Net Position - Unaudited Year Ended April 30, 2016 Net Revenue (Expense)/Changes Program Revenues in Net Position Operating Capital Charges for Grants and Grants and Governmental Functions/Programs Expenses Services Contributions Contributions Activities General Government $ 1,031,669 $ 136,221 $ - $ - $ (895,448) Program and Recreation 326,262 83,052 - - (243,210) Debt Service Interest/Issuance Costs 14,175 - - - (14,175) Total Governmental Activities $ 1,372,106 $ 219,273 $ - $ - (1,152,833) 13 General Revenues: Property Taxes 1,564,159 Replacement Tax 63,147 Investment Income 1,964 Sale of Land 588,788 Other Income 211,793 Total Revenues 2,429,851 Changes in Net Position 1,277,018 Net Position, Beginning of Year as Previously Stated 3,838,681 Restatement Due to Pensions (257,275) Net Position, Beginning of Year as Restated 3,581,406 Total Net Position $ 4,858,424 The accompanying notes are an integral part of these financial statements.
ROSEMONT PARK DISTRICT, ILLINOIS Governmental Funds Balance Sheet - Unaudited Year Ended April 30, 2016 Assets Bond & Capital Corporate Recreation Audit Interest Projects Fund Fund Fund Fund Fund Total Cash and Investments, at cost $ 1,555,787 $ 406,910 $ 17,572 $ 138,019 266,800 2,385,088 Property Tax Receivable 389,640 157,265 6,743 97,563-651,211 Total Assets 1,945,427 564,175 24,315 235,582 266,800 3,036,299 Liabilities 14 Accounts Payable 4,362 - - - - 4,362 Accrued Interest Payable - - - 4,420-4,420 Total Liabilities 4,362 - - 4,420-8,782 Deferred Inflows - Property taxes 389,640 157,265 6,743 97,563-651,211 Fund Balance Unspendable - - - - - - Restricted - 406,910 17,572 133,599 266,800 824,881 Committed - - - - - - Assigned - - - - - - Unassigned 1,551,425 - - - - 1,551,425 Total Fund Balance 1,551,425 406,910 17,572 133,599 266,800 2,376,306 Total Liabilities, Deferred Inflows, and Fund Balance $ 1,945,427 $ 564,175 $ 24,315 $ 235,582 $ 266,800 $ 3,036,299 The accompanying notes are an integral part of these financial statements.
ROSEMONT PARK DISTRICT, ILLINOIS Governmental Funds Combined Statement of Revenue, Expenditures, and Changes in Fund Balance - Unaudited Year Ended April 30, 2016 Bond & Capital Corporate Recreation Audit Interest Projects Fund Fund Fund Fund Fund Total Revenue Property tax - 2014 levy $ 254,086 $ 102,554 $ 4,397 $ 63,622 $ - $ 424,659 Property tax - 2015 levy 681,797 275,186 11,797 170,720-1,139,500 Replacement taxes 63,147 - - - - 63,147 Intergovernmental receipts 100,000 - - - - 100,000 Facility receipts 118,104 18,117 - - - 136,221 Program fees - 83,052 - - - 83,052 Interest 1,964 - - - - 1,964 Other 111,793 - - - - 111,793 Total Revenue 1,330,891 478,909 16,194 234,342-2,060,336 15 Expenditures Salaries and benefits 481,822 238,386 - - - 720,208 Contractual services 306,497 60,334 13,650 - - 380,481 Materials and supplies 40,993 27,542 - - - 68,535 Risk management 52,759 - - - - 52,759 Capital outlays - - - - 212,754 212,754 Debt service - principal payments - - - 239,000-239,000 Debt service - interest payments - - - 14,175-14,175 Total Expenditures 882,071 326,262 13,650 253,175 212,754 1,687,912 Excess(Deficiency) of Revenues Over (Under) Expenditures 448,820 152,647 2,544 (18,833) (212,754) 372,424 Disposition of capital asset 588,788 - - - - 588,788 Net Change in Fund Balance 1,037,608 152,647 2,544 (18,833) (212,754) 961,212 Park District Fund Balance Balance, beginning of year 513,817 254,263 15,028 152,432 479,554 1,415,094 Total Park District Fund Balance $ 1,551,425 $ 406,910 $ 17,572 $ 133,599 $ 266,800 $ 2,376,306 The accompanying notes are an integral part of these financial statements.
ROSEMONT PARK DISTRICT, ILLINOIS Reconciliations of the Governmental Funds to the Statement of Net Position and the Statement of Activities and Changes - Unaudited Year Ended April 30, 2016 Total Fund Balances - Total Governmental Funds $ 2,376,306 Amounts reported for governmental activities in the Statement of Net Position are different because: Reconciliation of the Governmental Fund Balance to the Statement of Net Position Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds 3,339,791 Deferred pension outflows are not included in the fund statements however, they are recorded as an assed in the Statement of Net Position 80,418 Pension liabilites are not recorded in the fund statement but is included as a liability in the Statement of Net Position (240,091) Long term debt interest is not recorded in the fund statement but is included as a liability in the Statement of Net Position (698,000) Net Position of Governmental Activities $ 4,858,424 Reconciliation of the Governmental Fund Statement of Revenues, Expenditures Expenditures, and changes in Net Position to the Governmental Statement of Activities and Changes in Net Position Excess (Deficiency) of Revenue Over Expenditures Governmental Funds $ 961,212 Amounts reported for governmental activities in the Statement of Revenue, Expenditures, and Changes in Net Position are different because: Capital expenditures are recorded as asset and not expensed in the Statement of Activities 196,485 Depreciation is shown as an expense in the Statement of Activities and not in the governmental funds (217,281) Loan payments are not shown as expenses in Statement of Activities but are in governmental funds 239,000 Changes in deferred outflows and pension liabilites are shown as expenses in the Statement of Activities but are not in Governmental funds 97,602 Changes in Net Position $ 1,277,018 The accompanying notes are an integral part of these financial statements. 16
NOTES TO THE BASIC FINANCIAL STATEMENTS
ROSEMONT PARK DISTRCIT, ILLINOIS Notes to Financial Statements Year ended April 30, 2016 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of Rosemont Park District (the District ) conform to accounting principles generally accepted in the United States of America as applicable to governmental units. The following is a summary of the significant accounting policies: In April 1999, the GASB issued Statement No. 34, Basic Financial Statements and Management s Discussion and Analysis for State and Local Governments. Certain of the significant changes in the Statement include the following: Management s Discussion and Analysis (MD&A) section providing an analysis of the District s overall financial position and results of operations. Financial statements prepared using full accrual accounting for all of the District s activities. A change in the fund financial statements to focus on the major funds. These and other changes are reflected in the accompanying financial statements (including notes to financial statements). REPORTING ENTITY The District was organized in 1964 and is located in the Village of Rosemont, Illinois and is governed by a board. The District is primarily funded through a tax levy, intergovernmental revenues, facility and program fees, and charitable donations. Revenue is used to operate and staff the District. The accompanying general purpose financial statements have been prepared in accordance with criteria established by the Governmental Accounting Standards Board for determining the various governmental organizations to be included in the reporting entity. Based on the significance of any operational or financial relationships with the District, there are no component units to be included in these financial statements. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION The District s basic financial statements include both government-wide (reporting the District as a whole) and fund financial statements (reporting the District s major funds). GOVERNMENT-WIDE FINANCIAL STATEMENTS The government-wide financial statements (i.e., the statement of net position and the statement of activities) are reported using the economic resources measurement focus and the accrual basis of accounting. Revenue is recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenue in the year for which they are levied and available. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. The Statement of Net Position includes and recognizes all long-term assets and receivables as well as long-term debt and obligations. The District s net position is reported in three parts net investment in capital assets; restricted net position; and unrestricted net position. 17
ROSEMONT PARK DISTRCIT, ILLINOIS Notes to Financial Statements Year ended April 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The Statement of Activities demonstrates the degree to which the direct expense of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenue includes (1) charges to District patrons who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and (2) grants and contributions that are restricted to meet the operational or capital requirements of a particular function or segment. Taxes and other items are not properly included among program revenues, and are reported instead as general revenue. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenue is recognized as soon as it is both measurable and available. Revenue is considered to be available if it is collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenue to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. The primary sources of revenue are property taxes, intergovernmental revenues, and facility and program fees, and state shared revenue associated with the current fiscal period. All are considered to be susceptible to accrual and so have been recognized as revenue of the current fiscal period. All other revenue items are considered to be available only when cash is received by the District. THE DISTRICT REPORTS THE FOLLOWING MAJOR GOVERNMENTAL FUNDS The Corporate Fund is the District s primary operating fund. It accounts for all financial resources of the District, except those required to be accounted for in another fund, while the District Bond and Interest Fund accounts for the resources associated with taxes levied specifically for the retirement of the District s bonded indebtedness. All other special revenue funds have been shown as major funds for the statements. FINANCIAL STATEMENT AMOUNTS Bank Deposits and Investments The District has defined cash and cash equivalents to include cash on hand, demand deposits, and short-term investments with a maturity of three months or less when acquired. Investments are stated at fair value. The District maintains a cash and investment pool which is available for use by the Corporate and Special Revenue Funds. The District's investment policies are governed by state statutes. All funds are deposited in federally insured banks and savings and loans. The cash and investments reflected in the combined balance sheet consist of demand accounts. Receivables and Payables In general, outstanding balances between funds are reported as due to/from other funds. Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as advances to/from other funds. All trade and property taxes receivable are shown net of an allowance for uncollectible amounts. Property taxes are levied on December 1st based on the taxable valuation of the property as of the preceding December 31 st and are received throughout the year following the levy. 18
ROSEMONT PARK DISTRCIT, ILLINOIS Notes to Financial Statements Year ended April 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) CAPITAL ASSETS Capital assets are defined by the District as assets with an initial cost of more than $5,000 and an estimated useful life in excess of five years. Such assets are recorded at historical cost or estimated historical cost. Donated assets are reported at estimated fair market value at the date of donation. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. Depreciation on all assets is provided on the straight-line basis over the following estimated useful lives: Building and improvements Equipment and vehicles 20-50 years 5-10 years Compensated Absences (Vacation and Sick Leave) - It is the District s policy to permit employees to accumulate earned but unused sick and vacation pay benefits. There is no liability for unpaid accumulated sick leave since the District does not have a policy to pay any amounts when employees separate from service with the District. All vacation pay is accrued when incurred in the government-wide financial statements. A liability for these amounts is reported in the governmental fund - Corporate Fund only for employee terminations as of year-end. Long-term Obligations - In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities statement of net position. The District has a pension plan covering substantially all the full time employees. Employees are covered by the Illinois Municipal Retirement Fund. The budget represents departmental appropriations as authorized by the District's appropriation ordinance and includes revisions authorized by the District Board to reflect changes in departmental programs. At April 30, 2016, unexpended appropriations of the budgetary funds (Corporate fund and special revenue funds) automatically lapse. The budget is prepared on the modified cash basis. The 2015-16 appropriations ordinance was adopted July 14, 2015. FUND BALANCE CLASSIFICATIONS The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the District is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. The classifications used in the governmental fund financial statements are as follows: NONSPENDABLE This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) are legally or contractually required to be maintained intact. The District has not classified any items as being Nonspendable. 19
ROSEMONT PARK DISTRCIT, ILLINOIS Notes to Financial Statements Year ended April 30, 2016 NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED) RESTRICTED This classification includes amounts for which constraints have been placed on the use of the resources either (a) externally imposed by creditors (such as through a debt covenant), grantors, contributors, or laws or regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation. Debt service resources are to be used for future servicing of the revenue note and are restricted through debt covenants. Infrastructure Projects are restricted by State Statute and County laws and are legally segregated for funding of infrastructure improvements. COMMITTED This classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Rosemont Park District Board. These amounts cannot be used for any other purpose unless the District Board removes or changes the specified use by taking the same type of action (ordinance or resolution) that was employed when the funds were initially committed. This classification also includes contractual obligations to the extent that existing resources have been specifically committed for use in satisfying those contractual requirements. The District did not have any committed resources as of April 30, 2016. ASSIGNED This classification includes amounts that are constrained by the District s intent to be used for a specific purpose but are neither restricted nor committed. This intent can be expressed by the District Board or through the District Board delegating this responsibility to the District manager through the budgetary process. This classification also includes the remaining positive fund balance for all governmental funds except for the General Fund. UNASSIGNED This classification includes the residual fund balance for the General Fund and the amount established for Minimum Funding which represents the portion of the General Fund balance that has been established by the board to be used for debt service or in emergency situations. The Unassigned classification also includes negative residual fund balance of any other governmental fund that cannot be eliminated by offsetting of Assigned fund balance amounts. The District would typically use Restricted fund balances first, followed by Committed resources, and then Assigned resources, as appropriate opportunities arise, but reserves the right to selectively spend Unassigned resources first to defer the use of these other classified funds. NOTE 2 CASH AND INVESTMENTS The District's investment policies are governed by state statutes whereby District money must be deposited in FDIC insured banks located within the state. Permissible investments include demand accounts and certificates of deposits. 20
ROSEMONT PARK DISTRCIT, ILLINOIS Notes to Financial Statements Year ended April 30, 2016 NOTE 2 CASH AND INVESTMENTS (CONTINUED) The District's pooled and non-pooled deposits are categorized to give an indication of the level of risk assumed by the District at April 30, 2016. The categories are described as follows: Category 1 Insured or collateralized with securities held by the entity or by its agent in the entity's name. Category 2 Collateralized with securities held by the pledging financial institution's trust department or agent in the entity's name. Category 3 Uncollateralized. Pooled Deposits - Category Bank Carrying 1 2 3 Balance Value Pooled deposits Checking/Savings $ 250,000 $ 2,222,839 $ - $ 2,472,839 $ 2,385,089 Total $ 250,000 $ 2,222,839 $ - $ 2,472,839 $ 2,385,089 NOTE 3 ILLINOIS MUNICIPAL RETIREMENT PLAN DESCRIPTION The Park District s defined benefit pension plan for regular employees provides retirement and disability benefits, post-retirement increases, and death benefits to plan members and beneficiaries. The Park District s plan is managed by the Illinois Municipal Retirement Fund (IMRF), the administrator of a multi-employer public pension fund. A summary of IMRF s pension benefits is provided in the Benefits Provided section of this document. Details of all benefits are available from IMRF. Benefit provisions are established by statute and may only be changed by the General Assembly of the State of Illinois. IMRF issues a publicly available Comprehensive Annual Financial Report that includes financial statements, detailed information about the pension plan s fiduciary net position, and required supplementary information. The report is available for download at www.imrf.org. BENEFITS PROVIDED IMRF has three benefit plans. The vast majority of IMRF members participate in the Regular Plan (RP). The Sheriff s Law Enforcement Personnel (SLEP) plan is for sheriffs, deputy sheriffs, and selected police chiefs. Counties could adopt the Elected County Official (ECO) plan for officials elected prior to August 8, 2011 (the ECO plan was closed to new participants after that date). All three IMRF benefit plans have two tiers. Employees hired before January 1, 2011, are eligible for Tier 1 benefits. Tier 1 employees are vested for pension benefits when they have at least eight years of qualifying service credit. Tier 1 employees who retire at age 55 (at reduced benefits) or after age 60 (at full benefits) with eight years of service are entitled to an annual retirement benefit, payable monthly for life, in an amount 21
ROSEMONT PARK DISTRCIT, ILLINOIS Notes to Financial Statements Year ended April 30, 2016 NOTE 3 ILLINOIS MUNICIPAL RETIREMENT (CONTINUED) equal to 1-2/3% of the final rate of earnings for the first 15 years of service credit, plus 2% for each year of service credit after 15 years to a maximum of 75% of their final rate of earnings. Final rate of earnings is the highest total earnings during any consecutive 48 months within the last 10 years of service, divided by 48. Under Tier 1, the pension is increased by 3% of the original amount on January 1 every year after retirement. Employees hired on or after January 1, 2011, are eligible for Tier 2 benefits. For Tier 2 employees, pension benefits vest after ten years of service. Participating employees who retire at age 62 (at reduced benefits) or after age 67 (at full benefits) with ten years of service are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to 1-2/3% of the final rate of earnings for the first 15 years of service credit, plus 2% for each year of service credit after 15 years to a maximum of 75% of their final rate of earnings. Final rate of earnings is the highest total earnings during any 96 consecutive months within the last 10 years of service, divided by 96. Under Tier 2, the pension is increased on January 1 every year after retirement, upon reaching age 67, by the lesser of: 3% of the original pension amount, or 1/2 of the increase in the Consumer Price Index of the original pension amount. As of December 31, 2015, the following employees were covered by the benefit terms: IMRF Retirees and Beneficiaries currently receiving benefits 5 Inactive Plan Members entitled to but not yet receiving benefits 3 Active Plan Members 5 Total 13 CONTRIBUTIONS As set by statute, the District s Regular Plan Members are required to contribute 4.5% of their annual covered salary. The statute requires employers to contribute the amount necessary, in addition to member contributions, to finance the retirement coverage of its own employees. The District s annual required contribution rate for calendar year 2015 was 16.97%. The required contribution for calendar year 2015 was $33,396, excluding any additional payments toward the unfunded amount. The District also contributes for disability benefits, death benefits, and supplemental retirement benefits, all of which are pooled at the IMRF level. Contribution rates for disability and death benefits are set by IMRF s Board of Trustees, while the supplemental retirement benefits rate is set by statute. NET PENSION LIABILITY The District s net pension liability was measured as of December 31, 2015. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. 22
ROSEMONT PARK DISTRCIT, ILLINOIS Notes to Financial Statements Year ended April 30, 2016 NOTE 3 ILLINOIS MUNICIPAL RETIREMENT (CONTINUED) ACTUARIAL ASSUMPTIONS The following are the methods and assumptions used to determine total pension liability at December 31, 2015: The Actuarial Cost Method used was Entry Age Normal. The Asset Valuation Method used was Market Value of Assets. The Inflation Rate was assumed to be 2.75%. Salary Increases were expected to be 3.75% to 14.50%, including inflation. The Investment Rate of Return was assumed to be 7.45%. Projected Retirement Age was from the Experience-based Table of Rates, specific to the type of eligibility condition, last updated for the 2014 valuation according to an experience study from years 2011 to 2013. The IMRF-specific rates for Mortality (for non-disabled retirees) were developed from the RP-2014 Blue Collar Health Annuitant Mortality Table with adjustments to match current IMRF experience. For Disabled Retirees, an IMRF-specific mortality table was used with fully generational projection scale MP-2014 (base year 2014). The IMRF-specific rates were developed from the RP-2014 Disabled Retirees Mortality Table, applying the same adjustments that were applied for non-disabled lives. For Active Members, an IMRF-specific mortality table was used with fully generational projection scale MP-2014 (base year 2014). The IMRF-specific rates were developed from the RP-2014 Employee Mortality Table with adjustments to match current IMRF experience. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense, and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return to the target asset allocation percentage and adding expected inflation. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: Long-Term Portfolio Expected Target Real Rate Asset Class Percentage of Return Domestic Equity 38% 7.60% International Equity 17% 7.80% Fixed Income 27% 3.00% Real Estate 8% 6.15% Alternative Investments 9% 5.25-8.50% Cash Equivalents 1% 2.25% Total 100% 23
ROSEMONT PARK DISTRCIT, ILLINOIS Notes to Financial Statements Year ended April 30, 2016 NOTE 3 ILLINOIS MUNICIPAL RETIREMENT (CONTINUED) Executive Summary as of December 31, 2015 Actuarial Valuation Date 12/31/2015 Measurement Date of the Net Pension Liability 12/31/2015 Fiscal Year End 4/30/2016 Membership Number of - Retirees and Beneficiaries 5 - Inactive, Non-Retired Members 3 - Active Members 5 - Total 13 Covered Valuation Payroll $ 196,797 Net Pension Liability Total Pension Liability/(Asset) $ 1,472,958 Plan Fiduciary Net Position 1,232,867 Net Pension Liability/(Asset) $ 240,091 Plan Fiduciary Net Position as a Percentage of Total Pension Liability 83.70% Net Pension Liability as a Percentage of Covered Valuation Payroll 122.00% Development of the Single Discount Rate as of December 31, 2015 Long-Term Expected Rate of Investment Return 7.50% Long-Term Municipal Bond Rate* 3.57% Last year ending December 31 in the 2016 to 2115 projection period for which projected benefit payments are fully funded 2077 Resulting Single Discount Rate based on the above development 7.45% Single Discount Rate calculated using December 31, 2014 Measurement Date 7.41% Total Pension Expense/(Income) $ 546 Deferred Outflows and Deferred Inflows of Resources by Source to be recognized in Future Pension Expenses Deferred Outflows of Resources Deferred Inflows of Resources Difference between expected and actual experience $ 21,213 $ - Changes in assumptions - 4,767 Net difference between projected and actual earnings on pension plan investments 63,972 - Total $ 85,185 $ 4,767 * "State & local bonds" rate from Federal Reserve statistical release (H.15) as of December 31, 2015. The statistical release describes this rate as "Bond Buyer Index, general obligation, 20 years to maturity, mixed quality." In describing this index, the Bond Buyer notes that the bonds' average credit quality is roughly equivalent to Moody's Investors Service's Aa2 rating and Standard & Poor's Corp.'s AA. 24
ROSEMONT PARK DISTRCIT, ILLINOIS Notes to Financial Statements Year ended April 30, 2016 NOTE 3 ILLINOIS MUNICIPAL RETIREMENT (CONTINUED) SINGLE DISCOUNT RATE A Single Discount Rate of 7.50% was used to measure the total pension liability. The projection of cash flow used to determine this Single Discount Rate assumed that the plan members contributions will be made at the current contribution rate, and that employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. The Single Discount Rate reflects: 1. The long-term expected rate of return on pension plan investments (during the period in which the fiduciary net position is projected to be sufficient to pay benefits), and 2. The tax-exempt municipal bond rate based on an index of 20-year general obligation bonds with an average AA credit rating (which is published by the Federal Reserve) as of the measurement date (to the extent that the contributions for use with the long-term expected rate of return are not met). For the purpose of the most recent valuation, the expected rate of return on plan investments is 7.50%, the municipal bond rate is 3.57%, and the resulting single discount rate is 7.45%. SENSITIVITY OF THE NET PENSION LIABILITY TO CHANGES IN THE DISCOUNT RATE The following presents the plan s net pension liability, calculated using a Single Discount Rate of 7.45%, as well as what the plan s net pension liability would be if it were calculated using a Single Discount Rate that is 1% lower or 1% higher: 25
ROSEMONT PARK DISTRCIT, ILLINOIS Notes to Financial Statements Year ended April 30, 2016 NOTE 3 ILLINOIS MUNICIPAL RETIREMENT (CONTINUED) Schedule of Changes in Net Pension Liability and Related Ratios -- Current Period Calendar Year Ended December 31, 2015 A. Total pension liability 1. Service Cost $ 30,077 2. Interest on the Total Pension Liability 101,839 3. Changes of benefit terms - 4. Difference between expected and actual experience of the Total Pension Liability 29,796 5. Changes of assumptions (6,695) 6. Benefit payments, including refunds of employee contributions (82,728) 7. Net change in total pension liability 72,289 8. Total pension liability beginning 1,400,669 9. Total pension liability ending $ 1,472,958 B. Plan fiduciary net position 1. Contributions employer $ 188,396 2. Contributions employee 8,856 3. Net investment income 5,552 4. Benefit payments, including refunds of employee contributions (82,728) 5. Other (Net Transfer) 59,645 6. Net change in plan fiduciary net position 179,721 7. Plan fiduciary net position beginning 1,053,146 8. Plan fiduciary net position ending $ 1,232,867 C. Net pension liability/(asset) $ 240,091 D. Plan fiduciary net position as a percentage of the total pension liability 83.70% E. Covered Valuation payroll $ 196,797 F. Net pension liability as a percentage of covered valuation payroll 122.00% Sensitivity of Net Pension Liability/(Asset) to the Single discount rate Assumption Current Single 1% Decrease Discount Rate 1% Increase 6.45% Assumption 7.45% 8.45% Total Pension Liability $ 1,655,252 $ 1,472,958 $ 1,322,279 Plan Fiduciary Net Position 1,232,867 1,232,867 1,232,867 Net Pension Liability/(Asset) $ 422,385 $ 240,091 $ 89,412 26