VILLAGE OF BUFFALO GROVE, ILLINOIS

Management’s Discussion and Analysis (Unaudited) December 31, 2022

The water and sewer utility experienced net operating income before interest and transfers of $5.7 million for FY 2022, a decrease of $0.1 million (2.1 percent) from the prior fiscal year. A rate increase of 4 percent was applied to all water and sewer usage. Sewer operations accounted for 29.7 percent, or $5.3 million of the total Water and Sewer operational expenses. Water operations accounted for $1.5 million (8.2 percent) and capital outlay for both systems totaling $9.2 million (51.3 percent). The purchase of water accounted for 10.8 percent, or $1.9 million. Sanitary sewer fees collected on behalf of Lake County Public Works was $3.5 million for FY 2022. These two pass-through expenses account for 31 percent of the total operating expense of the fund.

Nonoperating revenue (expense) increased $73,748 due to investment income.

The unrestricted net position of the Water and Sewer Fund at the end of the current fiscal year was $21.7 million and of that amount $9.2 million is the Village’s equity interest in the Northwest Water Commission. The installment note to pay down the water meter replacement project is $4.7 million, or 47.6 percent, of total liabilities in the water and sewer enterprise. The note is paid off by the increased margin of water metering accuracy.

The Village of Buffalo Grove owns and operates two municipal golf courses. The Village also reported the Arboretum Golf Course Fund as a major proprietary fund. This fund accounts for all operations of the Arboretum Golf Course. The course reported a year end unrestricted net position balance of $138,313. Total revenues were up $20,254 from 2021 The Buffalo Grove Golf Course generated $1.3 million in operating revenue while incurring $1.1 million in operating expenses. A total of 71,773 paid rounds were played between the two courses in 2022