VILLAGE OF BUFFALO GROVE, ILLINOIS

Notes to the Financial Statements

December 31, 2022

NOTE 3 – DETAIL NOTES ON ALL FUNDS

LONG-TERM DEBT – Continued

Asset Retirement Obligation

The Village has recognized an asset retirement obligation (ARO) and related deferred outflow of resources in connection with its obligation to seal and abandon various water wells, to seal underground tanks, and lift station at the end of their estimated useful lives in accordance with federal, state, and/or local requirements. The ARO was measured using actual historical costs for similar abandonments, adjusted for inflation through the end of the year. The estimated remaining useful lives of the water wells are 24 years, underground tanks are 49 years, and lift stations are 4 years.

Long-Term Liability Activity

Changes in long-term liabilities during the fiscal year were as follows:

For the governmental activities, payments on the compensated absences, the net pension liabilities/(asset) and the total OPEB liability are made by the General Fund. Payments on general obligation bonds are being liquidated by the Debt Service Fund, and the TIF revenue note payable are made by the Lake Cook Road TIF Fund.