Government-Wide Financial Statements Statement of Net Position 27

VILLAGE OF BUFFALO GROVE, ILLINOIS

Management’s Discussion and Analysis (Unaudited) December 31, 2020

The Police Protection levy increased $.2 million (4.8 percent) and the Fire Protection Levy decreased $.2 million (3.0 percent). The total tax levy decreased .16 percent due to $.6 million in abatements.

Sales and use tax increased by $0.3 million compared to the previous year primarily due to sales tax (net of rebates) declining 2.7%. Utility taxes decreased $0.2 million compared to prior year. Income taxes continue to rebound increasing $0.1 million from FY 2019, a 2.2 percent jump. Real estate transfer taxes stayed consistent with prior year. Income tax and sales and use tax are key indicators for the Village of Buffalo Grove’s local economy and are improving year over year.

Expenses:

The cost of all governmental activities this year was $42.2 million, a decrease of 11.5 percent from 2019 ($47.7 million). The largest decrease was made in Public Safety expenses $4.1 million in 2020. Public Works expenses decreased by $2.5 million (24.5 percent).

VILLAGE OF BUFFALO GROVE, ILLINOIS

Management’s Discussion and Analysis (Unaudited) December 31, 2020

The Statement of Activities shows that $4.7 million in revenue was generated to finance the services rendered by the user fees. Another $5.8 million in revenue was generated by operating and capital grants and other contributions that was expended for capital improvement.

Business-Type Activities:

Business-type activities net position increased by $6.9 million. Significant changes are noted below.

Revenue:

Water sales increased $3.9 million from the previous year. The total amount pumped was 1.24 billion gallons in 2019 versus 1.26 billion in 2020. The utility increased revenue with a 11.0 percent water rate increase. There was a slight increase in water consumed .05 billion gallons (4.3 percent). The two golf courses generated $2.5 million in 2020, $0.5 million (25 percent) better than 2019 earnings. The following graph shows a comparison of revenues and expenses for each business type activity (excludes non-operating activity, transfers and GAAP adjustments).

Expenses:

Expenses from all business-type activities increased by $0.5 million or 3.8 percent. The Water Fund expenses increased by $0.7 million due to more expenses in 2020 related to capital projects that weren’t capitalized at year end. Golf expenses were increased in 2020 to $2.6 million in total or increase of 225.0 percent.

20.0

15.0

10.0

5.0

0.0

Village of Buffalo Grove 2020 Business Type Activities Revenues and Expenses

(In Millions)

Water Fund Refuse Fund Arboretum Golf Buffalo Grove Golf Revenues Expenses

Financial Analysis of the Village’s Funds

As noted earlier the Village utilizes fund accounting to ensure and demonstrate compliance with finance related legal requirements.

Governmental Funds

The focus of the Village’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources.