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INDEPENDENT AUDITORS' REPORT 8
from 2020 CAFR
by BuffaloGrove
VILLAGE OF BUFFALO GROVE
Department of Finance & General Services
Fifty Raupp Blvd. Buffalo Grove, IL. 60089-2100 Phone 847-459-2500 Fax 847-459-0332
August 5, 2021
The Honorable Beverly Sussman Members of the Village Board Citizens of the Village of Buffalo Grove
The Comprehensive Annual Financial Report of the Village of Buffalo Grove for the year ended December 31, 2020 is submitted herewith. This report represents a comprehensive picture of the Village’s financial activities during Fiscal Year 2020 and the financial condition of its various funds at December 31, 2020. State law requires that all generalpurpose local governments publish within six months of the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audit in accordance with generally accepted auditing standards by a firm of licensed certified public accountants.
Management assumes full responsibility for the completeness and reliability of all of the information presented in the report based upon a comprehensive internal control framework. Because the cost of internal controls should not outweigh their benefits, the Village’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement.
Lauterbach & Amen, Independent Certified Public Accountants, have issued an unmodified (clean) opinion on the Village’s financial statements for the fiscal year ended December 31, 2020. The independent auditors’ report is presented at the front of the financial section of this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of a Management’s Discussion and Analysis (MD&A). The letter of transmittal is designated to complement the MD&A and should be read in conjunction with it. The Village of Buffalo Grove’s MD&A can be found immediately following the report of the independent auditors.
Profile of the Village of Buffalo Grove
The Village of Buffalo Grove was incorporated March 7, 1958, and is located approximately 29 miles northwest of the downtown of the City of Chicago. The Village resides in both Cook and Lake Counties and spans 9.2 square miles and, based on the 2010 U.S. Census, serves a population of 41,496. The Village of Buffalo Grove is empowered to levy a property tax on real property located within its boundaries. It is also empowered by state statute to extend its corporate limits by annexation, which it has done from time to time.
The Village became a home rule unit by referendum on July 1, 1980, giving it additional powers to tax and regulate in ways not specifically granted, or prohibited, by the Illinois Constitution. As a home rule entity, the Village has no tax rate or debt limits, nor is it required to conduct a referendum to authorize the issuance of debt or to increase property taxes.
The Village operates under a Council/Manager form of government. Policy making and legislative authority are vested with the Village Board, which consists of a President and a six member Board of Trustees. The Village Board is responsible for passing ordinances and resolutions, adopting the annual budget, appointing committees, and hiring the Village’s Manager and Attorney. The Village Manager is responsible for carrying out the policies, ordinances and resolutions of the Village Board, developing and presenting an annual budget, overseeing the day-to-day operations of the Village, and appointing department directors.
The Village provides a full range of services including police and fire protection, construction and maintenance of streets and infrastructure, planning and zoning, water and sewer utilities, and general administrative services. The Village also operates two golf courses and a municipal commuter parking lot. To provide these services there were 217 full-time and 55 part-time/seasonal positions in the Fiscal Year 2020 annual budget.
Budgetary Control and Accounting Systems
The annual budget serves as the foundation for the Village’s financial planning and as a management spending control document. All departments of the Village of Buffalo Grove are required to submit budget requests by a specified date each year. These requests serve as the starting point for budget development. The proposed budget is presented to the Village Board in November and adopted by ordinance in December concurrently with the property tax levy.
Legal spending thresholds are established through the annual budget under the budget officer method. The Village Board is required to hold a public hearing on the budget document and must adopt a final budget no later than December 31st of each year. The budget is prepared by fund, and department program. Department directors may make transfers of budget allocations within a department. Transfers of budget allocations between funds, however, require theapproval of the Village Board. All budget adjustments must be approved by the Village Board to amend the legal spending thresholds.
The accounts of the Village are organized on the basis of funds, each of which is considered a separate and distinct accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures. Revenues are allocated to and accounted for in individual funds based upon the purpose for which they are to be expended and the means by which spending activities are controlled. The accounting records for general governmental operations are maintained on the modified accrual basis, with revenues being recorded when available and measurable and expenditures being recorded when the material or services are received and the liability is incurred. Accounting records for the Village’s enterprise funds, internal service funds, agency funds and pension trust funds are maintained on the accrual basis of accounting.
Factors Affecting Financial Condition
Local Economy
The Village of Buffalo Grove, like many other communities, suffered a major economic decline following the onset of the COVID-19 pandemic in March 2020. The Village was approximately $1 million under the FY 2020 budget amounts in state sales tax and home rule sales tax combined. However, a financial plan to reduce operating expenses to mitigate the use of financial reserves was implemented. The plan included a voluntary separation incentive program, maintaining staff vacancies, and reducing operating expenditures.
The Village is primarily residential, with supporting commercial activity and limited industrial and manufacturing activity. There are approximately 820 licensed businesses operating in the Village. The majority of residents are employed in management, professional, sales and office occupations. The Village’s unemployment statistics have consistently been lower than the national and state averages, with an unemployment rate at the end of the year at 5.7 percent besting the state by 1.4 percent.
External economic factors at the national and state level continue to impact the Village’s revenue profile and, subsequently its ability to manage operating and capital resources.
• Property tax collections totaled $17,035,362 which is an increase from the previous year’s total of $16,321,876 an increase of 4.4 percent.
• Water and Sewer collections increased from $10,938,035 in 2019 to $14,625,649 in 2020. A total increase of 33.7 percent.
• Sales taxes [net of rebates], both state shared and home rule, generated $9,829,765 in 2020 versus $9,945,749 in 2019, a decrease of 1.1 percent.
The Village equalized assessed valuation increased by $127.8 million or 7.6 percent to $1.82 billion for the 2019 levy year. The increase is due primarily to the triennial and quadrennial assessments in Lake and Cook Counties respectively as well as new property and development experienced during the year.
The unassigned fund balance of the General Fund will again exceed the 25 percent threshold of the subsequent year’s budgeted expenditures, less non-operating transfers, which is policy established by the Village Board.
Unassigned Budgeted Fiscal Year Ended Fund Balance Expenditures Percent
December 31, 2011 $ 9,872,594 $29,271,054 33.73% December 31, 2012 $10,302,515 $29,768,828 34.61% December 31, 2013 $12,395,113 $35,511,109* 34.90% December 31, 2014 $13,225,644 $37,083,251 35.67% December 31, 2015 $14,991,907 $38,165,617 39.29% December 31, 2016 $16,143,726 $39,177,439 41.21% December 31, 2017 $18,902,476 $39,477,439 47.88% December 31, 2018 $17,039,974 $39,717,331 42.90% December 31, 2020 $18,939,974 $43,948,348 43.10% December 31, 2020 $20,304,913 $44,657,330 45.47% * Budget number includes employer pension costs beginning in FY 2013.
Long-Term Financial Planning
The Village compiles a General Fund Five-Year Financial Forecast annually which provides an analysis of future revenue and expenditures. This report is completed in tandem with the start of the annual budget process. Other long-range financial plans include the five-year Capital Improvement Plan, Twenty-Year Water Fund Pro-Forma, and a Twenty-Year Storm Sewer Pro Forma.
The Village assesses its capital needs through the Capital Improvement Plan (CIP) update. This document is a planning tool to identify short and medium term capital needs (facilities, infrastructure and roadways) and measure those demands against the Village’s ability to pay. For a project to be incorporated into the CIP, it must involve the creation, improvement, or acquisition of a tangible asset with an original cost of at least $25,000.
Within the next five years it is anticipated that the Village will be involved with or managing over $175 million in capital projects. Transportation-related projects represent a large percentage of the improvements at $76 million. Routine maintenance of existing streets accounts for $63 million of those projects. Approximately $32million and $7.5 million respectively, is allocated to improving and maintaining the water utility and sanitary sewer systems.
The Twenty-Year Water Fund Pro-Forma provides an overview of the Water Fund and adequacy of the current water rate to fund operating expenses and infrastructure improvements as well as generating a reserve to continue with a pay-as-you-go approach to capital budgeting. The Reserve for Capital Replacement Funding Report lists all Village owned vehicles, the service life, and its respective reserve balance.
Major Initiatives
In 2020, the Village of Buffalo Grove issued nearly2,700 commercial and residential building permits. These permits represent a total project valuation of $58 million invested into the Buffalo Grove community. In addition to building permit activity, the following major projects occurred in 2020:
Plans continued into 2020 regarding the Lake Cook Road Corridor implementation strategy to stimulate redevelopment of land within the corridor consistent with the adopted plan. Northwest Community Healthcare (NCH) and their development partner, MedProperties Group, continued to redevelop the 7.5 acre site at 15 S McHenry Road and 125 E Lake Cook Road into new four-story, 70,000 square foot medical office building to accommodate NCH. The project also includes a 4,900 square foot retail building.
The Combined Area Fire Training (CAFT) Facility redevelopment was completed at 851 Krause Drive. Other developments in 2020 include the Woodman’s unattended gas station, which is owned and operated by Woodman’s Food Market on 1.5 acres of land just south of its grocery store at 1550 Deerfield Parkway. The Link Crossing subdivision on 50 acres at 16802 W. Aptakisic Road continued its development in 2020.
The project by K. Hovnanian Homes will have a total of 187 units and include a mix of 68 clustered singlefamily detached homes and 119 two-story townhomes. Plans for future development include a Ricky Rockets gas station and retail space at 700 East Lake Cook and a new industrial and office headquarters at 1305 Busch Parkway. Other preliminary plans include a new townhome development and commercial redevelopment plans in the Village’s commercial corridors.
In July 2020, the Village established a Tax Increment Financing (TIF) District in the Lake Cook Corridor to help spur private development and implement the Lake Cook Corridor Market Study and Plan. The Village also took major steps to complete a new Comprehensive Plan to establish a new long-term vision for the entire community.
In 2020, 62 businesses opened, expanded and/or relocated in the Village of Buffalo Grove.
Awards and Acknowledgments
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Village of Buffalo Grove for its Comprehensive Annual Financial Report for the fiscal year ended December 31, 2019. This was the thirty-eighth consecutive year that the government has received this prestigious award. To be awarded a Certificate of Achievement, the government published an easily readable and efficiently organized Comprehensive Annual Financial Report. This report satisfies both GAAP and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
In addition, the Village also received the GFOA’s Distinguished Budget Presentation Award for its annual budget document for the fiscal year beginning January 1, 2020. In order to qualify for the Distinguished Budget Presentation Award, the Village’s budget document had to be judged proficient as a policy document, a financial plan, an operations guide, and a communications device.
The preparation of this report would not have been possible without the dedicated services of the entire staff of the Finance Department especially Deputy Finance Director Cheryl Mosqueda, CPA, CGFM. Credit also must be given to the Village President and Board of Trustees, and the Village Manager Dane Bragg for their assistance in planning and conducting the fiscal affairs of the Village in a responsible manner.
Respectfully submitted,
Chris Black Director of Finance/Village Treasurer
FINANCIAL SECTION
This section includes:
• Independent Auditors’ Report
• Management’s Discussion and Analysis
• Basic Financial Statements
• Required Supplementary Information
• Combining and Individual Fund Statements and Schedules
• Supplemental Schedules
INDEPENDENT AUDITORS’ REPORT
This section includes the opinion of the Village’s independent auditing firm.
INDEPENDENT AUDITORS' REPORT
August 5, 2021
The Honorable Village President Members of the Board of Trustees Village of Buffalo Grove, Illinois
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village of Buffalo Grove, Illinois, as of and for the year ended December 31, 2020, and the related notes to the financial statements, which collectively comprise the Village’s basic financial statements as listed in the table of contents.
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 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 Village’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 anopinion on the effectiveness of the Village’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.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village of Buffalo Grove, Illinois, as of December 31, 2020, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance 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 as listed in the table of contents and budgetary information reported in the required supplementary information as listed in the table of contents, 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 Village of Buffalo Grove, Illinois’ basic financial statements. The introductory section, other supplementary information, supplemental schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The other supplementary information and supplemental schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information 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 other supplementary information and supplemental schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Matters – Continued
Other Information – Continued
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated August 5, 2021, on our consideration of the Village’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 the effectiveness of the Village’s 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 the Village’s internal control over financial reporting and compliance.
Lauterbach & Amen, LLP
LAUTERBACH & AMEN, LLP
MANAGEMENT’S DISCUSSION AND ANAYLSIS
VILLAGE OF BUFFALO GROVE, ILLINOIS
Management’s Discussion and Analysis (Unaudited) December 31, 2020
The Village of Buffalo Grove’s Management’s Discussion and Analysis (MD&A) offers the readers of the Village of Buffalo Grove’s financial statements this narrative overview and analysis of the financial activities of the Village of Buffalo Grove for the fiscal year ended December 31, 2020. This information presented here should be considered in conjunction with additional information provided in the letter of transmittal, which is found in the introductory section of this report.
Financial Highlights
• The assets and deferred outflows of the Village exceeded its liabilities and deferred inflows at December 31, 2020 by $74.6 million (net position). The Net Position for governmental activities is $19.2 million or 25.7 percent of the total, and business-type activities account for $55.4 million. Of this amount, ($18.9) million is unrestricted, the negative amount of unrestricted assets is directly related to the recognition of all retirement obligations in noncurrent liabilities, which is $59.7 million for 2020 (a decrease of $12.6 million or 17.4% from 2019). • The Village’s total debt increased by $22.3 million (or 122.5 percent). Total general bonded debt outstanding is $34.6 million as of December 31, 2020. The General Fund transferred $2.9 million from fund balance to the Capital Projects Fund. • The Village’s net position increased by $13.8 million (or 22.7 percent) during the fiscal year ending December 31, 2020. The governmental net position increased by $6.9 million (56.1 percent) and the business-type activities net position increased by $6.9 million (14.2 percent). • As of December 31, 2020, the Village of Buffalo Grove’s General Fund reported ending fund balance of $30.5 million, an increase of $2.6 million from the prior year. Of this amount, $20.1 million was unassigned.
Overview of the Financial Statements
The MD&A is intended to serve as an introduction to the Village’s basic financial statements. The Village of Buffalo Grove’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements.
Government-wide financial statements
The government-wide financial statements are designed to provide readers with a broad overview of the Village’s finances similar to the corporate sector in that all governmental and business-type activities are consolidated into one total for the Primary Government.
The statement of net position presents information on all assets and deferred outflows and liabilities and deferred inflows, with the difference between the two reported as net position. Changing of the net position total over time can be one useful indicator in assessing the financial position of the Village. This statement combines and consolidates governmental funds’ current financial resources (short-term spendable resources) with capital assets and long-term obligations using the accrual basis of accounting and economic resources measurement focus.
The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event causing the change occurs, regardless of the timing of related cash flows. Revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods (e.g., uncollected taxes).
VILLAGE OF BUFFALO GROVE, ILLINOIS
Management’s Discussion and Analysis (Unaudited) December 31, 2020
Both of the government-wide financial statements distinguish functions of the Village that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the Village include public safety (police and fire), public works, streets and sidewalks, community development, and general government. Property taxes, state and home rule sales tax, shared state income tax, real estate transfer tax, prepared food and beverage tax, and utility taxes finance most of these services. The Business-type Activities reflect private sector type operations and include Water and Sewer Funds, Refuse Fund, Buffalo Grove Golf Course and Arboretum Golf Course. The intent is for the fees to cover the costs of operations, infrastructure replacement, and debt services expenses.
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 Village uses fund accounting to ensure and demonstrate fiscal accountability and legal compliance. All of the funds of the Village can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental Funds are used to account for primarily the same functions reported as governmental activities in the government wide financial statements. The focus, unlike the government-wide financial statement, is on the sources and uses of available resources (cash and cash equivalents), in order to provide a near, or short-term view of the Village’s operations. This information is useful in the evaluation of short-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 government’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 Village of Buffalo Grove maintains nine 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, Debt Service, Facilities Development, Street Maintenance, and Vehicle Equipment Replacement Funds, which are classified as major funds. Data on the other four governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in the report.
Proprietary Funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The Village uses enterprise funds to account for its water and sewer utility, refuse service, and activities at the Buffalo Grove and Arboretum Golf Courses. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water and Sewer Fund and the Arboretum Golf Fund as they are considered major funds.
VILLAGE OF BUFFALO GROVE, ILLINOIS
Management’s Discussion and Analysis (Unaudited) December 31, 2020
Fiduciary Funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are reflected in the government-wide financial statement since the implementation of GASB 67 & 68. The implementation was completed in fiscal year 2015. The accounting used for fiduciary funds is much like that used for proprietary funds. Notes to the financial statement provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.
Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the budgetary comparison to actual for the general fund, as well as the Village’s progress in funding its obligation to provide pension and retiree benefit plans to its employees.
Government-wide Financial Analysis
The assets and deferred outflows of the Village of Buffalo Grove exceeded liabilities and deferred inflows by $74.6 million as of December 31, 2020. The largest portion of the Village’s net position reflects its net investment in capital assets ($89.5 million). Those capital assets include land, buildings, streets, utility infrastructure, and equipment, less any outstanding debt related to the original acquisition. The Village uses these capital assets to help facilitate service delivery to its residents; consequently, these assets are not available for future spending. Although the Village’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay the debt must be provided from other sources, since the capital assets cannot be used to reduce these liabilities.
A portion of the Village’s net position ($4.0 million) represents resources that are subject to external restrictions on how they may be used, of that amount $3.0 million is restricted for improvements to roadway, public infrastructure, and other municipal public improvements. The remaining balance of unrestricted net position (($18.9) million) reduces total net position significantly due to GASB 68 and 75, which requires the Village to show the outstanding retirement obligations in noncurrent liabilities. The total increase in unrestricted net position from the prior year is $9.9 million (34.4 percent).
The Village’s combined net position increased by $13.8 million as a result of governmental activities increasing by $6.9 million and business-type activities increasing by $6.9 million. The net position of the Village’s governmental fund was $19.2 million. The Village’s unrestricted net position for governmental activities that are available for day-to-day financial operations were ($35.6) million compared to ($40.2) million at December 31, 2019. The net position of business-type activities was $55.4 million. The business type activities unrestricted net position increased by $5.3 million from the previous year.
VILLAGE OF BUFFALO GROVE, ILLINOIS
Management’s Discussion and Analysis (Unaudited) December 31, 2020
Please refer to table below for condensed Statement of Net Position:
Assets
Current / Other Assets
Capital Assets
Total Assets Village of Buffalo Grove's Net Position (in Millions)
Governmental Business-Type Activities Activities
Total 2020 2019 2020 2019 2020 2019
$ 72.4 51.0 19.3 14.6 91.7 65.6 71.6 62.5 44.6 43.4 116.2 105.9 144.0 113.5 63.9 58.0 207.9 171.5
Deferred Outflows
Total Assets/Deferred Outflows
12.2 14.1 2.3 1.0 14.5 15.1 156.2 127.6 66.2 59.0 222.4 186.6
Liabilities
Current Liabilities
Non-Current Liabilities
Total Liabilities
Deferred Infows
Total Liabilities/ Deferred Inflows
Net Position:
Net Investment in Capital Assets
Restricted
Unrestricted
Total Net Position
7.5 6.0 1.4 2.1 8.9 8.1 93.9 80.7 8.9 8.2 102.8 88.9 101.4 86.7 10.3 10.3 111.7 97.0
35.6 28.6 0.5 0.2 36.1 28.8 137.0 115.3 10.8 10.5 147.8 125.8
50.8 50.7 38.7 37.1 89.5 87.8 4.0 1.8 - - 4.0 1.8 (35.6) (40.2) 16.7 11.4 (18.9) (28.8) 19.2 12.3 55.4 48.5 74.6 60.8
VILLAGE OF BUFFALO GROVE, ILLINOIS
Management’s Discussion and Analysis (Unaudited)
December 31, 2020
Normal Impacts
There are five basic (normal) transactions that will affect the comparability of the Statement of Net Position summary presentation.
Net Results of Activities – which will impact (increase/decrease) current assets and unrestricted net position.
Borrowing of Capital – which will increase current assets and long-term debt.
Spending Borrowed Proceeds on New Capital – which will reduce current assets and increase capital assets. There is a second impact, an increase in invested in capital assets and an increase in related net debt which will not change the net investment in capital assets.
Reduction of Capital Assets through Depreciation – which will reduce capital assets and net investment in capital assets.
Current Year Impacts
At the end of the current fiscal year, the Village reported positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities.
Within the governmental activities, the Village increase in “Current and Other Assets” of $21.5 million is primarily related to $20.9 million more in cash and investments, $0.2 million more in receivables and $0.4 million more in prepaid reserves related to terminal illness coverage at the end of 2020 compared to 2019. The Village experienced a slight decrease of $0.2 million (-4.1 percent) in service charge revenues, $0.4 million (-30.8 percent) in telecommunications taxes, $0.2 million (-7.1 percent) in utility taxes and $2.5 million (-51% percent) in other general revenues. Real estate (property) transfer taxes stayed consistent to the prior year. Interest Income decreased $0.5 million (-66 percent) and miscellaneous income decreased $1.5 million (-58 percent).
The Village maintained capital improvement and asset purchases in 2020. The Village has adopted a philosophy of funding capital improvements to a large extent on a pay-as-you –go basis, and retires debt obligations quickly, resulting in positive net position calculations. Declines in “Capital Assets” are primarily as a result of depreciation.
Changes in Net Position.
The Village’s total revenues and expenses for governmental and business-type activities are reflected in the following chart:
