2020 Popular Financial Annual Report

2020 Popular Financial Annual Report

A Message from the Village President

It is with great pleasure that the Village of Buffalo Grove presents the annual “A Citizenʼs Guide to Local Financial Activities” for the fiscal year ended December 31, 2020. It is my desire to deliver to the residents of Buffalo Grove an overview of the Villageʼs progress and financial performance that is transparent and easily understood. This report summarizesthefinancialactivitiesoftheVillageand is not intended to replace the Comprehensive Annual Financial Report (CAFR). The full disclosure financial statements, or CAFR, can be found on the Villageʼswebsiteatwww.vbg.org.

The analysis conducted within this report outlines growth drivers, capital projects, and summarized financial and trend data. The presentation of financial information in the report has been derived fromtheauditedfinancialstatementsandconforms to generally accepted accounting principles (GAAP) andrelatedreportingstandards.

The Village continues to make financial transparency a priority and providing open communication with its residents and businesses. It is my hope that the information and data contained in the 2019 guide to local financial activities will provide the reader a snapshot of the challenges and opportunities the Village of Buffalo Grove is managingtodayandintothefuture.

Sincerely,

BG

is...

Responsible

Resilient Safe

Budget Overview

TheBuffaloGrove2021Budgetisdesignedtoprovideresidentsandother interestedpartieswithaneasytonavigateformatthatclearlyexplainshow theVillageallocatesitsresources.EachprogramstrivestomakeBGmore responsible,resilient,orsafe.Everyprogramconsistsofmajorservicesthe Villageprovidesforitsresidentsandthebusinesscommunity.Thebudget documentisthereforeorganizedbyareas,programs,andmajorservices.The grayboxesonthefollowingpagesprovideanoverviewofeacharea.

Each program provides oversight over the services that are provided either directly to the community or indirectly as an internal support function. How resources are allocated within the annual budget provides the reader insight as to what the strategic priorities are and what services are valued by Village stakeholders. The FY 2020 Budget supports 18 programs that deliver 47 services.

Each year, the Village determines its level of service, strategic goals and expectations and staffing levels based upon the demand for services, anticipated revenues, and progress toward long-term operational and capital developmentgoals.

The Village Clerk's office maintains all of the Villageʼs official records, meeting minutes, documents as well as a range of services including business and liquor licensing,voterregistrationandmunicipalcodeupdates areprovideddaily.

AndrewStein

LesterOttenheimer

DavidWeidenfeld

JoanneJohnson

EricSmith

GregoryPike

A Closer Look at BG

TheVillageʼsnetpositionincreasedby$13.8million(or22.7percent)duringthe 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 increasedby$6.9million(14.2percent).

Equalized assessed valuation increased by $127.8 million or 7.6 percent to $1.82billionfor the 2019 levy year. The increase is due primarily to the triennial andquadrennialassessmentsinCookandLakeCountiesaswellasnewproperty anddevelopmentexperiencedduringtheyear.

$115,951

43,212

BGis...

Responsible BGiscommittedto beingprudent stewardsofthepublic dollar. Toachievethis commitmentthe villagetakesthe followingactions:

Did you know?

Open BG provides a landing page with direct access to the villageʼs financial, historical, and contractual data. Anyone can use this data to participate in and improvegovernment.Checkitoutatvbg.org/openbg!

Where Your Property Tax Dollars Go

Innovating the administrative, personnel, and legislative functions

Managing the village's finances, pensions funds and debt service

Overseeing the strategic use of information

technology resources

Total population in BG

BGis...

Resilient

BGstrivestoprovide andmaintainthe highestquality infrastructure.

Toachievethis commitmentthevillage takesthefollowing actions:

2020 Top Employers and Tax Payers

BG has a distinctive local economy with an employment baseof20,000dailyworkers.

BGhasover10millionsquarefeetofcommercial,office, andindustrialspace.

BG is home to several advanced manufacturing centers as well as many high profile firms such as Flex, Siemens andYaskawa.

Local Economy

External economic factors at the national and state level continue to impact the Villageʼs revenue profile and, subsequently its abilitytomanageoperating andcapitalresources.

Property tax collections totaled $17,035,362 which is an increase from the previousyearʼstotalof$16,321,876anincreaseof4.4percent.

Water and Sewer collections increased from $10,938,035 in 2019 to $14,625,649in2020.Atotalincreaseof33.7percent.

Sales taxes [net of rebates], both state shared and home rule, generated $9,829,765in2020versus$9,945,749in2019,adecreaseof1.1percent.

Maintainingthe village'sstreets, grounds,water, drainage,and sewersystems

Improvingthe qualityofmunicipal buildings,parking lots,andvehicles

Directingthelong termstructural needsthrough engineering

Revenue Overview

Revenues for the Villageʼs governmental activities for the year ended December 31, 2020 were $50.7 million an increase of $1.8 million or 3.7 percent.Propertytaxes continue to be the Villageʼs largest source of revenue (33.5 percent) at $17.0 million. Included within the property tax revenues are the pension levies for the Police and Firefighter Pension Funds and IMRF/Social Security. The pension levies account for 39.5 percent of the property tax levy. Other taxes and intergovernmental revenue including sales tax, state income tax, utility tax, prepared food and beverage tax, hotel tax, and real estate transfer tax total $20.7 million or 40.8 percent of total governmentalactivitiesrevenue.

Did you know?

Did you know?

MoneyGeek.com recently evaluated small cities and towns across the United States - those with 30,000 to 100,000 residents - and ranked them according to the per capita cost of crime. They ranked Buffalo Grove the #1 safest town in the U.S., with a $22 crime cost percapita.

MoneyGeek.com recently evaluated small cities and towns across the United States - those with 30,000 to 100,000 residents - and ranked them according to the per capita cost of crime. They ranked Buffalo Grove the #1 safest town in the U.S., with a $22 crime cost per capita.

Tax Increment Financing

A TIF is a commonly used tool, which helps municipalities make needed improvements (such as roads and sewers) or helps attract private development. TIF generates a pool of revenue used for reinvestment within the district.Property owners within the district continue to pay theirnormalpropertytaxes.

When a TIF district is created, the property values of the parcels within the district are set at a base equalized assessed value (EAV). Taxing bodies (Village, county, township, school districts, etc) continue to collect property taxes based uponthe baseEAV.AnyincreaseintheEAVgeneratestheTIFincrement,whichis then available for projects within the TIF district. At the end of the TIF district's 23-year life, all real estate tax revenues are again shared proportionately by the taxingbodiesbasedontheirindividualtaxrates.

Town Center

Lake -Cook Road TIF District

The Village Board has authorized the establishment of a TIF district which includes the Town Center project and encompasses most Lake Cook Road properties.PreliminaryprojectionsshowthatthetaxableEAV,whichiscurrently $18 million, will grow to over $80 million. The preliminary TIF budget is projectedat$100million.

to redevelop the 20-acre Town Center property at a Public Hearing on April 6th. The proposed development, The Clove, will be a modern central entertainment and residential district anchored by a national grocery store, retail shops, a park, restaurantsandluxurymulti-familyresidential.

WJ Golf

Plans for the Village-owned The Arboretum Club at 401HalfDayRoadhavebeenapprovedtoconvertthe existingbanquetspaceintoavirtualgolfcenter.

WJ Golf, an indoor golf business, is the tenant and will manage the virtual golf center, as well as the renovated full-service restaurant WJ Golf will offer indoor golf activities including private lessons, golf simulators, full-service dining, and entertainment, t, which will complement the Arboretum Clubʼs beautiful 18-hole outdoor golf course to create a uniqueandexcitingregionaldestination

BGis...

Safe

BG knows that the community expects to be safe in their homes, at work, and around town.

To achieve this commitment, the village takes the following actions:

Insuring the public's safety through emergency medical , fire, and police services

Inspecting the environmental and heath impacts of businesses

Developing standards for the permitting and zoning of the village's built environment

AffirmativeAction

RecruitingPlanhasbeen inplacesince1986and updatedevery3years.

Village Pensions Obligations

The Fire Pension Fund was 76%. The annual interest rate assumption is 7% with a the five-year average return is 10.03%asofDecember31,2020.

The Police Pension Fund was 69% funded. The annual interest rate assumptionis7%withafive-yearaverage returnof9.45%asofDecember31,2020

72% of benefit costs are related to pensioncosts.$7.9millionistheVillageʼs employer obligation for current and future annuitants and $8.8 million will be distributedtoretiredpensioners.

Expense Overview

BiasedBasedPolicing

Annualreviewrevealed the17thconsecutive yearwithoutany complaintsofbiased basedprofiling.

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 expensesdecreasedby$2.5million(24.5percent).

BuffaloGrove2020ExpendituresbyFunction

Officerscompletean8 hourMentalHealthFirst Aidanda40hourCrisis Interventiontraining.

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 revenuewitha11.0percentwaterrateincrease.Therewas a slight increase in water consumed .05 billion gallons (4.3 percent).The two golf courses generated $2.5 million in 2020,$0.5million(25percent)betterthan2019earnings.

Infrastructure Modernization Program

Buffalo Grove will...

Embark on the largest infrastructure project in the Village's history.

TheVillageBoardapprovedtwosignificant revenuestreamsforthispurpose,the implementationofafixedfacilityfeeand water/sewerrateincreaseforwaterandsewer mainreplacementandalocalmotorfueltax tofundroadimprovements.

The Infrastructure Modernization Program encompasses the largest initiative in the Villageʼs history to replace and rehabilitate core infrastructure assets. Due to the developmentpatternsoftheVillagesince1958,muchofthe water and sewer infrastructure as well as road deficiencies exist in the Cook County portions of the Village. However, given the desire to balance the needs of the entire village withthisinitiative,severalprojectsareplannedvillage-wide overthenextfiveyearsandbeyond.

Learn More About Key IMP Projects

Saxon&DowningImprovement

Melinda&HiawathaImprovement

GreenKnolls&GailImprovement

AppleHill&TenerifeImprovement

Thompson&BrandywynContract1

Make significant Investments into infrastructure upgrades and replacements.

In2020,theBoardapprovedabondissue totaling$24million-$14millionfor water/sewerand$10millionforstreets,to beginourinfrastructuremodernization project,withminimalimpactonthe propertytaxlevy.

Factors Regarding the

Complete planned Capital Improvements over time.

Overthenextfiveyears,theVillage projectsinvestingover$50millioninto water,sewerandstreets.

Maintenance

Key IMP Project Impacts and Results

Minimize resident disruption.

Secure sustainable funding into the future.

Totheextentpossible,projectsequencing willbearrangedsuchthatentire neighborhoodswillbecompletedwithinone tothreeyearsbasedonoutsidefundinginan efforttoreduceserviceinterruptionsand overalldisruption.

The Village Board and staff have devoted a great deal of time to developing sustainable practices to improve and maintain our core infrastructure.