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HomeMy Public PortalAboutFY 2009 Certified Comprehensive Annual Financial Report-ix- June 10, 2010 Honorable President Members of the Board of Trustees Citizens of the Village of Glenview State law requires that every general-purpose local government publish, within six months of the close of each fiscal year, a complete set of audited financial statements. The Comprehensive Annual Financial Report of the Village of Glenview, Illinois, for the fiscal year ended December 31, 2009 is published to fulfill that requirement. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal controls that are established for this purpose. Because the cost of internal controls should not exceed the anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Miller, Cooper & Co., Ltd, Certified Public Accountants, has issued an unqualified (“clean”) opinion on the Village of Glenview’s (the “Village”) financial statements for the year ended December 31, 2009. The independent auditor’s report is located at the front of the financial section of this report. Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. Profile of the Village of Glenview The Village, incorporated in 1899, is located in northern Cook County and is 20 miles north of the City of Chicago. The Village serves a population of approximately 44,600. The Village is considered to be a primary government and provides a full range of general governmental services. The Village is empowered to levy a property tax on real property located within its boundaries. It also is empowered by state statute to extend its corporate limits by annexation, which it has done from time to time. The Village’s legislative body consists of the Village President and Board of six Trustees, all elected on an at-large basis to overlapping four-year terms. The Village Manager is responsible for the day-to-day operations of the Village. The Village of Glenview is a home rule municipality as defined by the Illinois Constitution. -xiv- VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -3- . Our discussion and analysis of the Village of Glenview’s financial performance provides an overview of the Village’s financial activities for the fiscal year ended December 31, 2009. Please read it in conjunction with the transmittal letter, which begins on page ix and the Village’s financial statements, which begin on page 20. FINANCIAL HIGHLIGHTS • The Village’s net assets decreased as a result of this year’s operations. Net assets of governmental activities increased by $395,277, or .2%, while net assets of the business-type activities decreased by $894,577, or 1.7%, resulting in total ending net assets for the year of $249,573,390. • During the year, government-wide revenues before transfers for the governmental and business-type activities totaled $99,253,846, while expenses totaled $99,753,146, resulting in the decrease in net assets of $499,300. • The Village’s net assets totaled $249,573,390 on December 31, 2009, which includes $132,813,507 invested in capital assets, net of related debt, $39,881,012 subject to external restrictions, and $76,878,871 unrestricted net assets that may be used to meet the ongoing obligations to citizens and creditors. • The General Fund reported a surplus for the year of $3,925,369, primarily as a result of expense management during the year resulting in expenses being $4,883,923 lower than budget. Some of the larger savings were realized in personnel costs ($1,849,794) due to staff reductions and Transfers Out ($2,000,000) due to a delay in the Pfingsten Road project. USING THIS ANNUAL REPORT This annual report consists of a series of financial statements. The Statement of Net Assets and the Statement of Activities (on pages 20-23) provide information about the activities of the Village as a whole and present a longer-term view of the Village’s finances. Fund financial statements begin on page 24. For governmental activities, these statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the Village’s operations in more detail than the government-wide statements by providing information about the Village’s most significant funds. The remaining statements provide financial information about fiduciary activities for which the Village acts solely as a trustee or agent for the benefit of those outside of the government. Government-Wide Financial Statements The government-wide financial statements provide readers with a broad overview of the Village’s finances, in a matter similar to a private-sector business. The government wide financial statements can be found on pages 20- 22 of this report. The Statement of Net Assets reports information on all of the Village’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Village is improving or deteriorating. Consideration of other nonfinancial factors, such as changes in the Village’s property tax base and the condition of the Village’s infrastructure, is needed to assess the overall health of the Village. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -4- . USING THIS ANNUAL REPORT – Continued Government-Wide Financial Statements - Continued The Statement of Activities presents information showing how the government’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). 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 general government, public works, public safety, and development. The business-type activities of the Village include water services, North Maine water and sewer operations, sanitary sewerage operations, wholesale water operations, and commuter parking operations. The Village includes one separate legal entity in its report. The Glenview Public Library is presented as a discretely presented component unit. Although legally separate, this “component unit” is important because the Village is financially accountable for it. Financial information for the component unit is reported separately from the financial information presented for the primary government itself. 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, like other local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Village can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the Village’s near-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 the comparison between governmental funds and governmental activities. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -5- . USING THIS ANNUAL REPORT – Continued Governmental Funds - Continued The Village maintains eighteen 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 Fund, Special Tax Allocation Fund, Village Permanent Fund, The Glen Land Sales Fund and the General Obligation Taxable Bond Series of 2009E fund, all of which are considered to be major funds. Data from the other thirteen governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The Village adopts an annual appropriated budget for all of the governmental funds. Budgetary comparison schedules for all budgeted funds have been provided to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 24-29 of this report. Proprietary Funds The Village maintains two proprietary fund types: enterprise and internal service. Enterprise funds are used to report the same functions presented as business-type activities in the government–wide financial statements. The Village utilizes enterprise funds to account for its water services, North Maine water and sewer operations, sanitary sewerage operations, wholesale water operations, and commuter parking operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the Village’s various functions. The Village uses internal service funds to account for its capital equipment replacement program, municipal equipment repair program, facilities replacement program, insurance program, and risk management program. These services predominantly benefit governmental rather than business-type functions, and therefore, have been included within governmental activities in the government-wide financial statements. Proprietary fund financial statements 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 Glenview Water Fund, the North Maine Water and Sewer Fund, and the Glenview Sanitary Sewer Fund, all of which are considered to be major funds of the Village. Data from the other two proprietary funds are combined into a single, aggregated presentation. Conversely, the internal service fund is presented in the proprietary fund financial statements in a single column. Individual fund data for the internal service funds is provided elsewhere in this report. The basic proprietary fund financial statements can be found on pages 30–39 of this report. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the Village’s own programs. The accounting use for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on pages 40-41 of this report. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -6- . USING THIS ANNUAL REPORT – Continued Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 42- 104 of this report. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the Village’s Illinois Municipal Retirement Fund, police and fire, and other post-employment benefit employee pension obligations. The required supplementary information also contains budget to actual comparison schedules for the General Fund and major special revenue funds. Required supplementary information can be found on pages 105-113 of this report. The combining statements referred to earlier in connection with non-major governmental funds and internal service funds are presented immediately following the required supplementary information on pensions. Combining and individual fund statements and schedules for the Village can be found on pages 114-190 of this report. Additionally, the combining and individual fund statements for the Component Unit can be found on pages 191-214. GOVERNMENT-WIDE FINANCIAL ANALYSIS Net assets may serve over time as a useful indicator of a government’s financial position. The following tables show that in the case of the Village of Glenview, assets exceeded liabilities by $249,573,390 at December 31, 2009, compared to $250,072,690 at December 31, 2008. 200920082009200820092008 Current and Other Assets$131,757,163$139,338,975$9,366,283$12,498,835$141,123,446$151,837,810 Capital Assets207,226,175206,837,92256,235,67856,046,222263,461,853262,884,144 Total Assets338,983,338346,176,89765,601,96168,545,057404,585,299414,721,954 Long-Term Debt 111,820,53792,894,67210,503,51511,007,025122,324,052103,901,697 Other Liabilities30,655,76657,170,4672,032,0913,577,10032,687,85760,747,567 Total Liabilities142,476,303150,065,13912,535,60614,584,125155,011,909164,649,264 Net Assets Invested in Capital Assets, Net of Related Debt87,607,48878,477,14145,206,01943,348,719132,813,507121,825,860 Restricted39,881,01249,074,532- - 39,881,01249,074,532 Unrestricted (Deficit)69,018,53568,560,0857,860,336 10,612,21376,878,87179,172,298 Total Net Assets$196,507,035$196,111,758$53,066,355 $53,960,932$249,573,390$250,072,690 Net Assets Total Governmental Activities Business-type Activities VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -7- . GOVERNMENT-WIDE FINANCIAL ANALYSIS – Continued A large portion of the Village’s net assets, $132,813,507 or 53.2%, reflects its investment in capital assets (for example, infrastructure, land, buildings and improvements, machinery, and equipment), less any related debt used to acquire those assets that is still outstanding. The Village uses these capital assets to provide services to citizens; 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 this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion, $39,881,012 or 16.0%, of the Village’s net assets represents resources that are subject to external restrictions on how they may be used, including restrictions for future street improvements, debt service payments, public safety, and future capital development. The remaining 30.8%, or $76,878,871, represents unrestricted net assets and may be used to meet the government’s ongoing obligations to citizens and creditors. At the end of the current fiscal year, the Village is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the previous fiscal year, as reflected in the table above. Normal Impacts There are six basic (normal) transactions that will affect the comparability of the Statement of Net Assets summary presentation: • 1) Net Results of Activities – which will impact (increase/decrease) current assets and unrestricted net assets. • 2) Borrowing for Capital – which will increase current assets and long-term debt outstanding. • 3) 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 investment in capital assets, net of related debt total. • 4) Spending Nonborrowed Current Assets on New Capital – which will (a) reduce current assets and increase capital assets and (b) will reduce unrestricted net assets and increase investment in capital assets, net of related debt. • 5) Principal Payment on Debt – which will (a) reduce current assets and reduce long-term debt and (b) reduce unrestricted net assets and increase investment in capital assets, net of related debt. • 6) Reduction of Capital Assets through Depreciation – which will reduce capital assets and reduce investment in capital assets, net of related debt. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -8- . 200920082009200820092008 Revenues Program Revenues Charges for Services$10,817,726$9,327,348$19,721,204$18,860,140$30,538,930$28,187,488 Operating Grants/Contrib.1,172,8991,401,777- - 1,172,8991,401,777 Capital Grants/Contrib.1,267,384- - - 1,267,384- General Revenues Taxes Property Taxes33,863,90737,030,734- - 33,863,90737,030,734 Home Rule Sales Tax5,920,7425,531,093- - 5,920,7425,531,093 Telecommunication Taxes2,583,4572,562,607- - 2,583,4572,562,607 Utility Taxes3,313,2183,541,338- - 3,313,2183,541,338 Other Taxes841,6581,109,982- - 841,6581,109,982 Intergovernmental Sales Tax11,943,63313,118,090- - 11,943,633 13,118,090 State Income Tax3,612,2824,207,152- - 3,612,2824,207,152 Local Use Tax519,587648,277- - 519,587648,277 Road and Bridge Tax294,331292,977- - 294,331292,977 Property Replacement Tax228,225273,588- - 228,225273,588 Other 357,770271,803- - 357,770271,803 Other General Revenues2,706,5465,535,90889,277268,0192,795,8235,803,927 Total Revenues79,443,36584,852,67419,810,48119,128,15999,253,846103,980,833 Expenses General Government29,780,62127,195,744- - 29,780,62127,195,744 Public Works12,741,12913,998,908- - 12,741,12913,998,908 Public Safety26,456,77127,622,472- - 26,456,77127,622,472 Development8,467,3407,306,324- - 8,467,3407,306,324 Interest on Long-Term Debt6,001,8866,068,865- - 6,001,8866,068,865 Water Services- - 7,733,0488,254,5417,733,0488,254,541 North Maine Water and Sewer- - 5,782,2166,148,1515,782,2166,148,151 Sanitary Sewerage- - 1,238,3831,473,3181,238,3831,473,318 Wholesale Water- - 1,074,8121,110,1761,074,8121,110,176 Commuter Parking- - 476,940381,133476,940381,133 Total Expenses83,447,74782,192,31316,305,39917,367,31999,753,14699,559,632 Change in Net Assets Before Transfers(4,004,382)2,660,3613,505,0821,760,840(499,300)4,421,201 Transfers4,399,659287,180(4,399,659)(287,180)- - Change in Net Assets395,2772,947,541(894,577)1,473,660(499,300)4,421,201 Net Assets-Beginning 196,111,758193,164,21753,960,93252,487,272250,072,690245,651,489 Net Assets-Ending$196,507,035$196,111,758$53,066,355$53,960,932$249,573,390$250,072,690 Changes in Net Assets Total Governmental Activities Business-Type Activities VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -9- . GOVERNMENT-WIDE FINANCIAL ANALYSIS – Continued Normal Impacts There are eight basic (normal) impacts on revenues and expenses as reflected below: Revenues: • 1) Economic Condition – which can reflect a declining, stable, or growing economic environment and has a substantial impact on state income, sales, and utility tax revenue as well as public spending habits for building permits, elective user fees, and levels of consumption. • 2) Increase/Decrease in Village-Approved Rates – while certain tax rates are set by statute, the Village Board has significant authority to impose and periodically increase/decrease rates (property taxes, water, sewer, impact fees, building fees, home rule sales tax, etc.). • 3) Changing Patterns in Intergovernmental and Grant Revenue (both Recurring and Nonrecurring) – certain recurring revenues (state-shared revenues, etc.) may experience significant changes periodically, while nonrecurring (or one-time) grants are less predictable and often distorting on their impact on year-to-year comparisons. • 4) Market Impacts on Investment Income – the Village’s investment policy is managed using a similar average maturity to most governments. Market conditions may cause investment income to fluctuate. Expenses: • 5) Introduction of New Programs – within the functional expense categories (general government, public works, public safety, etc.), individual programs may be added or deleted to meet changing community needs. • 6) Change in Authorized Personnel – changes in service demand may cause the Village Board to increase/decrease authorized staffing. Personnel costs (salary and related benefits) represent approximately 64.9% of the Village’s General Fund and approximately 14.4% of enterprise operating costs at December 31, 2009. • 7) Salary Increases (Annual Adjustments and Merit) – the ability to attract and retain human and intellectual resources requires the Village to strive to approach a competitive salary range position in the marketplace. • 8) Inflation – while overall inflation appears to be reasonably modest, the Village is a major consumer of certain commodities such as supplies, fuels, and parts. Some functions may experience unusual commodity-specific increases. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -10- . GOVERNMENT-WIDE FINANCIAL ANALYSIS – Continued Net assets of the Village’s governmental activities increased by .2%, or $395,277 ($196,507,035 in 2009 compared to $196,111,758 in 2008). The increase in the prior year for governmental activities was $2,947,541. Unrestricted net assets, the part of net assets that can be used to finance day-to-day operations without constraints, totaled $69,018,535 at December 31, 2009, an increase of $458,450 from 2008. Net assets of business-type activities decreased by 1.7%, or $894,577 ($53,066,355 in 2009 compared to $53,960,932 in 2008). The increase in the prior year for business-type activities was $1,473,660. Unrestricted net assets totaled $7,860,336 at December 31, 2009, a decrease of $2,751,877. Governmental Activities Revenues: Revenues for governmental activities totaled $79,443,365 at December 31, 2009 and $84,852,674 at December 31, 2008, a decrease of $5,409,309. Some key changes during the year for the governmental activity revenues are described below: • In 2008, the Village received proceeds from sale of land held for resale of $3,126,283. In 2009 there was no sale of land held for resale. • Property Taxes decreased 8.6%, or $3,166,827, as a result of a decrease of $3,415,842 in TIF incremental taxes ($23,897,485 in 2009 compared to $27,313,327 in 2008). • Home Rule Sales Tax increased from $5,531,093 at December 31, 2008 to $5,920,742 at December 31, 2009, reflecting a 7.04% increase due to the first full year recognition of the newly adopted rate of .75% effective July 2008. • Charges for Services revenues in Development activity increased $1,197,837, or 59% in part due to an increase in Licenses and Permits revenues. This increase is attributable to the building permits and engineering fees for a number of large development projects in the Village during the year. • Charges for Services Revenues in Public Safety activity increased $1,198,131, or 29.4% due to a large increase in the Ambulance Fees received during 2009 as this was the first full year of the Village receiving the fee which was initiated in late 2008. • General Sales Tax decreased $1,174,457, or 8.9% from 2008 and Income Tax decreased $594,870, or 14.1% due in large part to the declining economic environment. • Another significant decrease in revenues for the governmental activities occurred in the Investment Income category. Investment earnings for the governmental activities totaled $2,234,453 at December 31, 2008, while this total was only $975,360 at December 31, 2009, a decrease of $1,259,093, or 56.0%. The declining economic environment and drastically lower interest rates have greatly affected investment returns on the Village’s holdings. The Village has been working with an investment management firm to address cash flow needs and long-term investment returns in the hopes of improving investment returns and to position the Village to take advantage of higher interest rates when they do start to rebound. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -11- . GOVERNMENT-WIDE FINANCIAL ANALYSIS – Continued Governmental Activities – Continued Revenues – Continued Overall, for the year ended December 31, 2009, the large decrease in proceeds from sale of land, Property Taxes, General Sales Tax and Investment Income were somewhat offset by increases in Home Rule Sales Tax, Charges for Services revenues in both development and public safety resulting in the overall decrease in revenues in 2009 of $5,409,309 as compared to 2008. The following table graphically depicts the major revenue sources of the Village. It depicts very clearly the reliance of Property Taxes and Sales Taxes to fund governmental activities. It also clearly identifies the less significant percentage the Village receives from Income Taxes, Telecommunication Taxes, and Utility Taxes. Charges for Services 14% Operating Grants/Contrib. 1% Capital Grants/Contrib. 2% Property Taxes 43% Sales Taxes 22% Income Taxes 5% Telecomm Taxes 3% Utility Taxes 4% Other General Revenues 6% Revenues by Source -Governmental Activities December 31, 2009 VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -12- . GOVERNMENT-WIDE FINANCIAL ANALYSIS – Continued Governmental Activities – Continued Expenditures For the year ended December 31, 2009, governmental activities expenses totaled $83,447,747, an increase of $1,255,434, or 1.5%. For the most part, governmental operating expenses decreased during the year due in large part to the Village management’s approach to closely managing expenditures in response to the projected decrease in several sources of revenues. The village wide cost cutting initiatives included staff reductions and lower spending in the contractual services and commodities categories. However, these expense reductions were offset by a substantial one-time governmental expenditure during the year of $3,215,448. This expense was for the employer portion of the Early Retirement Incentive (ERI) payment. This ERI program was offered to eligible employees as a part of the comprehensive staff reduction plan initiated by the Village. The ‘Expenses and Program Revenues’ Table identifies those governmental functions where program expenses exceed revenues. These deficits are expected due to the fact that the governmental functions are primarily support by General Revenues (for instance Property Taxes and Sales Taxes) rather than the Program Revenues. $- $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 General Government Public WorksPublic SafetyDevelopmentInterest on Long-Term Debt Expenses and Program Revenues -Governmental Activities December 31, 2009 Revenues Expenses VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -13- . GOVERNMENT-WIDE FINANCIAL ANALYSIS – Continued Business-Type activities Business-Type activities posted total revenues of $19,810,481, while the cost of all business-type activities totaled $16,305,399. This results in a surplus of $3,505,082 prior to net transfers out of $4,399,659. In 2008, revenues of $19,128,159 exceed expenses of $17,367,319, resulting in a surplus of $1,760,840 prior to net transfers out of $287,180. Revenues For the fiscal year ended December 31, 2009, revenues for the business-type activities totaled $19,810,481, an increase of $682,322, or 3.6%, due primarily to increased charges for services ($19,721,204 in 2009 compared to $18,860,140 in 2008). Expenses Expenses for the year ended December 31, 2009 totaled $16,305,399, a decrease of $1,061,920, or 6.1%, primarily as a result of a combined decrease of $1,055,128 in operational expenses in all of the Enterprise Funds (Glenview Water Fund, North Maine Water and Sewer Fund, Glenview Sanitary Sewer Fund, Wholesale Water Fund and Commuter Parking Fund). $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 Water ServicesNorth Maine Water and Sewer Sanitary Sewerage Wholesale Water Commuter Parking Expenses and Program Revenues -Business-Type Activities December 31, 2009 Revenues Expenses The above graph compares program revenues to expenses for utility operations. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -14- . FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS As noted earlier, the Village uses 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. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. The Village’s governmental funds reported combining ending fund balances of $91,322,307, which is $7,634,237, or 7.7%, lower than last year’s total of $98,956,544. Of the $91,322,307 total, $31,946,509, or approximately 35.0%, of the fund balance constitutes unreserved fund balance. General Fund The General Fund reported a surplus for the year of $3,925,369, an increase of 24.2%. As previously discussed, this surplus was primarily a result of managing expenses during the year. Total expenditures were $4,883,923 lower than budget. Some of the larger savings were realized in Personnel Costs $1,849,794 due to staff reductions and Transfers Out $2,000,000 due to a delay in the Pfingsten Road project. The General Fund is the chief operating fund of the Village. At December 31, 2009, unreserved fund balance in the General Fund was $20,044,782, which represents 99.6% of the total fund balance of the General Fund. As a measure of the General Fund’s liquidity, it is useful to compare unreserved fund balance to total fund expenditures. Unreserved fund balance in the General Fund represents approximately 41.4% of total General Fund expenditures. Other Major Funds The Special Tax Allocation Fund is used to account for the incremental property tax revenue that is generated through the growth of the assessed valuation at The Glen, (formally referred to as Glenview Naval Air Station) and the ‘Make-Whole’ payments to core jurisdictions within the boundaries of the Tax Increment Financing District. The core jurisdictions consist of: the Village of Glenview, School District 34, School District 225, the Glenview Park District, and the Glenview Public Library, a discretely presented component unit of the Village. This fund also accounts for the service and incentive fees within the Tax Increment Financing District. At December 31, 2009 the Special Tax Allocation Fund reported a surplus of $1,402,199, due primarily to a transfer in from the Glen Land Sales Fund. The Village Permanent Fund, reported as a capital projects fund, was formed from 20% of the land sales proceeds of The Glen (formally referred to as Glenview Naval Air Station). Ongoing, the resources are used for Village- wide improvements as well as short-term liquidity for the Villlage’s Tax Increment Financing (TIF) projects at The Glen. For the year ended December 31, 2009 the Village Permanent Fund reported a deficit of $5,809,551, primarily the result of a budgeted transfer to the Capital Projects Fund of $3,100,974 for TIF related capital projects and a one-time personnel expenditure of $3,215,448 for an early retirement program offered to employees. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -15- . FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS – Continued Governmental Funds – Continued Other Major Funds – Continued The Glen Land Sales Fund, also reported as a capital projects fund, accounts for resources and expenditures related to the sale of properties in The Glen TIF District. For the year ended December 31, 2009 The Glen Land Sales Fund reported a deficit of $2,649,261, primarily as the result of land sales revenue of $373,671 and operating transfers in from other funds of $1,576,259 that was offset by operating transfers out to other funds of $3,878,489, including the $3,578,489 transfer to the Special Tax Allocation Fund. The General Obligation Taxable Bond Series of 2009E Fund is used to account for monies collected and paid for the Series 2009E taxable bonds, issued in the amount of $29,125,000 to acquire land in the Glenview Naval Air Station Economic Development Project Area. For the year ended December 31, 2009 the General Obligation Taxable Bond Series of 2009E Fund reported a deficit of $1,634,165, due to the refunding during the year of the outstanding Bond Series 2006B which resulted in Bond Proceeds of $28,125,000 offset by Interest and fiscal charges combined with Payment to escrow agent of $29,423,363. Proprietary Funds The Village’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The Village reports the Glenview Water, the North Maine Water and Sewer, and the Glenview Sanitary Sewer Funds as major proprietary funds. The Village also reports two nonmajor proprietary funds, the Wholesale Water Fund and the Commuter Parking Fund. The Glenview Water Fund accounts for the provision of water services to the property owners in the Village. The North Maine Water Fund accounts for the provision of water and sewer services to the property owners in an unincorporated area southwest of the Village. The Glenview Sanitary Sewer Fund accounts for the provision of sanitary sewer services to property owners in both incorporated and unincorporated areas of the Village. The Village purchases Lake Michigan water from neighboring Wilmette. The spread between purchase and sale rates is intended to finance the operations of the utility system, including labor costs, supplies, and infrastructure maintenance. The deficit in the Glenview Water Fund during the current fiscal year was $537,955, while the previous fiscal year reported a surplus of $271,683. Transfers out to other funds of $1,210,892 were $924,690 higher than last year. Unrestricted net assets in the Glenview Water Fund totaled $3,391,510 at December 31, 2009. The North Maine Water and Sewer Fund reported a surplus for the current year of $668,094, compared to the prior year when it reported a deficit of $17,270. Operating revenues of $7,206,186 were $381,550 higher than last year and operating expenses of $5,508,732 were $233,216 lower than last year. Total net assets at December 31, 2009 were $1,752,502. The surplus in the current year in the Glenview Sanitary Sewer Fund was $603,152, resulting in ending net assets of $13,951,375. In the prior year the Glenview Sanitary Sewer Fund also reported a surplus of $493,316. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -16- . GENERAL FUND BUDGETARY HIGHLIGHTS The Village Board made no budget amendments to the General Fund during the year. General Fund actual revenues for the year totaled $52,296,245, compared to budgeted revenues of $55,156,017, a shortfall of $2,859,772. As stated earlier, due to the economic downturn, several revenues came in much lower than budgeted. Budgeted general sales tax was $13,000,000 for the year, while actual general sales tax was $11,943,633 for the year, reflecting a shortfall of $1,056,367. State shared income tax of $3,612,282 fell $794,418 lower than the budgeted amount of $4,406,700. Utility tax receipts were $1,123,325 below budget due to an electric service rate reduction and a drop in the price of natural gas. Furthermore, investment income of $130,382 was $304,618 lower than the budgeted investment income of $435,000 due to reduced interest rates across all investments. These declines were offset, however, by 2008 enacted ambulance fees of $1,346,132 being $646,132 higher than the anticipated amount of $700,000. The General Fund original budgeted expenditures for the year of $53,254,799 were $4,883,923 higher than actual expenditures of $48,370,876. These lower than anticipated expenditures were due to the Village senior management team taking a proactive approach to the expected shortfall in revenues by aggressively managing expenditures for the year. Personnel expenditures were $1,849,794 lower than budget due to staff reductions. Actual expenditures for transfers to Capital Projects were $2,000,000 lower than budget due to the decision to delay a major road project as a result of the downturn in the economy. Final2009 BudgetActual Revenues Taxes$23,450,727$23,450,727$22,625,497 Intergovernmental22,378,67822,378,67820,372,319 Other6,636,9586,636,9586,784,427 Total Revenues52,466,36352,466,36349,782,243 Expenditures(50,224,309)(52,224,309)(45,315,254) Transfers In2,689,6542,689,6542,514,002 Transfers Out(3,030,490)(1,030,490)(3,055,622) Total Expenditures & Transfers(50,565,145)(50,565,145)(45,856,874) Net Change in Fund Balance$1,901,218$1,901,218$3,925,369 General Fund Budgetary Highlights Original Budget CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The Village’s investment in capital assets for its governmental and business type activities as of December 31, 2009 was $263,461,853 (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, machinery, equipment, and vehicles, water and sanitary sewer system improvements, and other infrastructure improvements. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -17- . CAPITAL ASSETS AND DEBT ADMINISTRATION - Continued Capital Assets - Continued 200920082009200820092008 Construction in Progress$1,003,290$939,207$209,803$- $1,213,093$939,207 Land11,860,69811,860,698802,851802,85112,663,54912,663,549 Land Right of Way55,142,28355,141,318- - 55,142,28355,141,318 Buildings and Improvements61,013,20759,516,854978,2551,026,87261,991,46260,543,726 Machinery, Equipment and Vehicles2,329,8582,672,576 596,087705,1692,925,9453,377,745 Infrastructure75,876,83976,707,269- - 75,876,83976,707,269 Water System- - 38,259,32838,590,07038,259,32838,590,070 Sanitary Sewer System- - 15,389,35414,921,26015,389,35414,921,260 Total$207,226,175$206,837,922$56,235,678$56,046,222 $263,461,853$262,884,144 Capital Assets - Net of Depreciation Total Business-typeGovernmental Activities Activities This year’s major additions included: Buildings and Improvements$3,395,182 Infrastructure, including roadways, etc.2,038,522 Construction in Progress (pump station, road program)1,003,290 Total $6,436,994 Additions Additional information on the Village’s capital assets can be found in Note D on pages 64-67 of this report. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -18- . CAPITAL ASSETS AND DEBT ADMINISTRATION - Continued Debt Administration At year-end, the Village had total outstanding debt of $130,162,645 as compared to $141,188,909 the previous year, a decrease of $11.0 million, or 7.8% which included two bond refundings during the year coupled with principal retirements that reduced the outstanding liability on the bonds. The following is a comparative statement of outstanding debt: 200920082009200820092008 General Obligation Bonds$118,865,000$128,505,000$9,629,897$10,889,470$128,494,897$139,394,470 Corporate Purpose Notes- - 1,667,7481,794,4391,667,7481,794,439 Total$118,865,000$128,505,000$11,297,645$12,683,909 $130,162,645$141,188,909 Long-Term Debt Outstanding Total Business-typeGovernmental ActivitiesActivities The Village maintains an Aaa rating from Moody’s for general obligation debt. This rating has not changed in the past six years. As the Village is a home rule community, there is not legal limit for outstanding debt. Additional information on the Village’s long-term debt can be found in Note F on pages 70-78 of this report. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES The Village’s elected and appointed officials considered many factors when setting the fiscal-year 2010 budget, tax rates, and fees that will be charged for its governmental and business-type activities. One of those factors is the economy. Unemployment rates for the Village were 6.9% for 2009, an increase of 2.7% from 2008, or 64%. Rising unemployment, declining interest rates and downturn in the stock market have created a tough economic environment which has not left the Village unscathed. All of these indicators were taken into account when adopting the budget for 2010. At the time of preparing the 2010 budget, it was projected that the Village would continue to experience decreases in revenues. However, expenditures in most areas were also trimmed to the fullest extent possible without impacting core services provided. Plans for beyond 2010 are also being developed to ensure the Village’s long term economic sustainability. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2009 -19- . REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the Village of Glenview’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional information should be directed to the Administrative Services Department, Village of Glenview, 1225 Waukegan Road, Glenview, Illinois 60025.