Loading...
HomeMy Public PortalAboutFY 2008 Certified Comprehensive Annual Financial Report-ix- July 30, 2009 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. This report is published to fulfill that requirement for the year ended December 31, 2008. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that is established for this purpose. Because the cost of internal control 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”) financials statements for the year ended December 31, 2008. 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. The Village provides a full range of services, including police and fire protection, health services, water and sewer utilities, street construction and maintenance, code enforcements, planning and zoning, and general administrative services. In addition to serving Village residents, the Fire Department also provides fire protection and ambulance service to the Village of Golf, as well as the Glenbrook Fire Protection District, which is comprised of approximately 20,000 residents located in unincorporated Cook County. Both of these entities have long-term intergovernmental agreements with the Village to pay for these services. Likewise, the Village operates the North Maine utilities system, which provides water and sewer service to 5,100 customers also primarily in unincorporated Cook County. The Honorable Village President and Members of the Board of Trustees Village of Glenview, Illinois (Continued) INDEPENDENT AUDITORS' REPORT Wehaveauditedtheaccompanyingfinancialstatementsofthegovernmentalactivities,thebusiness- typeactivities,thediscretelypresentedcomponentunit,eachmajorfund,andtheaggregateremaining fundinformationoftheVillageofGlenview,Illinois,asof andfortheyearendedDecember31,2008, whichcollectivelycomprisetheVillage’sbasicfinancial statements,aslistedinthetableofcontents. ThesefinancialstatementsaretheresponsibilityoftheVillageofGlenview,Illinois'management.Our responsibility is to express opinions on these financial statements based on our audit. WeconductedourauditinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStates ofAmerica.Thosestandardsrequirethatweplanandperform theaudittoobtainreasonableassurance aboutwhetherthefinancialstatementsarefreeofmaterial misstatement.Anauditincludes considerationofinternalcontrolandfinancialreporting asabasisfordesigningauditproceduresthat areappropriateinthecircumstances,butnotforthepurposeofexpressinganopiniononthe effectivenessoftheVillage'sinternalcontroloverfinancialreporting.Accordingly,weexpressnosuch opinion.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosures inthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedand significantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatement presentation. We believe that our audit provides a reasonable basis for our opinions. Inouropinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,the respectivefinancialpositionofthegovernmentalactivities,thebusiness-typeactivities,thediscretely presentedcomponentunit,eachmajorfund,andtheaggregateremainingfundinformationofthe VillageofGlenview,Illinois,asofDecember31,2008,andtherespectivechangesinfinancialposition andthecashflows,whereapplicable,thereoffortheyearthenendedinconformitywithaccounting principles generally accepted in the United States of America. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -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, 2008. 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 increased as a result of this year’s operations. Net assets of governmental activities increased by $2,947,541, or 1.5 percent, and net assets of the business- type activities increased by $1,473,660, or 2.8 percent, resulting in total ending net assets for the year of $250,072,690. • During the year, government-wide revenues before transfers for the governmental and business- type activities totaled $103,980,833, while expenses totaled $99,559,632, resulting in the increase to net assets of $4,421,201. • The Village’s net assets totaled $250,072,690 on December 31, 2008, which includes $121,825,860 invested in capital assets, net of related debt, $49,074,532 subject to external restrictions, and $79,172,298 unrestricted net assets that may be used to meet the ongoing obligations to citizens and creditors. • The General Fund reported a deficit for the year of $2,625,638, primarily as a result of operating transfers out to other funds of $4,957,232, including $3,708,243 to the Capital Projects Fund to fund planned capital improvements/purchases, $1,239,681 to the Joint Dispatch Fund, and $9,308 to the Police Department Headquarters Fund. 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 through 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. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -4- . USING THIS ANNUAL REPORT – Continued 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 through 23 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. 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. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -5- . USING THIS ANNUAL REPORT – Continued Fund Financial Statements – Continued 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. The Village maintains nineteen 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, and the Glen Land Sales Fund, all of which are considered to be major funds. Data from the other fifteen 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, except the 2006B Bond Project Fund, and the Police Department Headquarters Fund. 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 through 28 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. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -6- . USING THIS ANNUAL REPORT – Continued Fund Financial Statements – Continued Proprietary Funds – Continued The Village uses internal service funds to account for its capital equipment replacement program, municipal equipment replacement 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 funds are 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 through 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 through 41 of this report. 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 45 through 102 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 I/M/R/F, 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, including the Special Tax Allocation Fund. Required supplementary information can be found on pages 103 through 108 of this report. The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information on pensions. Combining and individual fund statements and schedules can be found on pages 124 through 173 of this report. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -7- . 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 $250,072,690 at December 31, 2008, compared to $245,651,489 at December 31, 2007. 2008 2007 2008 2007 2008 2007 Current and other assets $139,338,975 $144,813,014 $12,498,835 $14,620,897 $151,837,810 $159,433,911 Capital assets 206,837,922 208,331,090 56,046,222 53,796,474 262,884,144 262,127,564 Total assets 346,176,897 353,144,104 68,545,057 68,417,371 414,721,954 421,561,475 Long-term debt 92,894,672 130,564,187 11,007,025 12,388,865 103,901,697 142,953,052 Other liabilities 57,170,467 29,415,700 3,577,100 3,541,234 60,747,567 32,956,934 Total liabilities 150,065,139 159,979,887 14,584,125 15,930,099 164,649,264 175,909,986 Net assets Invested in capital assets, net of related debt 78,477,141 83,298,383 43,348,719 40,143,214 121,825,860 123,441,597 Restricted 49,074,532 54,229,537 - - 49,074,532 54,229,537 Unrestricted (deficit)68,560,085 55,636,297 10,612,213 12,344,058 79,172,298 67,980,355 Total net assets $196,111,758 $193,164,217 $53,960,932 $52,487,272 $250,072,690 $245,651,489 Net Assets Total Governmental Activities Business-type Activities A large portion of the Village’s net assets, $121,825,860 or 48.7 percent, 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, $49,074,532 or 19.6 percent, 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 31.7 percent, or $79,172,298, represents unrestricted net assets and may be used to meet the government’s ongoing obligations to citizens and creditors. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -8- . GOVERNMENT-WIDE FINANCIAL ANALYSIS – Continued 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 any 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, 2008 -9- . GOVERNMENT-WIDE FINANCIAL ANALYSIS – Continued 200820072008200720082007 Revenues Program revenues Charges for services$9,327,348$9,192,616$18,860,140 $18,439,703$28,187,488$27,632,319 Operating grants/contrib.1,401,7772,644,741- - 1,401,7772,644,741 Capital grants/contrib.- 1,473,479- 73,908- 1,547,387 General revenues Taxes Property taxes37,030,73429,533,794- - 37,030,73429,533,794 Home rule sales tax5,531,0934,637,466- - 5,531,0934,637,466 Telecommunication taxes2,562,6072,653,127- - 2,562,6072,653,127 Utility taxes3,541,3383,254,670- - 3,541,3383,254,670 Other taxes1,109,9821,103,360- - 1,109,9821,103,360 Intergovernmental Sales tax13,118,09013,600,730- - 13,118,090 13,600,730 State income tax4,207,1523,933,680- - 4,207,1523,933,680 Local use tax648,277595,772- - 648,277595,772 Road and bridge tax292,977238,426- - 292,977238,426 Property replacement tax273,588273,958- - 273,588273,958 Other 271,803779,280- - 271,803779,280 Other general revenues5,535,90810,143,837268,019362,8235,803,92710,506,660 Total revenues84,852,67484,058,93619,128,15918,876,434103,980,833102,935,370 Expenses General government27,195,74424,038,572- - 27,195,74424,038,572 Public works13,998,90821,897,066- - 13,998,90821,897,066 Public safety27,622,47225,405,356- - 27,622,47225,405,356 Development7,306,324- - - 7,306,324- Interest on long-term debt6,068,8656,751,793- - 6,068,8656,751,793 Water services- - 8,254,5418,241,8418,254,5418,241,841 North Maine water and sewer- - 6,148,1515,822,6936,148,1515,822,693 Sanitary sewerage- - 1,473,3181,675,4421,473,3181,675,442 Wholesale water- - 1,110,1761,221,4841,110,1761,221,484 Commuter parking- - 381,133458,586381,133458,586 Total expenses82,192,31378,092,78717,367,31917,420,04699,559,63295,512,833 Change in net assets Before transfers2,660,3615,966,1491,760,8401,456,3884,421,2017,422,537 Transfers287,180(989,499)(287,180)989,499- - Change in net assets2,947,5414,976,6501,473,6602,445,8874,421,2017,422,537 Net assets-beginning 193,164,217187,633,27452,487,27250,041,385245,651,489237,674,659 Restatements- 554,293- - - 554,293 Net assets-ending$196,111,758$193,164,217$53,960,932$52,487,272$250,072,690$245,651,489 Changes in Net Assets Total Governmental Activities Business-Type Activities VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -10- . GOVERNMENT-WIDE FINANCIAL ANALYSIS – Continued Normal Impacts There are eight basic (normal) impacts on revenues and expenses as reflected below: Revnues: • 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. Staffing costs (salary and related benefits) represent approximately 66.2 percent of the Village’s General Fund and approximately 15.4 percent of enterprise operating costs at December 31, 2008. • 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, 2008 -11- . GOVERNMENT-WIDE FINANCIAL ANALYSIS – Continued Net assets of the Village’s governmental activities increased by 1.5 percent, or $2,947,541 ($196,111,758 in 2008 compared to $193,164,217 in 2007). The increase in the prior year for governmental activities was $4,976,650. Unrestricted net assets, the part of net assets that can be used to finance day-to-day operations without constraints, totaled $68,560,085 at December 31, 2008, an increase of $12,923,788 from 2007. Net assets of business-type activities increased by 2.8 percent, or $1,473,660 ($53,960,932 in 2008 compared to $52,487,272 in 2007). The increase in the prior year for business-type activities was $2,445,887. Unrestricted net assets totaled $10,612,213 at December 31, 2008, a decrease of $1,731,845. Governmental Activities Revenues: Revenues for governmental activities totaled $84,852,674 at December 31, 2008 and $84,058,936 at December 31, 2007, an increase of $793,738. Some key changes during the year for the governmental activities revenues are described below: • In 2007, the Village received capital contributions from developers of $1,473,479. In 2008 there were no capital contributions received during the year. Also, operating grant revenues decreased from $2,644,741 in 2007 to $1,401,777 in 2008 as a result of FEMA grants received in 2007 that were not received in the current year. • Property taxes increased 25.4 percent, or $7,496,940, as a result of an increase of $6,810,486 in TIF incremental taxes ($27,313,327 in 2008 compared to $20,502,841 in 2007). • Home rule sales taxes increased from $4,637,466 at December 31, 2007 to $5,531,093 at December 31, 2008, reflecting a 19.3 percent increase. On July 1, 2008, the Village implemented a 0.25 percent rate increase in the home rule sales tax rate, resulting in an $893,627 increase in revenues. • State-shared sales tax decreased $482,640, or 3.6 percent, from 2007, due in large part to the declining economic environment, although income taxes increased $273,472, or 7.0 percent. • As stated earlier, operating grants and other one-time intergovernmental revenues decreased in the current year. Other intergovernmental revenues totaled $779,280 at December 31, 2007 and were only $271,803 at December 31, 2008. • The most significant decrease in revenues for the governmental activities occurred in the category labeled “other general revenues,” which includes investment earnings and miscellaneous income. Investment earnings for the governmental activities totaled $7,202,556 at December 31, 2007, while this total was only $2,234,453 at December 31, 2008, a decrease of $4,968,103, or 69.0 percent. The declining economic environment has greatly affected investment returns on the Village’s holdings. Subsequent to year-end, the Village hired an investment management firm to address cash flow needs and long-term investment returns in the hopes of improving investment returns in the coming months and years. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -12- . GOVERNMENT-WIDE FINANCIAL ANALYSIS – Continued Governmental Activities – Continued Revenues – Continued Overall, for the year ended December 31, 2008, the large increase in property tax revenues of $7,496,940, exceeded the decreases in other revenues, and particularly interest earnings, as described above, resulting in the overall increase in revenues in 2008 of $793,738 as compared to 2007. Although property taxes increased $7,496,940, the majority of this increase is due to increased incremental taxes in the TIF district; these funds are restricted to TIF debt service and improvements. 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. Revenues by Source - Governmental Activities December 31, 2008 Sales Taxes 22% Other General Revenues 10%Utility Taxes 4%Telecomm Taxes 3% Income Taxes 5% Property Taxes 44% Operating Grants/ Contributions 2% Charges for Services 11% VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -13- . GOVERNMENT-WIDE FINANCIAL ANALYSIS – Continued Governmental Activities – Continued Expenses At December 31, 2008, governmental activities expenses totaled $82,192,313, an increase of $4,099,526, or 5.3 percent. Increased expenses are attributable to a number of issues, including: personnel services annual salary and merit increases, and actuarial required pension fund increases for the Police Pension Fund and Firefighters’ Pension Fund. The expense for the Village’s contribution to the pension funds is included in the public safety function. In 2007, contributions to the two pension funds totaled $2,573,900, while the 2008 contributions to the two funds totaled $3,201,919, an increase of $628,019, or 24.4 percent. During the year-ended December 31, 2008, the Village reorganized several departments in the General Fund and split the 2007 function of “highways and streets” into “public works” and “development.” The ‘Expenses and Program Revenues’ Table identifies those governmental functions where program expenses greatly exceed revenues. Expenses and Program Revenues - Governmental Activities December 31, 2008 $- $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 General GovernmentPublic WorksPublic SafetyDevelopmentInterest on Long-Term Debt Revenues Expenses VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -14- . GOVERNMENT-WIDE FINANCIAL ANALYSIS – Continued Business-Type activities Business-Type activities posted total revenues of $19,128,159, while the cost of all business-type activities totaled $17,367,319. This results in a surplus of $1,760,840 prior to transfers out of $287,180. In 2007, revenues of $18,876,434 exceed expenses of $17,420,046, resulting in a surplus of $1,456,388 prior to transfers in of $989,499. Revenues For the fiscal year ended December 31, 2008, revenues for the business-type activities totaled $19,128,159, an increase of $251,725, or 1.3 percent, due primarily to a nonrecurring capital contribution of $73,908 in 2007 and increased charges for services ($18,860,140 in 2008 compared to $18,439,703 in 2007). Expenses Expenses at December 31, 2008 totaled $17,367,319, a decrease of $52,727, or less than one percent, primarily as a result of a $279,483 decrease in operational expenses in the Glenview Sanitary Sewer Fund, offset by marginal increases in operational expenses in the other enterprise funds. Expenses and Program Revenues - Business-Type Activities December 31, 2008 $- $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 SewerageWholesale WaterCommuter Parking Revenues Expenses The above graph compares program revenues to expenses for utility operations. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -15- . 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 General Fund 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 $98,956,544, which is $2,840,706, or 2.8 percent, lower than last year’s total of $101,797,250. Of the $98,956,544 total, $31,837,108, or approximately 32.2 percent, of the fund balance constitutes unreserved fund balance. The General Fund reported a deficit for the year of $2,625,638, a decrease of 14.0 percent. As previously discussed, this was due in large part to transfers out to other funds of $4,957,232 to fund capital projects and Joint Dispatch operations. Furthermore, actual revenues for the year of $47,181,204 were short of their budgeted number by $484,586, primarily the result of state sales tax declining due to the strained economic environment. The General Fund is the chief operating fund of the Village. At December 31, 2008, unreserved fund balance in the General Fund was $15,965,220, which represents 98.5 percent of the total fund balance of the General Fund. As a measure of the General Fund’s liquidity, it may be useful to compare unreserved fund balance to total fund expenditures. Unreserved fund balance in the General Fund represents approximately 33.8 percent 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 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 District. At December 31, 2008 the Special Tax Allocation Fund reported a surplus of $4,288,051, due primarily to an increase in incremental property taxes as discussed earlier and a transfer in from the Glen Land Sales Fund. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -16- . FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS – Continued Governmental Funds – Continued Other Major Funds – Continued The Village Permanent Fund, reported as a capital projects fund, is used to accumulate 20% of the land sales proceeds of The Glen (formally referred to as Glenview Naval Air Station). 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. At December 31, 2008, the Village Permanent Fund reported a deficit of $2,883,233, primarily the result of a budgeted transfer to the Capital Projects Fund of $3,932,623 for TIF-related capital projects. 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 Tax Increment Financing (TIF) District. At December 31, 2008, the Glen Land Sales Fund reported a deficit of $1,412,330, primarily as the result of land sales revenue of $3,126,283 that was offset by operating transfers out to other funds of $4,403,539, including the $3,760,000 transfer to the Special Tax Allocation Fund. 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 and Sewer 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 surplus in the Glenview Water Fund during the current fiscal year was $271,683, while the previous fiscal year reported a surplus of $1,719,495. Operating revenues declined $116,120 from the prior year. Unrestricted net assets in the Glenview Water Fund totaled $4,096,927 at December 31, 2008. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -17- . FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS – Continued Proprietary Funds – Continued The North Maine Water and Sewer Fund reported a deficit for the current year of $17,270, compared to the prior year when it reported a surplus of $273,640. Charges for services of $6,824,636 were $406,059 higher than last year. Total net assets at December 31, 2008 were $1,084,408. The surplus in the current year in the Glenview Sanitary Sewer Fund was $493,316, resulting in ending net assets of $13,348,223. In the prior year the Glenview Sanitary Sewer Fund reported a deficit of $30,958. GENERAL FUND BUDGETARY HIGHLIGHTS The Village Board made several budget amendments to the General Fund during the year, although no amendments were made to the budgeted revenues. General Fund actual revenues for the year totaled $47,181,204, compared to budgeted revenues of $47,665,790, a shortfall of $484,586. As stated earlier, due to the economic downturn, revenues for investment income came in much lower than budgeted. Budgeted investment income was $485,000 for the year, while actual investment income was $248,005 for the year, reflecting a shortfall of $236,995. Furthermore, the Village had budgeted $250,000 for revenues from land sales which did not occur during the year. The General Fund original budgeted expenditures for the year totaled $44,567,455, and final budgeted expenditures totaled $46,366,722. Budgeted expenditures were increased $1,799,267, of which $1,055,089 was added to the general government function budget for personnel and $403,650 was added to contractual services in the public works department. Actual expenditures for the year were $851,737 over the final budget. The general government function was $606,256 over final budget, due most significantly to contractual services costs in the human resources division, which were $184,644 over budget. The public safety function was $704,041 over budget, with an over budget amount of $192,381 in the police department due to personnel costs and an over budget amount of $518,643 in the fire department, also mostly due to personnel costs. Final 2008 Budget Actual Revenues Taxes $21,261,557 $21,261,557 $20,562,777 Intergovernmental 22,864,720 22,864,720 22,634,989 Other 3,539,513 3,539,513 3,983,438 Total revenues 47,665,790 47,665,790 47,181,204 Expenditures (44,567,455)(46,366,722)(47,218,459) Transfers in 773,940 773,940 2,368,849 Transfers out (4,947,924)(4,962,397)(4,957,232) Total expenditures & transfers (48,741,439)(50,555,179)(49,806,842) Net change in fund balance $(1,075,649)$(2,889,389)$(2,625,638) General Fund Budgetary Highlights Original Budget VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -18- . 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, 2008 was $262,844,144 (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, machinery, equipment, vehicles, water and sanitary sewer system improvements, and other infrastructure improvements. 200820072008200720082007 Construction in progress$939,207$- $- $- $939,207$- Land11,860,69811,860,698802,851802,85112,663,54912,663,549 Land right of way55,141,31855,140,813- - 55,141,31855,140,813 Buildings and improvements59,516,85461,064,7451,026,872980,02260,543,72662,044,767 Machinery, equipment and vehicles2,672,5763,481,677 705,169763,8973,377,7454,245,574 Infrastructure76,707,26976,783,157- - 76,707,26976,783,157 Water system- - 38,590,07037,127,15738,590,07037,127,157 Sanitary sewer system- - 14,921,26014,122,54714,921,26014,122,547 Total$206,837,922$208,331,090$56,046,222$53,796,474 $262,884,144$262,127,564 Capital Assets - Net of Depreciation Total Business-typeGovernmental ActivitiesActivities This year’s major additions included: Infrastructure, including roadways, etc.$2,732,441 Water system improvements 2,584,018 Sanitary sewer system improvements1,097,547 Total $6,414,006 Additions Additional information on the Village’s capital assets can be found in Note E on pages 64 through 67 of this report. VILLAGE OF GLENVIEW, ILLINOIS Management’s Discussion and Analysis December 31, 2008 -19- . CAPITAL ASSETS AND DEBT ADMINISTRATION – Continued Debt Administration At year-end, the Village had total outstanding debt of $141,188,909 as compared to $151,854,451 the previous year, a decrease of $10.7 million, or 7 percent, due to no new issuances during the year and principal retirements that reduced the outstanding liability on the bonds. The following is a comparative statement of outstanding debt: 200820072008200720082007 General obligation bonds$128,505,000$137,840,000$10,889,470$12,099,287$139,394,470$149,939,287 Corporate purpose notes- - 1,794,4391,915,1641,794,4391,915,164 Total$128,505,000$137,840,000$12,683,909$14,014,451 $141,188,909$151,854,451 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 five 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 G on pages 70 through 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 2009 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 4.2 percent for 2008, an increase of 1.1 percent from 2007, or 35 percent. Rising unemployment slumping interest rates, and the 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 2009. At the time of preparing the 2009 budget, it was projected that decreases in revenues would be experienced. Expenditures in all areas were also trimmed to the fullest extent possible without impacting core services provided. Plans for beyond 2009 are also being laid to ensure the Village’s long-term economic sustainability. 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 Finance Department, Village of Glenview, 1225 Waukegan Road, Glenview, Illinois 60025.