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HomeMy WebLinkAboutVillage of Glencoe - Public Financial ReportPopular Annual Financial Report | PB Popular Annual Financial Report | 1 VILLAGE OF GLENCOE CELEBRATING 150 YEARS OF EXCELLENCE IN LOCAL GOVERNMENT GLENCOE 1869-2019 SESQUICENTENNIAL POPULAR ANNUAL FINANCIAL REPORT VILLAGE OF GLENCOE FISCAL YEAR 2020 MARCH 1, 2019 – FEBRUARY 29, 2020 Popular Annual Financial Report | 2 Welcome The Village of Glencoe is pleased to present the Fiscal Year 2020 Popular Annual Financial Report (PAFR). The PAFR is designed to provide a summary of the financial activities of the Village, and most of the information is drawn from the Village’s 2020 Comprehensive Annual Financial Report (CAFR). This report has been developed to be easy to read, understand and to provide insight into the Village of Glencoe finances, projects and activities. All financial information in this report can be found in greater detail in the Village’s CAFR, available for download online through the Village’s Transparency Portal at www.villageofglencoe.org/ transparency. This report also contains an overview of the Village’s economic outlook, an analysis of the Village’s financial positions, and key financial information. In addition, the report highlights the Village’s investments, capital assets and outstanding debts. Moreover, it provides in-depth analysis of the General Fund, the accounting mechanism includes the majority of revenues and expenditures for day-to-day activities of the Village, and an explanation of how the monies are received and expended. The Fiscal Year 2020 PAFR highlights the financial strengths and integrity of our funds. Outstanding Achievement Award The Government Finance Officers Association of the United States and Canada (GFOA) has given an Award of Achievement in Popular Annual Financial Reporting to the Village of Glencoe for its Popular Annual Financial Reporting for the fiscal year ended February 28, 2019. The Award for Outstanding Achievement in Popular Annual Financial Report is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government popular reports. In order to receive an Award for Outstanding Achievement in Popular Annual Financial Reporting, a government unit must publish a Popular Annual Financial Report, which conforms to the program’s standards of creativity, presentation understandability and reader appeal. An award for Outstanding Achievement in Popular Annual Financial Reporting is valid for a period of one year only. The Village of Glencoe has received a Popular Award for the last nine consecutive years. We believe our current report continues to conform to the Popular Annual Financial Reporting requirements, and the Village will submit this report to GFOA for award consideration. Award for Presented to Village of Glencoe For its Annual February 28, 2019 Executive Director/CEO Financial Report for the Fiscal Year Ended Financial ReportingPopular AnnualAchievement inOutstanding Text38:Illinois Government Finance Officers Association Popular Annual Financial Report | 2 Popular Annual Financial Report | 3 Glencoe’s Elected Officials The Village President and Board of Trustees comprise the governing body of the Village. The Village President and each of the six Trustees are elected at large and serve four-year terms. The Village Board establishes the Village's financial policies, tax levy and adopts the Village's annual budget and Community Investment Plan. Likewise, the Village Board makes policy decisions which guide the Village's operations and enacts local laws and ordinances. The Village Board appoints the Village Manager, who oversees the day-to-day operations of the Village, and the Village President appoints members of volunteer committees and commissions with the advice and consent of the Board of Trustees. Table of Contents Organizational Chart 4 Expenses 9 Glencoe at a Glance 5 Business-Type Activities 9 Financial Policies 6 Capital Investments 10 Financial Highlights 7 Definitions 11 Revenues 8 Stay Connected 12 Village President and Board of Trustees Pictured: Lawrence R. Levin, Village President (Front, Center) Gail Lissner, Village Trustee (Front, Left) Gary Rubin, Village Trustee (Back, Middle Right) Jonathan Vree, Village Trustee (Back, Far Left) Barbara Miller, Village Trustee (Back, Far Right) Joe Halwax, Village Trustee (Back, Middle Left) Peter Mulvaney, Village Trustee (Front, Right) Popular Annual Financial Report | 4 Organizational Chart EmergencyMedical Services RESIDENTS OF GLENCOE VILLAGE MANAGER’S OFFICE 5 Employees PUBLIC WORKSDEPARTMENT42 Employees PUBLIC SAFETYDEPARTMENT42 Employees FINANCEDEPARTMENT6 Employees GLENCOE GOLF CLUB5 Employees VILLAGE PRESIDENT AND BOARD OF TRUSTEES $ Play BuildingandGrounds Financial Controls AuditBudget Risk ManagementAP/ Receivable/ Purchasing Paid On-Call Officers (Part-time) LawEnforcement FireCommunityDevelopment Operations Water Productionand Operations SewerStreet/ ParkwayForestry Engineering GLENCOE GOLF CLUB BOARD OF DIRECTORS Popular Annual Financial Report | 4 Popular Annual Financial Report | 5 Glencoe at a Glance Located in far northeastern Cook County, just 25 miles north of Chicago’s Loop, the Village of Glencoe is bordered by Lake Michigan to the east, the Village of Winnetka to the south, the Cook County Forest Preserve and Village of Northbrook to the west and the City of Highland Park to the north. With abundant parks, superb schools, convenient beach facilities, an active and engaged citizenry and one of the most attractive business districts on the North Shore, Glencoe is a wonderful place to live, grow a family or start a business. The Village was incorporated on March 29, 1869 and has operated under the Council-Manager form of government since 1914. Glencoe was the first community in the State of Illinois, and the fourteenth nationwide, to operate under this form of government. The approximately 8,894 residents of Glencoe enjoy premium services from the Village including public safety (police, fire and emergency medical services), infrastructure maintenance, water and sewer. The Village contracts for emergency dispatch services and the community’s garbage and recycling collection services with Lakeshore Recycling Systems. Village staff members are committed to exceptional service level delivery, responsiveness to the community and maintaining a fiscally and environmentally conservative footprint. Government INCORPORATED: March 29, 1869 GOVERNMENT TYPE: Council-Manager POPULATION: 8,894 AREA: 3.86 square miles NUMBER OF HOUSEHOLDS: 3,325 FULL-TIME VILLAGE EMPLOYEES: 98 MEDIAN HOUSEHOLD INCOME: $209,143 DISTANCE TO: O’Hare: 17.5 miles Midway: 32 miles The Loop: 25 miles Cook County Lake County Lake County,Indiana DuPage County 94 Village of Glencoe Highland Park Northbrook Winnetka La k e M i c h i g a n Chicago Botanic Garden GlencoeBeach Skokie Lagoons Writers Theatre City of Chicago Evanston Community Snapshot Popular Annual Financial Report | 6 Local Economy There are several factors that impact the local finances of the Village. The Village is impacted by regional, state and national economic conditions beyond the Village’s control. Several revenue sources that are impacted by these forces include sales tax, building permit fees, income tax, motor fuel tax, golf club revenue, and utility taxes. The Village’s opportunity to implement new revenues is relatively limited due to its non-home rule form of government. The State of Illinois may impact local revenues through legislative changes (i.e. formula for shared income tax, etc.) and by adjusting the timeliness of payments due to the Village. Despite these potential impacts, the Village continues to be rated AAA by Standard & Poors, which is the highest rating available from the rating agency. This rating is indicative of the demographics of the community and the Village’s long history of sound financial planning and policies. There are a limited number of communities within the State of Illinois that have been rated as AAA, and an even more limited number that have achieved that rating as a non-home rule communities. Given the magnitude of recent events, it is important to note that in light of events related to COVID-19 pandemic beginning in March 2020 (after the close of Fiscal Year 2020), the Village recognized the need to remain hyper vigilant in monitoring revenues and expenditures on a real time basis. Due to the financial impact of the COVID-19 pandameic, and as a result of the State of Illinois guidance to restrict business operations to reduce the spread of the COVID-19 virus, Glencoe’s locally economy has experienced a downturn. To properly monitor this impact, the Village has implemented a reporting and monitoring system for monthly cash flow projections and regularly reports on reserve and revenue balances. Additionally, approximately $2.3 million in expenditures have been removed from the current year budget to adjust for anticipated revenue shortfalls. The Village is committed to remaining vigilant in this monitoring process so that any required changes to the budget or operations may be executed in a timely manner. Financial Policies Annually, the Village Board reviews its financial policies and initiates consideration of available alternatives for funding operations and community investment projects, including issuing debt or utilizing fund balance to provide community improvement projects, and issuance of planning for long term obligations, such as pension liabilities. This coming year marks the Village’s transition from a February 28 fiscal year end to a December 31 calendar year end. Therefore, the “stub year” Budget will be 10 months in duration and will be followed by a calendar year fiscal year beginning January 1, 2021 and ending December 31, 2021. During the development of the Fiscal Year 2020 Budget, the Village Board received and approved major financial policy issues that included: • Consideration not to abate the 2018 Tax Levy for debt service, in order to accumulate available resources for capital investments. • A 2.5% increase in management fee charged to the Water Fund and the Glencoe Golf Club. • A recommendation that $185,000 in excess/surplus funds available from the Village’s property and casualty insurance pool (Illinois Risk Management Agency, or IRMA) be used to pay for Village Hall Security Improvements and replacement of the Public Safety Department’s fire bay doors during Fiscal Year 2020. • A sewer rate increase of 7.1% from $1.027 to $1.100 in an effort to finance upcoming improvements to the sewer system. • A significant increase in water rates was considered and approved as part of an ongoing review of the Water Fund’s operating and infrastructure investment needs. The fixed charge (based on water meter size) and volumetric rates were both increased by 9% to fund these needs. This new rate structure provides sufficient resources to pay for the Water Fund’s Fiscal Year 2020 operating expenses as well as approximately $855,000 in infrastructure and equipment replacements. Popular Annual Financial Report | 6 Popular Annual Financial Report | 7 The statement of net position included in this report is a condensed view of the Village’s assets and liabilities for all funds as of February 29, 2020. Governmental activities are reported separately from business-type activities (i.e. Water Fund and Glencoe Golf Club). During Fiscal Year 2020 (March 1, 2019-February 29, 2020), the net position of the total primary government increased from $52.98 million to $53.78 million. The net position of the governmental funds decreased by $126,128 million, largely due to an increase in property related revenue and the business-type net position increased by $913,318, due to an increase in the level of expenses. NET POSITION DEFINITIONS • Assets are resources owned and controlled by the Village that are expected to benefit future operations. • Deferred outflows are the consumption of net assets applicable to future reporting periods. • Liabilities are debt or obligations that the Village must pay. • Deferred inflows are the acquisition of net assets applicable to future reporting periods. The Village’s deferred inflows of resources include property taxes, deferred IMRF and deferred police pension. • Net investment in capital assets represents the Village’s investment in capital assets, less any related outstanding debt used to acquire those assets. • Net position reflects the Village’s net worth. (Net position = Assets + Deferred outflows - Liabilities - Deferred inflows) Financial Highlights Government Activities Business-type Activities Primary Government 2019 2020 2019 2020 2019 2020 Current and other assets $24,433,064 $27,667,338 $1,941,802 $1,688,543 $26,374,866 $29,355,881 Capital Assets 83,832,435 82,686,808 7,795,607 8,553,248 91,628,042 91,240,056 Total Assets 108,265,499 110,354,146 9,737,409 10,241,791 118,002,908 120,595,937 Deferred Outflows 6,607,863 5,407,204 984,975 448,801 7,592,838 5,856,005 Total Assets & Def. Outflows 114,873,362 115,761,350 10,722,384 10,690,592 125,595,746 126,451,942 $ Change 379,033 887,988 1,534,373 (31,792) 1,913,406 856,196 % Change 0.3%0.8%16.7%-0.3%1.5%0.7% Non-Current 47,972,213 48,250,129 4,117,439 2,938,488 52,089,652 51,188,617 Other Liabilities 4,140,476 4,072,682 732,870 683,695 4,873,346 4,756,377 Total Liabilities 52,112,689 52,322,811 4,850,309 3,622,183 56,962,998 55,944,994 Deferred Inflows 15,326,049 16,130,043 318,089 601,105 15,644,138 16,731,148 Total Liabilities & Def. Inflows 67,438,738 68,452,854 5,168,398 4,223,288 72,607,136 72,676,142 $ Change $1,165,668 1,014,116 660,525 (945,110) 1,826,193 69,006 % Change 1.8%1.5%14.7%-18.3%2.6%0.1% Net Position: Net investment in capital 66,848,456 66,333,858 5,558,764 6,463,563 72,407,220 72,797,421 Restricted 897,121 1,413,180 6,458 2,096 903,579 1,415,276 Unrestricted (20,310,953) (20,438,542) (11,236) 1,645 (20,322,189) (20,436,897) Total Net Position 47,434,624 47,308,496 5,553,986 6,467,304 52,988,610 53,775,800 $ Change $(786,635) $(126,128) $873,848 $913,318 $87,213 $787,190 % Change -1.6%-0.3%18.7%16.4%0.2%1.5% Statement of Net Position as of February 29, 2020 Popular Annual Financial Report | 8 Revenue Revenues 2019 2020 Property & Replacement Taxes 11,986,779 12,027,423 Sales Tax 2,132,872 2,293,372 Utility Tax 949,683 845,278 Income Tax 832,575 931,095 Charges for Service 2,271,228 3,151,263 Capital Grants & Contributions 222,579 304,003 Other 2,025,401 1,600,455 Total Revenues 20,421,117 21,152,889 Governmental Funds: Revenue Summary by Type REVENUE TYPE DEFINITIONS • Property tax is the Village’s largest revenue source and is levied annually by ordinance adopted by the Village Board of Trustees each December. • Sales tax is the second largest revenue source for the Village. Sales tax is derived from the sale of tangible personal property at busi-nesses located in the Village of Glencoe. The Village receives a 1% sales tax rate on all qualifying sales that take place. • Utility taxes are levied upon the gross receipts from the sale of utilities such as electricity and gas in an amount allowable by Illinois Compiled Statues. • Income tax is levied by the State of Illinois on every individual, corporation, trust and estate earning or receiving income. The tax is calculated by multiplying net income by a tired rate structure. • Charges for services include fees for sewers, ambulance service and general service fees. • Other includes reimbursements, grants, fines/forfeitures and leases. Government and Business-Type Activities The Governmental Activities reflect the Village’s basic services, including police, fire, public works and general/debt administration. Property taxes, local utility tax and shared state income and sales taxes, finance the majority of these activities. The business-type activities reflect fee-based operations (Water and Glencoe Golf Club funds), where the charge for service typically covers all or most of the cost of operation, including depreciation. For fiscal year ended February 29, 2020 revenues from governmental activities totaled $21,152,889. Property taxes (and replacement taxes) continue to be the Village’s largest revenue source totaling $12,027,423 representing 56.9% of total Governmental Activity revenue. Charges for Service Grants Property Tax Other Other Tax Sales Tax $21,152,889 Fiscal Year 2020 10.8% 8.4% 7.6% 14.9% 1.4% 56.9% Popular Annual Financial Report | 8 Popular Annual Financial Report | 9 Expenses For the fiscal year that ended February 29, 2020, expenses for governmental activities totaled $21,279,017. Notable changes are as follows: • Expenses for administration and finance decreased by $1,226 or 0.04% from the prior year. • Expenses for Public Safety increased from the prior year by $346,447 or 3.3%, which is primarily due to increases in pension contributions and contractual obligations. • Expenses for Public Works decreased by $266,790 or 3.6% from the prior year, which is largely due to deferral of capital projects and vacant positions. • Expenses related to debt service interest payments decreased by $7,166 or 1.6% in accordance with debt financing schedules. EXPENDITURE CATEGORY DEFINITIONS • Administration and Finance: Expenditures in this category includes the Village Manager’s office, information technology, legal, community services, boards and commissions, finance administration, purchasing and risk management. • Public Safety: Expenditures in this category includes fire, police and paramedic services. Expenditures in this category also includes the Village’s contribution towards Police Pension Obligation & Emergency Dispatch. • Public Works: Expenditures in this category include general operating cost of public works administration, community development, streets, sewers, forestry, building maintenance, street lighting, parking, and municipal garage functions and maintenance. • Debt Service: Interest and other related costs affiliated with the Village’s issuance of debt to support various Community Improvement Programs. Business-Type Activities $21,279,017 Fiscal Year 2020 Revenue from business-type activity totaled $4,423,804 and decreased by 4.6% from the prior year. At the end of Fiscal Year 2020, the water rate for the Village was $4.900 per 100 cubic feet. Charges for service for the Golf Club decreased $254,734 or 6.8% from the prior year. This was largely was attributable to rainy summer conditions. Expenses from business-type activity totaled $3,510,486. During the year, the Water Fund experienced an operating income of $703,752 as compared to the operating income of $650,615 during Fiscal Year 2019. The Glencoe Golf Club had an operating gain of $178,877, as compared to the operating gain at the Glencoe Golf Club during Fiscal Year 2019 of $208,266. Revenue Expense Water Golf 2020 Business-Type Funds (Program Revenue versus Expenses) 13.9% 34.5% 49.5% 2.1% Public Safety Public Works Administration & FinanceDebt Service 3,000,000 2,000,000 1,500,000 1,000,000 2,500,000 $2,654,319 $1,967,253 $1,769,485 $1,543,233 Popular Annual Financial Report | 10 Infrastructure and Capital Investments Fiscal Year 2020 The Village of Glencoe Community Investment Program (CIP) for Fiscal Year 2020 included over $2.8 million in capital spending aligned with the Village’s 10-year CIP and Strategic Work Plan. The CIP lays out a thoughtful, prudent spending plan that reviews available resources against needs and schedules to ensure the continued reinvestment in the Village, its infrastructure and equipment necessary for day-to-day operations. This years investment involved several projects, including: • Water Main replacements totaling $615,000 funded by water revenue to replace water mains originally constructed in the 1920s at Euclid Avenue, Lincoln Drive and Longwood Avenue. • Phase II Facility Safety Upgrades, included the central business district, Hubbard Woods Plaza, and the Metra train station. By enhancing the access and video surveillance, the Public Safety Department will have the ability to remotely monitor public spaces to ensure the safety and security of residents and visitors to the community. • Carryover from Fiscal Year 2019, the Rockgate Lane storm outfall project in the ravine bounded by Rockgate Lane and Brentwood Lane to improve two severely degraded outfalls and better direct the flow of stormwater to Lake Michigan, while preserving and protecting the fragile ravine ecosystem. A total investment of over $360,000 was completed using voter-approved bond funds. • The “arts core” on Tudor Court, includes street improvements and place-making elements such as lighting, seating and other unique features. GENERAL FUND BUDGET REQUEST Council Chambers Upgrade - Phase 1 25,000 Fire Bay Doors and Openers 35,000 2-1/2 Ton Dump Body & Drop in Salter 35,000 1/2 Ton Pickup Truck #35 44,300 Public Safety Kitchen Renovation 50,000 Patrol Vehicle Replacement #654 52,000 Downtown Gateway/Wayfinding Signs 70,000 Commuter Parking Lot Improvement 80,000 Downtown Sidewalk Paver Restoration 100,000 Parking System Program Improvements 125,000 Residential Sidewalk Maint. - Area 3 125,000 Phase II Facility Safety Upgrades 150,000 Sanitary Sewer Rehab IICP (Area 1, Yr. 3)325,000 Enterprise Resource Planning Program 420,000 Total General Fund $1,636,300 WATER FUND BUDGET REQUEST Water Main Replacement 615,000 Phase II SCADA System 190,000 Water Systems Study 50,000 Total Water Fund $855,000 CAPITAL FUND Storm Sewer Outfall Improvement 314,844 Total Capital Fund $314,844 FY 2020 CAPITAL BUDGET GRAND TOTAL $2,806,144 BONDED PROJECTS Tudor Court Street/Streetscape Impro.$1,700,000 Stub Year 2020 The Stub Year 2020 budget includes $7.4 million in infrastructure and capital projects, including $1.7 million in the Capital Projects Fund for the Tudor Court Street and Streetscape improvements. A detailed listing of projects can be found in the Stub Year 2020 Budget document available on the Village’s Transparency Portal at www.villageofglencoe.org/transparency. Popular Annual Financial Report | 10 Popular Annual Financial Report | 11 The following are definitions of terms used in this report and other financial reports of the Village: • Current and other assets: These are the assets that can reasonably be expected to convert to cash, sell or consume within one year. • Capital assets: These are the Village’s long-term investments in land, buildings, equipment, improvements, infrastructure and construction in progress. The Village uses capital assets to provide services to the residents. Consequently, these assets are not available for operational or other similar costs. • Community Investment Program (CIP): This is a tool that allows municipalities to direct funds and implement policy initiatives towards long-term replacement of capital assets. • Debt Service Fund: The debt service fund is used to account for the monies set aside for the payment of interest and principal to holders of the Village’s General Obligation Bonds. • Deferred inflows: These are the assets that can be expected to convert to cash, sell or consume within one year. • General Fund: The general fund accounts for all revenues and expenditures of the Village, which are not accounted for in any other fund. This is an operating fund from which most of the current operations of the Village are financed. • Motor Fuel Tax (MFT) Fund: The MFT fund receives and allocates funds provided by the State of Illinois, which generates revenue through a tax on fuel sales. The revenue received is limited to the maintenance of streets and support on ongoing maintenance of the street resurfacing program. • Non-current liabilities: This category mainly represents debt obligations of the Village, including general obligation bonds payable, compensated absences payable and net pension obligation payable. • Other liabilities/deferred inflows: This category primarily includes debt that can be paid off in one year or less (current liabilities). This includes accounts payable and accrued interest payable. • Net invested in capital assets, net of related debt: This category represents the Village’s investment in capital assets less any related outstanding debt used to acquire those assets. However, 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. • Restricted net position: These are the resources that are subject to external restrictions on how they may be used. The Village of Glencoe has resources set aside for roadway maintenance, debt service and public safety. This category includes fund balances and net position reported in the Comprehensive Annual Financial Report (CAFR) as not spendable, restricted or assigned. • Total net position: This figure represents total assets less total liabilities and is also reported as net position. • Unrestricted net position: These are resources accessible to the Village in order to provide services to the residents of Glencoe if there are no additional revenues or resources available. • Water Fund: The water fund, an enterprise fund, provides the financial resources for maintenance and operation of the Village’s water production and distribution systems. Revenue is solely generated through water sales. Definitions Village Website www.villageofglencoe.org Social Media @VGlencoe Glencoe CONNECT www.villageofglencoe.org/alerts Village eNews www.villageofglencoe.org/enews • Pay for your Village utility bills, parking tickets, vehicle and pet registration, false alarm invoices and alarm permits • Stream audio of Village Board meetings • View meeting agendas, budgets, Strategic Plan updates and other official documents • View schedule of upcoming meetings and community events• And so much more! • Get updates on the latest Village news • Hear about community events • Checkout photos of current projects and initiatives • Register your e-mail and cell phone number for real-time updates in case of an emergency or an urgent service update; Updates are geo-coded to home address • Subscribe for bi-weekly updates from the Village right to your inbox Stay Connected... Learn About the Village Budget, Budget in Brief, Strategic Plan, Inside Glencoe and more... The Village produces a number of communication pieces centered at helping our residents understand the ins-and-outs of Village business and community-life without all the government jargon. Find documents like the Budget, Budget in Brief, Strategic Plan, Inside Glencoe (our joint community publication with the Glencoe Park District, District 35, Family Service of Glencoe and the Glencoe Public Library) and more online at www.villageofglencoe.org.