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Village CAFR For Year Ended December 31, 2016 COMPREHENSIVE ANNUAL FINANCIAL REPORT for the year ended DECEMBER 31, 2016 VILLAGE OF DEERFIELD, ILLINOIS VILLAGE OF DEERFIELD, ILLINOIS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended December 31, 2016 Prepared by Finance Department Eric L. Burk Director of Finance/Treasurer VILLAGE OF DEERFIELD, ILLINOIS TABLE OF CONTENTS Page(s) INTRODUCTORY SECTION Principal Officials ....................................................................................................... i Organizational Chart ................................................................................................... ii Certificate of Achievement for Excellence in Financial Reporting ............................ iii Director of Finance’s Letter of Transmittal ................................................................ iv-vii FINANCIAL SECTION INDEPENDENT AUDITOR’S REPORT .................................................................. 1-3 GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS Management’s Discussion and Analysis ..................................................................... MD&A 1-7 Basic Financial Statements Government-Wide Financial Statements Statement of Net Position .................................................................................. 4-5 Statement of Activities ...................................................................................... 6-7 Fund Financial Statements Governmental Funds Balance Sheet ............................................................................................... 8-9 Reconciliation of Fund Balances of Governmental Funds to the Governmental Activities in the Statement of Net Position .................. 10 Statement of Revenues, Expenditures and Changes in Fund Balances ....... 11-12 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Governmental Activities in the Statement of Activities ..................................................... 13 VILLAGE OF DEERFIELD, ILLINOIS TABLE OF CONTENTS (Continued) Page(s) FINANCIAL SECTION (Continued) GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS (Continued) Basic Financial Statements (Continued) Fund Financial Statements (Continued) Proprietary Funds Statement of Net Position ............................................................................. 14-15 Statement of Revenues, Expenses and Changes in Net Position ................. 16 Statement of Cash Flows .............................................................................. 17-18 Fiduciary Funds Statement of Fiduciary Net Position ............................................................ 19 Statement of Changes in Fiduciary Net Position ......................................... 20 Notes to Financial Statements ........................................................................... 21-62 Required Supplementary Information Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund ....................................................................... 63 Schedule of Funding Progress and Employer Contributions Other Postemployment Benefit Plan ............................................................ 64 Notes to Required Supplementary Information ................................................ 65 Schedule of Employer Contributions Illinois Municipal Retirement Fund ............................................................. 66 Police Pension Fund ..................................................................................... 67 Schedule of the Village’s Proportionate Share of the Net Pension Liability Illinois Municipal Retirement Fund ................................................................ 68 Schedule of Changes in the Employer’s Net Pension Liability and Related Ratios Police Pension Fund ....................................................................................... 69 Schedule of Investment Returns Police Pension Fund ....................................................................................... 70 VILLAGE OF DEERFIELD, ILLINOIS TABLE OF CONTENTS (Continued) Page(s) FINANCIAL SECTION (Continued) COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES MAJOR GOVERNMENTAL FUNDS Schedule of Revenues - Budget and Actual - General Fund ................................. 71-72 Schedule of Expenditures - Budget and Actual - General Fund ............................ 73-75 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Debt Service Fund ........................................................................................ 76 Infrastructure Replacement Fund ................................................................. 77 NONMAJOR GOVERNMENTAL FUNDS Combining Balance Sheet ................................................................................. 78 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................................................................................................. 79 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Motor Fuel Tax Fund .................................................................................... 80 Enhanced 911 Fund ...................................................................................... 81 2011B Sinking Fund…. ................................................................................ 82 MAJOR ENTERPRISE FUNDS Water Fund Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual ...................................................................................... 83 Schedule of Operating Expenses - Budget and Actual ................................. 84 Schedule of Capital Assets and Depreciation ............................................... 85 Sewerage Fund Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual ...................................................................................... 86 Schedule of Operating Expenses - Budget and Actual ................................. 87 Schedule of Capital Assets and Depreciation ............................................... 88 Refuse Fund Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual ...................................................................................... 89 VILLAGE OF DEERFIELD, ILLINOIS TABLE OF CONTENTS (Continued) Page(s) FINANCIAL SECTION (Continued) COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES (Continued) NONMAJOR ENTERPRISE FUNDS Commuter Parking Lot Fund Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual ...................................................................................... 90 Schedule of Operating Expenses - Budget and Actual ................................. 91 Schedule of Capital Assets and Depreciation ............................................... 92 INTERNAL SERVICE FUNDS Combining Statement of Net Position ............................................................... 93 Combining Statement of Revenues, Expenses and Changes in Net Position ..................................................................................................... 94 Combining Statement of Cash Flows ................................................................ 95-96 Garage Fund Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual ...................................................................................... 97 Schedule of Operating Expenses - Budget and Actual ................................. 98 Vehicle and Equipment Replacement Fund Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual ...................................................................................... 99 FIDUCIARY FUNDS Schedule of Changes in Plan Net Position- Budget and Actual - Police Pension Fund ........................................................................................ 100 Combining Statement of Changes in Assets and Liabilities - Agency Funds .................................................................................................. 101 SUPPLEMENTAL DATA Long-Term Debt Requirements General Obligation Bond Series of 2008 .......................................................... 102 General Obligation Bond Series of 2010A ....................................................... 103 General Obligation Bond Series of 2011A ....................................................... 104 General Obligation Bond Series of 2011B ........................................................ 105 VILLAGE OF DEERFIELD, ILLINOIS TABLE OF CONTENTS (Continued) Page(s) FINANCIAL SECTION (Continued) SUPPLEMENTAL DATA (Continued) Long-Term Debt Requirements (Continued) General Obligation Bond Series of 2012 .......................................................... 106 General Obligation Bond Series of 2013 .......................................................... 107 General Obligation Bond Series of 2015 .......................................................... 108 STATISTICAL SECTION Financial Trends Net Position by Component ................................................................................... 109-110 Change in Net Position .......................................................................................... 111-114 Fund Balances of Governmental Funds ................................................................. 115-116 Changes in Fund Balances of Governmental Funds .............................................. 117-118 Revenue Capacity Sales Tax by Category ........................................................................................... 119 Direct and Overlapping Sales Tax Rates ............................................................... 120 Debt Capacity Ratios of Outstanding Debt by Type ...................................................................... 121 Ratios of General Bonded Debt Outstanding ......................................................... 122 Direct and Overlapping Bonded Debt - Governmental Activities ......................... 123 Legal Debt Margin Information ............................................................................. 124 Demographic and Economic Information Demographic and Economic Information .............................................................. 125 Principal Employers ............................................................................................... 126 Operating Information Full-Time Equivalent Employees .......................................................................... 127 Operating Indicators ............................................................................................... 128 Capital Asset Statistics ........................................................................................... 129 Continuing Disclosures ............................................................................................... 130-135 INTRODUCTORY SECTION - i - VILLAGE OF DEERFIELD, ILLINOIS PRINCIPAL OFFICIALS December 31, 2016 LEGISLATIVE VILLAGE BOARD OF TRUSTEES Harriet E. Rosenthal, Mayor Daniel C. Shapiro Thomas L. Jester Barbara J. Struthers William S. Seiden Robert D. Nadler Alan L. Farkas Kent Street, Clerk ADMINISTRATIVE Kent Street, Village Manager FINANCE DEPARTMENT Eric L. Burk Director of Finance/Treasurer Village of Deerfield, Illinois Organization Chart - ii - Village Residents Village Board Boards and Commissions Village Manager Assistant Village Manager Police Department Patrol Investigations & Youth Communications Records Finance Department Accounting Budgeting Personnel & Payroll Utility Billing & Customer Service Risk Managment Community Development Department Permits, Inspections Plan Review Planning Code Enforcement Zoning & Appearance Review Public Works & Engineering Engineering Inspection & Review Water Supply Sewer Maintenance & Sewer Treatment Vehicle Maintenance Street Maintenance Village Attorney - iii - v The financial reporting entity of the Village of Deerfield is comprised of all funds of the primary government (i.e., the Village of Deerfield as legally defined) and its pension trust fund: the Deerfield Police Pension Fund. This fund was determined to be a pension trust fund due to its fiduciary and fiscal relationship with the Village as its sole purpose is to provide retirement benefits to the Village's sworn police officers. No other legally separate entity qualifies as a component unit of the Village. Accounting System and Budgetary Control The accounts of the Village are organized on the basis of funds, each of which is considered a separate and distinct accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures/expenses. Revenues are allocated to and accounted for in individual funds based upon the purpose for which they are to be expended and the means by which spending activities are controlled. The accounting records for general governmental operations are maintained on the modified accrual basis, with revenues being recorded when available and measurable and expenditures being recorded when materials or services are received and the liability is incurred. Accounting records for the Village's enterprise funds, internal service funds, agency funds and pension trust fund are maintained on the accrual basis of accounting. Management of the Village is responsible for establishing and maintaining a system of internal accounting controls. These controls are designed to assure that the assets of the Village are safeguarded against any material loss, theft or misuse. These controls assure that the financial statements are in conformity with generally accepted accounting principles. Internal accounting controls are designed to provide reasonable, but not absolute, assurance that control objectives will be met. The concept of reasonable assurance recognizes that (1) the cost of control should not exceed the benefits likely to be derived; and (2) the evaluation of costs and benefits require estimates and judgment by Management. The annual budget serves as the foundation for the Village’s financial planning and control. State law requires that a municipality operating under the budget system adopt its annual budget prior to the start of its fiscal year. Through the budget, spending authority is conveyed by expenditure object. The legal level of budgetary control is the department level, or, where no departmental segregation of a fund exists, the fund level. Factors Affecting Financial Condition Economic Outlook. There are several measures of economic health for local governments. Four of the more objective measures or indicators are local employment levels, retail sales activity, family income levels and construction activity. Employment levels in the Village have always surpassed that of Lake and Cook Counties and the State of Illinois as a whole. As of December 31, 2015 the Village's unemployment rate was estimated to be 4.2%, compared to 5.3% for Lake County, 5.9% for the State of Illinois and 5.3% for the United States. Deerfield’s unemployment rate as of December 31, 2016 was estimated to be 4.4%. Other unemployment rates have remained relatively consistent at 5.2% in Lake County, 5.9% in the State of Illinois and 4.9% in the United States. The Village base sales tax revenue (which represents 1% of the total eligible sales), net of the Walgreen National sales tax rebate, increased approximately $26,000 from the amount received in 2015. Pursuant to a sales tax sharing agreement, 80% of the sales tax the Village receives from Walgreen National is rebated back to them. The Walgreen National activity regularly fluctuates from year to year. 2016 included greater receipts from Walgreen National, which accounted for an increase of approximately $150,000 over the 2015 receipts. The increase from Walgreen National was offset by decreases due to temporary and permanent business closures. vi Median household income figures from 2010 Census estimates demonstrate that the average income of Deerfield residents far exceeds county and state averages. According to the Census Bureau, Deerfield's 2010 median household income was $107,194 compared to $55,735 for the State of Illinois and $51,914 for the United States. This ranked Deerfield among the wealthiest communities in the State of Illinois. The median family income has increased approximately 28% from the 2010 Census figure. Commercial and residential construction activity increased from the prior year. Much of the activity was in commercial and residential remodeling. Overall permit revenue totaled $1,456,628 for the year ending December 31, 2016. Foreclosure rates remained low; with approximately 25 to 35 single family homes out of the Village’s 6,500 in this status during the year. Long-term Financial Planning. The Village utilizes a five year Capital Improvement Program (“CIP”) to address major capital and infrastructure improvements. For a project to be included in the CIP, it must involve the creation or purchase of a tangible asset with an original cost of at least $25,000 and a useful life of more than one year. Projects that are programmed for the first year of the CIP (i.e., the upcoming budget year) are most closely scrutinized in the capital planning process because associated funding must be provided in that budget. Until recently, the Village had primarily followed a “pay-as-you-go” funding strategy for maintenance and replacement of assets and had issued limited debt for new projects. Capital grants are sought at the state and local level for eligible projects. $10 million of additional debt was issued in 2015 as part of the five year CIP. Major Initiatives As part of the regular budget planning process, Village staff has presented the Board with an expanded capital projects program that will require significant expenditures over the next three years. The majority of these projects include road reconstruction along with water and sewer utility work. For 2015 -2017, the major funding sources will be balances in the Infrastructure Fund, property tax, state & federal grants, the home rule tax revenue and two bond issues totaling approximately $12 million. Awards and Acknowledgments The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Village of Deerfield for its comprehensive annual financial report for the fiscal year ended December 31, 2015. The Certificate of Achievement is a prestigious national award, recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report (CAFR) whose contents conform to program standards. Such CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The Village of Deerfield has received a Certificate of Achievement for the last thirty years. We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to the GFOA. In addition, the Village also received the GFOA’s Distinguished Budget Presentation Award for its annual budget document dated January 1, 2016. In order to qualify for the Distinguished Budget Presentation Award, the Village’s budget document had to be judged proficient as a policy document, a financial plan, an operations guide and a communications device. The preparation of the comprehensive annual financial report was made possible by the dedicated service of the entire staff of the Finance Department. Each member of the Department has my sincere appreciation for the contributions made in the preparation of this report. In particular, I would like to acknowledge the work of Richard Jett, Village Accountant, for his efforts in continuing to efficiently administer the accounting systems of the Village. FINANCIAL SECTION - 1 - INDEPENDENT AUDITOR’S REPORT The Honorable President Members of the Board of Trustees Village of Deerfield, Illinois We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund an d the aggregate remaining fund information of the Village of Deerfield, Illinois (the Village), as of and for the year ended December 31, 2016, and the related notes to financial statements, which collectively comprise the Village’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepte d in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit . We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Village’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of th e Village’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. - 1 - - 1 - Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the Village of Deerfield, Illinois, as of December 31, 2016, and the respective changes in financial position, and, where applicable, cash flows, for the year then ended in conformity with accounting principles generally accepted in the United States of America. Change in Accounting Principle The Village adopted GASB Statement No. 72 Fair Value Measurement and Application, which addresses accounting and financial reporting issues related to fair value measurements. The statement modifies certain disclosures in the notes to financial statements. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and the other required supplementary information be presented to supplement the basic financial statements . Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context . We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements and other knowledge we obtained during our audit of the basic financial statements . We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the basic financial statements that collectively comprise the Village’s basic financial statements as a whole. The introductory section, combining and individual fund financial statements and schedules, supplemental data and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual fund financial statements and schedules and supplemental data are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing p rocedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional - 2 - - 2 - procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Naperville, Illinois May 30, 2017 - 3 - GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS (MD&A) - 1 - VILLAGE OF DEERFIELD, ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS December 31, 2016 The Village of Deerfield (the “Village”) management’s discussion and analysis is designed to (1) assist the reader in focusing on significant financial issues, (2) pro vide an overview of the Village’s financial activity, (3) identify changes in the Village’s financial position (its ability to address subsequent year challenges), (4) identify any material deviations from the financial plan (the approved budget) and (5) identify individual fund issues or concerns. Since Management’s Discussion and Analysis (MD&A) is designed to focus on the current year’s activities, resulting changes and currently known facts, please read it in conjunction with the Transmittal Letter (be ginning on page iv) and the Village’s financial statements (beginning on page 3). Financial Highlights  The Village’s General Fund ended the period with total revenues exceeding total expenditures by $3,904,091. Combined with other financing uses of $4,398,953, the December 31, 2016 fund balance decreased by $494,862. The 2016 General Fund budget originally showed a decrease of $2,960,593. However, revenues exceeded budget due primarily to greater than expected tax and building permit receipts. See Major Governmental Funds section of MD&A for further details.  Sales tax and home rule sales tax increased $637,088 and $724,312, respectively in the current year. The increase was due largely to greater than expected economic incentive activity, which also resulted in greater than expected economic incentive expenditures in the finance department contractual services.  Hotel/motel tax revenue ($2,124,692) exceeded current year expectation of $1,900,000; business travel is the primary reason for stays at Deerfield hotels. All six of the Deerfield hotels remained open during the year.  The Village collected $1,273,363 from the Electric Utility tax and $1,722,295 from the Simplified Telecommunications tax. Electric Utility tax increased slightly from the prior year, but was consistent with the current year budget. Simplified Telecommunications tax increased slightly from the prior year and exceeded the current year budget.  The infrastructure maintenance fee of ½ of 1% of the project value, which was implemented in 2012, totaled to $349,559 for the year. This amount exceeded current year expectation, but decreased from the prior year amount.  2016 was the second year of a three year (2015-2017) expanded capital plan. The plan included funding from drawdowns of General Fund Balance by moving a portion of the property tax levy from the General Fund to the Infrastructure Replacement Fund. The plan also included bond issues in 2015 and 2016.  The Village retired $2,150,000 of general obligation debt during the period. The total balance of debt outstanding as of December 31, 2016 was $58,920,000. The Village planned to issue general obligation debt in 2016 to refund the 2008 series and to provide additional funding for the expanded three year (2015- 2017) capital plan. The 2016 bond issue was postponed until 2017 due to market conditions at the time of issuance. USING THE FINANCIAL SECTION OF THIS COMPREHENSIVE ANNUAL FINANCIAL REPORT The financial statement’s focus is on both the Village as a whole (government -wide) and on the major individual funds. Both perspectives (government-wide and major fund) allow the user to address relevant questions, broaden a basis for comparison (year-to-year or government-to-government) and enhance the Village’s accountability. Government-Wide Financial Statements The government-wide financial statements (see pages 4 - 7) are designed to be corporate-like in that all governmental and business-type activities are consolidated into columns that add to a total for the Primary Government. The focus of the Statement of Net Position (the “Unrestricted Net Position”) is designed to be similar to bottom line results for the Village and its governmental and business-type activities. This statement combines and consolidates the governmental fund’s current financial resources (short-term spendable resources) with capital assets and long-term obligations using the accrual basis of accounting and economic resources measurement focus. VILLAGE OF DEERFIELD, ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) - 2 - The Statement of Activities (see pages 6 – 7) is focused on both the gross and net cost of various activities (including governmental and business-type), which are supported by the government’s general taxes and other resources. This is intended to summarize and simplify the user’s analysis of the cost of various governmental services and/or subsidy to various business-type activities. The governmental activities reflect the Village’s basic services, including police, public works, engineering and administration. Property tax, shared state sales tax, local hotel/motel tax and shared state income taxes finance the majority of these services. The business-type activities reflect private sector type operations (Water, Sewer, Refuse Disposal and Commuter Parking) where the charges for services typically cover all or most of the cost of operation, including depreciation. Fund Financial Statements Traditional users of governmental financial statements will find the fund financial statements presentation more familiar. A fund is an accountability unit used to maintain control over resources segregated for specific activities or objectives. The Village uses funds to ensure and demonstrate compliance with finance -related laws and regulations. Within the basic financial statements, fund financial statements focus on th e Village’s most significant funds rather than the Village as a whole. Major funds are separately reported while all others are combined into a single, aggregated presentation. Individual fund data for non -major funds is provided in the form of combining statements in a later section of this report. The governmental major funds (see pages 8 – 13) are reported in the fund financial statements and encompass essentially the same functions reported as governmental activities in the government -wide financial statements. However, governmental fund statements report short-term fiscal accountability focusing on the use of spendable resources and balances of spendable resources available at the end of the year. They are useful in evaluating annual financing requirements of governmental programs and the commitment of spendable resources for the near - term. The government-wide financial statements provide a long-term view. Comparisons between the individual governmental fund statements and the government -wide statements provide information about financing decisions and the amount invested in maintaining and improving infrastructure. These two perspectives can provide insight into the long-term impact of short-term financing decisions. Both the governmental fund b alance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances reconcile the differences between these two perspectives. Budgetary comparison schedules for other funds can be found in a later section of this report . These statements and schedules demonstrate compliance with the Village’s budget. Proprietary or business-type activity funds (see pages 14 - 18) reported in the fund financial statements are for those services for which the Village charges customers a fee. There are two kinds of proprietary funds, enterprise and internal service. Enterprise funds essentially encompass the same functions reported as business -type activities in the government-wide statements. Enterprise fund services are primarily provided to customers external to the Village organization such as those of the water and sewer utilities , commuter parking lots and refuse collection and disposal. Internal service funds provide services and charge fees to customers within the Village organi zation such as equipment services (repair and maintenance of Village vehicles). Internal services are to both the governmental and business-type activities of the government-wide financial statements. Proprietary fund statements provide both long-term and short-term financial information consistent with the focus provided by the government-wide financial statements, but with more detail for major enterprise funds. Individual fund information for internal service funds and non-major enterprise funds is found in combining statements in a later section of this report. Fiduciary funds (see pages 19 - 20) such as the employee pension plans are reported in the fiduciary fund financial statements, but are excluded from the government -wide reporting. Fiduciary fund financial statements report resources that are not available to fund Village programs. Fiduciary fund financial statements report similarly to proprietary funds. The accompanying notes to the financial statements provide information essential to a f ull understanding of the government-wide and fund financial statements. The notes to the financial statements begin on page 18 of this report. VILLAGE OF DEERFIELD, ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) - 3 - In addition to the basic financial statements and accompanying notes, this report also presents certain requir ed supplementary information concerning the Village’s funding of pension benefit obligations to its employees and budget information. Major funds and component units are reported in the basic financial statements as discussed. Combining and individual statements and schedules for non-major and internal service funds are presented in a subsequent section of this report. FINANCIAL ANALYSIS OF THE VILLAGE AS A WHOLE The Village implemented the new financial reporting model (GASB #34) beginning with the fis cal year that ended April 30, 2004. Over time, as year-to-year financial information is accumulated on a consistent basis, changes in net position may be observed and used to discuss the changing financial position of the Village as a whole. STATEMENT OF NET POSITION – Village of Deerfield (in millions of dollars) Governmental Activities Business-type Activities Total – Primary Govt. 2016 2015 2016 2015 2016 2015 Current & Other Assets 57.65 54.90 1.80 1.49 59.45 56.39 Capital Assets 76.48 76.62 61.79 60.33 138.27 136.95 Total Assets 134.13 131.52 63.59 61.82 197.72 193.34 Deferred Outflows of Resources 13.83 16.25 0.95 0.74 14.78 16.99 Total Assets and Deferred Outflows of Resources 147.96 147.77 64.54 62.56 212.50 210.33 Long-Term Liabilities 53.37 63.01 30.72 31.47 84.09 94.48 Other Liabilities 6.12 3.59 1.30 1.39 7.42 4.98 Total Liabilities 59.49 66.60 32.02 32.86 91.51 99.46 Deferred Inflows of Resources 14.46 7.16 0.03 0.03 14.49 7.19 Total Liabilities and Deferred Inflows of Resources 73.95 73.76 32.05 32.89 106.00 106.65 Net Position: Net Investment in Capital Assets 55.73 54.33 32.11 29.87 87.84 84.20 Restricted 5.14 4.44 - - 5.14 4.44 Unrestricted 13.14 15.24 0.38 -.20 13.52 15.04 Total Net Position 74.01 74.01 32.49 29.67 106.50 103.68 The Village’s total primary government net position increased by $2.82 million due to various increases in assets and decreases in liabilities. Current & Other Assets have increased due largely to increased grants receivable related to large infrastructure projects completed in 2016. Business-type Activities Capital Assets increased due to water distribution and sanitary sewer system improvements that were completed in conjunction with major street reconstruction projects. Governmental Activities Capital Assets remained relatively consistent as the assets resulting from major street reconstruction projects were conveyed to the County through a jurisdictional transfer. Changes in deferred outflows of resources and deferred inflows of resources relate primarily to the actuarial valuation of the Village’s pension plans. (See Employee Retirement Systems footnote) Governmental Activities Long-Term Liabilities decreased $9.64 million due largely to a decrease in the actuarially determined Police Pension Net Pension Liability. VILLAGE OF DEERFIELD, ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) - 4 - The following table provides a summary of activities causing a change in net position. Change in Net Position – Village of Deerfield (in millions of dollars) Governmental Activities Business-type Activities Total – Primary Govt. 2016 2015 2016 2015 2016 2015 Revenues: Program Revenues: Charges for Service 5.06 4.04 7.70 7.21 12.76 11.25 Operating Grants 0.46 0.45 - - 0.46 0.45 Capital Grants 6.85 0.44 2.92 2.25 9.77 2.69 General Revenue: Property Taxes 7.20 5.38 - 0.97 7.20 6.35 Other Taxes/ Intergovernmental 17.51 16.30 - - 17.51 16.30 Transfers in (out) -2.77 -1.82 2.77 1.82 - - Other 0.63 1.54 0.24 0.20 0.87 1.74 Total Revenue 34.94 26.33 13.63 12.45 48.57 38.78 Expenses: General Government 8.94 8.18 - - 8.94 8.18 Public Safety 11.52 11.87 - - 11.52 11.87 Highways and Streets 12.90 8.07 - - 12.90 8.07 Interest/fiscal charges 0.92 1.11 - - 0.92 1.11 Water - - 4.41 4.52 4.41 4.52 Sewer - - 4.99 4.53 4.99 4.53 Refuse - - 1.45 1.43 1.45 1.43 Parking Lots - - 0.31 0.28 0.31 0.28 Total Expense 34.28 29.23 11.16 10.76 45.44 39.99 Changes in Net Position 0.66 -2.90 2.47 1.69 3.13 -1.21 CURRENT YEAR IMPACTS Governmental Activities Revenue Capital grants increased $6.41 million due to outside funding for major street reconstruction projects. Property tax revenue increased as the entire tax levy is reflected in Governmental Activities in 2016. In addition, 2016 is the first full year the 2015 bond issue payment was included in the tax levy. Other taxes/intergovernmental increased due largely to economic incentive activity that also resulted in increased expenditures. Expenses The Village’s Government Activities expenses increased by $5.05 million. General government and public safety remained relatively consistent with the prior year amount. The largest increase was to Highways and Streets, which relates to infrastructure projects completed during the year as a part of the three year expanded capital improvement plan. Interest and fiscal charges reflect scheduled interest payments adjusted for interest payable and amortization of discounts/premiums. No new debt was incurred in 2016. VILLAGE OF DEERFIELD, ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) - 5 - Business-type Activities Revenue A water rate increase of 4.0% was implemented in January, 2016; water sales totaled $4.04 million, which was less than the budget of $4.24 million. Sewer user charges of $2.85 million were consistent with the budget of $2.87 million. The sewer rates were increased 2.5% in January 2016. Refuse charge rates were held flat for 2016 and revenue of $0.51 million was consistent with the budgeted amount. The daily parking fee was also held flat which resulted in revenue of $0.28 million. Expenses Water Fund operating expenditures decreased $0.11 million from the prior year. Wholesale water purchases increased slightly; however, the completion of the accelerated meter change out program in 2015 added significant costs to the fund last year that were not incurred in 2016. The Village’s wholesale water supplier increased its rates on January 1st in combination with a series of annual increases to fund the reconstruction of their water treatment plant. Sewer Fund operating expenses increased in comparison to the prior year. The increase was due largely to accounting adjustments related to Other Post Employment Benefits and GASB 68. Refuse and Parking Fund operating expenses increased slightly in comparison to the period year. Both funds were under their expenditure budget. FINANCIAL ANALYSIS OF THE VILLAGE’S FUNDS Governmental Funds At December 31, 2016, the governmental funds reported a combined fund balance of $31.61 million which is a 2.50% increase from the beginning of the year ($30.84 million). The increase is due partially to an increase in the Infrastructure Replacement Fund balance related to cash and grants receivable. The 2011 B sinking fund also increased as expected. This fund will continue to increase until the Bonds are due on December 1, 2028. Major Governmental Funds The General Fund is the Village’s primary operating fund and the largest source of d ay-to-day service delivery. The General Fund cash balance of $16.3 million provides for approximately 300 days of anticipated annual expenditures. General Fund revenues exceeded the budget of $21.5 million by $2.5 million. State shared revenues, such as income taxes and use taxes, exceeded budgeted amounts. Sales tax and Home Rule Sales tax exceeded current year expectations due to economic incentive activity, which also resulted in greater than expected economic incentive payments. Hotel/motel tax, telecommunications tax and building permit revenue all exceeded the current year budget. General Fund expenditures were $0.05 million more than the budget. This was caused primarily by economic incentive payments and partially offset by the employer contribution to the Police Pension Fund being lower than expected. Vacant positions in multiple departments also offset the increased economic incentive payments. VILLAGE OF DEERFIELD, ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) - 6 - The table below shows the original and revised budget and the actual revenues and expenditures for the General Fund. More information may be found on the schedule of revenues, expenditures and changes to fund balance on page 63. General Fund Budget versus Actual Fiscal year ended December 31, 2016 (in millions) Original Amended Budget Budget Actual Revenues Taxes 11.43 11.43 12.68 Intergovernmental 6.76 6.76 7.25 Other 3.31 3.31 4.03 Total 21.50 21.50 23.96 Expenditures & Transfers Expenditures 20.01 20.01 20.05 Transfers – Net 4.45 4.45 4.40 Total 24.46 24.46 24.45 Change in Fund Balance -2.96 -2.96 -0.49 The Debt Service Fund is funded through property taxes and Build America Bond & Qualified Energy Conservation Bond rebates. Revenues and expenditures in this fund were consistent with expectation, including Federal Sequestration Cuts to the Build America Bond & Qualified Energy Conservation Bond rebates. The Infrastructure Replacement Fund (IRF) is primarily funded with a home r ule sales tax and grants. The Village also implemented an Infrastructure Maintenance Fee of ½ of 1% of the project value in 2012. Revenue in the IRF exceeded the budget by $0.19 million due partially to greater than expected Infrastructure Maintenance Fees and home rule sales tax. Expenditures in the IRF totaled $11.48 million. Engineering costs for upcoming projects, street improvements and infrastructure improvements accounted for the bulk of this fund’s expenditures. Major Proprietary Funds The major proprietary (or business-type) funds operated by the Village are the Water, Sewerage and Refuse Funds. The Water Fund operating revenues totaled $4.22 million for the year. Actual operating expenses, excluding depreciation and interest totaled $3.94 million. Overall, net position increased $1.75 million which included depreciation of $0.46 million and contributions of capital assets of $1.94 million. The Sewerage Fund operating expenses were over budget by $0.11 million due primarily to greater than expected personnel costs resulting from year-end accounting adjustments. The operating expenses excluding depreciation exceeded operating revenues by $0.96 million due to increased operating costs. Capital expenses for the foreseeable future in this fund have been transferred to the Infrastructure Fund. The Refuse Fund operating expenses exceeded operating revenues by $0.92 million. This Village also transfers a portion of its property tax levy to the refuse collection. Property tax transferred to the Refuse Fund totaled $0.96 million and the Refuse Fund’s net position increased $0.04 million during the year to $0.48 million. Internal Service Funds The Village’s combined internal service funds’ net position were $6.8 million as of December 31, 2016, with $5.2 million of the total available for major equipment purchases in the Vehicle and Equipment Replacement Fund. Total revenue approximated total expenses in the Garage Fund resulting in a minimal increase in net position. VILLAGE OF DEERFIELD, ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) - 7 - Capital assets Effective May 1, 2004, the Village revised its policy of capitalizing assets to raise the minimum to $25,000 (actual) or more in value. The Village’s investment in capital assets, net of accumulated depreciation, for governmental activities as of December 31, 2016 was $76.48 million. The Village’s investment in capital assets, net of accumulated depreciation, for business-type activities as of December 31, 2016 was $61.79 million. Major capital asset additions during the current year included streets and vehicles/equipment. Additional information on capital assets is presented in Note 4 to the financial statements. Long-term debt No new debt was issued during the year. The Village retired $2.15 million of general obligation debt. At the end of the year, the Village had total bonded debt outstanding of $58.92 million. As a home rule government, under Illinois law, the Village has no legal debt limit. As of December 31, 2016 the total Village debt represented 4.47% of the 2015 equalized assessed value. Additional information on long-term debt is presented in Note 6 to the financial statements. Bond Rating The Village’s general obligation bonds are rated Aaa by Moody’s Investor Rating Service. The Aaa rating was reaffirmed with the issuance of the General Obligation Bond Series of 201 5. Pension Funds The Village continues to fully fund its annual required contributions to both the Police Pension Fund and Illinois Municipal Retirement Fund. Increased salaries, an aging employee base, and end of career accumulated leave pay- outs have resulted in large contributions to both funds which cover all full-time employees. Additional information on the funding levels can be found in the Required Supplementary Information section. Economic Factors The national economic slowdown continues to affect the local Village micro-economy. However, slowdowns in local retail sales and hotel/motel occupancies have rebounded from the previous year. The Village is an affluent residential community with a substantial office/commercial presence including a number of headquarters operations in the health services and pharmaceutical areas. Property taxes are a minor part of the overall operating revenues. General Fund property tax revenue was transferred to the Infrastructure Replacement Fund in 2016 to help fund an expanded three year capital improvement plan. Previously, property tax revenue was approximately 10% of General Fund revenue. One of the major retail areas in the Village continues to attempt attracting major tenants. The Village is committed to working with developers and land owners to help them fill vacant retail space. Building permit revenues have again exceeded current period expectations. The Village’s hotel/motel tax has reached a high of $2.1 million and exceeded current year budget by $0.22 million due to more business travel. All of the Village’s six hotels have remained open during the year. The continued strength of the local corporate employment provides a base level of demand for rooms which is the primary market for these hotels. Contacting the Village’s Financial Management This financial report is designed to provide a general overview of the Village’s finances, comply with finance -related laws and regulations and demonstrate the Village’s commitment to public accountability. If you have questions about this report or would like to request additional information, contact the Village’s Finance Director, 850 Waukegan Road, Deerfield, IL 60015 or access the Village website at www.deerfield.il.us. Governmental Business-Type Activities Activities Total ASSETS Cash and investments 32,065,684$ 1,397,964$ 33,463,648$ Receivables (net, where applicable, of allowances for uncollectibles) Property taxes 7,075,988 - 7,075,988 Accounts 800,572 1,228,498 2,029,070 Accrued interest 46,430 678 47,108 Electric utility tax 113,231 - 113,231 Due from other governments 15,338,021 - 15,338,021 Note receivable 50,000 - 50,000 Internal balances 1,075,689 (1,075,689) - Inventory 170,925 139,407 310,332 Prepaid expenses 910,385 110,480 1,020,865 Capital assets not being depreciated 21,818,493 1,955,456 23,773,949 Capital assets (net of accumulated depreciation)54,663,951 59,830,597 114,494,548 Total assets 134,129,369 63,587,391 197,716,760 DEFERRED OUTFLOWS OF RESOURCES Pension items - IMRF 2,633,102 953,364 3,586,466 Pension items - Police Pension 11,195,726 - 11,195,726 Total deferred outflows of resources 13,828,828 953,364 14,782,192 Total assets and deferred outflows of resources 147,958,197 64,540,755 212,498,952 LIABILITIES Accounts payable 3,534,577 254,323 3,788,900 Accrued payroll 342,925 81,107 424,032 Contracts payable 595,655 - 595,655 Deposits payable - 43,869 43,869 Other payables 21,644 - 21,644 Accrued interest payable 75,724 84,672 160,396 Noncurrent liabilities Due within one year 1,555,790 832,279 2,388,069 Due in more than one year 53,369,796 30,720,471 84,090,267 Total liabilities 59,496,111 32,016,721 91,512,832 DEFERRED INFLOWS OF RESOURCES Deferred property taxes 7,075,988 - 7,075,988 Pension items - IMRF 81,469 29,497 110,966 Pension items - Police Pension 7,297,738 - 7,297,738 Total deferred inflows of resources 14,455,195 29,497 14,484,692 Total liabilities and deferred inflows of resources 73,951,306 32,046,218 105,997,524 VILLAGE OF DEERFIELD, ILLINOIS STATEMENT OF NET POSITION December 31, 2016 (This statement is continued on the following page.) - 4 - Governmental Business-Type Activities Activities Total NET POSITION Net investment in capital assets 55,732,838$ 32,118,523$ 87,851,361$ Restricted for Maintenance of roadways 360,593 - 360,593 Public safety 1,124,743 - 1,124,743 Debt service 3,644,178 - 3,644,178 Unrestricted 13,144,539 376,014 13,520,553 TOTAL NET POSITION 74,006,891$ 32,494,537$ 106,501,428$ STATEMENT OF NET POSITION (Continued) December 31, 2016 VILLAGE OF DEERFIELD, ILLINOIS See accompanying notes to financial statements. - 5 - Operating Capital Charges Grants and Grants and FUNCTIONS/PROGRAMS Expenses for Services Contributions Contributions PRIMARY GOVERNMENT Governmental Activities General government 8,938,512$ 2,706,969$ -$ -$ Public safety 11,516,466 1,221,896 - 2,055 Highways and streets 12,905,603 417,398 464,020 6,851,512 Interest 918,603 711,369 - - Total governmental activities 34,279,184 5,057,632 464,020 6,853,567 Business-Type Activities Water 4,405,066 4,058,510 - 1,936,420 Sewerage 4,996,664 2,853,730 - 986,429 Refuse disposal 1,449,954 515,496 - - Commuter parking lot 306,583 277,048 - - Total business-type activities 11,158,267 7,704,784 - 2,922,849 TOTAL PRIMARY GOVERNMENT 45,437,451$ 12,762,416$ 464,020$ 9,776,416$ Program Revenues VILLAGE OF DEERFIELD, ILLINOIS STATEMENT OF ACTIVITIES For the Year Ended December 31, 2016 - 6 - Governmental Business-Type Activities Activities Total (6,231,543)$ -$ (6,231,543)$ (10,292,515) - (10,292,515) (5,172,673) - (5,172,673) (207,234) - (207,234) (21,903,965) - (21,903,965) - 1,589,864 1,589,864 - (1,156,505) (1,156,505) - (934,458) (934,458) - (29,535) (29,535) - (530,634) (530,634) (21,903,965) (530,634) (22,434,599) General Revenues Taxes Property 7,203,484 22 7,203,506 Replacement 132,026 - 132,026 Home rule sales 3,484,806 - 3,484,806 Local use 419,908 - 419,908 Hotel/motel 2,124,692 - 2,124,692 Simplified telecommunications 1,722,295 - 1,722,295 Electric utility tax 1,273,363 - 1,273,363 Intergovernmental 8,350,115 - 8,350,115 Investment income 191,929 4,753 196,682 Miscellaneous 431,172 226,012 657,184 Transfers in (out) (2,770,464) 2,770,464 - Total 22,563,326 3,001,251 25,564,577 CHANGE IN NET POSITION 659,361 2,470,617 3,129,978 Special item - jurisdictional transfer of capital assets (1,194,772) - (1,194,772) NET POSITION, JANUARY 1 74,009,299 29,674,995 103,684,294 Change in accounting principle 533,003 348,925 881,928 NET POSITION, JANUARY 1, RESTATED 74,542,302 30,023,920 104,566,222 NET POSITION, DECEMBER 31 74,006,891$ 32,494,537$ 106,501,428$ Primary Government Net (Expense) Revenue and Change in Net Position See accompanying notes to financial statements. - 7 - BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2016 Debt Infrastructure Nonmajor General Service Replacement Governmental Total Cash and investments 16,345,630$ 111,253$ 5,366,750$ 5,027,403$ 26,851,036$ Receivables (net, where applicable, of allowances for uncollectibles) Property taxes 3,449,753 3,626,235 - - 7,075,988 Accounts 691,094 - 6,200 100,350 797,644 Accrued interest 13,454 667 4,804 24,126 43,051 Electric utility tax receivable 113,231 - - - 113,231 Due from other governments 3,219,153 9,110,000 2,965,633 43,235 15,338,021 Note receivable 50,000 - - - 50,000 Advance to other funds 1,075,689 - - - 1,075,689 Inventory 26,643 - - - 26,643 Prepaid items 904,041 - - - 904,041 TOTAL ASSETS 25,888,688$ 12,848,155$ 8,343,387$ 5,195,114$ 52,275,344$ ASSETS VILLAGE OF DEERFIELD, ILLINOIS - 8 - Debt Infrastructure Nonmajor General Service Replacement Governmental Total LIABILITIES Accounts payable 1,645,600$ -$ 1,811,753$ 65,600$ 3,522,953$ Accrued payroll 334,972 - - - 334,972 Contracts payable - - 595,655 - 595,655 Other payables 21,644 - - - 21,644 Total liabilities 2,002,216 - 2,407,408 65,600 4,475,224 DEFERRED INFLOWS OF RESOURCES Unavailable revenues - Library - 9,110,000 - - 9,110,000 Unavailable property tax revenues 3,449,753 3,626,235 - - 7,075,988 Total deferred inflows of resources 3,449,753 12,736,235 - - 16,185,988 Total liabilities and deferred inflows of resources 5,451,969 12,736,235 2,407,408 65,600 20,661,212 FUND BALANCES Nonspendable for Note receivable 50,000 - - - 50,000 Inventory 26,643 - - - 26,643 Prepaid items 904,041 - - - 904,041 Advance 1,075,689 - - - 1,075,689 Restricted for Maintenance of roadways - - - 360,593 360,593 Public safety - - - 1,124,743 1,124,743 Debt service - - - 3,644,178 3,644,178 Unrestricted Assigned for Debt service - 111,920 - - 111,920 Capital projects 1,300,000 - 5,935,979 - 7,235,979 Subsequent year's budget 2,117,018 - - - 2,117,018 Unassigned 14,963,328 - - - 14,963,328 Total fund balances 20,436,719 111,920 5,935,979 5,129,514 31,614,132 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 25,888,688$ 12,848,155$ 8,343,387$ 5,195,114$ 52,275,344$ OF RESOURCES AND FUND BALANCES LIABILITIES, DEFERRED INFLOWS See accompanying notes to financial statements. - 9 - FUND BALANCES OF GOVERNMENTAL FUNDS 31,614,132$ Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the governmental funds 76,482,444$ Less internal service funds (1,493,996)74,988,448 Premium on bonds issued are capitalized and amortized on the statement of net position (540,355) Discount on bonds issued are deferred and amortized on the statement of net position 55,749 Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds Bonds payable (29,375,000) Other postemployment benefit payable (1,103,475) Net pension liability - IMRF (4,116,323) Net pension liability - Police Pension (18,348,280) Compensated absences (1,497,902) Less internal service funds (18,220)(1,479,682) Intergovernmental receivable from the Library is not unavailable revenue on the statement of net position 9,110,000 Accrued interest on long-term liabilities is shown as a liability on the statement of net position (75,724) Differences between expected and actual experiences, assumption changes and net differences between projected and actual earnings, and contributions subsequent to the measurement date are recognized as deferred outflows and inflows of resources on the statement of net position IMRF 2,551,633 Police Pension 3,897,988 The net position of the internal service funds are included in the governmental activities in the statement of net position 6,827,780 NET POSITION OF GOVERNMENTAL ACTIVITIES 74,006,891$ December 31, 2016 VILLAGE OF DEERFIELD, ILLINOIS RECONCILIATION OF FUND BALANCES OF GOVERNMENTAL FUNDS TO THE GOVERNMENTAL ACTIVITIES IN THE STATEMENT OF NET POSITION See accompanying notes to financial statements. - 10 - STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended December 31, 2016 Debt Infrastructure Nonmajor General Service Replacement Governmental Total REVENUES Taxes 12,684,438$ 2,951,082$ 1,161,657$ 725,000$ 17,522,177$ Licenses and permits 1,958,108 - - - 1,958,108 Intergovernmental 7,249,068 496,238 6,798,660 464,020 15,007,986 Charges for services 646,574 - - 324,730 971,304 Fines and forfeits 286,981 - - - 286,981 Contribution from the Library - 730,131 - - 730,131 Investment income 97,285 4,747 37,350 52,547 191,929 Miscellaneous 1,035,036 - 520,105 252 1,555,393 Total revenues 23,957,490 4,182,198 8,517,772 1,566,549 38,224,009 EXPENDITURES Current General government 8,412,310 - - 494,592 8,906,902 Public safety 8,891,767 - - 162,732 9,054,499 Highways and streets 2,749,322 - - - 2,749,322 Capital outlay - - 11,479,622 173,003 11,652,625 Debt service Principal retirement - 1,369,000 - - 1,369,000 Interest and fiscal charges - 944,819 - - 944,819 Total expenditures 20,053,399 2,313,819 11,479,622 830,327 34,677,167 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 3,904,091 1,868,379 (2,961,850) 736,222 3,546,842 VILLAGE OF DEERFIELD, ILLINOIS - 11 - Debt Infrastructure Nonmajor General Service Replacement Governmental Total OTHER FINANCING SOURCES (USES) Transfers in 50,800$ -$ 4,190,796$ -$ 4,241,596$ Transfers (out)(4,449,753) (1,814,480) - (747,827) (7,012,060) Total other financing sources (uses)(4,398,953) (1,814,480) 4,190,796 (747,827) (2,770,464) NET CHANGE IN FUND BALANCES (494,862) 53,899 1,228,946 (11,605) 776,378 FUND BALANCES, JANUARY 1 20,931,581 58,021 4,707,033 5,141,119 30,837,754 FUND BALANCES, DECEMBER 31 20,436,719$ 111,920$ 5,935,979$ 5,129,514$ 31,614,132$ See accompanying notes to financial statements. - 12 - NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS 776,378$ Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlay as expenditures; however, they are capitalized and depreciated in the statement of activities 4,777,624$ Less internal service funds (266,492)4,511,132 The repayment of the principal portion long-term debt is reported as an expenditure when due in governmental funds but as a reduction of principal outstanding in the statement of activities 1,369,000 Revenues in the statement of activites that are not available in governmental funds are not reported as a revenue in governmental funds until received (515,000) The change in interest payable is reported as an expense on the statement of activities 2,800 Some expenses in the statement of activities (e.g., depreciation) do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds (2,673,964) Less internal service funds 331,959 (2,342,005) The loss on disposal of capital assets is an addition to expense on the statement of activities (1,060,624) Certain long-term liabilities, such as compensated absences, are not due and payable in the current period, and, therefore, are nor reported in the governmental funds 160,071 The increase in the other postemployment benefit payable is reported as an addition to expense on the statement of activities (167,588) The change in deferred inflows and outflows of resources is reported only on the statement of activities IMRF 1,000,005 Police Pension (10,311,205) The change in net pension liabilities are reported only on the statement of activities IMRF (944,470) Police Pension 7,856,265 The amortization of the discount and premium are reported as a reduction to expense on the statement of activities 23,416 The change in net position of certain activities of internal service funds is in governmental funds 301,186 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 659,361$ For the Year Ended December 31, 2016 VILLAGE OF DEERFIELD, ILLINOIS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, GOVERNMENTAL ACTIVITIES IN THE STATEMENT OF ACTIVITIES EXPENDITURES AND CHANGES IN FUND BALANCES TO THE See accompanying notes to financial statements. - 13 - VILLAGE OF DEERFIELD, ILLINOIS STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2016 Governmental Activities Nonmajor Enterprise Total Internal Water Sewerage Refuse (Parking Lot)Enterprise Service CURRENT ASSETS Cash and investments -$ 651,165$ 476,172$ 270,627$ 1,397,964$ 5,214,648$ Receivables Accounts - billed 211,472 173,200 19,771 - 404,443 2,928 Accounts - unbilled 427,472 312,407 84,176 - 824,055 - Accrued interest - 310 195 173 678 3,379 Prepaid expenses 45,316 60,421 2,568 2,175 110,480 6,344 Inventory 122,819 16,588 - - 139,407 144,282 Total current assets 807,079 1,214,091 582,882 272,975 2,877,027 5,371,581 CAPITAL ASSETS Nondepreciable 1,877,956 - - 77,500 1,955,456 - Depreciable 23,187,354 46,743,643 - 1,950,830 71,881,827 4,346,247 Accumulated depreciation (5,213,483) (5,911,855) - (925,892) (12,051,230) (2,852,251) Net capital assets 19,851,827 40,831,788 - 1,102,438 61,786,053 1,493,996 Total assets 20,658,906 42,045,879 582,882 1,375,413 64,663,080 6,865,577 DEFERRED OUTLFOWS OF RESOURCES Pension items - IMRF 317,788 635,576 - - 953,364 - Total assets and deferred outflows of resources 20,976,694 42,681,455 582,882 1,375,413 65,616,444 6,865,577 Business-Type Activities - 14 - Governmental Activities Nonmajor Enterprise Total Internal Water Sewerage Refuse (Parking Lot)Enterprise Service Business-Type Activities CURRENT LIABILITIES Accounts payable 55,792$ 91,252$ 104,448$ 2,831$ 254,323$ 11,624$ Accrued payroll 25,638 54,552 - 917 81,107 7,953 Accrued interest - 84,672 - - 84,672 - Deposits payable 24,071 19,798 - - 43,869 - Bonds payable - 804,000 - - 804,000 - Compensated absences payable 12,757 15,406 - 116 28,279 1,822 Total current liabilities 118,258 1,069,680 104,448 3,864 1,296,250 21,399 LONG-TERM LIABILITIES Advance from other funds 1,075,689 - - - 1,075,689 - Compensated absences payable 114,818 138,658 - 1,044 254,520 16,398 Net pension liability 496,797 993,595 - - 1,490,392 - Other postemployment benefit payable 38,161 73,868 - - 112,029 - Bonds payable - long-term - 28,863,530 - - 28,863,530 - Total long-term liabilities 1,725,465 30,069,651 - 1,044 31,796,160 16,398 Total liabilities 1,843,723 31,139,331 104,448 4,908 33,092,410 37,797 DEFERRED INFLOWS OF RESOURCES Pension items - IMRF 9,832 19,665 - - 29,497 - Total deferred inflows of resources 9,832 19,665 - - 29,497 - Total liabilities and deferred inflows of resources 1,853,555 31,158,996 104,448 4,908 33,121,907 37,797 NET POSITION Net investment in capital assets 19,851,827 11,164,258 - 1,102,438 32,118,523 1,493,996 Unrestricted (deficit)(728,688) 358,201 478,434 268,067 376,014 5,333,784 TOTAL NET POSITION 19,123,139$ 11,522,459$ 478,434$ 1,370,505$ 32,494,537$ 6,827,780$ See accompanying notes to financial statements. - 15 - VILLAGE OF DEERFIELD, ILLINOIS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2016 Governmental Activities Nonmajor Enterprise Total Internal Water Sewerage Refuse (Parking Lot)Enterprise Service OPERATING REVENUES Charges for services 4,058,510$ 2,853,730$ 515,496$ 277,048$ 7,704,784$ 1,122,553$ Miscellaneous 160,600 47,917 17,495 - 226,012 9,034 Total operating revenues 4,219,110 2,901,647 532,991 277,048 7,930,796 1,131,587 OPERATING EXPENSES Administration 636,554 597,044 - - 1,233,598 - Operations 3,307,476 2,400,139 1,449,954 279,846 7,437,415 371,368 Capital outlay - - - - - 217,906 Total operating expenses 3,944,030 2,997,183 1,449,954 279,846 8,671,013 589,274 OPERATING INCOME (LOSS) BEFORE DEPRECIATION AND AMORTIZATION 275,080 (95,536) (916,963) (2,798) (740,217) 542,313 Depreciation and amortization 461,036 979,442 - 26,737 1,467,215 331,959 OPERATING INCOME (LOSS)(185,956) (1,074,978) (916,963) (29,535) (2,207,432) 210,354 NON-OPERATING REVENUES (EXPENSES) Sale of capital assets - - - - - 10,000 Investment income - 2,165 1,332 1,256 4,753 24,875 Property taxes - - 22 - 22 - Interest expense - (1,020,039) - - (1,020,039) - Total non-operating revenues (expenses)- (1,017,874) 1,354 1,256 (1,015,264) 34,875 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS (185,956) (2,092,852) (915,609) (28,279) (3,222,696) 245,229 CONTRIBUTIONS 1,936,420 986,429 - - 2,922,849 55,957 TRANSFERS Transfers in - 1,814,480 955,984 - 2,770,464 - Total transfers - 1,814,480 955,984 - 2,770,464 - CHANGE IN NET POSITION 1,750,464 708,057 40,375 (28,279) 2,470,617 301,186 NET POSITION, JANUARY 1 17,256,368 10,581,784 438,059 1,398,784 29,674,995 6,526,594 Change in accounting principle 116,307 232,618 - - 348,925 - NET POSITION, JANUARY 1, RESTATED 17,372,675 10,814,402 438,059 1,398,784 30,023,920 6,526,594 NET POSITION, DECEMBER 31 19,123,139$ 11,522,459$ 478,434$ 1,370,505$ 32,494,537$ 6,827,780$ Business-Type Activities See accompanying notes to financial statements. - 16 - Governmental Activities Nonmajor Enterprise Total Internal Water Sewerage Refuse (Parking Lot)Enterprise Service CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users 3,984,982$ 2,804,908$ 506,593$ 277,048$ 7,573,531$ -$ Receipts from interfund services - - - - - 1,123,654 Receipts from miscellaneous revenues 160,600 47,917 17,495 - 226,012 9,034 Payments to suppliers (2,994,715) (1,062,476) (1,320,695) (230,841) (5,608,727) (377,412) Payments to employees (934,965) (1,735,703) (96,799) (38,170) (2,805,637) (212,748) Payments for interfund services (73,026) (50,992) (32,830) (12,343) (169,191) (1,900) Net cash from operating activities 142,876 3,654 (926,236) (4,306) (784,012) 540,628 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Interfund loan (142,876) - - - (142,876) - Interfund transfer - 1,814,480 955,984 - 2,770,464 - Property taxes - - 22 - 22 - Net cash from noncapital financing activities (142,876) 1,814,480 956,006 - 2,627,610 - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets - - - - - 10,000 Capital assets purchased - - - - - (220,535) Bond principal payments - (781,000) - - (781,000) - Bond interest payments - (1,033,855) - - (1,033,855) - Net cash from capital and related financing activities - (1,814,855) - - (1,814,855) (210,535) CASH FLOWS FROM INVESTING ACTIVITIES Sale of investments - 2,108 1,364 1,212 4,684 23,913 Net cash from investing activities - 2,108 1,364 1,212 4,684 23,913 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS - 5,387 31,134 (3,094) 33,427 354,006 CASH AND CASH EQUIVALENTS, JANUARY 1 - 645,778 445,038 273,721 1,364,537 4,860,642 CASH AND CASH EQUIVALENTS, DECEMBER 31 -$ 651,165$ 476,172$ 270,627$ 1,397,964$ 5,214,648$ STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2016 VILLAGE OF DEERFIELD, ILLINOIS Business-Type Activities (This statement is continued on the following page.) - 17 - Governmental Activities Nonmajor Enterprise Total Internal Water Sewerage Refuse (Parking Lot)Enterprise Service RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss)(185,956)$ (1,074,978)$ (916,963)$ (29,535)$ (2,207,432)$ 210,354$ Adjustments to reconcile operating income (loss) to net cash from operating activities Depreciation and amortization 461,036 979,442 - 26,737 1,467,215 331,959 (Increase) decrease in Receivables (73,528) (48,822) (8,903) - (131,253) 2,292 Prepaid expenses (11,211) (15,029) (482) (410) (27,132) (1,191) Inventories 25,840 (2,720) - - 23,120 4,100 Increase (decrease) in Accounts payable (140,560) 10,874 112 (1,674) (131,248) (7,429) Deposits payable 1,835 1,434 - - 3,269 - Interfund payables - - - - - (1,900) Accrued payroll 7,120 7,672 - 116 14,908 1,676 Other postemployment benefit payable 8,810 38,745 - - 47,555 - Compensated absences payable 4,213 16,478 - 460 21,151 767 Pension items 45,277 90,558 - - 135,835 - NET CASH FROM OPERATING ACTIVITIES 142,876$ 3,654$ (926,236)$ (4,306)$ (784,012)$ 540,628$ NONCASH TRANSACTIONS Contributions of capital assets by other funds 1,936,420$ 986,429$ -$ -$ 2,922,849$ 55,957$ TOTAL NONCASH TRANSACTIONS 1,936,420$ 986,429$ -$ -$ 2,922,849$ 55,957$ Business-Type Activities VILLAGE OF DEERFIELD, ILLINOIS STATEMENT OF CASH FLOWS (Continued) PROPRIETARY FUNDS For the Year Ended December 31, 2016 See accompanying notes to financial statements. - 18 - Pension Agency Trust Fund Funds ASSETS Cash and cash equivalents 831,670$ 2,882,901$ Investments U.S. Treasury obligations 2,681,733 - U.S. agencies securities 3,709 - Corporate bonds 10,749,642 - Mutual funds 28,302,179 - Municipal bonds 382,410 - Receivables Accrued interest 141,280 55 Total assets 43,092,623 2,882,956$ LIABILITIES Accounts payable 18,847 71,386$ Deposits payable - 2,698,680 Other payables - 112,890 Total liabilities 18,847 2,882,956$ NET POSITION RESTRICTED FOR PENSION BENEFITS 43,073,776$ VILLAGE OF DEERFIELD, ILLINOIS STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS December 31, 2016 See accompanying notes to financial statements. - 19 - ADDITIONS Contributions - employer 934,918$ Contributions - employee 425,791 Total contributions 1,360,709 Investment income Net appreciation in fair value of investments 2,801,143 Interest and dividends earned on investments 1,074,707 Total investment income 3,875,850 Less investment expense (30,824) Net investment income 3,845,026 Total additions 5,205,735 DEDUCTIONS Benefits and refunds Pension payments 2,603,139 Administrative 41,182 Total deductions 2,644,321 NET INCREASE 2,561,414 NET POSITION RESTRICTED FOR PENSION BENEFITS January 1 40,512,362 December 31 43,073,776$ VILLAGE OF DEERFIELD, ILLINOIS PENSION TRUST FUND STATEMENT OF CHANGES IN FIDUCIARY NET POSITION For the Year Ended December 31, 2016 See accompanying notes to financial statements. - 20 - - 18 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS December 31, 2016 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Village of Deerfield, Illinois (the Village) have been prepared in conformity with accountin g principles generally accepted in the United States of America, as applied to government units (hereinafter referred to as generally accepted accounting principles (GAAP)). The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the Village’s accounting policies are described below. a. Reporting Entity The Village was incorporated in 1903. The Village is a municipal corporation governed by an elected seven-member board. As required by GAAP, these financial statements present the Village (the primary government). The Village’s financial statements include: Pension Trust Fund Police Pension Employees Retirement System The Village’s police employees participate in the Police Pension Employees Retirement System (PPERS). PPERS functions for the benefit of these employees and is governed by a five-member pension board. Two members appointed by the Village’s Mayor, one elected pension beneficiary and two elected police employees constitute the pension board. The Village and PPERS participants are obligated to fund all PPERS costs based upon actuarial valuations . The State of Illinois is authorized to establish benefit levels and the Village is authorized to approve the actuarial assumptions used in the determination of contribution levels . Although it possesses many of the characteristics of a legally separate government, PPERS is reported as if it were part of the primary government because its sole purpose is to finance and administer the pensions of the Village ’s police employees and because of the fiduciary nature of such activities . PPERS is reported as a pension trust fund. Based on the criteria of GASB Statement No 61, The Financial Reporting Entity: Omnibus - an amendment of GASB Statements No. 14 and No. 34, there are no component units for which the Village is considered to be financially accountable. - 21 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 19 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) a. Reporting Entity (Continued) Joint Ventures Solid Waste Agency of Lake County Solid Waste Agency of Lake County (SWALCO) is a municipal corporation empowered to plan, finance, construct and operate a solid waste disposal system to serve its member municipalities. Management consists of a Board of Directors comprised of one appointed representative from each member . The Village does not exercise any control over the activities of SWALCO beyond its representation on the Board of Directors. SWALCO is reported as a proprietary joint venture. b. Fund Accounting The Village uses funds to report on its financial position, changes in its financial position and cash flows. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. A fund is a separate accounting entity with a s elf-balancing set of accounts. A minimum number of funds are maintained consistent with legal and man agerial requirements. Funds are classified into the following categories: governmental, proprietary and fiduciary. Governmental funds are used to account for all or most of the Village ’s general activities, including the collection and disbursement of restricted or committed monies (special revenue funds), the funds committed, restricted or assigned for the acquisition or construction of capital assets (capital projects funds) and the funds committed, restricted or assigned for the servicing of general long-term debt (debt service funds). The General Fund is used to account for all activities of the general government not accounted for in some other fund. Proprietary funds are used to account for activities similar to those found in the private sector, where the determination of net income is necessary or useful to sound financial administration. Goods or services from such activities can be provided either to outside parties (enterprise funds) or to other departments or agencies primarily within the Village (internal service funds). Fiduciary funds are used to account for assets held on behalf of outside parties, including other governments, or on behalf of other funds within the Village . When these assets are held under the terms of a formal trust agreement, a pension trust fund may be used. The Village has a police pension fund . Agency funds are used to account for funds that the Village holds on behalf of others as their agent . - 22 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 20 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) c. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non fiduciary activities of the Village. The effect of material interfund activity (except for activities reported in internal service funds) has been eliminated from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function, segment or program are offset by program revenues . Direct expenses are those that are clearly identifiable with a specific function or segment . Program revenues include (1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment and (2) grants and standard revenues that are restricted to meeting the operational or capital requirements of a particular function or segment . Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The Village reports the following major governmental funds : The General (Corporate) Fund is the Village’s primary operating fund. It accounts for all financial resources of the gene ral government, except those accounted for in another fund. The Debt Service Fund was established to accumulate restricted resources for the payment of general long-term debt. The Infrastructure Replacement Fund was established for the purpose of maintaining, repairing and renovating the capital assets of the Village. The Village reports the following major proprietary funds: The Water Fund accounts for all activity necessary to provide water to the residents of the Village including administ ration, operation, maintenance, financing and related debt service. - 23 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 21 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) c. Government-Wide and Fund Financial Statements (Continued) The Sewerage Fund accounts for the provision of sewer service to the residents of the Village. All activity necessary to provide such services is accounted for in this fund including, but not limited to, administration, construction, maintenance and operations of the Sewerage Treatment Plant and related debt service. The Refuse Fund accounts for all revenues and expenses necessary to provide the residents of the Village with refuse service. Additionally, the Village reports the following proprietary funds: The Parking Lot Fund accounts for all activity rel ated to the commuter lot. Internal Service Funds The Garage Fund accounts for all activity necessary to maintain the efficient and safe operation of the Village’s vehicles and equipment and is funded by various departments according to services rendered. The Vehicle and Equipment Replacement Fund accounts for purchases of vehicles and equipment and is funded by various departments according to services rendered. These funds are reported as governmental activities on the government -wide financial statements. The Village reports a pension trust fund as a Fiduciary Fund to account for the Police Pension Fund. The Village also reports Agency Funds to account for street deposits and water meter deposits (Deposit Fund), DARE Funds and radio dispatching funds (East Shore Radio Network Fund) that the Village holds on behalf of others as their agent. d. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements are reported using the econ omic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements (Agency Funds have no measurement focus). Revenues and additions are recorded when earned and expenses and deductions are recorded when a liability is incurred . Property taxes are recognized as revenues in the year for which they are levied (i.e., intended to finance). Grants and similar items - 24 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 22 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) d. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued) are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Operating revenues/expenses include all revenues/expenses directly related to providing the day-to-day enterprise fund services. Incidental revenues/expenses, such as property taxes and investment income, are reported as non-operating. Governmental fund financial statements are accounted for using a current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period . The Village recognizes property taxes when they become both measurable and available in the period intended to finance, generally within 60 days of year end. Sales taxes, telecommunications taxes and use taxe s use a 90-day period and income taxes use a 120-day period. Expenditures are recorded when the related fund liability is incurred . Principal and interest on general long-term debt are recorded as fund liabilities when due or when amounts have been accumul ated in the debt service fund for payments to be made early in the following year. Those revenues susceptible to accrual are property taxes, franchise taxes, license s, interest revenue and charges for services. Sales tax, telecommunication tax, local us e tax and motor fuel tax and fines owed to/collected by the state at year end on behalf of the Village also are recognized as revenue. Permit revenues are not susceptible to accrual because generally they are not measurable until received in cash. The Village reports unavailable/deferred revenue on its financial statements. Unavailable revenues arise when a potential revenue does not meet both the measurable and available or earned criteria for recognition in the current period . Deferred revenues arise when resources are received by the Village before it has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the Village has a legal claim to the resources, the deferred inflow of resources for unavailable revenue or the liability for deferred revenue is removed from the financial statements and revenue is recognized. e. Cash and Investments Cash and Cash Equivalents For purposes of the statement of cash flows, the Village ’s proprietary funds consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. - 25 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 23 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) e. Cash and Investments (Continued) Investments Investments with a maturity of less than one year when purchased, non-negotiable certificates of deposit and other nonparticipating investments are stated at cost or amortized cost. Investments with a maturity greater than one year when purchased and all investments of the pension trust funds are stated at fair value . Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date . The Village has invested in Illinois Funds during the year. Illinois Funds is an investment pool managed by the State of Illinois, Office of the Treasurer, which allows governments within the state to pool their funds for investment purposes. Investments in Illinois Funds are carried at amortized cost, which approximates fair value. f. Short-Term Interfund Receivables/Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as “due from other funds” or “due to other funds” on the balance sheet. Short-term interfund loans, if any, are classified as “interfund receivables/payables.” g. Advances to Other Funds Noncurrent portions of long-term interfund loan receivables are reported as advances between funds in the fund financial statements. The advances are offset equally by nonspendable fund balance in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. h. Inventories Inventories are valued at cost, which approximates market, using the first -in/first-out (FIFO) method. The costs of governmental fund inventories are recorded as expenditures when consumed rather than when purchased. i. Prepaid Items/Expenses Payments made to vendors for services that will benefit periods beyond the date of this report are recorded as prepaid items /expenses and are accounted for on the consumption method. - 26 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 24 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) j. Capital Assets Capital assets, which include property, plant, equipment, water and sewer system and infrastructure assets (e.g., roads, bridges and similar items) are reported in the applicable governmental or business-type activities columns in the government -wide financial statements. Capital assets are defined by the Village as assets with an initial, individual cost in excess of $25,000 and an estimated useful life in excess of one year. All purchased capital assets are valued at cost where historical records are available and at an estimated historical cost where no historical records exist . Donated capital assets are valued at acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized . Improvements are capitalized and depreciated over the remaining useful lives of the related capital assets, as applicable. Depreciation of buildings, equipment, water/sewer systems and vehicles is computed using the straight-line method over the following useful lives: Years Buildings and building improvements 20-50 Parking improvements 15-50 Water/sewer system 40-60 Vehicles, machinery and equipment 4-20 Infrastructure 20-50 k. Compensated Absences Vested or accumulated vacation leave, including related Social Security and Medicare, that is owed to retirees or terminated employees is reported as an expenditure and a fund liability of the governmental fund that will pay it in the fund financial statements and the remainder is reported in long-term debt. Vested or accumulated vacation leave and vested sick leave of proprietary funds at both levels and governmental activities at the government-wide level is recorded as an expense and liability as the benefits accrue to employees. - 27 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 25 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) l. Long-Term Obligations In the government-wide financial statements and proprietary funds in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities or proprietary fund financial statements. Bond premiums and discounts, and gains/losses on refundings, are deferred and amortized over the life of the bonds using the bonds outstanding method, which approximates the effective interest method. Bonds payable are reported net of the applicable bond premium or discount and gains/losses on refundings. In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the current period . The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as expenditures. m. Fund Equity/Net Position Governmental funds equity is classified as fund balance . Fund balance is further classified as nonspendable, restricted, committed, assigned or unassigned. Nonspendable fund balance is reported for amounts that are either not in spendable form or legally or contractually required to be maintained intact . Restrictions of fund balance are reported for amounts constrained by legal restrictions from outside parties for use for a specific purpose or externally imposed by outside entities . Committed fund balance is constrained by formal actions of the Village Board of Trustees, which is considered the Village’s highest level of decision-making authority. Formal actions include ordinances approved by the Village Board of Trustees. Assigned fund balance represents amounts constrained by the Village’s intent to use them for a specific purpose. The authority to assign fund balance has been delegated to the Finance Director through the approved fund balance policy of the Village. Any residual fund balance of the General Fund and any deficits in other funds, if any, is reported as unassigned. The Village’s flow of funds assumption prescribes that the funds with the highest level of constraint are expended first. If restricted or unrestricted funds are available for spending, the restricted funds are spent first. Additionally, if different levels of unrestricted funds are available for spending the Village considers committed funds to be expended first followed by assigned and then unassigned funds. - 28 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 26 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) m. Fund Equity/Net Position (Continued) In the government-wide and proprietary fund financial statements, restricted net position is legally restricted by outside parties for a specific purpose . At December 31, 2016, no net position restrictions were the result of enabling legislation adopted by the Village. Net investment in capital assets represents the Village’s investment in the book value of capital assets, less any outstanding debt that was issued to construct or acquire the capital asset . Unrestricted net position consists of net position that does not meet the definition of restricted or net investment in capital assets. n. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources . This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has two types of item, which arises under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, unavailable revenue, is reported in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: property taxes and the long-term receivable from the Deerfield Public Library (the Library). These amounts are deferred and recognized as an inflow of resources in the period that the amoun ts become available. Additionally the pension plans of the Village have both deferred inflows and outflows. o. Interfund Transactions Interfund services are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions, except interfund services and reimbursements, are reported as transfers. - 29 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 27 - 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) p. Accounting Estimates The preparation of financial statements in conformity with generally accep ted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period . Actual results could differ from those estimates. 2. DEPOSITS AND INVESTMENTS The Village and pension fund categorizes the fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The Village maintains a cash and investment pool that is available for use by all funds , except the Pension Trust Fund, 2011B Sinking Fund and the Bond Proceeds Fund. Each fund’s portion of this pool is displayed on the financial statements as “cash and investments.” In addition, investments are separately held by several of the Village ’s funds. The deposits and investments of the pension trust fund are held separately from those of other funds. Permitted Deposits and Investments - Statutes and the Village’s investment policy authorize the Village to make deposits/invest in insured commercial banks, savings and loan institutions, obligations of the U.S. Treasury and U.S. agencies, insured credit union shares, money market mutual funds with portfolios of securities issued or guaranteed by the United States Government or agreements to repurchase these same obligations, repurchase agreements, short-term commercial paper rated within the th ree highest classifications by at least two standard rating services and Illinois Funds. It is the policy of the Village to invest its funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the Village and conforming to all state and local statutes governing the investment of public funds, using the “prudent person” standard for managing the overall portfolio . The primary objective of the policy is safety (preservation of capital and protection of investment principal), liquidity and yield. a. Village Deposits with Financial Institutions Custodial credit risk for deposits with financial institutions is the risk that in the event of a bank’s failure, the Village’s deposits may not be returned to it. The Village’s investment policy requires pledging of collateral with a fair value of 100% of all bank balances in excess of federal depository insurance with the collateral held by the Village’s agent in the Village’s name. - 30 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 28 - 2. DEPOSITS AND INVESTMENTS (Continued) b. Village Investments The following table presents the Village’s investments in and maturities of debt securities as of December 31, 2016: Investment Maturities (in Years) Fair Less than Greater than Value 1 1-5 6-10 10 Corporate bonds $ 4,693,704 $ 3,672,915 $ 1,020,789 $ - $ - U.S. agency obligations 10,980,145 - 7,419,383 2,133,853 1,426,909 TOTAL $ 15,673,849 $ 3,672,915 $ 8,440,172 $ 2,133,853 $ 1,426,909 In accordance with its investment policy, the Village limits its exposure to interest rate risk by structuring the portfolio to provide liquidity for operating funds and maximizing yields for funds not needed within a five-year period. However, the investment policy does not limit the maximum maturity length of investments. Investments may be purchased with maturities to match future projects or liability requirements. In addition, the policy requires the Village to structure the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity. The Village has the following recurring fair value measurements as of December 31, 2016. The U.S. agency obligations and corporate bonds are valued using quoted matrix pricing models (Level 2 inputs). The Village limits its exposure to credit risk, the risk that the issuer of a debt security will not pay its par value upon maturity, by primarily investing i n U.S. agency obligations rated AAA by Moody’s ratings. Illinois Funds is rated AAA by Standard and Poor’s, the fair value of which are the same as the value of the pool shares. Corporate bonds are not rated. Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to the investment, the Village will not be able to recover the value of its investments that are in possession of an outside party. To limit its exposure, the Village’s investment policy requires all security transactions that are exposed to custodial credit risk to be processed on a delivery versus payment (DVP) basis with the underlying investments held by a third party acting as the Village ’s agent separate from where the investment was purchase d or by the trust department of the bank where purchased, in the Village’s name. Illinois Funds are not subject to custodial credit risk. Concentration of credit risk - The Village’s investment policy requires diversification of the portfolio, but does not specify maximum amounts that can be invested in any one investment vehicle, maturity, issuer or class of securities. - 31 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 29 - 2. DEPOSITS AND INVESTMENTS (Continued) b. Village Investments (Continued) The Village’s investment policy does not specifically prohibit the use of or the investment in derivatives. 3. RECEIVABLES a. Taxes Property taxes for 2016 attach as an enforceable lien on January 1, 2016 on property values assessed as of the same date. Taxes are levied by December of the subsequent fiscal year (by passage of a Tax Levy Ordinance). Tax bills are prepared by the County and issued on or about February 1 for Cook County and May 1 for Lake County and are payable in two installments, on or about March 1 and August 1 for Cook County and June 1 and September 1 for Lake County. The County collects such taxes and remits them periodically. The 2016 tax levy collections are intended to finance 2017 year and are not considered available for current operations and are, therefore, shown as unavailable/deferred revenue. b. Due from Other Governments The Village issued General Obligation Bonds in 2011 and 2013 on behalf of the Library to finance the Library Improvement Project . These bonds are in the Village’s name and are a liability of the Vil lage. The Library receives property tax collections to pay for the bond principal and interest and then remits the funds to the Village as the principal and interest payments become due . The Village has recorded a receivable, offset by unavailable revenue, for the amount of debt outstanding, less cash on hand, that the Library will be paying to the Village. 4. CAPITAL ASSETS Capital asset activity for the year ended December 31, 2016 was as follows: Beginning Balances Increases Decreases Jurisdiction Transfer Ending Balances GOVERNMENTAL ACTIVITIES Capital assets not being depreciated Land $ 4,769,586 $ 367,338 $ - $ - $ 5,136,924 Land right of way 16,180,188 - - - 16,180,188 Construction in progress 1,445,254 329,377 78,478 1,194,772 501,381 Total capital assets not being depreciated 22,395,028 696,715 78,478 1,194,772 21,818,493 - 32 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 30 - 4. CAPITAL ASSETS (Continued) Beginning Balances Increases Decreases Jurisdiction Transfer Ending Balances GOVERNMENTAL ACTIVITIES Capital assets being depreciated Buildings and improvements $ 12,232,033 $ 348,764 $ - $ - $ 12,580,797 Vehicles, machinery and equipment 4,758,248 276,492 55,931 - 4,978,809 Infrastructure 102,420,983 3,544,131 3,521,484 3,449,179 98,994,451 Total capital assets being depreciated 119,411,264 4,169,387 3,577,415 3,449,179 116,554,057 Less accumulated depreciation for Buildings and improvements 4,166,061 301,307 - - 4,467,368 Vehicles, machinery and equipment 2,746,588 394,694 55,931 - 3,085,351 Infrastructure 58,269,463 1,977,963 2,460,860 3,449,179 54,337,387 Total accumulated depreciation 65,182,112 2,673,964 2,516,791 3,449,179 61,890,106 Total capital assets being depreciated, net 54,229,152 1,495,423 1,060,624 - 54,663,951 GOVERNMENTAL ACTIVITIES CAPITAL ASSETS, NET $ 76,624,180 $ 2,192,138 $ 1,139,102 $ 1,194,772 $ 76,482,444 Beginning Balances Increases Decreases Ending Balances BUSINESS-TYPE ACTIVITIES Capital assets not being depreciated Land $ 1,955,456 $ - $ - $ 1,955,456 Construction in Progress 7,224 - 7,224 - Total capital assets not being depreciated 1,962,680 - 7,224 1,955,456 Capital assets being depreciated Buildings and improvements 45,185,189 - - 45,185,189 Parking lot improvements 1,950,830 - - 1,950,830 Vehicles, machinery and equipment 626,490 - - 626,490 Water distribution system 16,641,851 1,936,420 197,530 18,380,741 Sanitary sewer system 4,814,466 993,653 69,542 5,738,577 Total capital assets being depreciated 69,218,826 2,930,073 267,072 71,881,827 Less accumulated depreciation for Buildings and improvements 5,363,130 963,458 - 6,326,588 Parking lot improvements 899,155 26,737 - 925,892 Vehicles, machinery and equipment 495,644 18,054 - 513,698 Water distribution system 2,522,077 354,526 197,530 2,679,073 Sanitary sewer system 1,571,081 104,440 69,542 1,605,979 Total accumulated depreciation 10,851,087 1,467,215 267,072 12,051,230 Total capital assets being depreciated, net 58,367,739 1,462,858 - 59,830,597 BUSINESS-TYPE ACTIVITIES CAPITAL ASSETS, NET $ 60,330,419 $ 1,462,858 $ 7,224 $ 61,786,053 - 33 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 31 - 4. CAPITAL ASSETS (Continued) Depreciation expense was charged to functions/programs of the primary government as follows: GOVERNMENTAL ACTIVITIES General government $ 171,726 Public safety 166,147 Highways and streets, including depreciation of general infrastructure assets 2,336,091 DEPRECIATION EXPENSE - GOVERNMENTAL ACTIVITIES $ 2,673,964 5. RISK MANAGEMENT The Village is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions’ injuries to employees; illnesses of employees; and natural disasters. Intergovernmental Personnel Benefit Cooperative The Village participates in the Intergovernmental Personnel Benefit Cooperative (IPBC). IPBC is a public entity risk pool established by certain unit s of local government in Illinois to administer some or all of the personnel benefit prog rams (primarily medical, dental and life insurance coverage) offered by these members to their officers and employees and to the officers and employees of certain othe r governmental, quasi governmental and nonprofit public service entities. The IPBC receives, processes and pays such claims as may come within the benefit program of each member. Management consists of a Board of Directors comprised of one appointed representative from each member. In addition, there are two officers, a Benefit Administrator and a Treasurer. The Village does not exercise any control over the activities of IPBC beyond its representation on the Board of Directors. Municipal Insurance Cooperative Agency The Village participates in the Municipal Insurance Cooperative Agency (MICA). MICA is a public entity risk pool whose members are Illinois municipalities . MICA manages and funds first party property losses, third party liability claims, workers’ compensation claims and public officials’ liability claims of its members . MICA provides $2,000,000 of coverage after a $1,000 deductible. The Village’s payments to MICA are displayed on the financial statements as expenditures/expenses in appropr iate funds. - 34 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 32 - 5. RISK MANAGEMENT (Continued) Management consists of a Board of Directors comprised of one appointed representative from each member. In addition, there are three officers, a Risk Manager and a Treasurer. The Village does not exercise any control over activities of MICA beyond its representation on the Board of Directors. MICA functions solely as an administrative agent for each member. High-Level Excess Liability Pool The Village participates in the High-Level Excess Liability Pool (HELP). HELP is a public entity risk pool established by certain municipalities (the Members) in Illinois to provide excess liability coverage ($13,000,000 of coverage after the $2,000,000 coverage provided by MICA). The Village’s payments to HELP are displayed on the financial statements as expenditures/expenses in appropriate funds. HELP was organized on April 1, 1987 . The purpose of HELP is to act as a joint self-insurance pool for the purpose of seeking the prevention or lessening of liability claims for injuries to persons or property or claims for errors and omissions made against the Members and other parties included within the scope of coverage of HELP. HELP is governed by a Board of Directors, which consists of one appointed representative from each member municipality. Each director has an equal vote. The officers of HELP are appointed by the Board of Directors. The Board of Directors determines the general policy of HELP; makes all appropriations; approves contracts; adopts resolutions providing for the issuance of debt by HELP; adopts bylaws, rules and regulations; and exercises such powers and performs such duties as may be prescribed in the Agency Agreement or the by-laws. The Village does not exercise any control over the activities of HELP beyond its representation on the Board of Directors. 6. LONG-TERM DEBT a. General Obligation Bonds The Village issues general obligation bonds for the acquisition and construction of major capital facilities. - 35 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 33 - 6. LONG-TERM DEBT (Continued) a. General Obligation Bonds (Continued) General obligation bonds are direct obligations and pledge the full faith and credit of the Village. General obligation bonds currently outstanding are as follows: Issue Fund Debt Retired By Balances December 31 Additions Reductions Balances December 31 Current Portion General Obligation Bond Series of 2008 ($5,000,000 dated August 1 2008; maturing December 1, 2028; payable in annual installments; interest rates from 3.25% to 4.25%). Debt Service $ 3,660,000 $ - $ 220,000 $ 3,440,000 $ 225,000 General Obligation Bond Series of 2010A ($12,500,000 dated November 3, 2010; maturing December 1, 2030; payable in annual installments; interest rates from 0.80% to 5.50%). Debt Service* Sewer 3,914,000 5,871,000 - - 224,000 336,000 3,690,000 5,535,000 226,000 339,000 General Obligation Bond Series of 2011A ($9,900,000 dated October 17, 2011; maturing December 1, 2031; payable in annual installments; interest rates from 1.00% to 3.25%). Debt Service 8,505,000 - 280,000 8,225,000 295,000 General Obligation Taxable Bond Series of 2011B ($12,500,000 dated October 17, 2011; maturing December 1, 2028; payable in annual installments; interest rates of 4%). Sewer** 12,480,000 - - 12,480,000 - General Obligation Bond Series of 2012 ($10,000,000 dated February 21, 2012; maturing December 1, 2031, payable in annual installments; interest rates from 1.25% to 2.75%). Sewer 10,000,000 - - 10,000,000 - General Obligation Bond Series of 2013 ($9,075,000 dated January 3, 2013; maturing December 1, 2031, payable in annual installments; interest rates from 2.00% to 2.25%). Debt Service Sewer 5,090,000 1,975,000 - - 265,000 445,000 4,825,000 1,530,000 265,000 465,000 - 36 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 34 - 6. LONG-TERM DEBT (Continued) a. General Obligation Bonds (Continued) Issue Fund Debt Retired By Balances December 31 Additions Reductions Balances December 31 Current Portion General Obligation Bond Series of 2015 ($9,575,000 dated May 19, 2015; maturing December 1, 2034; payable in annual installments; interest rates from 3.00% to 3.25%). Debt Service $ 9,575,000 $ - $ 380,000 $ 9,195,000 $ 395,000 TOTAL $ 61,070,000 $ - $ 2,150,000 $ 58,920,000 $ 2,210,000 The $5,000,000 in General Obligation Bonds, Series 2008, was authorized to finance various capital improvement projects. The $12,500,000 in General Obligation Bonds, Series 2010A, was authorized to finance various general and wastewater reclamation facility improvements. The $9,900,000 in General Obligation Bonds, Series 2011A, was authorized to finance $4,000,000 in street improvement projects and $5,900,000 for the library renovation project. The $12,500,000 in General Obligation Bonds, Taxable Series 2011B (Qualified Energy Conservation Bonds) was authorized to finance the wastewater reclamation facility improvements. The $10,000,000 in General Obligation Bonds, Series 2012, was authorized to finance the wastewater reclamation facility improvements. The $9,075,000 in General Obligation Bonds, Series 2013, was authorized to finance $3,200,000 in wastewater reclamation facility improvements and $5,875,000 for the library renovation project. The $9,575,000 in General Obligation Bonds, Series 2015, was authorized to finance various street and infrastructure rehabilitation projects . * The Village abated a portion of the tax levy on this bond issue for fiscal year 2016 and evaluates annually if the Village is financially capable of doing so . The bonds were issued as taxable Build America Bonds and are eligible for a 35% direct payment interest credit from the United States Government. ** The Village abated a portion of the tax levy on this bond issue for fiscal year 2016 and evaluates annually if the Village is financially capable o f doing so. The bonds were issued as taxable Qualified Energy Conservation Bonds and are eligible for a 70% direct payment interest credit from the United States Government. - 37 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 35 - 6. LONG-TERM DEBT (Continued) b. Debt Service Requirements to Maturity Annual debt service requirements to maturity are as follows: Year Ending Governmental Activities Business-Type Activities December 31, Principal Interest Total Principal Interest Total 2017 $ 1,406,000 $ 908,692 $ 2,314,692 $ 804,000 $ 1,016,052 $ 1,820,052 2018 1,450,000 872,464 2,322,464 825,000 997,429 1,822,429 2019 1,494,000 833,662 2,327,662 851,000 978,319 1,829,319 2020 1,545,000 791,294 2,336,294 875,000 958,983 1,833,983 2021 1,599,000 746,873 2,345,873 901,000 937,098 1,838,098 2022 1,650,000 700,069 2,350,069 930,000 912,580 1,842,580 2023 1,713,000 650,319 2,363,319 957,000 886,592 1,843,592 2024 1,774,000 597,147 2,371,147 991,000 857,777 1,848,777 2025 1,837,000 541,188 2,378,188 1,018,000 827,265 1,845,265 2026 1,905,000 481,767 2,386,767 1,055,000 793,686 1,848,686 2027 1,983,000 418,899 2,401,899 1,087,000 758,116 1,845,116 2028 1,879,000 351,961 2,230,961 13,431,000 719,552 14,150,552 2029 2,475,000 287,173 2,762,173 1,885,000 184,435 2,069,435 2030 2,560,000 208,103 2,768,103 1,940,000 120,525 2,060,525 2031 2,215,000 124,100 2,339,100 1,995,000 54,638 2,049,638 2032 610,000 59,900 669,900 - - - 2033 630,000 41,600 671,600 - - - 2034 650,000 21,125 671,125 - - - TOTAL $ 29,375,000 $ 8,636,336 $ 38,011,336 $ 29,545,000 $ 11,003,047 $ 40,548,047 - 38 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 36 - 6. LONG-TERM DEBT (Continued) c. Changes in Long-Term Liabilities During the fiscal year, the following changes occurred in long-term liabilities: Fund Debt Retired By Balances December 31, Restated Additions Reductions Balances December 31 Current Portion GOVERNMENTAL ACTIVITIES General obligation bonds Debt Service $ 30,744,000 $ - $ 1,369,000 $ 29,375,000 $ 1,406,000 Premium 564,519 - 24,164 540,355 - Discount (56,497) - (748) (55,749) - Net pension liability - IMRF General 3,171,853 944,470 - 4,116,323 - Net pension liability - Police Pension General 26,204,545 - 7,856,265 18,348,280 - Compensated absences (Governmental) General 1,639,753 3,904 163,975 1,479,682 147,968 Compensated absences (Internal Service) Garage 17,453 2,512 1,745 18,220 1,822 Other postemployment benefit General 935,887 167,588 - 1,103,475 - TOTAL GOVERNMENTAL ACTIVITIES $ 63,221,513 $ 1,184,474 $ 9,414,401 $ 54,925,586 $ 1,555,790 The General Fund will liquidate the pension and OPEB liabilities. Fund Debt Retired By Balances December 31, Restated Additions Reductions Balances December 31 Current Portion BUSINESS-TYPE ACTIVITIES General obligation bonds Sewer Sewer $ 30,326,000 $ - $ 781,000 $ 29,545,000 $ 804,000 Premium 134,961 - 12,431 122,530 - Compensated absences (Enterprise) Water/Sewer /Parking 261,649 47,315 26,165 282,799 28,279 Net pension liability Water/Sewer 1,067,278 423,114 - 1,490,392 - Other postemployment benefit Water/Sewer 64,474 47,555 - 112,029 - TOTAL BUSINESS-TYPE ACTIVITIES $ 31,854,362 $ 517,984 $ 819,596 $ 31,522,750 $ 832,279 - 39 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 37 - 6. LONG-TERM DEBT (Continued) d. Legal Debt Margin The Village is a home rule municipality. Article VII, Section 6(k) of the 1970 Illinois Constitution governs computation of the legal debt margin. “The General Assembly may limit by law the amount and require referendum approval of debt to be incurred by home rule municipalities, payable from ad valorem property tax receipts, only in excess of the following percentages of the assessed value of its taxable property...(2) if its population is more than 25,000 and less than 500,000 an aggregate of one percent: ...indebtedness which is outstanding on the effective date (July 1, 1971) of this constitution or which is thereafter approved by referendum... shall not be included in the foregoing percentage amounts.” To date, the General Assembly has set no limits for home rule municipalities. The Village qualifies as a Home Rule Unit under Section 6(a) of Article VII of the 1970 Constitution of Illinois and, under the powers granted by this section, can exercise any power and perform any function pertaining to its government and affairs that is not prohibited by the Illinois Compiled Statutes. 7. INTERFUND ASSETS/LIABILITIES a. Interfund Transfers Transfers From Transfers To Amount General Infrastructure Replacement $ 3,493,769 Bond Proceeds General 50,800 Bond Proceeds Infrastructure Replacement 697,027 General Refuse 955,984 Debt Service Sewer 1,814,480 TOTAL $ 7,012,060 The purpose of significant transfers from/to other funds is as follows:  $3,493,769 transferred from the General Fund to the Infrastructure Replacement Fund is to provide additional funding needed to complete budgeted capital projects. - 40 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 38 - 7. INTERFUND ASSETS/LIABILITIES (Continued) a. Interfund Transfers (Continued)  $50,800 and $697,027 transferred from the Bond Proceeds Fund to the General and Infrastructure Replacement Fund is to provide reimbursements for eligible construction project costs. The amount will not be repaid.  $955,984 transferred from the General Fund to the Refuse Fund is to subsidize administrative charges. This amount will not be repaid.  $1,814,480 transferred from Debt Service Fund to the Sewer Fund is to make the principal and interest payment s for the sewer bonds. b. Interfund Payables/Receivables Receivable Fund Payable Fund Amount General Water - long-term $ 1,075,689 TOTAL $ 1,075,689 The interfund payables/receivables all represent temporary financing that will be repaid within one year, except for the long-term portion as noted. 8. COMMITMENTS High-Level Excess Liability Pool The Village has committed to purchase excess liability insurance from HELP, a joint venture of Illinois municipalities . These amounts have been calculated using the Village’s current allocation percentage of 3.59% of premium expense. In future years, this allocation percentage will be subject to change because HELP’s agreement provides that the members will be assessed each year based upon a formula that specifies the following four criteria for allocating premium costs: Miles of streets Full-time equivalent employees Number of licensed vehicles Operating revenues The Village has passed a resolution authorizing the extension of HELP for t en years beginning May 1, 2008. - 41 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 39 - 9. CONTINGENT LIABILITIES a. Litigation The Village is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the Village ’s attorney, the resolution of these matters will not have a material adverse effect on the financial condition of the Village. b. Grants Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies, principally the federal government . Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time although the Village expects such amounts, if any, to be immaterial. c. High-Level Excess Liability Pool The Village’s agreement with HELP provides that each member is liable for its proportionate share of any costs arising from defaults in payment obligations by other members. d. Solid Waste Agency of Lake County The Village’s contract with SWALCO provides that each member is liable for its proportionate share of any costs arising from defaults in payment obligations by other members. 10. JOINT VENTURES Solid Waste Agency of Lake County Description of Joint Venture The Village is a member of SWALCO, which consists of 35 municipalities. SWALCO is a municipal corporation and public body politic and corporate established pursuant to the Constitution of the State of Illinois and the Intergovernmental Cooperation Act of the State of Illinois, as amended (the Act). SWALCO is empowered under the Act to plan, construct, finance, operate and maintain a solid waste disposal system to serve its members. These percentage shares are subject to change in future years based on the combination of the population and equalized assessed valuation of the municipalities. - 42 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 40 - 10. JOINT VENTURES (Continued) Solid Waste Agency of Lake County (Continued) Description of Joint Venture (Continued) The members form a contiguous geographic service area, which is located in Lake County . Under the agency agreement, additional members may join SWALCO upon the approval of each member. SWALCO is governed by a Board of Directors, which consists of one appointed representative from each member municipality. Each Director has an equal vote. The officers of SWALCO are appointed by the Board of Directors . The Board of Directors determines the general policy of SWALCO; makes all appropriations; approves cont racts; adopts resolutions providing for the issuance of bonds or notes by SWALCO; adopts bylaws, rules and regulations; and exercises such powers and performs such duties as may be prescribed in the agency agreement or the by-laws. SWALCO is an oversight advisory board providing long range planning services to member municipalities. The Village is a participant in SWALCO, but no agreement has been reached as to services to be provided. Complete financial statements can be obtained from the Solid Waste Agency of Lake County, 1300 N. Skokie Highway, Suite 103, Gurnee, Illinois 60031. The Village does not have an equity interest in SWALCO at December 31, 2016. 11. OTHER POSTEMPLOYMENT BENEFITS a. Plan Description In addition to providing the pensio n benefits described, the Village provides postemployment health care benefits (OPEB) for retired employees through a single-employer defined benefit plan. The benefits, benefit levels, employee contributions and employer contributions are governed by the Village and can be amended by the Village through its personnel manual and union contracts . The plan is not accounted for as a trust fund, as an irrevocable trust has not been established to account for the plan. The plan does not issue a separate report. The activity of the plan is reported in the Village’s governmental and business-type activities. b. Benefits Provided The Village provides pre and post-Medicare postretirement health insurance to retirees, their spouses and dependents (enrolled at tim e of employee’s retirement). To be eligible for benefits, the employee must qualify for retirement under one of the Village’s two retirement plans. The Village pays a subsidy of 50% of the cost of the - 43 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 41 - 11. OTHER POSTEMPLOYMENT BENEFITS (Continued) b. Benefits Provided (Continued) monthly health insurance premiums for the retirees up to a maximum of $50 . The retiree pays the remainder of the blended premium . Upon a retiree becoming eligible for Medicare, the amount payable under the Village ’s health plan will be reduced by the amount payable under Medicare for those expenses that are covered under both. c. Membership At December 31, 2016, membership consisted of: Retirees and beneficiaries currently receiving benefits 31 Terminated employees entitled to benefits but not yet receiving them - Active employees 162 TOTAL 193 Participating employers 1 d. Funding Policy The Village is not required to and currently does not advance fund the cost of benefits that will become due and payable in the future. Active employees do not contribute to the plan until retirement. e. Annual OPEB Costs and Net OPEB Obligation The Village’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for the last three years was as follows: Fiscal Year Ended Annual OPEB Cost Employer Contributions Percentage of Annual OPEB Cost Contributed Net OPEB Obligation 2014 $ 186,696 $ 108,707 $ 58.22% $ 921,853 2015 187,216 108,707 58.06% 1,000,362 2016 367,814 152,672 41.51% 1,215,504 - 44 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 42 - 11. OTHER POSTEMPLOYMENT BENEFITS (Continued) e. Annual OPEB Costs and Net OPEB Obligation (Continued) The net OPEB obligation as of December 31, 2016 was calculated as follows: Annual required contribution $ 361,147 Interest on net OPEB obligation 40,014 Adjustment to annual required contribution (33,347) Annual OPEB cost 367,814 Contributions made 152,672 Increase in net OPEB obligation 215,142 Net OPEB obligation, beginning of year 1,000,362 NET OPEB OBLIGATION, END OF YEAR $ 1,215,504 Funded Status and Funding Progress - The funded status of the plan as of December 31, 2016, was as follows: Actuarial accrued liability (AAL) $ 5,862,837 Actuarial value of plan assets - Unfunded actuarial accrued liability (UAAL) 5,862,837 Funded ratio (actuarial value of plan assets/AAL) 0.00% Covered payroll (active plan members) $ 12,945,062 UAAL as a percentage of covered payroll 45.29% Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to financial statements, presents multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial methods and assumptions - projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point . The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term perspective of the calculations. - 45 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 43 - 11. OTHER POSTEMPLOYMENT BENEFITS (Continued) e. Annual OPEB Costs and Net OPEB Obligation (C ontinued) In the December 31, 2016 actuarial valuation, the entry-age normal actuarial cost method was used. The actuarial assumptions included 4% investment rate of return and an initial healthcare cost trend rate of 5% with an ultimate healthcare inflation rate of 5%. Both rates include a 3% inflation assumption and 4% wage inflation assumption. The actuarial value of assets was not determined as the Village has not advance funded its obligation. The plan’s unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open basis over a 30 year amortization period. The remaining amortization period at December 31, 2016, was 30 years. 12. EMPLOYEE RETIREMENT SYSTEMS a. Plan Descriptions Illinois Municipal Retirement Fund The Village contributes to the Illinois Municipal Retirement Fund (IMRF), a defined benefit agent multiple-employer public employee retirement system that acts as a common investment and administrative agent for local governments and sch ool districts in Illinois (other than those covered by the Police Pension Plan). The Illinois Pension Code establishes the benefit provisions of the plan that can only be amended by the Illinois General Assembly. IMRF issues a publicly available report tha t includes financial statements and supplementary information for the plan as a whole but not by individual employer. That report may be obtained by writing to the Illinois Municipal Retirement Fund, 2211 York Road, Suite 500, Oak Brook, Illinois 60523. Plan Administration All employees hired in positions that meet or exceed the prescribed annual hourly standard must be enrolled in IMRF as participating members. The plan is accounted for on the economic resources measurement focus and the accrual basis of accounting. Employer and employee contributions are recognized when earned in the year that the contributions are required, benefits and refunds are recognized as an expense and liability when due and payable. - 46 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 44 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Illinois Municipal Retirement Fund (Continued) Plan Membership At December 31, 2015, IMRF membership consisted of: Inactive employees or their beneficiaries currently receiving benefits 120 Inactive employees entitled to but not yet receiving benefits 98 Active employees 107 TOTAL 325 The IMRF data included in the table above includes membership of both the Village and the Library. Benefits Provided IMRF provides two tiers of pension benefits. Employees hired prior to January 1, 2011 are eligible for Tier 1 benefits. For Tier 1 employees, pension benefits vest after eight years of service. Participating members who retire at age 55 (reduced benefits) or after age 60 (full benefits) with eight years of credited service are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to 1 2/3% of their final rate of earnings, for each year of credited service up to 15 years, and 2% for each year thereafter. E mployees hired on or after January 1, 2011 are eligible for Tier 2 benefits. For Tier 2 employees, pension benefits vest after ten years of service. Participating members who retire at age 62 (reduced benefits) or after age 67 (full benefits) with ten year s of credited service are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to 1 2/3% of their final rate of earnings, for each year of credited service up to 15 years, and 2% for each year thereafter. IMRF also provides death and disability benefits. These benefit provisions and all other requirements are established by state statute. Contributions Participating members are required to contribute 4.5 0% of their annual covered salary to IMRF. The Village is required to contribute the remaining amounts necessary to fund IMRF as specified by statute. The employer contribution rate for the calendar year ended December 31, 2016 was 12.78% of covered payroll. - 47 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 45 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Illinois Municipal Retirement Fund (Continued) Actuarial Assumptions The Village’s net pension liability was measured as of December 31, 2015 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation performed as of the same date using the following actuarial methods and assumptions. Actuarial valuation date December 31, 2015 Actuarial cost method Entry-age normal Assumptions Inflation 2.75% Salary increases 3.75% to 14.50% Interest rate 7.50% Cost of living adjustments 3.00% Asset valuation method Market value For nondisabled retirees, an IMRF specific mortality table was used with fully generational projection scale MP -2014 (base year 2014). IMRF specific rates were developed from the RP-2014 Blue Collar Health Annuitant Mortality Table with adjustments to match current IMRF experience. For disabled retirees, an IMRF specific mortality table was used with fully generational projection scal e MP-2014 (base year 2014). IMRF specific rates were developed from the RP -2014 Disabled Retirees Mortality Table applying the same adjustment that were applied for nondisabled lives. For active members, an IMRF specific mortality table was used with fully generational projection scale MP -2014 (base year 2014). IMRF specific rates were developed from the RP -2014 Employee Mortality Table with adjustments to match current IMRF experience. - 48 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 46 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Illinois Municipal Retirement Fund (Continued) Discount Rate The discount rate used to measure the total pension liability was 7.48%. The projection of cash flows used to determine the discount rate assumed that member contributions will be made at the current contribution rate and that the Village contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the Village’s fiduciary net position was projected not to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments of 7.5 0% was blended with the index rate of 3.57% for tax exempt general obligation municipal bonds rated AA or better at December 31, 2015 to arrive at a discount rate of 7.48% used to determine the total pension liability. Changes in the Net Pension Liability (a) Total Pension Liability (b) Plan Fiduciary Net Position (a) - (b) Net Pension Liability BALANCES AT JANUARY 1, 2015 $ 46,096,514 $ 41,014,236 $ 5,082,278 Changes for the period Service cost 818,026 - 818,026 Interest 3,391,973 - 3,391,973 Difference between expected and actual experience (19,404) - (19,404) Changes in assumptions 56,963 - 56,963 Employer contributions - 1,004,206 (1,004,206) Employee contributions - 347,043 (347,043) Net investment income - 202,355 (202,355) Benefit payments and refunds (2,437,679) (2,437,679) - Administrative expense - - - Other (net transfer) - 679,125 (679,125) Net changes 1,809,879 (204,950) 2,014,829 BALANCES AT DECEMBER 31, 2015 $ 47,906,393 $ 40,809,286 $ 7,097,107 There was a change in assumption related to the discount rate made since the prior measurement date. The discount rate used in the current actuarial valuation, dated December 31, 2015, is 7.48%. The discount rate used in the prior actuaria l valuation, dated December 31, 2014, was 7.49%. - 49 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 47 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Illinois Municipal Retirement Fund (Continued) Changes in the Net Pension Liability (Continued) The table presented on the previous page includes amounts for both the Village and the Library. The Village’s proportionate share of the net pension liability at January 1, 2015, the employer contributions and the net pension liability at December 31, 2015 was $4,015,000, $793,113 and $5,606,715, respectively. The Library’s proportionate share of the net pension liability at January 1, 2015, the employer contributions and the net pension liability at December 31, 2015 was $1,067,278, $211,093 and $1,490,392, respectively. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources For the year ended December 31, 2016, the Village recognized pension expense of $80,298. At December 31, 2016, the Village reported deferred outflows of resources and deferred inflows of resources related to IMRF from the following sources: Deferred Outflows of Deferred Inflows of Resources Resources Difference between expected and actual experience $ - $ 140,464 Changes in assumption 912,805 - Net difference between projected and actual earnings on pension plan investments 2,612,305 - Employer contributions after the measurement date 1,014,721 - TOTAL $ 4,539,831 $ 140,464 The deferred outflows presented in the table above include am ounts for both the Village and the Library. The Village’s proportionate share of the deferred outflows and inflows of resources at December 31, 2016 was $3,586,466 and $110,966, respectively. The Library’s proportionate share of the deferred outflows and inflows of resources at December 31, 2016 was $953,365 and $29,498, respectively. $1,014,721 reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the reporting year ending December 31, 2017. - 50 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 48 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Illinois Municipal Retirement Fund (Continued) Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources (Continued) Other amounts reported as deferred outflows of resources and deferred inflows of resources related to IMRF will be recognized in pension expense as follows: Year Ending December 31, 2017 $ 1,043,047 2018 1,043,047 2019 726,346 2020 572,206 2021 - Thereafter - TOTAL $ 3,384,646 Discount Rate Sensitivity The following is a sensitivity analysis of the net pension liability to changes in the discount rate. The table below presents the net pension liability of the Village calculated using the discount rate of 7.48% as well as what the Village’s net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (6.48%) or 1 percentage point higher (8.48%) than the current rate: 1% Decrease Current Discount Rate 1% Increase (6.48%) (7.48%) (8.48%) Net pension liability (Village) $ 10,497,219 $ 5,606,715 $ 1,642,257 Net pension liability (Library) 2,790,400 1,490,392 436,550 Net pension liability (total) $ 13,287,619 $ 7,097,107 $ 2,078,807 - 51 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 49 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Police Pension Plan Plan Administration Police sworn personnel are covered by the Police Pension Plan, which is a defined benefit single-employer pension plan. Although this is a single-employer pension plan, the defined benefits and employee and employer contributions levels are governed by Illinois Compiled Statutes (40 ILCS 5/3-1) and can be amended only by the Illinois legislature. The Village accounts for the Police Pension Plan as a Pension Trust Fund. The plan is governed by a five-member Board of Trustees. Two members appointed by the Village’s Board of Trustees, one elected by retired pension members and two elected by active members constitute the pension board. The plan is accounted for on the economic resources measurement focus and the accrual basis of accounting. Employer and employee contributions are reco gnized when earned in the year that the contributions are required, benefits and refunds are recognized as an expense and liability when due and payable. The Police Pension Plan does not issue a separate financial report. Plan Membership At December 31, 2016, the Police Pension Plan membership consisted of: Inactive plan members currently receiving benefits 39 Inactive plan members but not yet receiving benefits - Active plan members Vested 21 Nonvested 17 TOTAL 77 - 52 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 50 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Police Pension Plan (Continued) Benefits Provided The Police Pension Plan provides retirement benefits as well as death and disability benefits. Tier 1 employees (those hired prior to January 1, 2011) attaining the age of 50 or older with 20 or more years of creditable service are entitled to receive an annual retirement benefit equal to one -half of the salary attached to the rank held on the last day of service, or for one year prior to the last day, whichever is greater. The annual benefit shall be increased by 2.5% of such salary for each additional year of service over 20 years up to 30 years to a maximum of 75% of such salary. Employees with at least eight years but less than 20 years of credited service may retire at or after age 60 and receive a reduced benefit . The monthly benefit of a police officer who retired with 20 or more years of service after January 1, 1977 shall be increased annually, following the first anniv ersary date of retirement and be paid upon reaching the age of at least 55 years, by 3% of the original pension and 3% compounded annually thereafter. Tier 2 employees (those hired on or after January 1, 2011) attaining the age of 55 or older with ten or more years of creditable service are entitled to receive an annual retirement benefit equal to the average monthly salary obtained by dividing the total salary of the police officer during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period. Police officers’ salary for pension purposes is capped at $106,800, plus the lesser of ½ of the annual change in the Consumer Price Index or 3% compounded. The annual benefit shall be increased by 2.5% of such salary for each additional year of service over 20 years up to 30 years to a maximum of 75% of such salary. Employees with at least ten years may retire at or after age 50 and receive a reduced benefit (i.e., ½% for each month under 55). The monthly benefit of a Tier 2 police officer shall be increased annually at age 60 on the January 1st after the police officer retires, or the first anniversary of the pension starting date, whichever is later. Noncompounding increases occur annually, each January thereafter. The increase is the lesser of 3% or ½ of the change in the Consumer Price Index for the proceeding calendar year. Contributions Covered employees are required to contribute 9.91% of their base salary to the Police Pension Plan. If an employee leaves covered employment with less than 20 years of service, accumulated employee contributions may be refunded without accumulated interest. The Village is required to contribute the remaining amoun ts - 53 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 51 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Police Pension Plan (Continued) Contributions (Continued) necessary to finance the Police Pension Plan as actuarially determined by an enrolled actuary. Effective January 1, 2011, the Village has until the year 2040 to fund 90% of the past service cost for the Police Pension Plan and this is the Village’s funding policy. The employer contribution for the year ended December 31, 2016 was 24.44% of covered payroll. Investment Policy Permitted Deposits and Investments - Statutes and the Police Pension Fund’s (the Fund) investment policy authorize the Fund to make deposits/invest in insured commercial banks, savings and loan institutions, obligations of the U.S. T reasury and U.S. agencies, insured credit union shares, money market mutual funds with portfolios of securities issued or guaranteed by the United States Government or agreements to repurchase these same obligations, repurchase agreements, short -term commercial paper rated within the three highest classifications by at least two standard rating services, Illinois Funds, IMET, certain non -U.S. obligations, Illinois municipal corporations tax anticipation warrants, veteran’s loans, obligations of the State of Illinois and its political subdivisions, and Illinois insurance company general and separate accounts, mutual funds and equity securities (not to exceed 65% of the total net position of the Fund) and corporate bonds. During the year, no changes to the investment policy were approved by the Board of Trustees. The Fund’s Board of Trustees established the following target allocation across asset classes: Asset Class Target Long-Term Expected Real Rate of Return Corporate Bonds 34% 1.70% Equity 60% 6.10% U.S. Government 5% 1.00% Cash 1% 0.00% - 54 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 52 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Police Pension Plan (Continued) Investment Policy (Continued) Long-term expected real returns under GASB reflect the period of time that begins when a plan member begins to provide service to the employer and ends at the point when all benefits to the plan member have been paid. The expected inflation rate is 3% and is included in the long-term rate of return on investments. Long-term rates of return are expected to exhibit geometric properties. Geometric rates of return are equal to arithmetic rates of return when the annual returns exhibit no volatility over time. When arithmetic returns are volatile on a year-to-year basis, the actual realized geometric returns over time will be lower. The higher the volatility, the greater the difference. Investment Valuations All investments in the plan are stated at fair value and are recorded as of the trade date. Fair value is based on quoted market prices at December 31 for debt securities, equity securities and mutual funds and contract values for any insurance contracts. Investment income is recognized as earned. Gains and losses on sales and exchanges of fixed income securities are recognized on the transaction date. Investment Concentration There are no significant investments (other than United States Government guaranteed obligations) in any one organization that represent 5% or more of the plan net assets for the Police Pension Plan. At December 31, 2016, the Fund had greater than 5% of its fixed income portfolio invested in obligations of the U.S. Treasury notes, equity mutual funds and corporate bonds. The investment policy does not include any limitations on how much U.S. Treasury or U.S. agency securities can be held in the portfolio. Investment Rate of Return For the year ended December 31, 2016, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expe nse, was 10.96%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. - 55 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 53 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Police Pension Plan (Continued) Deposits with Financial Institutions Custodial credit risk for deposits with financial institutions is the risk that in the event of a bank’s failure, the Fund’s deposits may not be returned to them. The Fund’s investment policies do not require pledging of collateral for all bank balances in excess of federal depository insurance, since flow -through FDIC insurance is available for the Fund’s deposits with financial institutions. Interest Rate Risk The following table presents the investments and maturities of the Fund’s debt securities as of December 31, 2016: Investment Maturities (in Years) Fair Less than Greater than Value 1 1-5 6-10 10 U.S. agency obligations $ 3,709 $ - $ - $ 3,709 $ - U.S. Treasury obligations 2,681,733 - 244,355 - 2,437,378 Corporate bonds 10,749,642 195,668 6,644,217 3,452,158 457,599 Municipal bonds 382,410 - 85,310 - 297,100 TOTAL $ 13,817,494 $ 195,668 $ 6,973,882 $ 3,455,867 $ 3,192,077 In accordance with its investment policy, the Fund limits its exposure to interest rate risk by structuring the portfolio to provide liquidity for operating funds not needed within a one-year period. The investment policy does not limit the maximum maturity length of investments in the Fund. The Fund has the following recurring fair value measurements as of December 31, 2016. The U.S. Treasury Obligations, money market mutual funds and equity mutual funds are valued using quoted prices in active market s for identical assets (Level 1 inputs). The U.S. Agency Obligations, Municipal Bonds and the Corporate Bonds are valued using quoted matrix pricing models (Level 2 inputs). - 56 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 54 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Police Pension Plan (Continued) Credit Risk The Fund limits its exposure to credit risk, the risk that the issuer of a debt security will not pay its par value upon maturity, by investing in primarily investment grade bonds, or obligations guaranteed by the United States Government or securities issued by agencies of the United States Government that are explicitly or implicitly guaranteed by the United States Government. The U.S. Treasury and agency obligations are rated by Moody’s Aaa, the corporate bonds are rated between Baa3 and Aaa, and the municipal bonds are rated between A1 and Aaa. Illinois Funds is rated Aaa by Standard and Poor’s. The investment policy is silent on minimum ratings required. Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to the investment, the Fund will not be able to recover the value of its investments that are in possession of an outside party. To limit its exposure, the Fund’s investment policy requires all security transactions that are exposed to custodial credit risk to be processed on a delivery versus payment (DVP) basis with the underlying investments held by a third party acting as the Fund’s agent separate from where the investment was purchased in the Fund’s name. Illinois Funds and IMET are not subject to custodial credit risk. Concentration of credit risk - The Fund’s investment policy limits the amount of the portfolio that can be invested in any one investment vehicle. With t he exception of U.S. Treasury securities and authorized pools, no more than 65% of the Fund’s total investment portfolio can be invested in a single security type or with a single financial institution. The Fund’s investment policy does not specificall y prohibit the use of or the investment in derivatives. - 57 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 55 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Police Pension Plan (Continued) Actuarial Assumptions The total pension liability above was determined by an actu arial valuation performed using the following actuarial methods and assumptions. Actuarial valuation date December 31, 2016 Actuarial cost method Entry-age normal Assumptions Inflation 2.50% Salary increases 3.25% Interest rate 7.25% Cost of living adjustments 2.50% Asset valuation method Market Mortality rates were based on the L&A 2016 Illinois Police Table. The actuarial assumptions used in the December 31, 2016 valuation were based on the results of an actuarial experience study conducted by the Illinois Department of Insurance. Discount Rate The discount rate used to measure the total pension liability was 6.44%. The projection of cash flows used to determine the discount rate assumed that member contributions will be made at the current contribution rate and that the Village contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the Fund’s fiduciary net position was not projected to be available to make all projected future benefit payments of current plan members and, therefore, was blended with the index rate of 3.78% for tax exempt general obligation municipal bonds rated AA or better at December 31, 2016 to arrive at a discount rate of 6.44% used to determine the total pension liability. - 58 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 56 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Police Pension Plan (Continued) Discount Rate Sensitivity The following is a sensitive analysis of the net pension liability to changes in the discount rate. The table below presents the pension liability of the Village calculated using the discount rate of 6.44% as well as what the Village’s net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.44%) or 1 percentage point higher (7.44%) than the current rate: 1% Decrease Current Discount Rate 1% Increase (5.44%) (6.44%) (7.44%) Net pension liability $ 27,657,805 $ 18,348,280 $ 10,833,297 Changes in the Net Pension Liability (a) Total Pension Liability (b) Plan Fiduciary Net Position (a) - (b) Net Pension Liability BALANCES AT JANUARY 1, 2016 $ 66,716,907 $ 40,512,362 $ 26,204,545 Changes for the period Service cost 941,842 - 941,842 Interest 4,212,748 - 4,212,748 Difference between expected and actual experience (2,314,800) - (2,314,800) Changes in assumptions (5,531,502) - (5,531,502) Employer contributions - 934,918 (934,918) Employee contributions - 425,791 (425,791) Net investment income - 3,845,026 (3,845,026) Benefit payments and refunds (2,603,139) (2,603,139) - Other (net transfer) - (41,182) 41,182 Net changes (5,294,851) 2,561,414 (7,856,265) BALANCES AT DECEMBER 31, 2016 $ 61,422,056 $ 43,073,776 $ 18,348,280 - 59 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 57 - 12. EMPLOYEE RETIREMENT SYSTEMS (Continued) a. Plan Descriptions (Continued) Police Pension Plan (Continued) Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources For the year ended December 31, 2016, the Village recognized pension expense of $2,454,940. At December 31, 2016, the Village reported deferred outflows of resources and deferred inflows of resources related to the police pension from the following sources: Deferred Outflows of Deferred Inflows of Resources Resources Difference between expected and actual experience $ 1,379,214 $ 1,927,709 Changes in assumption 8,041,290 4,606,501 Net difference between projected and actual earnings on pension plan investments 1,775,222 763,528 TOTAL $ 11,195,726 $ 7,297,738 Amounts reported as deferred outflows of resources and deferred inflows of resources related to police pension will be recognized in pension expense as follows: Year Ending December 31, 2017 $ 1,510,493 2018 1,510,493 2019 1,510,489 2020 652,355 2021 (1,285,842) Thereafter - TOTAL $ 3,897,988 13. TAX ABATEMENTS The Village rebates certain taxes to recruit, retain, or improve local business facilities or their supporting public infrastructure under certain circumstances. The terms of these rebate arrangements are specified within written agreements with the b usinesses concerned. - 60 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 58 - 13. TAX ABATEMENTS (Continued) During the fiscal year 2002, the Village entered into an economic incentive agreement with a commercial entity. The agreement was approved by the Board, in accordance with Illinois Compiled Statues. The Village has agreed to reimburse the commercial entit y 75% of the total sales tax revenue generated for the first s ix years of the agreement, and 80% of any sales tax revenue generated for the seventh year and all subsequent years . The amount of the rebates is limited to specified time period and are payable over 20 years solely from sales taxes generated by the commercial entity. The rebates are to be paid monthly with the agreement expiring 20 years after commencement. The total amount of home-rule sales tax rebated for the fiscal year ending December 31, 2016 was $1,808,528. At December 31, 2016, the Village has accrued an estimated home-rule sales tax rebate liability of $597,932 for amounts collected by the state through December 31, 201 6 but not yet paid to the commercial entity. To date, the Village has rebated $11,859,788 of home-rule sales tax to the commercial entit y. The agreement has no stated maximum. The rebate is not subject to recapture, in whole or in part. 14. CHANGE IN ACCOUNTING PRINCIPLE In 2015, the Village adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions, an Amendment of GASB Statement No. 27. The new standards required the Village to recognize a net pension liability and related deferred outflows and deferred inflows in its government-wide financial statements for the net pension liability associated with its pension plan . In 2016, the Village made a determination to report information from the December 31, 2015 actuarial evaluation from IMRF in order to continue its dedication to timely financial reporting. Therefore, the related accounts were restated for the prior year to reflect the net pension liabilities, deferred outflows and deferred inflows from December 31, 2014. The beginning net position reported in the government-wide financial statements has been restated to reflect the new guidance as follows : Governmental Activities BEGINNING NET POSITION, AS PREVIOUSLY REPORTED $ 74,009,299 Net pension liability - IMRF 944,470 Deferred outflows of resources - IMRF (972,770) Deferred inflows of resources - IMRF (65,192) Contributions subsequent to the measurement date - deferred outflows of resources 626,495 BEGINNING NET POSITION, AS RESTATED $ 74,542,302 - 61 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO FINANCIAL STATEMENTS (Continued) - 59 - 14. CHANGE IN ACCOUNTING PRINCIPLE (Continued) Business-Type Activities BEGINNING NET POSITION, AS PREVIOUSLY REPORTED $ 29,674,995 Net pension liability - IMRF 647,243 Deferred outflows of resources - IMRF (455,366) Deferred inflows of resources - IMRF (9,488) Contributions subsequent to the measurement date - deferred outflows of resources 166,536 BEGINNING NET POSITION, AS RESTATED $ 30,023,920 The Village also implemented GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an Amendment of GASB Statement No. 68, in 2016, which resulted in $626,495 and $166,536 of the governmental activities and business-type activities restatements above, respectively. 15. SUBSEQUENT EVENT On February 6, 2017, the Village issued $5,700,000 General Obligation Refunding Bonds, Series 2017 with the closing dated February 28, 2017. The bonds mature annually on December 1, beginning December 1, 2017 through December 1, 2026, with maturities ranging from $35,000 to $320,000. Interest is due semiannually on June 1 and December 1, commencing on December 1, 2017, with interest rate of 3%. The bonds were issued to refund $3,215,000 of the Village’s General Obligation Bonds, Series 2008. 16. SPECIAL ITEM During the fiscal year ending December 31, 2016, $1,194,722 of Village road improvements transferred ownership from the Village to the County. $3,449,179 of previously capitalized infrastructure capital assets and $1,194,772 of construction in progress was removed as part of this jurisdictional transfer. - 62 - REQUIRED SUPPLEMENTARY INFORMATION VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL FUND December 31, 2016 Original and Final Budget Actual REVENUES Taxes 11,431,753$ 12,684,438$ Licenses and permits 1,429,500 1,958,108 Intergovernmental 6,756,000 7,249,068 Charges for services 604,000 646,574 Fines and forfeits 275,000 286,981 Investment income 105,000 97,285 Miscellaneous 893,400 1,035,036 Total revenues 21,494,653 23,957,490 EXPENDITURES General government 7,513,695 8,412,310 Public safety 9,696,904 8,891,767 Highways and streets 2,794,894 2,749,322 Total expenditures 20,005,493 20,053,399 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 1,489,160 3,904,091 OTHER FINANCING SOURCES (USES) Transfers in - 50,800 Transfers (out)(4,449,753) (4,449,753) Total other financing sources (uses)(4,449,753) (4,398,953) NET CHANGE IN FUND BALANCE (2,960,593)$ (494,862) FUND BALANCE, JANUARY 1 20,931,581 FUND BALANCE, DECEMBER 31 20,436,719$ (See independent auditor's report.) - 63 - Schedule of Funding Progress (6) Unfunded Actuarial (2)(4)Accrued (1)Actuarial Unfunded Liability as Actuarial Accrued (3)Actuarial (5)a Percentage Actuarial Value of Liability Percentage Accrued Annual of Covered Valuation Plan (AAL)Funded Liability Covered Payroll Date Assets Entry-Age (1) / (2) (2) - (1)Payroll (4) / (5) April 30, 2012 N/A N/A N/A N/A N/A N/A April 30, 2013 -$ 4,168,658$ 0.00%4,168,658$ 9,909,624$ 42.07% December 31, 2013*- 4,168,658 0.00%4,168,658 9,909,624 42.07% December 31, 2014 N/A N/A N/A N/A N/A N/A December 31, 2015 N/A N/A N/A N/A N/A N/A December 31, 2016 - 5,862,837 0.00%5,862,837 12,945,062 45.29% Schedule of Employer Contributions Annual Required Fiscal Employer Contribution Percentage Year Contributions (ARC)Contributed April 30, 2012 186,725$ 328,060$ 56.92% April 30, 2013 186,725 328,060 56.92% December 31, 2013*108,707 181,070 60.04% December 31, 2014 108,707 181,070 60.04% December 31, 2015 108,707 181,070 60.04% December 31, 2016 152,672 361,147 42.27% * The Village changed to a December 31 year end for the fiscal year ended December 31, 2013. N/A - Not available December 31, 2016 VILLAGE OF DEERFIELD, ILLINOIS REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFIT PLAN (See independent auditor's report.) - 64 - - 59 - VILLAGE OF DEERFIELD, ILLINOIS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION December 31, 2016 BUDGETS Budgets are adopted on a basis consistent with GAAP. Annual appropriated budgets are adopted (at the fund level) for the General, Special Revenue, De bt Service, Capital Projects, Enterprise, Internal Service and Pension Trust Funds, with the exception of the Bond Proceeds Fund . The annual appropriated budget is legally enacted and provides for a legal level of control at the fund level. All annual appropriations lapse at fiscal year end. Encumbrances represent commitments related to unperformed contracts for goods or services. Encumbrance accounting under which purchase orders, contracts and other commitments for the expenditure of resources are recorded to assign or commit that portion of the applicable appropriation is utilized in the governmental funds. Material encumbrances outstanding at year end, if any, are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year. No material encumbrances were recorded for 2016. All departments of the Village submit requests for appropriation to the Village’s manager so that a budget may be prepared. The budget is prepared by fund and includes information on the past year, current year estimates and requested appropriations for the next fiscal year. The proposed budget is presented to the governing body for review. The governing body holds public hearings and can add to, subtract from or change appropriations; but cannot change the form of the budget. Management cannot amend the total budget for individual funds without seeking the approval of the governing body. Expenditures cannot legally exceed budgeted appro priations at the fund level, and the Board of Trustees must approve any over expenditures of appropriation or transfers of appropriated amounts. The budget and appropriation ordinance was not amended for the year ended December 31, 2016. The following funds had expenditures greater than the appropriation for the year ended December 31, 2016, due to year end accounting adjustments : Fund Actual Expenditures Appropriation General Fund $ 24,503,152 $ 24,455,246 Sewer Fund 4,996,664 3,923,525 - 65 - FISCAL YEAR ENDING DECEMBER 31,2015 2016 Actuarially determined contributions 996,735$ 809,012$ Contributions in relation to the actuarially determined contribution 1,004,206 809,012 CONTRIBUTION DEFICIENCY (Excess)(7,471)$ -$ Covered-employee payroll 7,702,744$ 6,330,297$ Contributions as a percentage of covered-employee payroll 13.04%12.78% Notes to the Required Supplementary Information Ultimately,this schedule should present information for the last ten years.However,until ten years of information can be compiled,information will be presented for as many years as is available. VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF EMPLOYER CONTRIBUTIONS ILLINOIS MUNICIPAL RETIREMENT FUND Last Two Fiscal Years The information presented was determined as part of the actuarial valuations as of January 1 of the prior fiscal year.Additional information as of the latest actuarial valuation presented is as follows:the actuarial cost method was entry-age normal;the amortization method was level percent of pay,closed and the amortization period was 28 years;the asset valuation method was market and the significant actuarial assumptions were an investment rate of return at 7.5% annually,projected salary increases assumption of 4.45 to 16.0%annually and postretirement benefit increases of 3.0% compounded annually. (See independent auditor's report.) - 66 - FISCAL YEAR ENDING DECEMBER 31,2008 2009 2010 2011 2012 2013 2013*2014 2015 2016 Actuarially determined contribution 698,335$ 843,209$ 1,202,006$ 1,350,132$ 860,228$ 1,023,006$ 895,479$ 989,616$ 871,305$ 934,918$ Contribution in relation to the actuarially determined contribution 698,335 843,209 1,202,006 1,350,132 860,228 1,023,006 895,479 989,616 871,305 934,918 CONTRIBUTION DEFICIENCY (Excess)-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Covered-employee payroll 3,192,147$ 3,104,786$ 3,356,276$ 3,216,370$ 3,412,049$ 3,512,925$ 3,591,966$ 3,702,863$ 3,806,499$ 3,825,286$ Contributions as a percentage of covered-employee payroll 21.88%27.16%35.81%41.98%25.21%29.12%24.93%26.73%22.89%24.44% * The Village changed to a December 31 year end for the fiscal year ended December 31, 2013. Notes to Required Supplementary Information This information directly above is presented in accordance with GASB Statement No.67.The information presented was determined as part of the actuarial valuations as of January 1.Additional information as of the latest actuarial valuation presented is as follows:the actuarial cost method was entry-age normal;the amortization method was level percent of pay,closed and the amortization period was 25 years;the asset valuation method was at market value;and the significant actuarial assumptions were an investment rate of return of 7.25%annually,after 2012 and 7.5%2012 and prior,projected salary increase assumption of 4.5%compounded annually and postretirement benefit increases of 3.0% compounded annually. VILLAGE OF DEERFIELD, ILLINOIS POLICE PENSION FUND SCHEDULE OF EMPLOYER CONTRIBUTIONS Last Ten Fiscal Years (See independent auditor's report.) - 67 - MEASUREMENT DATE DECEMBER 31,2014 2015 Employer's proportion of net pension liability 79.00%79.00% Employer's proportionate share of net pension liability 4,015,000$ 5,606,715$ Employer's covered-employee payroll 5,994,578 6,085,168 Employer's proportionate share of the net pension liability as a percentage of its covered-employee payroll 66.98%92.14% Plan fiduciary net position as a percentage of the total pension liability 88.97%85.19% Ultimately,this schedule should present information for the last ten years.However,until ten years of information can be compiled, information will be presented for as many years as is available. VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF THE VILLAGE'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY ILLINOIS MUNICIPAL RETIREMENT FUND Last Two Fiscal Years There was a change in assumption related to the discount rate made since the prior measurement date.The discount rate used in the current actuarial valuation,dated December 31,2015,is 7.48%. The discount rate used in the prior actuarial valuation, dated December 31, 2014, was 7.49%. (See independent auditor's report.) - 68 - MEASUREMENT DATE DECEMBER 31,2014 2015 2016 TOTAL PENSION LIABILITY Service cost 841,716$ 1,138,463$ 941,842$ Interest 3,358,650 2,800,129 4,212,748 Changes of benefit terms - - - Differences between expected and actual experience - 2,088,324 (2,314,800) Changes of assumptions - 12,175,632 (5,531,502) Benefit payments, including refunds of member contributions (2,447,399) (2,443,015) (2,603,139) Net change in total pension liability 1,752,967 15,759,533 (5,294,851) Total pension liability - beginning 49,204,407 50,957,374 66,716,907 TOTAL PENSION LIABILITY - ENDING 50,957,374$ 66,716,907$ 61,422,056$ PLAN FIDUCIARY NET POSITION Contributions - employer 989,616$ 871,305$ 934,918$ Contributions - member 374,137 517,457 425,791 Net investment income 3,637,510 (4,524) 3,845,026 Benefit payments, including refunds of member contributions (2,447,399) (2,443,015) (2,603,139) Administrative expense (20,524) (23,217) (41,182) Net change in plan fiduciary net position 2,533,340 (1,081,994) 2,561,414 Plan net position - beginning 39,061,016 41,594,356 40,512,362 PLAN NET POSITION - ENDING 41,594,356$ 40,512,362$ 43,073,776$ EMPLOYER'S NET PENSION LIABILITY 9,363,018$ 26,204,545$ 18,348,280$ Plan fiduciary net position as a percentage of the total pension liability 81.63%60.72%70.13% Covered employee payroll 3,702,863$ 3,806,499$ 3,825,286$ Employer's net pension liability as a percentage of covered employee payroll 252.86%688.42%479.66% VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF CHANGES IN THE EMPLOYER'S NET PENSION LIABILITY AND RELATED RATIOS POLICE PENSION FUND Last Three Fiscal Years Ultimately,this schedule should present information for the last ten years.However,until ten years of information can be compiled, information should be presented for as many years as is available. There was a change in assumption related to the discount rate made since the prior measurement date. The discount rate used in the current actuarial valuation, dated December 31, 2016, is 6.44%. The discount rate used in the prior actuarial valuations, dated December 31, 2015 and December 31, 2014 was 5.63% and 7.00%, respectively. (See independent auditor's report.) - 69 - FISCAL YEAR ENDING DECEMBER 31, 2014 2015 2016 Annual money-weighted rate of return, net of investment expense 9.54% (0.02%)10.96% Ultimately,this schedule should present return information for the last ten years.However, until ten years of information can be compiled,return information should be presented for as many years as is available. VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF INVESTMENT RETURNS POLICE PENSION FUND Last Three Fiscal Years (See independent auditor's report.) - 70 - COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES MAJOR GOVERNMENTAL FUNDS VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF REVENUES - BUDGET AND ACTUAL GENERAL FUND For the Year Ended December 31, 2016 Original and Final Budget Actual TAXES Property 3,476,753$ 3,527,348$ Replacement 135,000 132,026 Home rule sales 3,100,000 3,484,806 Local use 320,000 419,908 Electric utility tax 1,250,000 1,273,363 Hotel/motel 1,900,000 2,124,692 Telecommunication 1,250,000 1,722,295 Total taxes 11,431,753 12,684,438 LICENSES AND PERMITS Beer/liquor licenses 70,000 72,250 Food licenses 5,000 3,865 Other business licenses 5,500 8,236 Building permits 925,000 1,456,628 Contractor's licenses 7,000 6,750 Nonbusiness licenses and permits 47,000 39,600 Vehicle licenses 370,000 370,779 Total licenses and permits 1,429,500 1,958,108 INTERGOVERNMENTAL Federal grant - 1,803 Sales taxes 5,000,000 5,414,418 Income taxes 1,700,000 1,774,095 State highway maintenance 56,000 58,752 Total intergovernmental 6,756,000 7,249,068 CHARGES FOR SERVICES Special police services 279,000 333,126 Dispatching services 250,000 250,584 50/50 tree planting 65,000 61,940 Engineering services 10,000 924 Total charges for services 604,000 646,574 FINES AND FORFEITS 275,000 286,981 INVESTMENT INCOME 105,000 97,285 (This schedule is continued on the following page.) - 71 - VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF REVENUES - BUDGET AND ACTUAL (Continued) GENERAL FUND For the Year Ended December 31, 2016 Original and Final Budget Actual MISCELLANEOUS False alarms 27,000$ 26,475$ Rentals 235,000 282,544 Miscellaneous 198,900 250,319 Sale of equipment 7,500 10,304 Franchise fees 425,000 465,394 Total miscellaneous 893,400 1,035,036 TOTAL REVENUES 21,494,653$ 23,957,490$ (See independent auditor's report.) - 72 - VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL GENERAL FUND For the Year Ended December 31, 2016 Original and Final Budget Actual GENERAL GOVERNMENT Finance department Personnel services 995,500$ 975,198$ Training and development 8,050 3,464 Contractual services 2,828,311 3,766,596 Commodities 14,500 7,192 Utilities 22,900 16,802 Capital outlay 39,638 38,697 Total finance department 3,908,899 4,807,949 Administration Personnel services 894,139 900,764 Training and development 9,500 3,959 Contractual services 678,456 753,694 Commodities 5,050 5,074 Utilities 10,250 10,635 Capital outlay 92,771 77,309 Total administration 1,690,166 1,751,435 Community development Personnel services 1,070,155 1,026,784 Training and development 7,200 6,679 Contractual services 125,124 80,133 Commodities 18,000 6,184 Utilities 14,400 11,395 Capital outlay 21,121 16,714 Total community development 1,256,000 1,147,889 Engineering Personnel services 425,900 477,388 Training and development 5,000 4,779 Contractual services 182,731 186,020 Commodities 12,000 9,199 Utilities 10,567 7,162 Capital outlay 22,432 20,489 Total engineering 658,630 705,037 Total general government 7,513,695 8,412,310 PUBLIC SAFETY Police department Administrative services Personnel services 1,010,402 818,107 Training and development 12,040 5,342 (This schedule is continued on the following pages.) - 73 - VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL (Continued) GENERAL FUND For the Year Ended December 31, 2016 Original and Final Budget Actual PUBLIC SAFETY (Continued) Police department (Continued) Administrative services (Continued) Contractual services 624,628$ 659,067$ Commodities 31,000 21,984 Utilities 22,750 18,005 Capital outlay 195,504 191,666 Total administrative services 1,896,324 1,714,171 Communications Personnel services 1,010,344 972,078 Training and development 6,600 3,441 Contractual services 500 485 Capital outlay 5,000 500 Total communications 1,022,444 976,504 Investigations Personnel services 1,096,432 1,024,544 Training and development 15,000 3,879 Contractual services 7,370 4,024 Commodities 20,000 7,790 Capital outlay 14,500 4,236 Total investigations 1,153,302 1,044,473 Patrol Personnel services 5,167,784 4,829,889 Training and development 32,100 28,795 Contractual services 65,400 71,545 Commodities 117,100 45,719 Utilities 4,000 5,492 Capital outlay 80,850 10,921 Total patrol 5,467,234 4,992,361 Special detail Personnel services 157,600 164,258 Total special detail 157,600 164,258 Total public safety 9,696,904 8,891,767 HIGHWAYS AND STREETS Public works department Administration Personnel services 300,850 279,890 Training and development 5,000 1,618 (This schedule is continued on the following page.) - 74 - VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL (Continued) GENERAL FUND For the Year Ended December 31, 2016 Original and Final Budget Actual HIGHWAYS AND STREETS (Continued) Public works department (Continued) Administration (Continued) Contractual services 206,474$ 197,545$ Commodities 5,200 5,195 Utilities 9,467 7,754 Capital outlay 167,303 165,925 Total administration 694,294 657,927 Maintenance Personnel services 743,500 697,785 Contractual services 99,000 187,124 Commodities 160,500 160,030 Utilities 110,000 99,512 Capital outlay 2,500 - Total maintenance 1,115,500 1,144,451 Snow and ice control Personnel services 122,750 74,524 Contractual services 114,000 108,055 Commodities 256,250 288,193 Capital outlay 750 - Total snow and ice control 493,750 470,772 Forestry Personnel services 8,600 694 Contractual services 288,000 309,879 Commodities 15,000 4,990 Capital outlay 127,000 102,818 Total forestry 438,600 418,381 Train station maintenance Personnel services 9,750 9,704 Contractual services 38,500 45,445 Commodities 4,000 2,003 Utilities 500 639 Total train station maintenance 52,750 57,791 Total highways and streets 2,794,894 2,749,322 TOTAL EXPENDITURES 20,005,493$ 20,053,399$ (See independent auditor's report.) - 75 - VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL DEBT SERVICE FUND For the Year Ended December 31, 2016 Original and Final Budget Actual REVENUES Taxes Property 2,901,235$ 2,951,082$ Intergovernmental 494,408 496,238 Contribution from library 730,131 730,131 Investment income 4,000 4,747 Total revenues 4,129,774 4,182,198 EXPENDITURES Debt service Principal retirement 1,369,000 1,369,000 Interest 942,294 942,294 Fiscal charges 5,000 2,525 Total expenditures 2,316,294 2,313,819 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 1,813,480 1,868,379 OTHER FINANCING SOURCES (USES) Transfers (out)(1,814,480) (1,814,480) Total other financing sources (uses)(1,814,480) (1,814,480) NET CHANGE IN FUND BALANCE (1,000)$ 53,899 NET POSITION, JANUARY 1 58,021 NET POSITION, DECEMBER 31 111,920$ (See independent auditor's report.) - 76 - SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL INFRASTRUCTURE REPLACEMENT FUND For the Year Ended December 31, 2016 Original and Final Budget Actual REVENUES Taxes Property -$ 55$ Home rule sales tax 1,050,000 1,161,602 Intergovernmental 6,889,263 6,798,660 Investment income 2,500 37,350 Miscellaneous 390,000 520,105 Total revenues 8,331,763 8,517,772 EXPENDITURES Capital outlay Contractual services 2,877,000 2,888,169 Construction 10,878,632 8,591,453 Total expenditures 13,755,632 11,479,622 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (5,423,869) (2,961,850) OTHER FINANCING SOURCES (USES) Transfers in 3,493,769 4,190,796 Total other financing sources (uses)3,493,769 4,190,796 NET CHANGE IN FUND BALANCE (1,930,100)$ 1,228,946 NET POSITION, JANUARY 1 4,707,033 NET POSITION, DECEMBER 31 5,935,979$ VILLAGE OF DEERFIELD, ILLINOIS (See independent auditor's report.) - 77 - NONMAJOR GOVERNMENTAL FUNDS Motor Fuel Tax Fund - to account for activity funded by the state share of tax on the use of motor fuels. Enhanced 911 Fund - to account for the operation of the E911 emergency response system which is funded by a per line charge on land-based and cellular phones. 2011B Sinking Fund - to accumulate restricted resources for the payment of general long-term debt. Bond Proceeds Fund - to account for the restricted proceeds of the General Obligation Bonds, Series 2015 and related expenditures. COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2016 Debt Capital Service Fund Project Fund Motor Enhanced 2011B Bond Fuel Tax 911 Sinking Proceeds Total Cash and investments 317,048$ 1,089,273$ 3,621,082$ -$ 5,027,403$ Receivables Accounts - 100,350 - - 100,350 Accrued interest 310 720 23,096 - 24,126 Due from other governments 43,235 - - - 43,235 TOTAL ASSETS 360,593$ 1,190,343$ 3,644,178$ -$ 5,195,114$ LIABILITIES Accounts payable -$ 65,600$ -$ -$ 65,600$ Total liabilities - 65,600 - - 65,600 FUND BALANCES Restricted for Maintenance of roadways 360,593 - - - 360,593 Public safety - 1,124,743 - - 1,124,743 Debt service - - 3,644,178 - 3,644,178 Total fund balances 360,593 1,124,743 3,644,178 - 5,129,514 TOTAL LIABILITIES AND FUND BALANCES 360,593$ 1,190,343$ 3,644,178$ -$ 5,195,114$ Special Revenue Funds VILLAGE OF DEERFIELD, ILLINOIS ASSETS LIABILITIES AND FUND BALANCES (See independent auditor's report.) - 78 - VILLAGE OF DEERFIELD, ILLINOIS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2016 Debt Capital Service Fund Project Fund Motor Enhanced 2011B Bond Fuel Tax 911 Sinking Proceeds Total REVENUES Property taxes -$ -$ 725,000$ -$ 725,000$ Intergovernmental 464,020 - - - 464,020 Charges for services - 324,730 - - 324,730 Investment income 2,027 5,203 44,948 369 52,547 Miscellaneous - 252 - - 252 Total revenues 466,047 330,185 769,948 369 1,566,549 EXPENDITURES Current General government 494,000 - 592 - 494,592 Public safety - 162,732 - - 162,732 Capital outlay 173,003 - - 173,003 Total expenditures 494,000 335,735 592 - 830,327 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (27,953) (5,550) 769,356 369 736,222 OTHER FINANCING SOURCES (USES) Transfers (out)- - (50,800) (697,027) (747,827) Total other financing sources (uses)- - (50,800) (697,027) (747,827) NET CHANGE IN FUND BALANCES (27,953) (5,550) 718,556 (696,658) (11,605) NET POSITION, JANUARY 1 388,546 1,130,293 2,925,622 696,658 5,141,119 NET POSITION, DECEMBER 31 360,593$ 1,124,743$ 3,644,178$ -$ 5,129,514$ Special Revenue Funds (See independent auditor's report.) - 79 - SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL MOTOR FUEL TAX FUND For the Year Ended December 31, 2016 Original and Final Budget Actual REVENUES Intergovernmental Allotments earned 425,000$ 464,020$ Investment income 1,500 2,027 Total revenues 426,500 466,047 EXPENDITURES Highways and streets Capital outlay 494,000 494,000 Total expenditures 494,000 494,000 NET CHANGE IN FUND BALANCE (67,500)$ (27,953) NET POSITION, JANUARY 1 388,546 NET POSITION, DECEMBER 31 360,593$ VILLAGE OF DEERFIELD, ILLINOIS (See independent auditor's report.) - 80 - SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL ENHANCED 911 FUND For the Year Ended December 31, 2016 Original and Final Budget Actual REVENUES Charges for services Other charges 330,000$ 324,730$ Investment income 6,000 5,203 Miscellaneous - 252 Total revenues 336,000 330,185 EXPENDITURES Public safety Contractual services 140,900 154,899 Utilities 50,000 7,833 Capital outlay 266,987 173,003 Total expenditures 457,887 335,735 NET CHANGE IN FUND BALANCE (121,887)$ (5,550) NET POSITION, JANUARY 1 1,130,293 NET POSITION, DECEMBER 31 1,124,743$ VILLAGE OF DEERFIELD, ILLINOIS (See independent auditor's report.) - 81 - SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL 2011B SINKING FUND For the Year Ended December 31, 2016 Original and Final Budget Actual REVENUES Property taxes 725,000$ 725,000$ Investment income 40,000 44,948 Total revenues 765,000 769,948 EXPENDITURES Contractual services 1,200 592 Total expenditures 1,200 592 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 763,800 769,356 OTHER FINANCING SOURCES (USES) Transfers (out)(25,000) (50,800) NET CHANGE IN FUND BALANCE 738,800$ 718,556 NET POSITION, JANUARY 1 2,925,622 NET POSITION, DECEMBER 31 3,644,178$ VILLAGE OF DEERFIELD, ILLINOIS (See independent auditor's report.) - 82 - MAJOR ENTERPRISE FUNDS SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - BUDGET AND ACTUAL WATER FUND For the Year Ended December 31, 2016 Original and Final Budget Actual OPERATING REVENUES Charges for services Water sales 4,240,000$ 4,058,510$ Miscellaneous Permits and fees 40,000 69,143 Penalties 30,000 34,114 Other 63,000 57,343 Total operating revenues 4,373,000 4,219,110 OPERATING EXPENSES EXCLUDING DEPRECIATION Administration 626,888 636,554 Operations Distribution 2,759,700 2,436,987 Maintenance - mains and fire hydrants 592,700 652,533 Maintenance - meters 141,900 217,956 Total operating expenses excluding depreciation 4,121,188 3,944,030 OPERATING INCOME (LOSS) BEFORE DEPRECIATION 251,812 275,080 Depreciation - 461,036 OPERATING INCOME (LOSS) BEFORE CONTRIBUTIONS OF CAPITAL ASSETS 251,812 (185,956) Contributions of capital assets - 1,936,420 CHANGE IN NET POSITION 251,812$ 1,750,464 NET POSITION, JANUARY 1 17,256,368 Change in accounting principle 116,307 NET POSITION, JANUARY 1, RESTATED 17,372,675 NET POSITION, DECEMBER 31 19,123,139$ VILLAGE OF DEERFIELD, ILLINOIS (See independent auditor's report.) - 83 - VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF OPERATING EXPENSES - BUDGET AND ACTUAL WATER FUND For the Year Ended December 31, 2016 Original and Final Budget Actual ADMINISTRATION Personnel services 363,150$ 377,019$ Training and development 1,850 1,465 Contractual services 190,193 185,102 Commodities 5,000 5,042 Utilities 7,980 9,582 Capital outlay 58,715 58,344 Total administration 626,888 636,554 OPERATIONS Distribution Personnel services 136,800 140,672 Contractual services 45,000 41,364 Commodities 2,480,400 2,175,316 Utilities 92,500 79,635 Capital outlay 5,000 - Total distribution 2,759,700 2,436,987 Main and fire hydrant maintenance Personnel services 368,500 392,218 Contractual services 106,000 93,215 Commodities 116,200 165,039 Capital outlay 2,000 2,061 Total main and fire hydrant maintenance 592,700 652,533 Meter maintenance Personnel services 91,500 90,476 Contractual services 13,000 19,334 Commodities 5,400 1,754 Capital outlay 32,000 106,392 Total meter maintenance 141,900 217,956 TOTAL OPERATING EXPENSES 4,121,188$ 3,944,030$ (See independent auditor's report.) - 84 - VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF CAPITAL ASSETS AND DEPRECIATION WATER FUND For the Year Ended December 31, 2016 Balances Balances December 31, December 31, 2015 Additions Retirements 2016 Land 1,877,956$ -$ -$ 1,877,956$ Buildings 4,180,123 - - 4,180,123 Water system improvements 16,641,851 1,936,420 197,530 18,380,741 Equipment and vehicles 626,490 - - 626,490 TOTAL 23,326,420$ 1,936,420$ 197,530$ 25,065,310$ Balances Balances December 31, December 31, 2015 Additions Retirements 2016 Buildings 1,932,256$ 88,456$ -$ 2,020,712$ Water system improvements 2,522,077 354,526 197,530 2,679,073 Equipment and vehicles 495,644 18,054 - 513,698 TOTAL 4,949,977$ 461,036$ 197,530$ 5,213,483$ NET ASSET VALUE 19,851,827$ Accumulated Depreciation Assets (See independent auditor's report.) - 85 - VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - BUDGET AND ACTUAL SEWERAGE FUND For the Year Ended December 31, 2016 Original and Final Budget Actual OPERATING REVENUES Charges for services Sewer charges 2,870,500$ 2,853,730$ Miscellaneous Permits and fees 15,000 16,200 Penalties 30,000 31,393 Other 5,000 324 Total operating revenues 2,920,500 2,901,647 OPERATING EXPENSES EXCLUDING DEPRECIATION Administration 565,159 597,044 Operations Treatment plant 1,649,186 1,726,780 Cleaning and maintenance 302,500 306,404 Construction 373,200 366,955 Total operating expenses excluding depreciation 2,890,045 2,997,183 OPERATING INCOME (LOSS) BEFORE DEPRECIATION AND AMORTIZATION 30,455 (95,536) Depreciation and amortization - 979,442 OPERATING INCOME (LOSS)30,455 (1,074,978) NON-OPERATING REVENUES (EXPENSES) Investment income 2,000 2,165 Interest expense (1,033,480) (1,020,039) Total non-operating revenues (expenses)(1,031,480) (1,017,874) INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS (1,001,025) (2,092,852) Contributions - 986,429 Transfers 1,814,480 1,814,480 CHANGE IN NET POSITION 813,455$ 708,057 NET POSITION, JANUARY 1 10,581,784 Change in accounting principle 232,618 NET POSITION, JANUARY 1, RESTATED 10,814,402 NET POSITION, DECEMBER 31 11,522,459$ (See independent auditor's report.) - 86 - VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF OPERATING EXPENSES - BUDGET AND ACTUAL SEWERAGE FUND For the Year Ended December 31, 2016 Original and Final Budget Actual ADMINISTRATION Personnel services 253,600$ 288,129$ Training and development 2,100 1,955 Contractual services 233,000 230,873 Commodities 4,800 4,848 Utilities 3,450 3,180 Capital outlay 68,209 68,059 Total administration 565,159 597,044 OPERATIONS Treatment plant Personnel services 977,525 1,067,571 Training and development 9,130 6,385 Contractual services 198,961 181,888 Commodities 125,000 83,610 Utilities 263,916 314,354 Miscellaneous 20,000 19,000 Capital outlay 54,654 53,972 Total treatment plant 1,649,186 1,726,780 Cleaning and maintenance Personnel services 231,000 236,341 Contractual services 54,000 50,509 Commodities 17,500 19,554 Total cleaning and maintenance 302,500 306,404 Construction Personnel services 285,500 297,115 Contractual services 30,500 25,865 Commodities 57,200 43,975 Total construction 373,200 366,955 Total operations 2,324,886 2,400,139 TOTAL OPERATING EXPENSES 2,890,045$ 2,997,183$ (See independent auditor's report.) - 87 - SCHEDULE OF CAPITAL ASSETS AND DEPRECIATION SEWERAGE FUND For the Year Ended December 31, 2016 Balances Balances December 31, December 31, 2015 Additions Retirements 2016 Construction in progress 7,224$ -$ 7,224$ -$ Sewer system 4,814,466 993,653 69,542 5,738,577 Buildings and improvements 41,005,066 - - 41,005,066 TOTAL 45,826,756$ 993,653$ 76,766$ 46,743,643$ Balances Balances December 31,December 31, 2015 Additions Retirements 2016 Sewer system 1,571,081$ 104,440$ 69,542$ 1,605,979$ Buildings and improvements 3,430,874 875,002 - 4,305,876 TOTAL 5,001,955$ 979,442$ 69,542$ 5,911,855$ NET ASSET VALUE 40,831,788$ Assets Accumulated Depreciation VILLAGE OF DEERFIELD, ILLINOIS (See independent auditor's report.) - 88 - SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - BUDGET AND ACTUAL REFUSE FUND For the Year Ended December 31, 2016 Original and Final Budget Actual OPERATING REVENUES Charges for services Refuse billing 505,500$ 515,496$ Miscellaneous 24,000 17,495 Total operating revenues 529,500 532,991 OPERATING EXPENSES Operations Personnel services 113,250 96,799 Contractual services 1,326,500 1,318,214 Commodities 24,700 21,193 Capital outlay 13,748 13,748 Total operating expenses 1,478,198 1,449,954 OPERATING INCOME (LOSS)(948,698) (916,963) NON-OPERATING REVENUES (EXPENSES) Investment income 2,500 1,332 Property taxes - 22 Total non-operating revenues (expenses)2,500 1,354 INCOME (LOSS) BEFORE TRANSFERS (946,198) (915,609) Transfers in 955,984 955,984 CHANGE IN NET POSITION 9,786$ 40,375 NET POSITION, JANUARY 1 438,059 NET POSITION, DECEMBER 31 478,434$ VILLAGE OF DEERFIELD, ILLINOIS (See independent auditor's report.) - 89 - NONMAJOR ENTERPRISE FUNDS SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - BUDGET AND ACTUAL COMMUTER PARKING LOT FUND For the Year Ended December 31, 2016 Original and Final Budget Actual OPERATING REVENUES Parking lot fees 248,000$ 277,048$ Total operating revenues 248,000 277,048 OPERATING EXPENSES Operations 320,300 279,846 Depreciation - 26,737 Total operating expenses 320,300 306,583 OPERATING INCOME (LOSS)(72,300) (29,535) NON-OPERATING REVENUES (EXPENSES) Investment income 1,400 1,256 Total non-operating revenues (expenses)1,400 1,256 CHANGE IN NET POSITION (70,900)$ (28,279) NET POSITION, JANUARY 1 1,398,784 NET POSITION, DECEMBER 31 1,370,505$ VILLAGE OF DEERFIELD, ILLINOIS (See independent auditor's report.) - 90 - VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF OPERATING EXPENSES - BUDGET AND ACTUAL COMMUTER PARKING LOT FUND For the Year Ended December 31, 2016 Original and Final Budget Actual OPERATIONS Parking lots - village and federal funds Personnel services 20,500$ 19,373$ Contractual services 153,600 127,012 Utilities 3,600 3,035 Total parking lots - village and federal funds 177,700 149,420 Parking lots - village construction Personnel services 20,500 19,373 Contractual services 116,100 108,208 Utilities 6,000 2,845 Total parking lots - village construction 142,600 130,426 TOTAL OPERATING EXPENSES 320,300$ 279,846$ (See independent auditor's report.) - 91 - SCHEDULE OF CAPITAL ASSETS AND DEPRECIATION COMMUTER PARKING LOT FUND For the Year Ended December 31, 2016 Balances Balances December 31,December 31, 2015 Additions Retirements 2016 Land 77,500$ -$ -$ 77,500$ Parking lot improvements 1,950,830 - - 1,950,830 TOTAL 2,028,330$ -$ -$ 2,028,330$ Balances Balances December 31, December 31, 2015 Additions Retirements 2016 Parking lot improvements 899,155$ 26,737$ -$ 925,892$ NET ASSET VALUE 1,102,438$ Assets Accumulated Depreciation VILLAGE OF DEERFIELD, ILLINOIS (See independent auditor's report.) - 92 - INTERNAL SERVICE FUNDS VILLAGE OF DEERFIELD, ILLINOIS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS December 31, 2016 Vehicle and Equipment Garage Replacement Total CURRENT ASSETS Cash and investments 28,867$ 5,185,781$ 5,214,648$ Receivables Accounts 2,928 - 2,928 Accrued interest 2 3,377 3,379 Prepaid expenses 6,344 - 6,344 Inventory 144,282 - 144,282 Total current assets 182,423 5,189,158 5,371,581 CAPITAL ASSETS Depreciable - 4,346,247 4,346,247 Accumulated depreciation - (2,852,251) (2,852,251) Net capital assets - 1,493,996 1,493,996 Total assets 182,423 6,683,154 6,865,577 CURRENT LIABILITIES Accounts payable 10,414 1,210 11,624 Accrued payroll 7,953 - 7,953 Compensated absences payable 1,822 - 1,822 Due to other funds - - - Total current liabilities 20,189 1,210 21,399 LONG-TERM LIABILITIES Compensated absences payable 16,398 - 16,398 Total long-term liabilities 16,398 - 16,398 Total liabilities 36,587 1,210 37,797 NET POSITION Net investment in capital assets - 1,493,996 1,493,996 Unrestricted 145,836 5,187,948 5,333,784 TOTAL NET POSITION 145,836$ 6,681,944$ 6,827,780$ (See independent auditor's report.) - 93 - COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS For the Year Ended December 31, 2016 Vehicle and Equipment Garage Replacement Total OPERATING REVENUES Interfund services Billings 390,437$ 732,116$ 1,122,553$ Miscellaneous 9,034 - 9,034 Total operating revenues 399,471 732,116 1,131,587 OPERATING EXPENSES Operations 371,368 - 371,368 Capital outlay - 217,906 217,906 Total operating expenses 371,368 217,906 589,274 OPERATING INCOME (LOSS) BEFORE DEPRECIATION 28,103 514,210 542,313 Depreciation - 331,959 331,959 OPERATING INCOME (LOSS)28,103 182,251 210,354 NON-OPERATING REVENUES (EXPENSES) Sale of capital assets - 10,000 10,000 Investment income 27 24,848 24,875 Total non-operating revenues (expenses)27 34,848 34,875 INCOME (LOSS) BEFORE CONTRIBUTIONS 28,130 217,099 245,229 Contributions - 55,957 55,957 CHANGE IN NET POSITION 28,130 273,056 301,186 NET POSITION, JANUARY 1 117,706 6,408,888 6,526,594 NET POSITION, DECEMBER 31 145,836$ 6,681,944$ 6,827,780$ VILLAGE OF DEERFIELD, ILLINOIS (See independent auditor's report.) - 94 - VILLAGE OF DEERFIELD, ILLINOIS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2016 Vehicle and Equipment Garage Replacement Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from interfund services 391,538$ 732,116$ 1,123,654$ Receipts from miscellaneous revenue 9,034 - 9,034 Payments to suppliers (157,082) (220,330) (377,412) Payments to employees (212,748) - (212,748) Payments for interfund services (1,900) - (1,900) Net cash from operating activities 28,842 511,786 540,628 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES None - - - Net cash from noncapital financing activities - - - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of capital assets - 10,000 10,000 Capital assets purchased - (220,535) (220,535) Net cash from capital and related financing activities - (210,535) (210,535) CASH FLOWS FROM INVESTING ACTIVITIES Interest received 25 23,888 23,913 Net cash from investing activities 25 23,888 23,913 NET INCREASE IN CASH AND CASH EQUIVALENTS 28,867 325,139 354,006 CASH AND CASH EQUIVALENTS, JANUARY 1 - 4,860,642 4,860,642 CASH AND CASH EQUIVALENTS, DECEMBER 31 28,867$ 5,185,781$ 5,214,648$ (This schedule is continued on the following page.) - 95 - VILLAGE OF DEERFIELD, ILLINOIS COMBINING STATEMENT OF CASH FLOWS (Continued) INTERNAL SERVICE FUNDS For the Year Ended December 31, 2016 Vehicle and Equipment Garage Replacement Total RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS FROM OPERATING ACTIVITIES Operating income 28,103$ 182,251$ 210,354$ Adjustments to reconcile operating income to net cash from operating activities Depreciation - 331,959 331,959 (Increase) decrease in Accounts receivable 2,292 - 2,292 Prepaid expenses (1,191) - (1,191) Inventories 4,100 - 4,100 Increase (decrease) in Accounts payable (5,005) (2,424) (7,429) Interfund payables (1,900) - (1,900) Accrued payroll 1,676 - 1,676 Compensated absences payable 767 - 767 NET CASH FROM OPERATING ACTIVITIES 28,842$ 511,786$ 540,628$ (See independent auditor's report.) - 96 - SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - BUDGET AND ACTUAL GARAGE FUND For the Year Ended December 31, 2016 Original and Final Budget Actual OPERATING REVENUES Interfund services Billings 395,000$ 390,437$ Miscellaneous 10,000 9,034 Total operating revenues 405,000 399,471 OPERATING EXPENSES Operations 408,634 371,368 OPERATING INCOME (LOSS)(3,634) 28,103 NON-OPERATING REVENUES (EXPENSES) Investment income 100 27 Total non-operating revenues (expenses)100 27 CHANGE IN NET POSITION (3,534)$ 28,130 NET POSITION, JANUARY 1 117,706 NET POSITION, DECEMBER 31 145,836$ VILLAGE OF DEERFIELD, ILLINOIS (See independent auditor's report.) - 97 - VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF OPERATING EXPENSES - BUDGET AND ACTUAL GARAGE FUND For the Year Ended December 31, 2016 Original and Final Budget Actual OPERATING EXPENSES Public works department Personnel services 228,500$ 215,191$ Training and development 3,500 776 Contractual services 33,400 25,898 Commodities 112,800 119,339 Utilities 3,800 2,148 Capital outlay 26,634 8,016 TOTAL OPERATING EXPENSES 408,634$ 371,368$ (See independent auditor's report.) - 98 - VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - BUDGET AND ACTUAL VEHICLE AND EQUIPMENT REPLACEMENT FUND For the Year Ended December 31, 2016 Original and Final Budget Actual OPERATING REVENUES Interfund services Billings 732,116$ 732,116$ Total operating revenues 732,116 732,116 OPERATING EXPENSES Capital outlay 880,834 484,398 Less capital assets capitalized (266,492) (266,492) Net operating expenses 614,342 217,906 OPERATING INCOME BEFORE DEPRECIATION 117,774 514,210 Depreciation - 331,959 OPERATING INCOME 117,774 182,251 NON-OPERATING REVENUES (EXPENSES) Sale of capital assets - 10,000 Investment income 20,000 24,848 Total non-operating revenues (expenses)20,000 34,848 INCOME (LOSS) BEFORE CONTRIBUTIONS 137,774 217,099 Contributions - 55,957 CHANGE IN NET POSITION 137,774$ 273,056 NET POSITION, JANUARY 1 6,408,888 NET POSITION, DECEMBER 31 6,681,944$ (See independent auditor's report.) - 99 - FIDUCIARY FUNDS Original and Final Budget Actual ADDITIONS Contributions - employer 1,000,000$ 934,918$ Contributions - employee 395,000 425,791 Total contributions 1,395,000 1,360,709 Investment income Net appreciation in fair value of investments 500,000 2,801,143 Interest and dividends earned on investments 700,000 1,074,707 Total investment income 1,200,000 3,875,850 Less investment expense (32,000) (30,824) Net investment income 1,168,000 3,845,026 Total additions 2,563,000 5,205,735 DEDUCTIONS Benefits and refunds Pension payments 2,700,000 2,603,139 Administrative 34,300 41,182 Total deductions 2,734,300 2,644,321 NET INCREASE (DECREASE)(171,300)$ 2,561,414 NET POSITION RESTRICTED FOR PENSION BENEFITS January 1 40,512,362 December 31 43,073,776$ VILLAGE OF DEERFIELD, ILLINOIS SCHEDULE OF CHANGES IN PLAN NET POSITION - BUDGET AND ACTUAL POLICE PENSION FUND For the Year Ended December 31, 2016 (See independent auditor's report.) - 100 - VILLAGE OF DEERFIELD, ILLINOIS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended December 31, 2016 Balances Balances December 31, December 31, 2015 Additions Deductions 2016 ASSETS Cash and investments 2,925,021$ 54,446$ 96,566$ 2,882,901$ Receivables - accrued interest 23 32 - 55 TOTAL ASSETS 2,925,044$ 54,478$ 96,566$ 2,882,956$ LIABILITIES Accounts payable 5,366$ 66,163$ 143$ 71,386$ Deposits payable 2,860,996 102,236 264,552 2,698,680 Other payables 58,682 54,208 - 112,890 TOTAL LIABILITIES 2,925,044$ 222,607$ 264,695$ 2,882,956$ ASSETS Cash and investments 2,862,746$ 413$ 96,566$ 2,766,593$ TOTAL ASSETS 2,862,746$ 413$ 96,566$ 2,766,593$ LIABILITIES Accounts payable 1,750$ 66,163$ -$ 67,913$ Deposits payable 2,860,996 102,236 264,552 2,698,680 TOTAL LIABILITIES 2,862,746$ 168,399$ 264,552$ 2,766,593$ ASSETS Cash and investments 62,275$ 54,033$ -$ 116,308$ Receivables - accrued interest 23 32 - 55 TOTAL ASSETS 62,298$ 54,065$ -$ 116,363$ LIABILITIES Accounts payable 3,616$ -$ 143$ 3,473$ Other payables 58,682 54,208 - 112,890 TOTAL LIABILITIES 62,298$ 54,208$ 143$ 116,363$ All Funds Deposit Fund East Shore Radio Network Fund (See independent auditor's report.) - 101 - SUPPLEMENTAL DATA VILLAGE OF DEERFIELD, ILLINOIS LONG-TERM DEBT REQUIREMENTS GENERAL OBLIGATION BOND SERIES OF 2008 December 31, 2016 Date of Issue August 1, 2008 Date of Maturity December 1, 2028 Authorized Issue $5,000,000 Denomination of Bonds $5,000 Interest Rates 3.250%, 3.375%, 3.500%, 3.750%, 3.875%, 4.000%, 4.125% and 4.250% Principal Maturity Date December 1 Payable at Amalgamated Bank, Chicago, Illinois Tax Levy Year Principal Interest Total June 1 Amount December 1 Amount 2016 225,000$ 139,544$ 364,544$ 2017 69,772$ 2017 69,772$ 2017 235,000 131,106 366,106 2018 65,553 2018 65,553 2018 245,000 122,294 367,294 2019 61,147 2019 61,147 2019 255,000 112,800 367,800 2020 56,400 2020 56,400 2020 265,000 102,919 367,919 2021 51,459 2021 51,460 2021 275,000 92,319 367,319 2022 46,159 2022 46,160 2022 290,000 81,319 371,319 2023 40,659 2023 40,660 2023 300,000 69,356 369,356 2024 34,678 2024 34,678 2024 315,000 56,981 371,981 2025 28,491 2025 28,490 2025 330,000 43,987 373,987 2026 21,994 2026 21,993 2026 345,000 29,962 374,962 2027 14,981 2027 14,981 2027 360,000 15,300 375,300 2028 7,650 2028 7,650 3,440,000$ 997,887$ 4,437,887$ 498,943$ 498,944$ Tax Levy Interest Due on FUTURE PRINCIPAL AND INTEREST REQUIREMENTS (See independent auditor's report.) - 102 - VILLAGE OF DEERFIELD, ILLINOIS LONG-TERM DEBT REQUIREMENTS GENERAL OBLIGATION BOND SERIES OF 2010A December 31, 2016 Date of Issue November 3, 2010 Date of Maturity December 1, 2030 Authorized Issue $12,500,000 Denomination of Bonds $5,000 Interest Rates 0.80% to 5.50% Principal Maturity Date December 1 Payable at Depository Trust Company, Chicago, Illinois Tax Levy Year Principal Interest Total June 1 Amount December 1 Amount 2016 565,000$ 418,455$ 983,455$ 2017 209,227$ 2017 209,228$ 2017 575,000 402,918 977,918 2018 201,459 2018 201,459 2018 585,000 385,380 970,380 2019 192,690 2019 192,690 2019 600,000 364,320 964,320 2020 182,160 2020 182,160 2020 610,000 341,220 951,220 2021 170,610 2021 170,610 2021 625,000 316,210 941,210 2022 158,105 2022 158,105 2022 645,000 289,335 934,335 2023 144,667 2023 144,668 2023 660,000 260,310 920,310 2024 130,155 2024 130,155 2024 680,000 229,290 909,290 2025 114,645 2025 114,645 2025 700,000 195,970 895,970 2026 97,985 2026 97,985 2026 720,000 160,270 880,270 2027 80,135 2027 80,135 2027 735,000 122,830 857,830 2028 61,415 2028 61,415 2028 750,000 83,875 833,875 2029 41,937 2029 41,938 2029 775,000 42,625 817,625 2030 21,312 2030 21,313 9,225,000$ 3,613,008$ 12,838,008$ 1,806,502$ 1,806,506$ Tax Levy Interest Due on FUTURE PRINCIPAL AND INTEREST REQUIREMENTS (See independent auditor's report.) - 103 - VILLAGE OF DEERFIELD, ILLINOIS LONG-TERM DEBT REQUIREMENTS GENERAL OBLIGATION BOND SERIES OF 2011A December 31, 2016 Date of Issue October 17, 2011 Date of Maturity December 1, 2031 Authorized Issue $9,900,000 Denomination of Bonds $5,000 Interest Rates 1.00% to 3.25% Principal Maturity Date December 1 Payable at Depository Trust Company, Chicago, Illinois FUTURE PRINCIPAL AND INTEREST REQUIREMENTS Tax Levy Year Principal Interest Total June 1 Amount December 1 Amount 2016 295,000$ 222,715$ 517,715$ 2017 111,358$ 2017 111,357$ 2017 310,000 218,290 528,290 2018 109,145 2018 109,145 2018 325,000 212,865 537,865 2019 106,433 2019 106,432 2019 340,000 206,365 546,365 2020 103,183 2020 103,182 2020 365,000 199,565 564,565 2021 99,783 2021 99,782 2021 380,000 192,265 572,265 2022 96,133 2022 96,132 2022 400,000 183,715 583,715 2023 91,858 2023 91,857 2023 425,000 174,115 599,115 2024 87,058 2024 87,057 2024 450,000 163,490 613,490 2025 81,745 2025 81,745 2025 475,000 151,340 626,340 2026 75,670 2026 75,670 2026 500,000 138,277 638,277 2027 69,139 2027 69,138 2027 355,000 123,277 478,277 2028 61,639 2028 61,638 2028 1,280,000 112,628 1,392,628 2029 56,314 2029 56,314 2029 1,335,000 74,228 1,409,228 2030 37,114 2030 37,114 2030 990,000 32,175 1,022,175 2031 16,088 2031 16,087 8,225,000$ 2,405,310$ 10,630,310$ 1,202,660$ 1,202,650$ Tax Levy Interest Due on (See independent auditor's report.) - 104 - VILLAGE OF DEERFIELD, ILLINOIS LONG-TERM DEBT REQUIREMENTS GENERAL OBLIGATION BOND SERIES OF 2011B December 31, 2016 Date of Issue October 17, 2011 Date of Maturity December 1, 2028 Authorized Issue $12,500,000 Denomination of Bonds $5,000 Interest Rates 4% Principal Maturity Date December 1 Payable at Depository Trust Company, Chicago, Illinois Tax Levy Year Principal Interest Total June 1 Amount December 1 Amount 2016 -$ 499,200$ 499,200$ 2017 249,600$ 2017 249,600$ 2017 - 499,200 499,200 2018 249,600 2018 249,600 2018 - 499,200 499,200 2019 249,600 2019 249,600 2019 - 499,200 499,200 2020 249,600 2020 249,600 2020 - 499,200 499,200 2021 249,600 2021 249,600 2021 - 499,200 499,200 2022 249,600 2022 249,600 2022 - 499,200 499,200 2023 249,600 2023 249,600 2023 - 499,200 499,200 2024 249,600 2024 249,600 2024 - 499,200 499,200 2025 249,600 2025 249,600 2025 - 499,200 499,200 2026 249,600 2026 249,600 2026 - 499,200 499,200 2027 249,600 2027 249,600 2027 12,480,000 499,200 12,979,200 2028 249,600 2028 249,600 12,480,000$ 5,990,400$ 18,470,400$ 2,995,200$ 2,995,200$ Tax Levy Interest Due on FUTURE PRINCIPAL AND INTEREST REQUIREMENTS (See independent auditor's report.) - 105 - VILLAGE OF DEERFIELD, ILLINOIS LONG-TERM DEBT REQUIREMENTS GENERAL OBLIGATION BOND SERIES OF 2012 December 31, 2016 Date of Issue February 21, 2012 Date of Maturity December 1, 2031 Authorized Issue $10,000,000 Denomination of Bonds $5,000 Interest Rates 1.25% to 2.75% Principal Maturity Date December 1 Payable at Depository Trust Company, Chicago, Illinois FUTURE PRINCIPAL AND INTEREST REQUIREMENTS Tax Levy Year Principal Interest Total June 1 Amount December 1 Amount 2016 -$ 234,763$ 234,763$ 2017 117,381$ 2017 117,382$ 2017 135,000 234,763 369,763 2018 117,381 2018 117,382 2018 440,000 233,075 673,075 2019 116,537 2019 116,538 2019 455,000 227,575 682,575 2020 113,787 2020 113,788 2020 475,000 220,750 695,750 2021 110,375 2021 110,375 2021 495,000 212,438 707,438 2022 106,219 2022 106,219 2022 515,000 203,775 718,775 2023 101,887 2023 101,888 2023 540,000 193,475 733,475 2024 96,737 2024 96,738 2024 555,000 182,674 737,674 2025 91,337 2025 91,337 2025 580,000 170,188 750,188 2026 85,094 2026 85,094 2026 600,000 157,138 757,138 2027 78,569 2027 78,569 2027 455,000 142,138 597,138 2028 71,069 2028 71,069 2028 1,380,000 130,762 1,510,762 2029 65,381 2029 65,381 2029 1,425,000 92,812 1,517,812 2030 46,406 2030 46,406 2030 1,950,000 53,625 2,003,625 2031 26,812 2031 26,813 10,000,000$ 2,689,951$ 12,689,951$ 1,344,972$ 1,344,979$ Tax Levy Interest Due on (See independent auditor's report.) - 106 - VILLAGE OF DEERFIELD, ILLINOIS LONG-TERM DEBT REQUIREMENTS GENERAL OBLIGATION BOND SERIES OF 2013 December 31, 2016 Date of Issue January 3, 2013 Date of Maturity December 1, 2031 Authorized Issue $9,075,000 Denomination of Bonds $5,000 Interest Rates 2.00% to 2.25% Principal Maturity Date December 1 Payable at Depository Trust Company, Chicago, Illinois FUTURE PRINCIPAL AND INTEREST REQUIREMENTS Tax Levy Year Principal Interest Total June 1 Amount December 1 Amount 2016 730,000$ 131,018$ 861,018$ 2017 65,509$ 2017 65,509$ 2017 615,000 116,418 731,418 2018 58,209 2018 58,209 2018 335,000 104,118 439,118 2019 52,059 2019 52,059 2019 340,000 97,418 437,418 2020 48,709 2020 48,709 2020 345,000 90,618 435,618 2021 45,309 2021 45,309 2021 350,000 83,718 433,718 2022 41,859 2022 41,859 2022 350,000 76,718 426,718 2023 38,359 2023 38,359 2023 355,000 69,718 424,718 2024 34,859 2024 34,859 2024 360,000 62,618 422,618 2025 31,309 2025 31,309 2025 365,000 55,416 420,416 2026 27,708 2026 27,708 2026 375,000 48,118 423,118 2027 24,059 2027 24,059 2027 380,000 40,618 420,618 2028 20,309 2028 20,309 2028 390,000 32,542 422,542 2029 16,271 2029 16,271 2029 390,000 23,962 413,962 2030 11,981 2030 11,981 2030 675,000 15,183 690,183 2031 7,592 2031 7,591 6,355,000$ 1,048,201$ 7,403,201$ 524,101$ 524,100$ Tax Levy Interest Due on (See independent auditor's report.) - 107 - VILLAGE OF DEERFIELD, ILLINOIS LONG-TERM DEBT REQUIREMENTS GENERAL OBLIGATION BOND SERIES OF 2015 December 31, 2016 Date of Issue May 19, 2015 Date of Maturity December 1, 2034 Authorized Issue $9,575,000 Denomination of Bonds $5,000 Interest Rates 3.00% to 3.25% Principal Maturity Date December 1 Payable at Depository Trust Company, Chicago, Illinois FUTURE PRINCIPAL AND INTEREST REQUIREMENTS Tax Levy Year Principal Interest Total June 1 Amount December 1 Amount 2016 395,000$ 279,050$ 674,050$ 2017 139,525$ 2017 139,525$ 2017 405,000 267,200 672,200 2018 133,600 2018 133,600 2018 415,000 255,050 670,050 2019 127,525 2019 127,525 2019 430,000 242,600 672,600 2020 121,300 2020 121,300 2020 440,000 229,700 669,700 2021 114,850 2021 114,850 2021 455,000 216,500 671,500 2022 108,250 2022 108,250 2022 470,000 202,850 672,850 2023 101,425 2023 101,425 2023 485,000 188,750 673,750 2024 94,375 2024 94,375 2024 495,000 174,200 669,200 2025 87,100 2025 87,100 2025 510,000 159,350 669,350 2026 79,675 2026 79,675 2026 530,000 144,050 674,050 2027 72,025 2027 72,025 2027 545,000 128,150 673,150 2028 64,075 2028 64,075 2028 560,000 111,800 671,800 2029 55,900 2029 55,900 2029 575,000 95,000 670,000 2030 47,500 2030 47,500 2030 595,000 77,750 672,750 2031 38,875 2031 38,875 2031 610,000 59,900 669,900 2032 29,950 2032 29,950 2032 630,000 41,600 671,600 2033 20,800 2033 20,800 2033 650,000 21,125 671,125 2034 10,562 2034 10,563 9,195,000$ 2,894,625$ 12,089,625$ 1,447,312$ 1,447,313$ Tax Levy Interest Due on (See independent auditor's report.) - 108 - STATISTICAL SECTION This part of the Village of Deerfield, Illinois’ comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the Village’s overall financial health. Contents Page(s) Financial Trends These schedules contain trend information to help the reader understand how the Village’s financial performance and well-being have changed over time. 109-118 Revenue Capacity These schedules contain information to help the reader assess the Village’s most significant local revenue source, the property tax. 119-120 Debt Capacity These schedules present information to help the reader assess the affordability of the Village’s current levels of outstanding debt and the Village’s ability to issue additional debt in the future. 121-124 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the Village’s financial activities take place. 125-126 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the Village’s financial report relates to the services the Village provides and the activities it performs. 127-129 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. Fiscal Year 2008 2009 2010 2011 GOVERNMENTAL ACTIVITIES Net investment in capital assets 60,243,189$ 62,619,244$ 66,174,872$ 64,483,632$ Restricted 4,979,340 5,899,947 1,698,902 1,833,178 Unrestricted 22,238,210 18,140,003 14,799,887 13,730,019 TOTAL GOVERNMENTAL ACTIVITIES 87,460,739$ 86,659,194$ 82,673,661$ 80,046,829$ BUSINESS-TYPE ACTIVITIES Net investment in capital assets 19,176,339$ 22,289,499$ 25,794,886$ 28,525,266$ Unrestricted 3,120,381 2,071,153 1,332,314 649,610 TOTAL BUSINESS-TYPE ACTIVITIES 22,296,720$ 24,360,652$ 27,127,200$ 29,174,876$ PRIMARY GOVERNMENT Net investment in capital assets 79,419,528$ 84,908,743$ 91,969,758$ 93,008,898$ Restricted 4,979,340 5,899,947 1,698,902 1,833,178 Unrestricted 25,358,591 20,211,156 16,132,201 14,379,629 TOTAL PRIMARY GOVERNMENT 109,757,459$ 111,019,846$ 109,800,861$ 109,221,705$ * Eight months ended December 31, 2013. The Village implemented GASB Statement No.68 in 2015, causing a reduction in unrestricted net position. Data Source Audited Financial Statements VILLAGE OF DEERFIELD, ILLINOIS NET POSITION BY COMPONENT Last Ten Fiscal Years - 109 - 2012 2013 2013*2014 2015 2016 51,392,981$ 55,359,465$ 59,186,881$ 58,835,531$ 55,025,274$ 55,732,838$ 1,864,620 2,000,978 1,690,206 4,326,031 4,467,283 5,129,514 9,491,193 (3,773,495) 25,298,828 27,077,751 14,516,742 13,144,539 62,748,794$ 53,586,948$ 86,175,915$ 90,239,313$ 74,009,299$ 74,006,891$ 47,891,247$ 59,834,517$ 28,906,421$ 28,270,616$ 29,869,458$ 32,118,523$ 113,829 140,855 651,661 786,552 (194,463) 376,014 48,005,076$ 59,975,372$ 29,558,082$ 29,057,168$ 29,674,995$ 32,494,537$ 84,682,839$ 86,323,125$ 82,313,682$ 87,106,147$ 84,894,732$ 87,851,361$ 1,864,620 2,000,978 1,690,206 4,326,031 4,467,283 5,129,514 24,206,411 25,238,217 31,730,109 27,864,303 14,322,279 13,520,553 110,753,870$ 113,562,320$ 115,733,997$ 119,296,481$ 103,684,294$ 106,501,428$ - 110 - Fiscal Year 2008 2009 2010 2011 EXPENSES Governmental Activities General government 4,569,982$ 5,228,097$ 9,833,315$ 5,477,968$ Public safety 7,232,143 7,715,014 8,543,631 8,497,498 Highways and streets 4,451,069 7,317,060 10,985,018 7,749,726 Interest 209,430 215,464 193,105 393,054 Total governmental activities expenses 16,462,624 20,475,635 29,555,069 22,118,246 Business-Type Activities Water 6,224,262 3,993,964 4,103,889 4,215,482 Sewerage 2,735,053 3,040,082 2,643,276 2,846,388 Refuse disposal 1,520,190 1,590,167 1,599,244 1,600,736 Commuter parking 210,307 282,534 262,458 322,431 Total business-type activities expenses 10,689,812 8,906,747 8,608,867 8,985,037 TOTAL PRIMARY GOVERNMENT EXPENSES 27,152,436$ 29,382,382$ 38,163,936$ 31,103,283$ PROGRAM REVENUES Governmental Activities Charges for services General government 1,480,008$ 1,645,678$ 1,862,200$ 2,011,535$ Public safety 935,302 956,468 866,510 873,947 Highways and streets 75,400 59,609 47,219 73,968 Interest - - - - Operating grants and contributions 524,423 490,768 474,526 582,734 Capital grants and contributions 1,492,153 894,545 2,195,963 360,539 Total governmental activities program revenues 4,507,286 4,047,068 5,446,418 3,902,723 Business-Type Activities Charges for services Water 4,365,767 3,647,017 3,567,809 3,777,700 Sewerage 2,396,295 2,306,028 2,320,123 2,450,088 Refuse disposal 624,349 623,738 622,629 608,475 Commuter parking 212,585 218,770 209,165 204,236 Capital grants and contributions 441,605 - - 2,963,996 Total business-type activities program revenues 8,040,601 6,795,553 6,719,726 10,004,495 TOTAL PRIMARY GOVERNMENT PROGRAM REVENUES 12,547,887$ 10,842,621$ 12,166,144$ 13,907,218$ NET (EXPENSE) REVENUE Governmental activities (11,955,338)$ (16,428,567)$ (24,108,651)$ (18,215,523)$ Business-type activities (2,649,211) (2,111,194) (1,889,141) 1,019,458 TOTAL PRIMARY GOVERNMENT NET (EXPENSE) REVENUE (14,604,549)$ (18,539,761)$ (25,997,792)$ (17,196,065)$ VILLAGE OF DEERFIELD, ILLINOIS CHANGE IN NET POSITION Last Ten Fiscal Years - 111 - 2012 2013 2013*2014 2015 2016 24,267,281$ 18,988,356$ 5,755,847$ 7,756,784$ 8,182,572$ 8,938,512$ 8,388,066 8,572,034 6,256,914 9,189,101 11,870,633 11,516,466 6,602,895 5,753,656 6,208,891 6,286,456 8,065,953 12,905,603 1,098,736 1,791,625 628,554 685,495 1,113,073 918,603 40,356,978 35,105,671 18,850,206 23,917,836 29,232,231 34,279,184 4,455,971 4,625,679 3,153,643 4,345,300 4,517,289 4,405,066 2,996,805 3,267,868 3,147,664 4,691,951 4,533,170 4,996,664 1,307,850 1,343,691 953,301 1,440,045 1,433,697 1,449,954 337,337 352,088 243,017 331,951 284,789 306,583 9,097,963 9,589,326 7,497,625 10,809,247 10,768,945 11,158,267 49,454,941$ 44,694,997$ 26,347,831$ 34,727,083$ 40,001,176$ 45,437,451$ 1,833,930$ 2,290,768$ 1,811,306$ 3,812,004$ 2,214,956$ 2,706,969$ 986,382 1,047,217 783,151 1,167,096 1,218,489 1,221,896 66,279 263,607 234,034 442,918 606,549 417,398 - - - - - 711,369 715,849 1,140,504 890,860 612,569 445,554 464,020 434,225 75,864 58,791 1,306,043 442,690 6,853,567 4,036,665 4,817,960 3,778,142 7,340,630 4,928,238 12,375,219 3,891,387 4,295,580 3,006,491 3,763,753 3,701,281 4,058,510 2,499,701 2,892,170 2,065,472 2,645,264 2,724,235 2,853,730 461,887 476,926 324,969 500,449 513,672 515,496 201,426 223,381 187,386 226,450 270,799 277,048 19,620,003 12,566,460 1,802,087 173,695 2,249,741 2,922,849 26,674,404 20,454,517 7,386,405 7,309,611 9,459,728 10,627,633 30,711,069$ 25,272,477$ 11,164,547$ 14,650,241$ 14,387,966$ 23,002,852$ (36,320,313)$ (30,287,711)$ (15,072,064)$ (16,577,206)$ (24,303,993)$ (21,903,965)$ 17,576,441 10,891,928 (115,808) (3,514,422) (1,309,217) (530,634) (18,743,872)$ (19,395,783)$ (15,187,872)$ (20,091,628)$ (25,613,210)$ (22,434,599)$ - 112 - Fiscal Year 2008 2009 2010 2011 GENERAL REVENUES AND OTHER CHANGES IN NET POSITION Governmental Activities Taxes Property and replacement 6,617,648$ 7,093,819$ 8,618,052$ 2,278,574$ Home rule sales 1,913,268 2,448,385 2,525,183 2,725,330 Simplified telecommunications 354,984 347,666 326,528 644,129 Other 4,065,091 3,684,318 3,097,643 4,396,881 Intergovernmental 4,552,097 4,438,194 4,995,509 5,281,422 Investment income 1,253,533 486,398 166,844 92,855 Miscellaneous 278,667 260,971 393,359 169,500 Contributions - - - - Transfers (out)(2,000,000) (3,132,729) - - Total governmental activities 17,035,288 15,627,022 20,123,118 15,588,691 Business-Type Activities Property taxes 780,785 807,708 807,968 832,264 Investment income 192,967 49,427 8,304 4,530 Miscellaneous 204,343 185,262 146,400 191,424 Transfers in 2,000,000 3,132,729 - - Total business-type activities 3,178,095 4,175,126 962,672 1,028,218 TOTAL PRIMARY GOVERNMENT 20,213,383$ 19,802,148$ 21,085,790$ 16,616,909$ CHANGE IN NET POSITION Governmental activities 5,079,950$ (801,545)$ (3,985,533)$ (2,626,832)$ Business-type activities 528,884 2,063,932 (926,469) 2,047,676 TOTAL PRIMARY GOVERNMENT CHANGE IN NET POSITION 5,608,834$ 1,262,387$ (4,912,002)$ (579,156)$ * Eight months ended December 31, 2013. Data Source Audited Financial Statements VILLAGE OF DEERFIELD, ILLINOIS CHANGE IN NET POSITION (Continued) Last Ten Fiscal Years - 113 - 2012 2013 2013*2014 2015 2016 2,822,939$ 4,410,633$ 5,010,070$ 5,260,112$ 5,527,577$ 7,335,510$ 3,121,749 3,665,374 2,257,183 3,413,920 2,941,572 3,484,806 1,752,850 1,430,126 936,501 1,261,799 1,707,745 1,722,295 4,684,153 3,438,882 2,398,124 3,721,354 3,797,848 3,817,963 5,968,953 8,474,800 5,396,719 8,316,948 7,697,052 8,350,115 115,175 117,770 - (221,419) 130,060 191,929 556,459 252,924 279,991 704,909 676,294 431,172 - - - - 732,831 - - - - (1,817,019) (1,805,840) (2,770,464) 19,022,278 21,790,509 16,278,588 20,640,604 21,405,139 22,563,326 889,586 890,214 906,951 936,361 965,948 22 3,701 3,024 (4,588) (14,786) 4,055 4,753 360,472 211,867 174,010 260,128 218,479 226,012 - - - 1,817,019 1,805,840 2,770,464 1,253,759 1,105,105 1,076,373 2,998,722 2,994,322 3,001,251 20,276,037$ 22,895,614$ 17,354,961$ 23,639,326$ 24,399,461$ 25,564,577$ (17,298,035)$ (8,497,202)$ 1,206,524$ 4,063,398$ (2,898,854)$ 659,361$ 18,830,200 11,970,296 965,153 (500,914) 1,685,105 2,470,617 1,532,165$ 3,473,094$ 2,171,677$ 3,562,484$ (1,213,749)$ 3,129,978$ - 114 - Fiscal Year 2008 2009 2010 2011 GENERAL FUND Reserved 2,233,242$ 453,124$ 447,892$ 443,532$ Unreserved 14,913,911 16,155,829 15,619,459 16,566,828 Nonspendable for Note receivable - - - - Inventory - - - - Prepaid items - - - - Advance - - - - Unrestricted Assigned for debt service - - - - Assigned for capital projects - - - - Subsequent year's budget - - - - Unassigned - - - - TOTAL GENERAL FUND 17,147,153$ 16,608,953$ 16,067,351$ 17,010,360$ ALL OTHER GOVERNMENTAL FUNDS Reserved 4,979,340$ 5,899,947$ 1,698,902$ 6,927,256$ Unreserved, reported in Capital Project Funds 1,804,245 1,928,286 230,653 417,104 Restricted for Capital projects - - - - Maintenance of roadways - - - - Public safety - - - - Debt service - - - - Unrestricted Assigned for Debt service - - - - Capital projects - - - - TOTAL ALL OTHER GOVERNMENTAL FUNDS 6,783,585$ 7,828,233$ 1,929,555$ 7,344,360$ * Eight months ended December 31, 2013. Data Source Audited Financial Statements VILLAGE OF DEERFIELD, ILLINOIS FUND BALANCES OF GOVERNMENTAL FUNDS Last Ten Fiscal Years Note:The Village implemented GASB Statement No.54 for the year ended April 30,2012.This resulted in a change in fund balance classification. The Village has not elected to report this change retroactively. - 115 - 2012 2013 2013*2014 2015 2016 -$ -$ -$ -$ -$ -$ - - - - - - 100,000 90,000 80,000 70,000 60,000 50,000 55,190 27,824 54,477 42,968 21,031 26,643 441,382 459,247 752,402 713,737 707,640 904,041 - - - - - 1,075,689 833,396 818,344 831,850 - - - 1,650,000 1,400,000 1,500,000 1,200,000 1,000,000 1,300,000 - - - - 2,960,593 2,117,018 16,206,557 17,002,357 16,815,607 19,667,419 15,200,930 14,963,328 19,286,525$ 19,797,772$ 20,034,336$ 21,694,124$ 19,950,194$ 20,436,719$ -$ -$ -$ -$ -$ -$ - - - - - - 14,581,925 1,515,401 40,280 - 696,658 - 601,423 633,057 325,768 927,908 388,546 360,593 1,263,197 1,367,921 1,364,438 1,214,895 1,130,293 1,124,743 - - - 2,183,228 2,948,444 3,644,178 286,753 841,240 1,473,632 25,299 58,021 111,920 1,088,012 2,154,351 749,533 2,276,297 4,707,033 5,935,979 17,821,310$ 6,511,970$ 3,953,651$ 6,627,627$ 9,928,995$ 11,177,413$ - 116 - Fiscal Year 2008 2009 2010 2011 REVENUES Taxes 17,503,089$ 18,012,382$ 19,562,915$ 15,326,336$ Licenses and permits 1,161,276 1,271,817 1,366,472 1,431,793 Intergovernmental 713,470 1,349,486 951,183 944,344 Charges for services 716,522 727,445 654,662 687,515 Fines and forfeitures 261,495 251,680 227,686 262,542 Contribution from library - - - - Investment income 1,253,533 486,398 166,844 92,855 Miscellaneous 614,796 698,839 821,396 715,868 Total revenues 22,224,181 22,798,047 23,751,158 19,461,253 EXPENDITURES General government 4,827,462 5,156,342 12,471,646 5,328,331 Public safety 7,273,503 7,656,333 8,322,821 8,407,416 Highways and streets 3,034,841 3,536,206 2,916,045 3,032,200 Capital outlay 4,204,984 6,735,684 6,207,466 8,278,643 Debt service Principal 2,000,000 4,000,000 175,000 180,000 Interest 216,600 184,939 193,150 237,997 Total expenditures 21,557,390 27,269,504 30,286,128 25,464,587 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 666,791 (4,471,457) (6,534,970) (6,003,334) OTHER FINANCING SOURCES (USES) Transfers in 4,216,000 8,629,795 923,389 7,506,834 Transfers (out)(6,216,000) (8,629,795) (923,389) (7,506,834) Bonds issued - 5,000,000 - 12,500,000 Premium (discount) on bonds issued - (30,867) - (69,013) Sale of capital assets 11,052 8,772 94,690 30,161 Total other financing sources (uses)(1,988,948) 4,977,905 94,690 12,461,148 NET CHANGE IN FUND BALANCES (1,322,157)$ 506,448$ (6,440,280)$ 6,457,814$ DEBT SERVICE AS A PERCENTAGE OF NONCAPITAL EXPENDITURES 12.77%20.38%1.53%2.09% * Eight months ended December 31, 2013. Data Source Audited Financial Statements VILLAGE OF DEERFIELD, ILLINOIS CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS Last Ten Fiscal Years - 117 - 2012 2013 2013*2014 2015 2016 18,350,644$ 12,220,016$ 9,876,878$ 14,070,158$ 14,955,266$ 17,522,177$ 1,173,799 1,645,735 1,277,977 3,062,263 1,464,015 1,958,108 1,152,141 9,692,051 6,342,610 9,599,274 8,102,221 15,007,986 709,146 710,049 565,213 1,004,048 1,114,515 971,304 317,262 342,740 236,390 307,744 292,284 286,981 - 763,572 742,476 730,381 732,831 730,131 115,175 117,770 (164,823) (221,419) 130,060 191,929 1,219,949 1,113,205 998,549 1,218,373 1,348,025 1,555,393 23,038,116 26,605,138 19,875,270 29,770,822 28,139,217 38,224,009 6,436,048 7,783,224 5,063,339 7,353,449 8,266,520 8,906,902 8,352,887 8,540,957 6,117,121 8,963,170 9,136,003 9,054,499 3,091,770 2,806,358 2,326,884 2,924,874 2,816,855 2,749,322 23,114,852 24,479,003 5,280,135 2,777,322 11,958,472 11,652,625 710,000 1,355,000 928,000 935,000 962,000 1,369,000 1,180,062 1,770,522 699,324 693,655 674,859 944,819 42,885,619 46,735,064 20,414,803 23,647,470 33,814,709 34,677,167 (19,847,503) (20,129,926) (539,533) 6,123,352 (5,675,492) 3,546,842 22,440,459 14,290,621 3,152,954 2,354,180 10,191,142 4,241,596 (22,440,459) (14,290,621) (4,943,562) (4,171,199) (11,996,982) (7,012,060) 32,400,000 9,075,000 - - 9,575,000 - 79,791 253,502 - - 422,335 - 20,827 3,331 8,386 27,431 - - 32,500,618 9,331,833 (1,782,222) (1,789,588) 8,191,495 (2,770,464) 12,653,115$ (10,798,093)$ (2,321,755)$ 4,333,764$ 2,516,003$ 776,378$ 4.75%7.16%9.02%7.35%6.60%7.67% - 118 - SALES TAX BY CATEGORY Last Ten Calendar Years Calendar Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 General merchandise 268,413$ 181,355$ 215,487$ 222,696$ 233,408$ 222,366$ 224,653$ 247,348$ 208,851$ 195,293$ Food 712,229 656,766 708,194 772,736 798,668 796,940 743,285 870,464 874,095 746,457 Drinking and eating places 749,845 756,872 931,610 932,074 970,059 1,018,539 1,032,833 1,108,407 1,128,992 1,036,096 Apparel 195,358 178,925 205,112 207,981 240,746 205,856 180,876 210,488 164,410 150,231 Furniture, H.H. and radio 784,397 676,075 644,981 752,175 713,431 473,808 345,052 291,839 288,538 279,964 Lumber, building hardware 614,752 532,637 622,406 610,072 590,742 564,884 583,287 642,214 542,259 507,057 Automobile and filling stations 257,719 283,125 284,289 434,095 513,421 348,318 358,919 510,550 314,993 347,603 Drugs and miscellaneous retail 1,877,780 2,184,421 3,211,071 2,625,382 3,625,900 5,476,027 4,692,108 4,937,251 4,069,522 5,664,948 Agriculture and all others 737,298 711,157 895,708 852,588 1,138,377 1,005,454 966,396 914,323 839,745 910,728 Manufacturers 93,150 143,018 196,451 203,171 214,511 237,039 226,254 251,653 266,575 220,430 TOTAL 6,290,941$ 6,304,351$ 7,915,309$ 7,612,970$ 9,039,263$ 10,349,231$ 9,353,663$ 9,984,537$ 8,697,980$ 10,058,807$ Village direct sales tax rate 1.00%1.00%1.00%1.00%1.00%1.00%1.00%1.00%1.00%1.00% Village home rule rate 0.50%0.50%0.50%1.00%1.00%1.00%1.00%1.00%1.00%1.00% Data Source Illinois Department of Revenue VILLAGE OF DEERFIELD, ILLINOIS - 119 - VILLAGE OF DEERFIELD, ILLINOIS DIRECT AND OVERLAPPING SALES TAX RATES Last Ten Fiscal Years Cook Village Lake RTA Cook County RTA Home Village Calendar County Lake County County Home Rule Cook County Rule Direct State Year Rate Rate Rate Rate Rate Rate Rate Rate 2007 0.25%0.25%0.25%0.75%0.75%0.50%1.00%5.00% 2008 0.25%0.75%0.25%1.75%1.00%0.50%1.00%5.00% 2009 0.25%0.75%0.25%1.75%1.00%1.00%1.00%5.00% 2010 0.25%0.75%0.25%1.25%1.00%1.00%1.00%5.00% 2011 0.25%0.75%0.25%1.00%1.00%1.00%1.00%5.00% 2012 0.25%0.75%0.25%0.75%1.00%1.00%1.00%5.00% 2013 0.25%0.75%0.25%0.75%1.00%1.00%1.00%5.00% 2014 0.25%0.75%0.25%0.75%1.00%1.00%1.00%5.00% 2015 0.25%0.75%0.25%0.75%1.00%1.00%1.00%5.00% 2016 0.25%0.75%0.25%0.75%1.00%1.00%1.00%5.00% Data Sources Village and County Records - 120 - RATIOS OF OUTSTANDING DEBT BY TYPE Last Ten Fiscal Years Governmental Business-Type Activities Activities Percentage General General Total of Obligation Obligation Primary Personal Per Bonds Bonds Government Income*Capita* 4,000,000$ 2,185,000$ 6,185,000$ 0.90%335.78$ 5,000,000 1,775,000 6,775,000 0.98%367.81 4,825,000 1,350,000 6,175,000 0.90%335.23 17,145,000 915,000 18,060,000 2.13%940.43 48,835,000 465,000 49,300,000 5.86%2,678.62 56,555,000 - 56,555,000 6.55%3,063.98 23,164,958 31,997,146 55,162,104 6.52%2,989.49 22,223,327 31,230,833 53,454,160 5.97%2,890.86 31,252,022 30,460,961 61,712,983 5.29%3,340.17 29,859,606 29,667,530 59,527,136 4.87%3,202.45 * **Eight months ended December 31, 2013. Note: Details of the Village's outstanding debt can be found in the notes to financial statements. Data Source Audited Financial Statements 2013** 2014 2016 See the schedule of Demographic and Economic Statistics on page 120 for personal income and population data. 2015 2009 2010 2011 2012 2013 VILLAGE OF DEERFIELD, ILLINOIS Fiscal Year Ended 2008 - 121 - (1)(1) Governmental Business-Type (1)Percentage of Activities Activities Less Amounts Estimated General General Available Actual Taxable Fiscal Obligation Obligation In Debt Value of Per Year Bonds Bonds Service Fund Total Property Capita 2008 4,000,000$ 2,185,000$ 560,711$ 5,624,289$ 0.12%305.34$ 2009 5,000,000 1,775,000 472,761 6,302,239 0.13%342.14 2010 4,825,000 1,350,000 105,915 6,069,085 0.13%329.48 2011 17,145,000 915,000 101,518 17,958,482 1.18%935.14 2012 48,835,000 465,000 286,753 49,013,247 3.52%2,656.26 2013 56,555,000 - 113,074 56,441,926 4.36%3,058.85 2013**23,164,958 31,997,146 1,473,632 53,688,472 4.15%2,895.70 2014 22,223,327 31,230,833 2,208,527 51,245,633 4.17%2,770.89 2015 31,252,022 30,460,961 2,983,643 58,729,340 4.78%3,178.68 2016*29,859,606 29,667,530 3,756,098 55,771,038 4.23%3,000.38 * 2015 EAV used as it is the most recent data available. ** Eight months ended December 31, 2013. Data Source (1) Audited Financial Statements VILLAGE OF DEERFIELD, ILLINOIS RATIOS OF GENERAL BONDED DEBT OUTSTANDING Last Ten Fiscal Years - 122 - *** (1)(2) Gross Percentage *** General of Debt Village's Obligation Applicable to Share Governmental Unit Debt Government of Debt Village of Deerfield 58,920,000$ 100.00%58,920,000$ Lake County 190,325,000 5.09%9,687,543 Lake County Forest Preserve 285,680,000 5.09%14,541,112 Cook County 3,313,286,750 0.10%3,313,287 Cook County Forest Preserve 168,620,000 0.10%168,620 Deerfield Park District 2,820,000 97.54%2,750,628 Park District of Highland Park 2,935,000 1.31%38,449 Northbrook Park District 7,675,000 3.61%277,068 Lake Elementary School District No. 109 19,425,000 76.99%14,955,308 Lake High School District No. 113 95,840,000 29.84%28,598,656 Cook Northfield Township High School District No. 225 77,918,534 2.94%2,290,805 Community College of Lake County No. 532 69,265,000 5.36%3,712,604 Oakton Community College District No. 535 33,175,000 0.69%228,908 Metropolitan Water Reclamation District of Greater Chicago 2,802,575,327 1.74%48,792,836 Total gross debt 7,128,460,611 188,275,824 Less Debt Service Fund amount available - Village of Deerfield 3,756,098 3,756,098 TOTAL DIRECT AND OVERLAPPING DEBT 7,124,704,513$ 184,519,726$ *Most recent data available. ** ***Amount of column (2) multiplied by amount in column (1). Data Sources Lake and Cook County Clerk's Offices VILLAGE OF DEERFIELD, ILLINOIS DIRECT AND OVERLAPPING BONDED DEBT - December 31, 2016 Determined by ratio of assessed value of property subject to taxation in overlapping unit to value of property subject to taxation. GOVERNMENTAL ACTIVITIES - 123 - LEGAL DEBT MARGIN INFORMATION December 31, 2016 EQUALIZED ASSESSED VALUATION - 2015*1,319,070,385$ Non-Home Rule Legal Debt Limit - 8.625%113,769,821 Amount of debt applicable to limit: General Obligation Bonds Series 2008 3,440,000 General Obligation Bonds Series 2010A 9,225,000 General Obligation Bonds Series 2011A 8,225,000 General Obligation Bonds Series 2011B 12,480,000 General Obligation Bonds Series 2012 10,000,000 General Obligation Bonds Series 2013 6,355,000 General Obligation Bonds Series 2015 9,195,000 Total amount of debt applicable to limit:58,920,000 NON-HOME RULE LEGAL DEBT MARGIN 54,849,821$ * Most Recent EAV Available. VILLAGE OF DEERFIELD, ILLINOIS Illustrative Computation of Debt Margin If Government Were Not a Home Rule Municipality The Village is a home rule municipality and,as such,has no debt limitations.If,however,the Village were a non-home rule municipality, its available debt limit would be as follows: The Village is a home rule municipality. Article VII, Section 6(k) of the 1970 Illinois Constitution governs computation of the legal debt margin: To date, the General Assembly has set no limits for home rule municipalities. The General Assembly may limit by law the amount and require referendum approval of debt to be incurred by home rule municipalities,payable from ad valorem property tax receipts,only in excess of the following percentages of the assessed value of its taxable property...(2)if its population is more than 25,000 and less than 500,000 an aggregate of one per cent:...indebtedness which is outstanding on the effective date (July 1,1971)of this constitution or which is thereafter approved by referendum...shall not be included in the foregoing percentage. - 124 - Per Capita Median Fiscal Personal Household Unemployment Year Population Income Income Rate 2008 (a)18,420 37,361$ 107,194$ 3.40% 2009 (a)18,420 37,361 107,194 4.90% 2010 (a)18,420 37,361 107,194 7.10% 2011 (b)19,204 44,127 131,585 5.60% 2012 (c)18,405 45,703 131,534 5.75% 2013 (d)18,458 46,782 132,785 5.30% 2013 (e)18,452 45,823 129,187 5.85% 2014 (f)18,408 48,431 135,881 5.05% 2015 (g)18,476 63,190 135,754 4.20% 2016 (h)18,588 65,757 137,423 4.40% Data Sources (a) U.S. Census Bureau "Census 2000 Summary Files" and U.S. Bureau of Labor Statistics (b) U.S. Census Bureau "2005-2009 American Community Survey 5-Yr. Estimates" and U.S. Bureau of Labor Statistics (c) U.S. Census Bureau "2006-2010 American Community Survey 5-Yr. Estimates" and U.S. Bureau of Labor Statistics (d) U.S. Census Bureau, "2007-2011 American Community Survey 5-Yr. Estimates" U.S. Bureau of Labor Statistics (e) U.S. Census Bureau, "2008-2012 American Community Survey 5-Yr. Estimates" and U.S. Bureau of Labor Statistics (f) U.S. Census Bureau, "2009-2013 American Community Survey 5-Yr. Estimates" and U.S. Bureau of Labor Statistics (g) U.S. Census Bureau, "2010-2014 American Community Survey 5-Yr. Estimates" and U.S. Bureau of Labor Statistics (h) U.S. Census Bureau, "2011-2015 American Community Survey 5-Yr. Estimates" and U.S. Bureau of Labor Statistics VILLAGE OF DEERFIELD, ILLINOIS DEMOGRAPHIC AND ECONOMIC INFORMATION Last Ten Fiscal Years - 125 - % of % of Total Village Total Village Employer Employees Rank Population Employees Rank Population Walgreen Boots Alliance Inc 2,100 1 11.30%2,000 2 10.86% Baxter International Inc 1,900 2 10.22%3,000 1 16.29% Takeda Pharmaceuticals North 1,700 3 9.15%1,200 3 6.51% Mondelez International, Inc.700 4 3.77% Essendant Inc (formerly United Stationers)600 5 3.23% Deerfield Park District 500 6 2.69% Deerfield School District 109 500 7 2.69% Siemens Healthcare 310 8 1.67% Beam Suntory Inv (formerly Beam Inc.)260 9 1.40% Lundbeck Inc 260 10 1.40% Kinetek Inc 1,080 4 5.86% Astella Pharma US Inc 1,000 5 5.43% Linkscorp LLC 700 6 3.80% Illinois Student Assistance Commission 550 7 2.99% Woodhead Industries Inc 500 8 2.71% American Continental Life Insurance Co 405 9 2.20% Dade Behring 400 10 2.17% TOTAL 8,830 47.52%10,835 58.82% Village population 18,588 18,420 Data Source Lake County Partners VILLAGE OF DEERFIELD, ILLINOIS PRINCIPAL EMPLOYERS Current Year and Nine Years Ago 2016 2007 - 126 - Function/Program 2008 2009 2010 2011 2012 2013 2013*2014 2015 2016 GENERAL GOVERNMENT Village Manager 3 3 3 2 4 5 5 5 5 5 Finance 10 10 10 10 8 8 8 8 8 8 Engineering 3 3 3 2 2 2 2 2 3 3 Community Development 7 7 7 7 7 7 7 8 8 8 PUBLIC WORKS Administration 4 4 4 4 4 4 4 4 4 4 Street Maintenance 7 7 7 7 7 7 7 7 7 7 Utilities Maintenance 15 15 15 14 14 14 14 14 13 13 Sewage Treatment Plant 8 8 8 8 8 7 7 7 7 7 Garage 2 2 2 2 2 2 2 2 2 2 PUBLIC SAFETY Police Administration 7 7 7 7 7 7 7 7 7 7 Communications 8 8 8 8 8 8 8 8 8 8 Investigations/Youth 7 7 7 7 7 7 7 7 7 7 Patrol 31 31 31 31 31 33 33 34 34 34 TOTAL 112 112 112 109 109 111 111 113 113 113 * Eight months ended December 31, 2013. Data Source Village budget office VILLAGE OF DEERFIELD, ILLINOIS FULL-TIME EQUIVALENT EMPLOYEES Last Ten Fiscal Years - 127 - Function/Program 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 PUBLIC SAFETY Police Physical arrests 587 568 415 575 513 485 367 337 336 426 Parking violations 2,690 2,385 1,656 1,509 1,343 2,628 2,307 2,560 1,709 1,598 Traffic violations 4,278 4,255 3,703 3,106 3,391 3,367 3,550 3,452 3,765 3,463 PUBLIC WORKS Street resurfacing (miles)3.21 3.14 0.89 0.86 1.83 2.80 1.76 1.96 6.45 0.36 WATER Water main breaks 77 47 59 76 75 78 108 56 61 53 Average daily consumption (gallons)3,128,000 2,566,000 2,630,000 2,683,526 2,522,061 2,805,124 2,730,295 2,571,000 2,380,000 2,306,605 Peak daily consumption (gallons)5,894,000 5,279,000 4,510,000 5,009,819 5,502,196 5,482,125 5,069,827 3,903,000 3,800,000 4,363,018 WASTEWATER Average daily treatment (gallons)2,963,972 3,324,536 3,313,068 2,930,000 3,530,000 2,395,000 2,761,000 3,452,000 3,180,000 2,680,000 Data Source Various village departments VILLAGE OF DEERFIELD, ILLINOIS OPERATING INDICATORS Last Ten Calendar Years - 128 - Function/Program 2008 2009 2010 2011 2012 2013 2013*2014 2015 2016 PUBLIC SAFETY Police Stations 1 1 1 1 1 1 1 1 1 1 Number of Police Officers 41 41 41 41 41 42 43 40 40 40 PUBLIC WORKS Arterial streets (miles)8 8 8 8 8 8 8 8 8 8 Residential streets (miles)68 68 68 68 68 68 68 68 68 68 Traffic signals 10 10 10 10 10 10 10 10 10 10 WATER Water mains (miles)84 84 88 90 90 90 90 90 90 90 Fire hydrants 1,203 1,203 1,212 1,217 1,208 1,220 1,205 1,208 1,206 1,267 Storage capacity (gallons)8,000,000 8,000,000 8,000,000 8,200,850 8,200,850 8,200,850 8,200,850 8,200,850 8,200,850 8,200,850 WASTEWATER Sewers (miles)80 80 80 80 80 80 80 80 80 80 Treatment capacity (gallons)8,000,000 8,000,000 8,000,000 8,000,000 9,200,000 9,200,000 9,200,000 9,200,000 9,200,000 9,200,000 * Eight months ended December 31, 2013. Data Source Various village departments VILLAGE OF DEERFIELD, ILLINOIS CAPITAL ASSET STATISTICS Last Ten Fiscal Years - 129 - Debt Information Direct Debt : General Obligation Bonds $58,920,000 Gross General Percent Village's Share Obligation Debt Applicable of Debt Overlapping Debt : Lake County 190,325,000 5.09%9,687,543 Lake County Forest Preserve 285,680,000 5.09%14,541,112 Cook County 3,313,286,750 0.10%3,313,287 Cook County Forest Preserve 168,620,000 0.10%168,620 Deerfield Park District 2,820,000 97.54%2,750,628 Park District of Highland Park 2,935,000 1.31%38,449 Northbrook Park District 7,675,000 3.61%277,068 Lake School District No. 109 19,425,000 76.99%14,955,308 Lake High School District No. 113 95,840,000 29.84%28,598,656 Cook High School District No. 225 77,918,534 2.94%2,290,805 Community College No. 532 69,265,000 5.36%3,712,604 Community College No. 535 33,175,000 0.69%228,908 Metro Water Reclamation District 2,802,575,327 1.74%48,792,836 Total Overlapping Debt $129,355,824 Total Direct and Overlapping Debt $188,275,824 Source: Lake and Cook County Clerk's Offices. - 130 - Statement of Indebtedness Amount % of % of Estimated Applicable EAV True Value Per Capita* 2015 Equalized Assessed Valuation (1)1,319,070,388$ 100.00%33.33%70,964 Estimated True Value 3,957,211,164 300.00%100.00%212,891 Direct Debt 58,920,000 4.47%1.49%3,170 Overlapping Debt 129,355,824 9.81%3.27%6,959 Direct and Overlapping Debt 188,275,824 14.27%4.76%10,129 *Population of 18,476 based on 2015 CAFR. (1) Reflects 2014 Lake County EAV and 2014 Cook County EAV. - 131 - Equalized Assessed Valuation 2011 2012 2013 2014 2015 Residential $1,012,534,720 $938,649,978 898,117,390$ 909,922,822$ 984,948,931$ Commerical 364,721,276 340,275,838 316,522,689 311,130,618 327,995,985 Industrial 15,266,443 14,338,152 13,777,096 6,248,146 6,125,472 Total $1,392,522,439 $1,293,263,968 $1,228,417,175 $1,227,301,586 1,319,070,388$ Source: Offices of Lake and Cook County Clerk. Lake County Residential $1,011,816,893 $937,972,021 897,492,359$ 909,334,162$ 984,103,737$ Farm - - - - - Commerical 220,050,035 207,908,753 191,692,037 184,960,326 203,659,873 Industrial 2,713,600 2,562,167 2,460,043 2,481,937 2,437,757 Total $1,234,580,528 $1,148,442,941 1,091,644,439$ 1,096,776,425$ 1,190,201,367$ Cook County Residential 717,827$ 677,957$ 625,031$ 588,660$ 845,194$ Farm - - - - - Commerical 144,671,241 132,367,085 124,830,652 126,170,292 124,336,112 Industrial 12,552,843 11,775,985 11,317,053 3,766,209 3,687,715 Total 157,941,911$ 144,821,027$ 136,772,736$ 130,525,161$ 128,869,021$ - 132 - Tax Rates Per $100 of Assessed Valuation 2011 2012 2013 2014 2015 Bonds and Interest 0.098 0.159 0.175 0.251 0.289 Corporate 0.154 0.164 0.184 0.000 0.269 Garbage 0.064 0.071 0.077 0.080 0.000 All Other 0.004 0.063 0.067 0.199 0.000 Total Village 0.320 0.457 0.503 0.530 0.558 County Including Forest Preserve 0.755 0.820 0.881 0.893 0.871 Deerfield Elementary Dist. 109 2.892 3.254 3.424 3.401 3.211 High School District 113 2.167 2.178 2.364 2.421 2.309 Community College (Lake County) Dist. 532 0.240 0.272 0.296 0.306 0.299 Deerfield Park District 0.503 0.546 0.585 0.599 0.552 Deerfield-Bannockburn Fire Protection Dist.0.529 0.593 0.637 0.650 0.624 Library 0.237 0.262 0.290 0.364 0.353 All Other 0.073 0.053 0.048 0.053 0.049 Total 7.716 8.435 9.028 9.217 8.826 Village as a Percent of Total 4.1%5.4%5.6%5.8%6.3% Source: Office of Lake County Clerk. - 133 - Tax Extensions and Collections LAKE COUNTY COOK COUNTY Levy Collection Levy Collection Year Year Taxes Extended Amount Percent Year Year Taxes Extended Amount Percent 2004 2005 3,980,792 3,958,956 99.45%2004 2005 258,537 261,462 101.13% 2005 2006 4,723,411 4,706,769 99.65%2005 2006 444,012 457,708 103.08% 2006 2007 4,290,135 4,287,885 99.95%2006 2007 420,514 416,589 99.07% 2007 2008 4,700,551 4,690,657 99.79%2007 2008 409,907 410,137 100.06% 2008 2009 4,838,606 4,829,011 99.80%2008 2009 414,860 407,960 98.34% 2009 2010 5,106,445 5,098,946 99.85%2009 2010 399,022 402,287 100.82% 2010 2011 5,850,305 5,838,131 99.79%2010 2011 445,248 452,011 101.52% 2011 2012 7,469,212 7,470,033 100.01%2011 2012 521,208 520,642 99.89% 2012 2013 8,257,305 8,247,653 99.88%2012 2013 593,766 595,080 100.22% 2013 2014 8,558,492 8,550,030 99.90%2013 2014 607,271 608,961 100.28% 2014 2015 9,602,672 9,586,819 99.83%2014 2015 691,783 691,424 99.95% 2015 2016 10,633,806 10,614,943 99.82%2015 2016 720,378 720,378 100.00% Total Levy Collection Year Year Taxes Extended Amount Percent 2004 2005 4,239,329 4,220,418 99.55% 2005 2006 5,167,423 5,164,477 99.94% 2006 2007 4,710,649 4,704,474 99.87% 2007 2008 5,110,458 5,100,794 99.81% 2008 2009 5,253,466 5,236,971 99.69% 2009 2010 5,505,467 5,501,233 99.92% 2010 2011 6,295,553 6,290,142 99.91% 2011 2012 7,990,420 7,990,675 100.00% 2012 2013 8,851,071 8,842,733 99.91% 2013 2014 9,165,763 9,158,991 99.93% 2014 2015 10,294,455 10,278,243 99.84% 2015 2016 11,354,184 11,335,321 99.83% Lake County and Cook County as of 5/31/2016. Total Collections Source: Cook County Clerk's Office. Total Collections Source: Lake County Clerk's Office. Total Collections Source: Lake and Cook County Clerk's Office. - 134 - Principal Taxpayers within the Village Taxpayer Taxable Assessed Value % of Total Taxable Assessed Valuation Walgreen Co.$40,655,745 1.03% Arden Realty, Inc.39,402,488 1.00% Scott Dressing, Sr Mgr Taxation 27,302,061 0.69% MidAmerica Asset Management 26,098,628 0.66% JBC Funds Parkway North LLC 20,199,294 0.51% CRM Properties Group 13,751,674 0.35% James Campbell Co LLC 13,543,858 0.34% LO Deerfield Operating 8,744,921 0.22% Wells Core REIT - Four Parkway North LLC 8,015,031 0.20% Mariner 111 Pfingsten 7,182,217 0.18% Total $204,895,917 5.19% Data Source: Lake & Cook County Clerk's & Assessor's Offices. - 135 -