City of Burbank Illinois Annual Financial Report 2012

CITY OF BURBANK, ILLINOIS ANNUAL FINANCIAL REPORT
December 31, 2012
CITY OF BURBANK, ILLINOIS December 31, 2012
CONTENTS
FINANCIAL SECTION Independent Auditors Report ............................................................................................................ REQUIRED SUPPLEMENTARY INFORMATION: Managements Discussion and Analysis ........................................................................................... FINANCIAL STATEMENTS: Government-wide Financial Statements: Statement of Net Position ............................................................................................................... Statement of Activities .................................................................................................................... Fund Financial Statements: Balance Sheet Governmental Funds .............................................................................................. Reconciliation of Governmental Funds Balance Sheet to Statement of Net Position................................................................................................................................... Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds ....................................................................................................................... Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to Statement of Activities ............................................. Statement of Fiduciary Net Position ................................................................................................. Statement of Changes in Fiduciary Net Position ............................................................................... Notes to Financial Statements ........................................................................................................... REQUIRED SUPPLEMENTARY INFORMATION: Schedule of Employer Contributions ................................................................................................. Schedule of Funding Progress .......................................................................................................... Schedule of Employer Contributions and Funding Progress Other Post Employment Benefits (OPEB) ......................................................................................................... Budgetary Comparison Schedule: Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget (GAAP Basis) and Actual General Fund ................................................................................... Notes to the Required Supplementary Information ........................................................................... COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES: Combining Balance Sheet General Fund ....................................................................................... Combining Statement of Revenues, Expenditures and Changes in Fund Balances General Fund ................................................................................................................ Schedule of Expenditures Budget (GAAP Basis) and Actual General Fund ............................... Combining Balance Sheet Nonmajor Governmental Funds ........................................................... Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds .................................................................................... Nonmajor Capital Projects Funds: Combining Balance Sheet .............................................................................................................. Combining Statement of Revenues, Expenditures and Changes in Fund Balances .......................................................................................................................... Fiduciary Funds Combining Statement of Net Position Fiduciary Funds ............................................................... Combining Statement of Changes in Net Position Pension Trust Funds ....................................
9 10
11 13 14 16 17 18 19
50 51 52
53 54
55 56 57 59 60 61 62 63 64
INDEPENDENT AUDITORS REPORT
Honorable Mayor and Members of the City Council City of Burbank, Illinois Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Burbank, Illinois (City), as of and for the year then ended December 31, 2012, and the related notes to the financial statements, which collectively comprise the Citys basic financial statements as listed in the table of contents. Managements Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted 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. Auditors Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Police Pension Fund or the Firefighters Pension Fund, which statements reflect total assets constituting 100 percent, respectively, of total assets of the Pension Trust Funds at December 31, 2012, and total revenues constituting 100 percent, respectively, of total revenues for the year then ended. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for Police Pension Fund and the Firefighters Pension Fund, is based solely on the report of the other auditors. 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 auditors 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 Citys 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 the entitys 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.
Opinions In our opinion, based on our audit and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City as of December 31, 2012, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 14 to the financial statements, in June 2011, the GASB issued GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. Statement 63 is effective for the Citys fiscal year ending December 31, 2012. The City has implemented this statement retroactively for their fiscal year ended December 31, 2012. This Statement provides a new statement of net position format to report all assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position (which is the net residual amount of the other elements). This Statement requires that deferred outflows of resources and deferred inflows of resources be reported separately from assets and liabilities. This Statement also amends certain provisions of GASB Statement No. 34, Basic Financial Statements -- and Managements Discussion and Analysis -- for State and Local Governments, and related pronouncements to reflect the residual measure in the statement of financial position as net position, rather than net assets. Our opinion is not modified with respect to this matter. As discussed in Note 14 to the financial statements, in March 2012, the GASB issued GASB Statement 65, Items Previously Reported as Assets and Liabilities. The provisions of this Statement are effective for the Citys fiscal year ended December 31, 2013, with earlier application being encouraged. The City has implemented this statement retroactively for their fiscal year ended December 31, 2012. This Statement establishes accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets and liabilities. This Statement also provides other financial reporting guidance related to the impact of the financial statement elements deferred outflows of resources and deferred inflows of resources, such as changes in the determination of the major fund calculations and limiting the use of the term deferred in financial statement presentations. As a result, net position was restated for the cumulative effect of the application of this pronouncement. 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 Managements Discussion and Analysis, schedule of employer contributions, schedule of funding progress, schedule of employer contributions and funding progress other post-employment benefits and budgetary comparison schedule be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board (GASB), who considers it to be an essential part of financial reporting for placing the 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 managements responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the 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.
2.
Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Citys financial statements. The accompanying combining and individual fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the financial statements. The accompanying combining and individual fund financial statements and schedules are the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the 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 procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the financial statements as a whole.
Crowe Horwath LLP Oak Brook, Illinois June 27, 2013
3.
City of Burbank, Illinois Managements Discussion and Analysis December 31, 2012
As management of the City of Burbank (City), we offer readers of the Citys financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2012. Since the Managements Discussion and Analysis (MD&A) is designed to focus on the current years activities, resulting changes and currently known facts, it should be read in conjunction with the Citys financial statements. Financial Highlights The assets of the City exceeded its liabilities and deferred inflows of resources at the close of fiscal year 2012 by $41.4 million (net position). Of this amount, $2.9 million (unrestricted net position) may be used to meet the governments ongoing obligations to citizens and creditors. As of the close of fiscal year 2012, the Citys governmental funds reported combined ending fund balances of $9.9 million, a decrease of $1.2 million in comparison to the prior year, or an 11% decrease. At the end of fiscal year 2012, unassigned fund balance for the general fund was $2.6 million or 14% of the total general fund expenditures. The Citys total long term debt increased by $1.0 million (8%) during the current fiscal year. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Citys basic financial statements. The Citys basic financial statements comprise three components: (1) government-wide financial statements, (2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the Citys finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the Citys assets and liabilities, with the difference between the two reported as net position. Over time increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the Citys net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. The governmental activities reflect the Citys basic services, including administration, public safety, highways, streets and building control. Property taxes, shared state taxes and local utility taxes finance the majority of these services. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and fiduciary funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the
4.
government-wide financial statements. By doing so, readers may better understand the long-term impact of the Citys near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains 9 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General Fund, Motor Fuel Tax Fund, Debt Service Fund, and the 2002, 2007, and 2008 General Obligation Bond Funds, each of which are considered to be major funds. Information from the Citys other governmental funds is combined into a single column presentation. Individual fund information for these non-major governmental funds is provided elsewhere in the report. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the Citys own programs. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the information provided in the government-wide and fund financial statements. Other Information In addition to the basic financial statements, this report also includes certain required supplementary information related to budgetary information and the Citys progress in funding its obligation to provide pension benefits to its employees. Non-major fund information can be found immediately following the required supplementary information. Statement of Net Position The following chart reflects the condensed Statement of Net Position:
Governmental Activities 2012 2011 Assets: Current & other assets Capital assets Total assets Liabilities: Current liabilities Long-term liabilities Total liabilities Deferred Inflows of Resources Net position: Invested in capital assets, net Restricted Unrestricted Total net position $ 19.2 44.0 63.2 $ 18.6 44.4 63.0
5.9 10.4 16.3 5.4
4.3 9.4 13.7 5.1
36.9 1.6 2.9 41.4
38.8 1.4 4.0 44.2
5.
Approximately 89% of the Citys net position are made up of capital assets (e.g., land, buildings, machinery and equipment) less any related debt used to acquire those assets that are still outstanding. The City uses these capital assets to provide services to its citizens; consequently, those assets are not available for future spending. An additional portion of the Citys net position (4%) are resources that are subject to external restrictions on their use. The remaining balance of unrestricted net position ($2.9 million), are available to meet the governments ongoing obligations to its citizens and creditors. At the end of the fiscal year, there are positive balances in all three categories of the Citys net position. Analysis of Operations Burbank has not raised property taxes beyond minor adjustments in the levy for inflation based on the consumer price index. Burbank is a home rule unit of local government and has maintained one of the lowest real estate property tax rates in the metropolitan Chicago region. For the most part, increases in expenses closely parallel inflation and growth for demand in services. The City Council passed increases in vehicle sticker fees, gasoline tax, telecommunication tax, and electric utility tax. This was done to replace revenues that decreased in 2010, specifically revenues collected through the local governments share of the state revenue tax. While some revenues increased such as sales and income taxes, these additions were not as large as expense increases in liability insurance reserve costs. The following chart reflects the condensed Statement of Activities:
Governmental Activities 2012 2011 Revenues: Program revenues: Charges for Services Operation Grants/Contrib. Capital Grants/Contrib. General revenues: Property taxes Other taxes Other Total revenues Expenses: General government Public safety Public works Interest on debt Total liabilities Change in net position Beginning net position as restated Ending net position
1.9 0.8 0.2 5.4 11.6 0.4 20.3 4.2 13.6 4.7 0.5 23.0
1.8 0.9 0.1 5.4 10.3 0.5 19.0 3.3 12.0 4.9 0.5 20.7 (1.7) 45.9 44.2
(2.7) 44.1 41.4 $
6.
Governmental Funds The General Fund balance decreased by $2.1 million. This was due to revenue increases that were insufficient to meet increases in expenditures. The City used fund balance to supplement the shortfall and to ensure all obligations were met. Motor Fuel Tax Fund increased by $0.2 million due to planned spending of accumulated resources on street and repair projects. Debt Service Fund increased by $1.9 million due to transfers from capital project funds to recognize debt service payments made. 2002 General Obligation Bond Fund was eliminated due to resolution and inactivity for all projects pertaining to this bond. 2007 and 2008 General Obligation Bond Funds decreased in total by $1.1 million due to planned spending of bond proceeds on project costs and scheduled debt service transfers.
General Fund Budgetary Highlights Total spending for the year for the majority of departments mirrored the budgeted appropriation ordinance. Revenues were up from the previous year due to an increase of fees passed by the City Council in 2010 and 2012. Expenditures were also increased due to increases in liability claims and increased in hired positions that were previously unfilled. Departments that deviated from their budgeted appropriations are as follows: Generally, the various departmental spending is in line with the appropriations and those appropriations have become lower due to a reduction in spending overall. Administrative The overall expenditures in this section were 18% over budget due to overages the City received in real estate taxes that need to be reimbursed. Police Department The personnel services section was over budget by 11% due to increases in workers compensation liability reserves. Building and Grounds The contractual section was 30% under budget due to a reduction of inspections. This is due to the reduced number of inspections that correlates with the general decline in new residential housing projects Interest revenue was lower than anticipated due to continued reductions in the amount banks are willing to pay in investments. There were no amendments to the original budget ordinance during the fiscal year.
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Capital Assets
Change in Capital Assets (in millions) Balance Net Additions/ Balance January 1, 2012 Deletions December 31, 2012 Capital assets not being depreciated Capital assets being depreciated Accumulated depreciation Capital assets being depreciated, net Total $ $ 1.9 89.8 (47.3) 42.5 44.4 $ $ (0.2) $ 2.5 (2.7) (0.2) (0.4) $ 1.7 92.3 (50.0) 42.3 44.0
In 2012, the City replaced a major thoroughfare with Cook County along with the Citys assuming responsibility for future repairs and maintenance of the road. Burbank has replaced any deteriorated infrastructure within the last decade and will continue to replace worn side streets as needed utilizing current motor fuel funds and additional long term financing secured in 2012. More detailed information about capital assets can be found in Note 6 to the financial statements. Debt Administration The City retired over $2.9 million of previously classified long-term debt. Additional bonds were issued for $3.1 million in general obligation bonds in 2012 for additional road paving projects. The City has an insignificant real estate tax receipts loss factor, and collects all revenues needed to finance debt service of the City. Long term levies have been approved and filed for all future debt service funding. The City has an AA3 rating from Moodys investors service for general obligation debt. More detailed information about long term debt can be found in Note 8 to the financial statements. Economic Factors The City has a mature and stable residential tax base 12 miles southwest of Chicago. The tax base is well established with new development largely from the replacement of older homes. The City has home rule status with a manageable debt burden with rapid principal amortization. The City Council, over the years, has imposed various tax increases/user fees to diversify revenues. Imposed revenues include a cent local option sales tax. The City still imposes lower sales taxes than its neighbor Chicago. The TIF district that has dissolved created the ability to add additional new property that was previously unavailable for the general corporate fund levy. This commercial property is now included in the new tax base available for the Citys real estate tax levy purposes. Requests for Information This financial report is designed to provide a general overview of the City of Burbanks finances for all those with an interest in the governments finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of Burbank Treasurer, 6530 W. 79th Street, Burbank, Illinois 60459.
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CITY OF BURBANK, ILLINOIS Statement of Net Position December 31, 2012
Primary Government Governmental Activities ASSETS Cash and Investments Property Taxes Receivable Other Governmental Receivables Due from Fiduciary Funds Prepaid Items Interest Receivable Net Pension Asset Capital Assets Not Being Depreciated Capital Assets Being Depreciated, Net Total Assets LIABILITIES Accounts Payable Accrued Payroll Accrued Payroll Taxes Claims Payable Other Payables Unearned Revenue Interest Payable Due to Fiduciary Funds Long Term Debt, Due Within One Year: Compensated Absences General Obligation Bonds Payable Retiree Insurance Premiums Payable Long Term Debt, Due in More Than One Year: Compensated Absences General Obligation Bonds Payable Retiree Insurance Premiums Payable Net Pension Obligation Net OPEB Obligation Net IMRF Obligation Total Liabilities DEFERRED INFLOWS OF RESOURCES Unearned Property Taxes Total Deferred Inflows of Resources NET POSITION Invested in Capital Assets, Net of Related Debt Restricted for: Capital projects Unrestricted Total Net Position $ 10,572,149 5,432,129 2,894,574 27,430 53,546 53 200,190 1,732,935 42,242,716 63,155,722
1,181,359 461,975 54,148 951,078 29,872 110,888 30,679 138,784 557,617 2,294,000 92,353 1,043,612 8,570,470 212,792 351,173 164,755 54,289 16,299,844
5,432,129 5,432,129
36,896,403 1,626,995 2,900,351 41,423,749
See accompanying notes to financial statements.
9.
CITY OF BURBANK, ILLINOIS Statement of Activities Year Ended December 31, 2012
Functions/Programs Primary Government: Governmental Activities: General Government Public Safety Public Works Interest on Debt Total Primary Government
Expenses
Fees, Fines & Charges for Services
Program Revenues Operating Grants and Contributions
Capital Grants and Contributions
Net (Expense)/Revenue and Changes in Net Position Primary Government Governmental Activities
4,151,361 13,552,100 4,726,654 486,013 22,916,128
1,025,467 908,204 1,933,671
75,928 704,144 780,072
251,437 251,437
(3,125,894) (12,567,968) (3,771,073) (486,013) (19,950,948)
General Revenues: Taxes: Property Taxes Sales Tax Home Rule Tax Income Tax Other Taxes Investment Earnings Other General Revenues Total General Revenues Change in Net Position Net Position, January 1, 2012 as restated Net Position, December 31, 2012 $
5,413,803 3,184,745 1,960,680 2,534,039 3,797,935 19,491 402,784 17,313,477 (2,637,471) 44,061,220 41,423,749
10.
CITY OF BURBANK, ILLINOIS Balance Sheet Governmental Funds December 31, 2012
Major Funds General Fund ASSETS Cash and Investments Property Taxes Receivable Other Governmental Receivables Prepaid Items Due from Fiduciary Funds Interest Receivable Interfund Receivables Total Assets LIABILITIES Accounts Payable Accrued Payroll Accrued Payroll Taxes Claims Payable Other Payables Interfund Payables Due to Fiduciary Funds Unearned Revenue Total Liabilities DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Property Taxes Unavailable Revenue - Taxes Unavailable Revenue - Grants Total Deferred Inflows of Resources FUND BALANCES Nonspendable Prepaid Items Restricted Motor Fuel Tax Projects Debt Service Infrastructure Projects Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 2,657,121 695,761 3,352,882 2,439,650 2,439,650 $ 2,299,431 2,657,121 2,555,700 53,546 27,430 640,827 8,234,055 $ Motor Fuel Tax Fund 1,228,830 117,986 285,146 1,631,962 $ Debt Service Fund 3,243,081 2,439,650 5,682,731
442,767 461,975 54,148 951,078 29,872 201,413 130,784 2,272,037
4,967 4,967
53,546 2,555,590 2,609,136 8,234,055 $
1,626,995 1,626,995 1,631,962 $
3,243,081 3,243,081 5,682,731
11.
2002 General Obligation Bond Fund $ -
2007 General Obligation Bond Fund $ 136,921 220,888 381,072 738,881
2008 General Obligation Bond Fund $ 3,104,907 53 3,104,960
Nonmajor Governmental Funds $ 558,979 335,358 354 894,691
Total Governmental Funds $ 10,572,149 5,432,129 2,894,574 53,546 27,430 53 1,307,399 20,287,280
733,625 630,252 110,888 1,474,765
78,662 78,662
397,072 8,000 405,072
1,181,359 461,975 54,148 951,078 29,872 1,307,399 138,784 110,888 4,235,503
55,000 55,000
335,358 335,358
5,432,129 695,761 55,000 6,182,890
$ $
(790,884) (790,884) 738,881 $
3,026,298 3,026,298 3,104,960 $
13,995 151,676 (11,410) 154,261 894,691 $
53,546 1,626,995 3,257,076 3,177,974 1,753,296 9,868,887 20,287,280
12.
CITY OF BURBANK, ILLINOIS Reconciliation of Governmental Funds Balance Sheet to Statement of Net Position December 31, 2012
Total fund balances - governmental funds Amounts reported for governmental activities in the net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds: Capital Assets Accumulated Depreciation Net Capital Assets Other long-term assets are not available to pay for current period expenditures and therefore are unavailable in the funds: Taxes Receivable Unavailble in Governmental Funds Grants Receivable Unavailble in Governmental Funds 695,761 55,000 93,962,645 (49,986,994)
9,868,887
43,975,651
750,761 Interest on long-term debt is not accrued in governmental funds, but rather is recognized when due. Some assets reported in the statement of net position do not require the use of current financial resources and therefore are not reported as assets in governmental funds. These assets consist of : Net Pension Asset Some liabilities reported in the statement of net position do not require the use of current financial resources and therefore are not reported as liabilities in governmental funds. These liabilities consist of : Provision for Compensated Absences Retireee Insurance Premiums Payable Net OPEB Obligation Net IMRF Obligation Net Pension Obligation Bonds Payable Total Long-term liabilities Net position of governmental activities (1,601,229) (305,145) (164,755) (54,289) (351,173) (10,864,470) (13,341,061) $ 41,423,749 200,190
(30,679)
13.
CITY OF BURBANK, ILLINOIS Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended December 31, 2012
Major Funds General Fund REVENUES Property Taxes Sales Tax Home Rule Tax Income Tax Motor Fuel Tax Other Taxes Licenses, Permits and Fees Fines Investment Income Grants Other Revenue Total Revenues EXPENDITURES Current: Administration Building & Grounds Fire Department Police Department Civil Defense Public Works Department Building & License Enforcement Zoning Board of Appeals Liquor Commission Police & Fire Commission Capital Projects Debt Service - Principal Retired Debt Service - Interest and Fees Total Expenditures Excess (Deficiency) of Revenues Over Expenditures OTHER FINANCING SOURCES (USES) Proceeds from Bonds Bond Premium Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances at Beginning of Year Fund Balances at End of Year $ $ 2,653,556 3,097,071 1,901,505 2,534,039 3,784,139 1,552,856 380,815 1,260 75,928 400,520 16,381,689 $ Motor Fuel Tax Fund 704,144 1,714 141,437 2,264 849,559 Debt Service Fund $ 2,500,775 1,177 2,501,952 2002 General Obligation Bond Fund $ 77 77
3,657,248 106,879 4,374,964 8,172,047 18,891 1,735,498 282,591 46,961 29,137 25,136 18,449,352
634,978 634,978
2,120,000 350,554 2,470,554
(2,067,663)
214,581
31,398
77
344,462 (421,881) (77,419) (2,145,082) 4,754,218 2,609,136 $
214,581 1,412,414 1,626,995 $
1,830,400 1,830,400 1,861,798 1,381,283 3,243,081 $
67,225 67,225 67,302 (67,302) -
14.
2007 General Obligation Bond Fund $ 1,775 95,000 96,775
2008 General Obligation Bond Fund $ 12,435 12,435
Nonmajor Governmental Funds $ 259,472 1,053 260,525
Total Governmental Funds $ 5,413,803 3,097,071 1,901,505 2,534,039 704,144 3,784,139 1,552,856 380,815 19,491 312,365 402,784 20,103,012
285 2,475,888 2,476,173
60 75,120 75,180
1,367 251,000 83,378 335,745
3,657,593 106,879 4,374,964 8,172,047 18,891 1,735,498 282,591 46,961 29,137 25,136 3,112,233 2,371,000 509,052 24,441,982
(2,379,398)
(62,745)
(75,220)
(4,338,970)
2,306,020 (860,000) 1,446,020 (933,378) 142,494 $ (790,884) $
3,090,000 77,120 (3,256,520) (89,400) (152,145) 3,178,443 3,026,298 $
324,652 (334,358) (9,706) (84,926) 239,187 154,261 $
3,090,000 77,120 4,872,759 (4,872,759) 3,167,120 (1,171,850) 11,040,737 9,868,887
15.
CITY OF BURBANK, ILLINOIS Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to Statement of Activities Year Ended December 31, 2012
Net change in total fund balances Amounts reported for governmental activities in the Statement of Activities are different because: Some taxes were not collected for several months after the close of the fiscal year and therefore were not considered to be "available" and are not reported as revenue in the governmental funds. In governmental funds, long-term debt is considered an other source of financing, but in the statement of net assets, debt is reported as a liability. In the current period, proceeds were received from: General obligation bonds Bond premium (3,090,000) (77,120)
$ (1,171,850)
175,645
(3,167,120) Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported in the governmental funds Reduction of Retiree insurance premiums payable Compensated absences addition Reduction in Net Pension Asset Addition in Net Pension Obligation Addition in Net IMRF Pension Obligation Reduction in accrued interest on bonds Amortization of deferred bond premium Total expenses of non-current resources Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets. Capital Outlay Depreciation Capital Outlay in excess of depreciation Repayment of principal on long-term debt is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Bond principal retirement Change in net position of governmental activities 2,371,000 $ (2,637,471) 2,294,061 (2,673,988) (379,927) 48,344 (105,920) (229,219) (200,326) (1,137) 2,436 20,603 (465,219)
16.
CITY OF BURBANK, ILLINOIS Statement of Fiduciary Net Position December 31, 2012
Pension Trust Funds ASSETS Cash Investments Due from the City Accrued Interest Prepaid Items Total Assets LIABILITIES Accounts Payable Due to City Due to Participants/Bond Holders Total Liabilities NET POSITION Held in Trust for Employee Pension Benefits $ 209,495 51,626,915 130,784 327,903 4,223 52,299,320 $
Agency Fund 741,618 8,000 749,618
15,837 15,837
27,430 722,188 749,618
52,283,483
17.
CITY OF BURBANK, ILLINOIS Statement of Changes in Fiduciary Net Position Year Ended December 31, 2012
Pension Trust Funds ADDITIONS Contributions Employer Plan Members Total Contributions Investment Income Net Appreciation in Fair Value of Investments Less Investment Expense Net Investment Income Total Additions DEDUCTIONS Benefits and Refunds Administrative Expenses Total Deductions Change in Net Position Net Position at Beginning of Year Net Position at End of Year $
1,284,187 825,892 2,110,079
3,751,294 (165,527) 3,585,767 5,695,846
1,862,516 86,602 1,949,118 3,746,728 48,536,755 52,283,483
18.
CITY OF BURBANK, ILLINOIS NOTES TO FINANCIAL STATEMENTS December 31, 2012
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City of Burbank (City), Illinois conform to accounting principles generally accepted in the United States of America (GAAP) as applicable to governments. The following is a summary of the significant policies: The Reporting Entity: Financial Reporting Entity These financial statements include all organizations, activities, functions, funds and component units for which the City is financially accountable. Financial accountability is defined as the appointment of a voting majority of the component units board, and either (1) the Citys ability to impose its will over the component unit, or (2) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the City. The following component units have been included in the financial statements of the City. Fiduciary Component Units The Police Pension Fund of the City of Burbank is an Illinois local government, as such; it is a separate legal entity with its own management and budget authority. This fund exists solely to provide pension benefits for the Citys police officers. The Pension Plan may not issue bonded debt or levy taxes without the Citys approval. The financial statements of the Police Pension Fund as of and for the fiscal year ended December 31, 2012, are included in the Citys combined financial statements as a pension trust fund. The Firefighters Pension Fund of the City of Burbank is an Illinois local government, as such; it is a separate legal entity with its own management and budget authority. This fund exists solely to provide pension benefits for the Citys firefighters. The Pension Plan may not issue bonded debt or levy taxes without the Citys approval. The financial statements of the Firefighters Pension Fund as of and for the fiscal year ended December 31, 2012, are included in the Citys combined financial statements as a pension trust fund. Basis of Presentation: The Citys financial statements consist of government-wide statements, including a statement of net position and a statement of activities, and fund financial statements, which provide a more detailed level of financial information. The government-wide focus is more on the sustainability of the City as an entity and the change in aggregate financial position resulting from activities of the fiscal period. Government-wide Financial Statements The statement of net position and the statement of activities display information about the City as a whole. In the government-wide statement of net position, the governmental activities column is presented on a consolidated basis. These statements include the financial activities of the primary government, except for fiduciary activities. The effect of interfund activity has been removed 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 government-wide statement of activities reflects both the direct expenses and net cost of each function of the Citys governmental activities. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include charges paid by the recipient for the goods or services offered by the program, grants and contributions that are restricted to meeting the operational or capital requirements of a particular program and interest earned on grants that is required to be used to support a particular program. Revenues, which are not classified as program revenues, are presented as general revenues of the City, with certain limited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each government function is self-financing or draws from the general revenues of the City.
(Continued) 19.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fund Financial Statements - The financial transactions of the City are recorded in individual funds. A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures as appropriate. Separate statements for each fund category governmental and fiduciary are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and presented as nonmajor funds. Measurement Focus and Basis of Accounting: Government-wide Financial Statements The government-wide financial statements and fund financial statements for fiduciary funds are reported using the economic resources measurement focus and the accrual basis of accounting. The economic resources measurement focus means all assets and liabilities (whether current or non-current) are included on the balance sheet and the operating statements present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized when earned, if measurable, and expenses are recognized as incurred, regardless of the timing of related cash flows. The City has reported three categories of program revenues in the statement of activities (1) charges for services, (2) program-specific operating grants and contributions, and (3) program-specific capital grants and contributions. Program revenues are derived directly from the program itself or from external sources, such as the State of Illinois; they reduce the net cost of each function to be financed from the Citys general revenues. For identifying the function to which program revenue pertains, the determining factor for charges for services is which function generates the revenue. For grants and contributions, the determining factor is the function to which the revenues are restricted. Eliminations have been made in the statement of net position to remove the grossing-up effect on assets and liabilities within the governmental activities column for amounts reported in the individual funds as interfund receivables and payables. Similarly, transfers between funds have been eliminated in the statement of activities. Amounts reported in the governmental funds as receivable from or payable to fiduciary funds have been reclassified in the statement of net position as accounts receivable or payable to external parties. Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose the City considers revenues to be available if they are collected within sixty (60) days of the end of the current fiscal period. Revenues accrued at the end of the year include charges for services, licenses and permits, fines and forfeitures, intergovernmental revenues, investment earnings, property taxes, sales taxes and income taxes. All other revenue items are considered to be measurable and available only when cash is received by the government. Nonexchange transactions, in which the City receives value without directly giving equal value in return, include taxes, grants, and donations. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. For the year ended December 31, 2012, a portion of the Citys share of the State Income Tax was received past 60 days of year end due to the current fiscal issues facing the State of Illinois. As such, the City elected to recognize the portion received after 60 days as revenue, or $352,027, in order to properly present 12 months of revenue on the financial statements.
(Continued) 20.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The City reports unearned revenues on its financial statements. Unearned revenues arise when resources are received by the City 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 City has a legal claim to the resources, the liability for unearned revenue is removed from the balance sheet or statement of net position and revenue is recognized. In addition to liabilities, the balance sheet 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 position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has only one type of item which arises only under the modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: property taxes and taxes. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. When an expenditure/expense is incurred for purposes for which both restricted and unrestricted resources are available, it is the Citys policy to apply restricted resources first, then unrestricted resources as needed. Differences occur from the manner in which the governmental activities and the government-wide financial statements are prepared due to the inclusion of capital asset and long-term debt activity. Governmental fund financial statements, therefore, include reconciliation with brief explanations to better identify the relationship between the government-wide statements and the statements for governmental funds. The City reports the following major governmental funds: General Fund The General Fund is the general operating fund of the City. The General Fund has the following accounts: Corporate the Corporate account is used to account for all financial resources except those required to be accounted for in another fund. Working Cash the Working Cash account is used to loan resources to other funds. Fire House Grant the Fire House Grant account is used for prior year fire department grants and their related expenditures for project completion. 79th Street Beautification the 79th Street Beautification account is used for prior year public works projects and their related expenditures for project completion. SSA 28 the SSA 28 account is used for final project costs for the Special Service Area #28. Motor Fuel Tax Fund This fund accounts for motor fuel tax revenues received, including interest income, for the purpose of street and alley maintenance. Debt Service Fund This fund is used to account for the accumulation of resources for and the payment of general long-term debt principal, interest and related costs.
(Continued) 21.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 2002 GO Bond Fund This fund accounts for capital improvements that are financed by the proceeds of the 2002 GO bonds, 2003 GO bonds and 2004 GO bonds. 2007 GO Bond Fund This fund accounts for capital improvements that are financed by the proceeds of the 2007 GO bonds. 2008 GO Bond Fund This fund accounts for capital improvements that are financed by the proceeds of the 2008 GO bonds and subsequent bonds. Fiduciary Funds Trust and Agency Funds Trust and Agency Funds are used to account for assets held by the Government in a trustee capacity or as an agent for individuals, private organizations, other governments and/or other funds. These include pension trust and agency funds. Pension trust funds are accounted for in essentially the same manner as proprietary funds since capital maintenance is critical. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. In addition to the major funds listed above, the City uses the following fund types: Special Revenue Funds Special Revenue Funds are used to account for the proceeds of specific revenue sources requiring separate accounting because of legal or regulatory provisions or administrative action. Debt Service Funds Debt Service Funds are used to account for the Citys accumulation of resources for, and the payment of, general long-term debt, principal, interest and related costs. Capital Projects Funds The Capital Projects Funds are used to account for the Citys purchase or construction of major capital facilities, which are not financed by other funds. Cash and Investments: Investments are stated at fair value. Fair value for the investment in Illinois Funds is the same as the value of the pool shares. State statute requires the State Treasurers Illinois Funds to comply with the Illinois Public Funds Investment Act. Accumulated Unpaid Vacation, Sick Pay, and Other Employee Benefit Amount: City employees receive vacation and sick pay in varying amounts based upon their employment anniversary dates. The City reimburses employees for accumulated vacation days upon their termination or retirement. Nonunionemployees must take vacation accrued during the year of the accrual. Union employees are allowed to carry forward up to 10 days to the next fiscal year. The City also reimburses employees for accumulated sick pay days upon their termination or retirement. Depending on the contract the employee falls under, sick days are paid at a rate ranging from $35 for an 8 hour day to $200 per day. The liability for compensated absences, (unused vacation and sick time) of the City relating to employees of the governmental activities at December 31, 2012, of $1,601,229 is recorded in the Government-wide financial statements. The long term portion of compensated absences will be paid from the fund from which the employee is paid. An employee who retires with 20 or more years of service shall have the option, which must be exercised not later than 30 days after retirement, to convert accrued benefits (sick time, vacation time, and compensatory time) into a health insurance benefit. The rate of pay at the time of retirement and the
(Continued) 22.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) monthly insurance rate paid by the City at the time of retirement shall be used to calculate the health insurance benefit. The employees health insurance benefit shall be determined by taking 100% of the hours of accrued benefits times the hourly salary rate divided by the monthly health insurance premium in order to determine the number of months of health insurance to be provided by the City at no cost to the employee. The health insurance benefit must be used by the employee within 10 years of retirement. As of December 31, 2012, there are 12 retired City of Burbank employees eligible for this benefit who are participating. $305,145 is recorded as a liability in the Government-wide financial statements related to this retirement insurance benefit. The benefit expense for the year ended December 31, 2012 was $88,436. If the employee decides not to have the health insurance benefit, the employee may receive a less than pay stipend. Capital Assets: Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges and similar items), are reported in the governmental activities column in the governmentwide financial statements. Capital assets are defined by the City as assets with an initial, individual cost above a set dollar threshold based on the asset type. All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets are recorded at estimated fair market value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. The capitalization threshold for the City is $5,000. All reported capital assets except land and construction in progress are depreciated. Depreciation on all assets is provided on the straight-line basis over the following estimated useful live: Capital Asset Category Land Land Improvements Building Vehicles, Machinery, and Equipment Software Infrastructure-Street Network Infrastructure-Storm Sewers Estimated Useful Live n/a 20 years 50 years 5-20 years 2-7 years 25-50 years 100 years
Property Tax Revenue Recognition: Property taxes attach as an enforceable lien on January 1. They are normally levied in September (by passage of a Tax Levy Ordinance). Tax bills are prepared by the County and issued on or about March 1 and August 1 and are payable in two installments, on or about April 1 and September 1. The County collects such taxes and remits them periodically. The amounts levied in fiscal year 2012 are intended to fund fiscal year 2013 activity. Property tax revenues are recognized when they become both measurable and available. Available means when due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. Such time thereafter shall not exceed 60 days. Long-Term Debt: In the government-wide financial statements, long-term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method, which approximates the effective interest rate method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed in the statement of activities.
(Continued) 23.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) In the fund financial statements, governmental fund types 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 are reported as debt service expenditures. Fund Equity/Net Position: Net position represents the difference between assets and liabilities. Net position invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition or construction of improvements of those assets. Net position are reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors, laws, or regulations of other governments. In order to show compliance with GASB Statement No. 54, the components of the fund balance include the following line items: a. Nonspendable fund balance is inherently nonspendable, such as portions of net resources that cannot be spent because of their form and portions of net resources that cannot be spent because they must be maintained intact b. Restricted fund balance is externally enforceable limitations on use, such as limitations imposed by creditors, grantors, contributors, or laws and regulations of other government as well as limitations imposed by law through constitutional provision or enabling legislation c. Committed fund balance has self-imposed limitations set in place prior to the end of the period. The limitations are imposed at the highest level of decision making that requires formal action at the same level to remove. For the City, the City Council is the highest level of decision making. As of December 31, 2012, the City does not have any commitments of fund balance. d. Assigned fund balance has limitations resulting from intended use consisting of amounts where the intended use is established by the City Council designated for that purpose. The intended use is established by an official designated for that purpose. The City Council has not designated any members of management for this purpose. e. Unassigned fund balance is the total fund balance in the general fund in excess of nonspendable, restricted, committed, and assigned fund balance. The implementation of these new components is intended to decrease confusion and help serve the needs of the financial statement users. If there is an expenditure incurred for purposes for which both restricted and unrestricted fund balance is available, the City will consider restricted fund balance to have been spent before unrestricted fund balance. Further, if there is an expenditure incurred for purposes for which committed, assigned, or unassigned fund balance classifications could be used, then the City will consider committed fund balance to be spent before assigned fund balance, and consider assigned fund balance to be spent before unassigned fund balance. The City does not have a minimum fund balance policy. Claims and Judgments: Liability resulting from claims and judgments, if any, has been reflected in the financial statements in accordance with GASB Statement 10 provisions.
(Continued) 24.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Estimates: The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.
NOTE 2 - DEPOSITS AND INVESTMENTS Cash: The City has cash on hand of $500. The carrying amount of cash, excluding the Pension Trust Funds, was $9,311,010 at December 31, 2012, while the bank balances were $9,548,218. 100% of the bank balances were either insured by the Federal Deposit Insurance Corporation (FDIC) for $250,000, or collateralized with securities of the U.S. Government or with letters of credit issued by the Federal Home Loan Bank held in the Citys name by financial institutions acting as the Citys agent. At December 31, 2012, the Pension Trust Funds carrying amount of cash was $209,495 while the bank balances were $356,930. As of December 31, 2012, $75,017 was covered by federal depository or equivalent insurance. The remaining balance was uncollateralized. The Pension Trust Funds investment policy does not require pledging of collateral for all bank balances in excess of federal depository insurance, since flow-through FDIC insurance is available for the Pension Trust Funds deposits with financial institutions. Certificates of Deposit: Certificates of Deposit, excluding the Pension Trust Funds, amounted to $2,002,257 at December 31, 2012. As of December 31, 2012, the balance was fully collateralized. The remaining balance was either insured by the Federal Deposit Insurance Corporation (FDIC) for $250,000, or collateralized with securities of the U.S. Government or with letters of credit issued by the Federal Home Loan Bank held in the Citys name by financial institutions acting as the Citys agent. All investment collateral is held in safekeeping in the Citys name by financial institutions acting as the Citys agent. Collateral is priced to market semi-monthly and monitored regularly with additional collateral requested as necessary. At December 31, 2012, the Pension Trust Funds Certificates of Deposit amounted to $526,280. As of December 31, 2012, the entire amount was covered by federal depository or equivalent insurance. The Pension Trust Funds investment policy does not require pledging of collateral for all bank balances in excess of federal depository insurance, since flow-through FDIC insurance is available for the Pension Trust Funds deposits with financial institutions. Investments (Excluding Pension Trust Funds): The investments which the City may purchase are limited to those authorized under the Public Funds Investment Act and include: (1) securities that are guaranteed by the full faith and credit of the United States as to principal and interest; (2) obligations of agencies and instrumentalities of the United states as originally issued by the agencies and instrumentalities; (3) interest-bearing savings accounts, interest-bearing certificates of deposit, or interestbearing time deposits of a bank, savings bank, savings and loan association, or credit union which maintains its principal office in the state of Illinois; (4) money market mutual funds registered under the Investment Company Act of 1940 and rated at the highest classification of at least one nationally recognized rating service; (5) interest-bearing bonds of any county, township, municipality, municipal corporation or school district rated at the time of purchase within the four highest general classifications of at least one nationally recognized rating service;
(Continued) 25.
NOTE 2 - DEPOSITS AND INVESTMENTS (Continued) (6) the Public Treasurers Investment Pool administered the State Treasurer and (7) a fund managed, operated, and administered by a bank, subsidiary of a bank, or subsidiary of a bank holding company or which uses the services of such an entity and invest or advise regarding the investment of any public funds. As of December 31, 2012, the City did not have any investments. Interest Rate Risk Interest rate risk is minimized by structuring investments so that securities mature to meet cash requirements for ongoing operations without selling or cashing in securities on the open market prior to maturity Credit Risk The Citys general investment policy is to apply the prudent-person rule: Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserve capital, and, in general, avoid speculative investments. The City prohibits the following investments: (1) commercial paper of any corporation; (2) repurchase agreements of government securities; (3) derivative products; (4) leveraging of assets through reverse purchase agreements and (5) direct investments in tri-party repurchase agreements. Custodial Credit Risk For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Citys investment policy does not require collateralization of deposits and investments, unless the amount of funds deposited in a financial institution exceeds 50% of the capital stock and surplus of a bank, exceeds 50% of the net worth of a savings bank or savings and loan association, or exceeds 50% of the unimpaired capital and surplus of a credit union. Concentration of Credit Risk The City places no limit on the amount the City may invest in any one issuer. Pension Trust Funds Investments: The deposits and investments of the Pension Trust Funds are held separately from those of other City funds. Statutes authorize the Pension Funds to make deposits/invest in interest bearing direct obligations of the United States of America; obligations that are fully guaranteed or insured as to the payment of principal and interest by the United States of America; bonds, notes, debentures, or similar obligations of agencies of the United States of America; savings accounts or certificates of deposit issued by banks or savings and loan associations chartered by the United States of America or by the State of Illinois, to the extent that the deposits are insured by the agencies or instrumentalities of the federal government; credit unions, to the extent that the deposits are insured by the agencies or instrumentalities of the federal government; State of Illinois bonds; pooled accounts managed by the Illinois Public Treasurer, or by banks, their subsidiaries or holding companies, in accordance with the laws of the State of Illinois; bonds or tax anticipation warrants of any county, township, or municipal corporation of the State of Illinois; money market mutual funds managed by investment companies that are registered under the federal Investment Company Act of 1940 and the Illinois Securities law of 1953 and are diversified, open-ended management investment companies, provided the portfolio is limited to specified restrictions; general accounts of life insurance companies and separate accounts of life insurance. Pension funds with net position of 2.5 million or more may invest up to 45% of plan net position in separate accounts of life insurance companies and mutual funds. In addition, pension funds with plan net position of at least 5 million that have appointed an investment advisor, may through that investment advisor invest up to 45% of the plans net position in common and preferred stocks that meet specific restrictions.
(Continued) 26.
NOTE 2 - DEPOSITS AND INVESTMENTS (Continued) The following schedule reports the fair values and maturities (using the segmented time method) for the Pension Funds investments at December 31, 2012:
Maturities One to Six to Five Years Ten Years
Investment Type U.S. Treasury Notes U.S. Treasury Bonds Government National Mortgage Financing Corporation Strips & Bonds Federal Farm Credit Bank Federal Home Loan Mortgage Corp Federal Home Loan Bank Federal National Mortgage Assn Corporate Bonds State and Local Obligations Tennessee Valley Authority Federal Agricultural Mortgage Corp Total Money Market Mutual Funds Equity Mutual Funds Equity Securities Total
Fair Value
Less than One Year
Greater than Ten Years
$ 6,635,683 $ 2,495,945 $ 1,672,326 74,420 769,806 940,312 3,852,075 101,240 2,505,747 103,059 3,950,452 659,204 4,140,833 1,219,930 244,158 101,191 261,956 26,267,698 $ 3,460,639 $ 2,370,701 12,668,777 9,793,459 $ 51,100,635
1,970,303 $ 2,169,435 $ 638,595 1,033,731 2,104 72,316 441,792 328,014 338,318 333,382 268,612 1,845,954 1,904,881 643,953 1,758,735 2,280,952 342,339 667,957 1,196,417 2,944,416 1,097,372 122,558 142,967 145,268 116,688 9,644,519 $ 12,031,097 $ 1,131,443
The Pension Funds assumes any callable securities will not be called. Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The Funds limit their exposure to interest rate risk by structuring the portfolio to provide liquidity while at the same time matching investment maturities to projected fund liabilities. The Pension Funds investment policy provides no additional limitations to interest rate risk.
(Continued) 27.
NOTE 2 - DEPOSITS AND INVESTMENTS (Continued) Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Funds help limit their exposure to credit risk by primarily investing in securities issued by the United State Government and/or its agencies that are implicitly guaranteed by the United States Government. The Pension Trust Funds investment policies establish criteria for allowable investments; those criteria follow the requirements of the Illinois Pension Code. The Investments in the securities of US government agencies were all rated triple A by Standard & Poors or by Moodys Investors Services or were small issues that were unrated. Investments in U.S. Treasuries and Notes were rated AA+ by Standard and Poors. Investments in State and Local Obligations were all rated AA or better by Standard and Poors. Investments in Corporate Bonds were not available. Unrated investments other than Corporate Bonds are listed in the table below.
Investment Federal Agricultural Mortgage Corp Federal Home Loan Mortgage Corp Par Value Interest Rate $ 140,000 285,000 3.0500% 5.7500% Maturity Date May 14, 2014 June 27,2016
The Pension Trust Funds investment policy also prescribes to the prudent expert rule, which states, investments shall be made with the same care, skill, prudence, and diligence under the circumstances that experienced investment professionals, acting in a like capacity and fully familiar with such matters, would use in like activities for like funds with like aims in accordance and compliance with all applicable laws, rules and regulations. Custodial Risk Deposits In the case of deposits, this is the risk that in the event of a bank failure, the Funds deposits may not be returned to it. At December 31, 2012, $281,913 of the Police Pension Trust Funds bank balance of the deposit was uninsured and uncollateralized. The Pension Funds investment policy does not require pledging of collateral for all bank balances in excess of federal depository insurance, since flow-through FDIC insurance is available for the Police Pension Trust Funds deposits with financial institutions. At December 31, 2012, the entire amount of the Firefighters Pension Trust Funds bank balance of the deposits was covered by federal depository or equivalent insurance. The Pension Trust Funds investment policy does not require pledging of collateral for all certificate of deposit balances in excess of federal depository insurance. Custodial Risk Investments For an investment, this is the risk that, in the event of the failure of the counterparty, the Pension Funds will not be able to recover the value of their investments or collateral securities that are in the possession of an outside party. Money market mutual funds and equity mutual funds are not subject to custodial credit risk. The Pension Trust Funds investment policy does not require a third-party custodian. The Pension Trust Funds does, however, limit its exposure by requiring the investment broker/custodian to acquire an excess SIPC policy to provide the same coverage for the portfolio as would be provided by the SIPC.
(Continued) 28.
NOTE 2 - DEPOSITS AND INVESTMENTS (Continued) Concentration of Credit Risk This is the risk of loss attributed to the magnitude of the Funds investment in a single issuer. At December 31, 2012, the Pension Trust Funds did not have investments that are valued greater than 5% of the total plan assets. Agency investments represent a large portion of the portfolio; however, the investments are diversified by maturities date and as mentioned earlier are backed by the issuing organization. Although unlike Treasuries, agency securities do not have the full faith and credit backing of the U.S. Government, they are considered to have a moral obligation of implicit backing and are supported by Treasury lines of credit and increasingly stringent federal regulation. Due to general economic declines and investment market volatility, total plan net position, as reported, may not be representative of values subsequent to year end. Reconciliation of the Deposits and Investments Note to the financial statements:
Note 2 Deposts and Investments Cash City Pension Funds Certificates of Deposit City Pension Funds Petty Cash Investments Pension Funds Total per Note $ Financial Statements Statement of Net Position 9,311,010 Cash and Investments $ 10,572,149 209,495 Statement of Fiducary Net Position Cash - Pension Trust Funds 209,495 2,002,257 Statement of Fiducary Net Position 526,280 Cash - Agency Funds 741,618 500 Statement of Fiducary Net Position Investments - Pension Trust Funds 51,626,915 51,100,635 $ 63,150,177 Total Financial Statements $ 63,150,177
(Continued) 29.
NOTE 3 - INTERFUND RECEIVABLES AND PAYABLES Interfund receivables and payables as of December 31, 2012 are summarized below:
Due From Other Funds Major Governmental Funds: General Motor Fuel Tax 2007 General Obligation Bond 2008 General Obligation Bond Nonmajor Governmental Total Interfunds $ 640,827 285,146 381,072 354 1,307,399 Due to Other Funds $ 201,413 630,252 78,662 397,072 1,307,399
Interfund receivables and payables consist of loans of cash between funds on a routine basis. The loans will be repaid to the various funds when surplus cash is available.
NOTE 4 - TRANSFERS The following transfers were made during the fiscal year between funds within the primary government:
Transfers In Major Governmental Funds: General Debt Service 2002 General Obligation Bond 2007 General Obligation Bond 2008 General Obligation Bond Nonmajor Governmental Total transfers Transfers Out
344,462 1,830,400 67,225 2,306,020 324,652 4,872,759
421,881 860,000 3,256,520 334,358 4,872,759
The transfers represent routine and non-routine items. Generally, routine transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, and (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. The non-routine transfers include $344,462 to the General Fund to close the Fire House Grant, 79th Street Beautification and SSA 28 Accounts as well as $67,225 from the General Fund to close the 2002 General Obligation Bond Fund.
(Continued) 30.
NOTE 5 - DEFICIT FUND BALANCES The following funds had a deficit fund balance as of December 31, 2012: 2007 General Obligation Bond Fund SSA 30 & 33 Fund $ 790,884 11,410
The City plans to eliminate these deficits through transfers of cash from funds with surplus unrestricted activity.
NOTE 6 - CAPITAL ASSETS Capital asset activity for the year ended December 31, 2012 was as follows:
Balance at January 1, 2012 Governmental Activities: Capital Assets not Being Depreciated: Land Construction in Progress Subtotal Capital Assets Being Depreciated: Land Improvements Buildings Machinery and Equipment Infrastructure Subtotal Less Accumulated Depreciation for: Land Improvements Buildings Machinery and Equipment Infrastructure Total Accumulated Depreciation Total Capital Assets Being Depreciated, Net Governmental Activities Capital Assets, Net Balance at December 31, 2012
Additions
Deletions
1,732,935 163,548 1,896,483 357,191 10,800,736 5,172,996 73,441,178 89,772,101 (270,207) (3,156,999) (3,617,960) (40,267,840) (47,313,006) 42,459,095
23,459 2,434,150 2,457,609 (9,156) (182,655) (334,032) (2,148,145) (2,673,988) (216,379)
(163,548) (163,548) -
1,732,935 1,732,935 357,191 10,800,736 5,196,455 75,875,328 92,229,710 (279,363) (3,339,654) (3,951,992) (42,415,985) (49,986,994) 42,242,716
44,355,578
(216,379)
$ (163,548)
43,975,651
Depreciation expense of $2,673,988 was charged to the governmental activities functional expense categories as follows: Governmental Activities: General Government Public Safety Public Works Total Depreciation $ 20,855 462,656 2,190,477
$ 2,673,988
(Continued) 31.
NOTE 7 - RECEIVABLES, UNEARNED REVENUE AND DEFERRED INFLOWS OF RESOURCES The following is a summary of other governmental receivables by fund type at December 31, 2012. Any uncollectible amount is not believed to be material.
General Other Governmental Receivables: Allotments State Income Tax State Sales Tax Personal Property Replacement Tax Court Fines Franchise Fee Local Use Tax Home Rule Tax Telecommunications Tax CDBG grant Due from other governments Total Due From Other Governments $ 774,237 835,818 9,721 4,208 73,052 132,659 524,844 201,161 $
MFT 117,986 117,986
2007 General Obligation Fund $ 110,000 110,888 220,888 $
Total 117,986 774,237 835,818 9,721 4,208 73,052 132,659 524,844 201,161 110,000 110,888
$ 2,555,700
$ 2,894,574
Governmental funds report unearned revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of unearned and unavailable revenue reported in the governmental funds were as follows: Unearned Delinquent intergovernmental receivable (2007 General Obligation Fund) Unavailable Delinquent property taxes receivable (General Fund) Delinquent local use taxes receivable (General Fund) Delinquent home rule taxes receivable (General Fund) Delinquent telecommunication taxes receivable (General Fund) Delinquent sales taxes receivable (General Fund) Delinquent property taxes receivable (Debt Service Fund) Delinquent grant funds receivable (2007 General Obligation Fund) Delinquent property taxes receivable (SSA Debt Service Fund) $ 2,657,121 56,098 221,465 66,177 352,021 2,439,650 55,000 335,358 $ 6,182,890 $ 110,888
(Continued) 32.
NOTE 8 - LONG-TERM DEBT The following is a summary of changes to the Citys long-term debt for the fiscal year:
Obligations Outstanding January 1, 2012 Governmental Activities: General Obligation Bonds Series of 2004 Series of 2007 Series of 2008 Series of 2012 Plus Deferred Amounts: For Bond Premiums Total General Obligation Bonds General Obligation Covenant Bonds: Series of 2002 Series of 2003 Series of 2005 Series of 2006 Series of 2007 Series of 2009 Series of 2010 Total General Obligation Covenant Bond: Other Debt: Compensated Absences Retiree Insurance Premiums Net OPEB Obligation Net IMRF Obligation Net Pension Obligation Total Other Debt Total Governmental Activities Debt Additions Debt Deletions Obligations Outstanding December 31, 2012 Due Within One Year
620,000 4,000,000 3,800,000 31,953 8,451,953
3,090,000 77,120 3,167,120
620,000 700,000 800,000 20,603 2,140,603
3,300,000 3,000,000 3,090,000 88,470 9,478,470
1,100,000 945,000 2,045,000
15,000 33,000 242,000 200,000 372,000 302,000 473,000 1,637,000 1,495,309 353,489 164,755 53,152 150,847 2,217,552 12,306,505
584,700 40,092 1,137 200,326 826,255 $ 3,993,375
15,000 16,000 55,000 36,000 53,000 32,000 44,000 251,000 478,780 88,436 567,216 $ 2,958,819
17,000 187,000 164,000 319,000 270,000 429,000 1,386,000 1,601,229 305,145 164,755 54,289 351,173 2,476,591 13,341,061
17,000 58,000 38,000 57,000 33,000 46,000 249,000 557,617 92,353 649,970 $ 2,943,970
Long-term obligations outstanding at December 31, 2012 are comprised of the following: General Obligation Bonds General Obligation Bonds, Series 2007 $4,000,000 2007 General Obligation Bonds dated June 1, 2007 due December 31, 2015; interest of 4% (principal and interest to be serviced by the general revenues of the City). The principal and interest payments will be made from the Debt Service Fund. Remaining principal and interest payments to maturity are as follows:
(Continued) 33.
NOTE 8 - LONG-TERM DEBT (Continued)
Fiscal Year 2013 2014 2015 $
Principal 1,100,000 1,100,000 1,100,000 3,300,000 $
Interest 132,000 88,000 44,000 264,000
Total Debt Service $ 1,232,000 1,188,000 1,144,000 3,564,000
General Obligation Bonds, Series 2008 $3,800,000 2008 General Obligation Bonds dated April 23, 2008 due December 1, 2018; interest of 3.45% to 4.00% (principal and interest to be serviced by the general revenues of the City). The principal and interest payments will be made from the Debt Service Fund. Remaining principal and interest payments to maturity are as follows:
Fiscal Year 2013 2014 2015 2016 2017 2018 $ Total Debt Service $ 107,500 107,500 107,500 1,107,500 1,073,000 1,037,000 3,540,000
Principal 1,000,000 1,000,000 1,000,000 3,000,000 $
Interest 107,500 107,500 107,500 107,500 73,000 37,000 540,000
General Obligation Bonds, Series 2012 $3,090,000 2012 General Obligation Bonds dated June 1, 2012 due December 1, 2015; interest of 2.00% (principal and interest to be serviced by the general revenues of the City). The principal and interest payments will be made from the Debt Service Fund. Remaining principal and interest payments to maturity are as follows:
Fiscal Year 2013 2014 2015 $ Total Debt Service $ 1,006,800 1,082,900 1,127,100 3,216,800
Principal 945,000 1,040,000 1,105,000 3,090,000 $
Interest 61,800 42,900 22,100 126,800
(Continued) 34.
NOTE 8 - LONG-TERM DEBT (Continued) General Obligation Covenant Bonds: General Obligation Covenant Bonds, Series 2003 $138,000 2003 General Obligation Covenant Bonds dated December 1, 2003 due December 1, 2013; interest at 4.3% (principal and interest to be serviced by the general revenues of the City). The principal and interest payments will be made from the SSA Debt Service Fund. Remaining principal and interest payments to maturity are as follows:
Fiscal Year 2013 $ $
Principal 17,000 17,000 $ $
Interest 732 732
Total Debt Service $ $ 17,732 17,732
General Obligation Covenant Bonds, Series 2005 $520,000 2005 General Obligation Covenant Bonds dated August 1, 2005 due December 1, 2015; interest at 3.80% (principal and interest to be serviced by the general revenues of the City). The principal and interest payments will be made from the SSA Debt Service Fund. Remaining principal and interest payments to maturity are as follows:
Fiscal Year 2013 2014 2015 $
Principal 58,000 62,000 67,000 187,000 $
Interest 7,106 4,902 2,546 14,554
Total Debt Service $ 65,106 66,902 69,546 201,554
(Continued) 35.
NOTE 8 - LONG-TERM DEBT (Continued) General Obligation Covenant Bonds, Series 2006 $350,000 2006 General Obligation Covenant Bonds dated October 16, 2006 due December 1, 2016; interest at 5.90% (principal and interest to be serviced by the general revenues of the City). The principal and interest payments will be made from the SSA Debt Service Fund. Remaining principal and interest payments to maturity are as follows:
Fiscal Year 2013 2014 2015 2016 $
Principal 38,000 40,000 42,000 44,000 164,000 $
Interest 9,676 7,434 5,074 2,596 24,780
Total Debt Service $ 47,676 47,434 47,074 46,596 188,780
General Obligation Covenant Bonds, Series 2007 $566,000 2007 General Obligation Covenant Bonds dated November 1, 2007 due December 1, 2017; interest at 6% (principal and interest to be serviced by the general revenues of the City). The principal and interest payments will be made from the SSA Debt Service Fund. Remaining principal and interest payments to maturity are as follows:
Fiscal Year 2013 2014 2015 2016 2017 $ Total Debt Service $ 76,140 75,720 76,120 75,280 75,260 378,520
Principal 57,000 60,000 64,000 67,000 71,000 319,000 $
Interest 19,140 15,720 12,120 8,280 4,260 59,520
General Obligation Covenant Bonds, Series 2009 $350,000 2009 General Obligation Covenant Bonds dated June 1, 2009 due December 1, 2019; interest at 5.15% (principal and interest to be serviced by the general revenues of the City). The principal and interest payments will be made from the SSA Debt Service Fund.
(Continued) 36.
NOTE 8 - LONG-TERM DEBT (Continued) Remaining principal and interest payments to maturity are as follows:
Fiscal Year 2013 2014 2015 2016 2017 2018-2019 $ Total Debt Service $ 46,906 47,206 47,404 46,498 46,540 93,798 328,352
Principal 33,000 35,000 37,000 38,000 40,000 87,000 270,000 $
Interest 13,906 12,206 10,404 8,498 6,540 6,798 58,352
General Obligation Covenant Bonds, Series 2010 $515,000 2010 General Obligation Covenant Bonds dated September 30, 2010 due December 1, 2020; interest at 4.75% (principal and interest to be serviced by the general revenues of the City). The principal and interest payments will be made from the SSA Debt Service Fund. Remaining principal and interest payments to maturity are as follows:
Fiscal Year 2013 2014 2015 2016 2017 2018-2020 $ Total Debt Service $ 66,378 66,192 65,912 65,538 66,068 195,150 525,238
Principal 46,000 48,000 50,000 52,000 55,000 178,000 429,000 $
Interest 20,378 18,192 15,912 13,538 11,068 17,150 96,238
NOTE 9 - PENSION AND RETIREMENT FUND Illinois Municipal Retirement Fund Plan Description - The Citys defined benefit pension plan, Illinois Municipal Retirement (IMRF), provides retirement, disability, post retirement increases, and death benefits to plan members and beneficiaries. The City is affiliated with IMRF, an agent multiple employer plan. Benefit provisions are established by statute and may only be changed by the General Assembly of the State of Illinois. IMRF issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained on-line at www.imrf.org.
(Continued) 37.
NOTE 9 - PENSION AND RETIREMENT FUND (Continued) Funding Policy - As set by statute, employees participating in IMRF are required to contribute 4.50% of their annual covered salary. The statutes require employers to contribution the amount necessary, in addition to member contributions, to finance the retirement coverage of its own employees. The employer contribution rate for calendar year 2012 was 10.05% of annual covered payroll. The employer annual required contribution rate for calendar year 2012 was 10.05%. The City also contributes for disability benefits, death benefits, and supplemental retirement benefits, all of which are pooled at the IMRF level. Contribution rates for disability and death benefits are set by the IMRF Board of Trustees, while the supplemental retirement benefits rate is set by statute. Annual Pension Cost - For calendar year ending December 31, 2012, the employers actual contributions for pension cost for the Regular plan were $259,781. Its required contribution for calendar year 2012 was $259,446. Three-year trend information is as follows: Actuarial Valuation Date 12/31/12 12/31/11 12/31/10 Annual Pension Cost (APC) $ 260,918 260,154 260,739 Percentage of APC Contributed 99% 94% 85% Net Pension Obligation $ 54,289 53,152 37,101
Annual pension cost calculation is as follows:

December 31, 2012 Annual required contribution Interest on net pension obligation Adjustment to the ARC Annual Pension Cost Contribution made Increase in net pension obligation NPO beginning of year NPO end of year $ $ 259,781 3,986 (2,849) 260,918 259,781 1,137 53,152 54,289
The required contribution for 2012 was determined as part of the December 31, 2010, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions at December 31, 2010 included (a) 7.50% investment rate of return (net of administrative and direct investment expenses), (b) additional projected salary increases of 4.00% a year, attributable to inflation, (c) additional projected salary increases ranging from 0.40% to 10.00% per year depending on age and service, attributable to seniority/merit, and (d) post-retirement benefit increases of 3.00% annually. The actuarial value of IMRF assets was determined using techniques that spread the effects of short-term volatility in the market value of investments over a five-year period with a 20% corridor between the actuarial and market value of assets. The Citys plan unfunded actuarial accrued liability at December 31, 2010 is being amortized as a level percentage of projected payroll on an open 30 year basis. (Continued) 38.
NOTE 9 - PENSION AND RETIREMENT FUND (Continued) Funded Status and Funding Progress - As of December 31, 2012, the most recent actuarial valuation date, the plan was 91.53% funded. The actuarial accrued liability for benefits was $8,079,535 and the actuarial value of assets was $7,394,994, resulting in an underfunded actuarial liability (UAAL) of $684,541. The covered payroll (annual payroll of active employees covered by the plan) was $2,581,553 and the plan ratio of the UAAL to the covered payroll was 27%. The schedule of funding progress, presented as RSI following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets in increasing or decreasing over time relative to the accrued liability for benefits. Police Pension Plan Description - 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) and may be amended only by the Illinois legislature. As of December 31, 2011 (the latest actuarial information available), the Police Pension Plan membership consisted of: Retirees and beneficiaries currently receiving benefits Active plan members Vested and Nonvested The following is a summary of the Police Pension Plan as provided for in Illinois State Statutes. The Police Pension Plan provides retirement benefits as well as death and disability benefits. Covered employees attaining the age of 50 or more with 20 or more years of creditable service are entitled to receive an annual retirement benefit of 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 pension 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 8 years but less than 20 years of credited service may retire at or after the age of 60 and receive a reduced benefit of 2.5% of final salary for each year of service. 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 anniversary 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. 22 46 68
(Continued) 39.
NOTE 9 - PENSION AND RETIREMENT FUND (Continued) For Employees hired after January 1, 2011, the Normal Retirement age is attainment of age 55 and completion of 10 years of service; Early Retirement age is attainment of age 50, completion of 10 years of service and the Early Retirement Factor is 6% per year; the Employees Accrued Benefit is based on the Employees final 8-year average salary not to exceed $106,800 (as indexed); Cost-of-living adjustments are simple increases (not compounded) of the lesser of 3% or 50% of CPI beginning the later of the anniversary date and age 60; Surviving Spouses Benefits are 66 2/3% of the Employees benefit at the time of death. Funding Policy - 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 City is required to contribute the remaining amounts necessary to finance the plan as actuarially determined by an enrolled actuary, this includes the costs of administering the plan. Basis of Accounting - The accrual basis of accounting is utilized by pension trust funds. Under this method, additions to net plan assets are recorded when earned and deductions from net plan assets are recorded when the time related liabilities are incurred. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Method Used to Value Investments - Fixed-income securities are reported at fair market value. Shortterm investments are reported a cost which approximates market value. Securities traded on national exchange s are valued at the last reported sales price. Investments that do not have any established market, if any, are reported at estimated fair value. Gains and losses of investments represent the increase (decrease) of cost over market value. Short-term Interfund Receivables/Payables - During the course of operations, numerous transactions occur between individual funds of the City for goods provided or services rendered. These receivables and payables, if any, which relate to Police Pension Trust Fund are classified as Due from the City or Due to the City on the statement of plan assets. The Citys annual pension cost for the current year and related information for each plan is as follows: Contributed Rates Employer Employee Annual Pension Cost Contributions Actuarial Valuation Date Actuarial Cost Method Amortization Method 19.77% 9.91% $ 964,169 $ 734,950 12/31/11 Entry Age - Normal Level % of Projected Payroll - Closed Basis
(Continued) 40.
NOTE 9 - PENSION AND RETIREMENT FUND (Continued) Remaining Amortization Period Asset Valuation Method Actuarial Assumptions Investment Rate of Return Projected Salary Increases Inflation Rate Included Cost of Living Adjustments 22 Years Market
7.00% Compounded Annually 5.50% 3.00% 3.00%
The Pension liability at transition was determined in accordance with GASB Statement No. 50, Pension Disclosures. Annual Pension Cost - For 2012, the Citys annual pension cost was $964,169 for the Police Pension plan while contributions were $734,950. Annual pension cost calculation is as follows:
December 31, 2012 Annual required contribution Interest on net pension asset Adjustment to the ARC Annual Pension Cost Contribution made Increase in net pension asset Net Pension Asset beginning of year Net Pension Asset end of year $ 972,208 (30,059) 22,020 964,169 734,950 229,219 (429,409) $ (200,190)
The schedule of funding progress, presented as RSI following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets in increasing or decreasing over time relative to the accrued liability for benefits. Firefighters Pension: Plan Description - Fire sworn personnel are covered by the Firefighters Pension Plan which is a defined benefit single-employer pension plan. The Firefighters Pension Plan provides retirement, disability, and death benefits, as well as automatic annual cost of living adjustments, to plan members and their beneficiaries. Plan members are required to contribute 9.455% of their annual covered payroll. The City is required to contribute at an actuarially determined rate. Although this is a single-employer pension plan, the defined benefits and contribution requirements of the plan members and the City are governed by Illinois State Statues and may only be amended by the Illinois legislatures.
(Continued) 41.
NOTE 9 - PENSION AND RETIREMENT FUND (Continued) Administrative costs are financed through investment earnings. At December 31, 2011, the date of the latest actuarial valuation, the Firefighters Pension Plan membership consisted of the following: Retirees and beneficiaries currently receiving benefits and terminated employees entitled to but not yet receiving benefits Current Employees Vested and Nonvested
18 32 50
The following is a summary of the Firefighters Pension Plan as provided for in Illinois State Statues. The Firefighters Pension Plan provides retirement benefits as well as death and disability benefits. Covered employees attaining the age of 50 or more with 20 or more years of creditable service are entitled to receive an annual retirement benefit of one-half of the monthly salary attached to the rank held at the date of retirement. The pension shall be increased by 1/12 of 2.5% of such monthly salary for each additional month over 20 years of service through 30 years of service, to a maximum of 75% of such salary. Employee with at least 10 years but less than 20 years of credited service may retire at or after age 60 and receive a reduced benefit ranging from 15% of final salary for 10 years of service to 45.6% for 19 years of service. The monthly pension of a firefighter who retired with 20 or more years of service after January 1, 1977 shall be increased annually, following the first anniversary 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. For Employees hired after January 1, 2011, the Normal Retirement age is attainment of age 55 and completion of 10 years of service; Early Retirement age is attainment of age 50, completion of 10 years of service and the Early Retirement Factor is 6% per year; the Employees Accrued Benefit is based on the Employees final 8-year average salary not to exceed $106,800 (as indexed); Cost-of-living adjustments are simple increases (not compounded) of the lesser of 3% or 50% of CPI beginning the later of the anniversary date and age 60; Surviving Spouses Benefits are 66 2/3% of the Employees benefit at the time of death. Funding Policy - Covered employees are required to contribute 9.455% of their base salary to the Firefighters 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 City is required to contribute the remaining amounts necessary to finance the plan as actuarially determined by an enrolled actuary, this includes the costs of administering the plan. Basis of Accounting - The accrual basis of accounting is utilized by pension trust funds. Under this method, additions to net plan assets are recorded when earned and deductions from net plan assets are recorded when the time related liabilities are incurred. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Method Used to Value Investments - Fixed-income securities are reported at fair market values. Shortterm investments are reported at cost which approximates market value. Investment income is recognized when earned. Securities traded on national exchange s are valued at the last reported sales price. Investments that do not have any established market, if any, are reported at estimated fair value. Gains and losses of investments represent the increase (decrease) of cost over market value.
(Continued) 42.
NOTE 9 - PENSION AND RETIREMENT FUND (Continued) Short-term Interfund Receivables/Payables - During the course of operations, numerous transactions occur between individual funds of the City for goods provided or services rendered. These receivables and payables, if any, which relate to the Firefighters Pension Trust Fund are classified as Due from the City or Due to the City on the statement of plan assets. The Citys annual pension cost for the current year and related information for each plan is as follows: Contributed Rates Employer Employee Annual Pension Cost Contributions Actuarial Valuation Date Actuarial Cost Method Amortization Method Remaining Amortization Period Asset Valuation Method Actuarial Assumptions Investment Rate of Return Projected Salary Increases Inflation Rate Included Cost-of-Living Adjustments
18.902% 9.455% $ 702,410 $ 502,084 12/31/11 Entry Age - Normal Level % of Projected Payroll - Closed Basis 22 Years Market 7.00% Compounded Annually
5.50% 3.00% 3.00%
The Pension liability at transition was determined in accordance with GASB Statement No. 50, Pension Disclosures.
(Continued) 43.
NOTE 9 - PENSION AND RETIREMENT FUND (Continued) Annual Pension Cost - For 2012, the Citys annual pension cost was $702,410 for the firefighters pension plan while contributions were $502,084. Annual pension cost calculation is as follows:
December 31, 2012 Annual required contribution Interest on net pension obligation Adjustment to the ARC Annual Pension Cost Contribution made Increase in net pension obligation NPO beginning of year NPO end of year $ $ 699,586 10,559 (7,735) 702,410 502,084 200,326 150,847 351,173
The schedule of funding progress, presented as RSI following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets in increasing or decreasing over time relative to the accrued liability for benefits.
NOTE 10 - POST-EMPLOYMENT BENEFITS Plan Description: The City of Burbank provides limited health care insurance coverage for its eligible retired employees. Membership in the plan as of December 31, 2011 (the latest information available) consisted of the following:
December 31, 2011 18 84 46 148 1
Retirees and beneficiaries receiving benefits Terminated plan members entitled to but not yet receiving benefits Active vested plan members Active nonvested plan members Total Number of participating employers
Annual OPEB Cost and Net OPEB Obligations: The Citys annual other post-employment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The City has elected not to obtain an actuarial valuation for the year ended December 31, 2012. The following table shows the components of the Citys annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the Citys net OPEB obligation:
(Continued) 44.
NOTE 10 - POST-EMPLOYMENT BENEFITS (Continued)
December 31, 2011 Annual required contribution Interest on net OPEB obligation Adjustment to annual required contribution Annual OPEB cost Contributions made Increase (decrease) in net OPEB obligation Net OPEB obligation beginning of year Net OPEB obligation end of year $ 115,142 6,160 (4,107) 117,195 75,641 41,554 123,201 164,755
The Citys annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2011 (the latest information available) and the two preceding years were as follows:
Percentage of Annual Annual OPEB OPEB Cost Cost Contributed $ 115,844 65.3% 116,514 64.9% 117,195 64.5%
Fiscal Year Ending 12/31/09 12/31/10 12/31/11
Net OPEB Obligation $ 82,327 123,201 164,755
The annual required contribution (ARC) is made up of the following components:
December 31, 2011 Service cost Amortization Interest Annual required contribution $ 25,029 84,630 5,483 115,142
Funding Status and the Funding Progress: As of December 31, 2011, the most recent actuarial valuation date, the plan was unfunded. The actuarial accrued liability (AAL) for benefits was $3,356,200, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $3,356,200.
(Continued) 45.
NOTE 10 - POST-EMPLOYMENT BENEFITS (Continued) 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 the financial statements, presents multiyear trend information about 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 the 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 the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the December 31, 2011 actuarial valuation, the market asset valuation method was used with the entry age actuarial cost method. The actuarial assumptions included a 5 percent investment rate of return (includes 3 percent inflation), project salary increases of 5 percent, and an annual healthcare cost trend rate of 8 percent initially, reduced by decrements to an ultimate rate of 6 percent. The UAAL is being amortized as a level percentage of pay on an open basis. The remaining amortization period at December 31, 2011, was thirty years. Other actuarial assumptions include:
Description Percentage of Active Employees Assumed to Elect Benefit Employer provided benefit: Implicit: Explicit (Eligible disabled pensioners): Explicit (all others): Contribution Rates 25.0%
40% of (50% of $460/mo + 50% of $902/yr) to age 65 100% of premium for life Increases in peremiums from time of retirement to age 65
NOTE 11 - RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. These risks, except for workers compensation, are covered by commercial insurance purchased from independent third parties. The City also purchases its employee health and accident insurance from commercial carriers. Settled claims from these risks have not exceeded commercial insurance coverage for the past three years. There were no significant reductions in insurance coverage during fiscal year 2012. During the past three years there have been no settlements that exceed insurance coverage.
(Continued) 46.
NOTE 11 - RISK MANAGEMENT (Continued) In prior years, the City began a self-insurance program for workers compensation claims. The claims liability of $951,078 reported in the General Fund is based on the requirements of GASB Statement No. 10, Auditing and Financial Reporting for Risk Financing and Related Issues, which requires that a liability for claims be reported if information indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount can be reasonably estimated. Changes in the claims liability for the past two fiscal years are as follows: Liability January 1, 2011 Current year claims and charges in estimates Claims payments Liability December 31, 2011 Current year claims and charges in estimates Claims payments Liability December 31, 2012 NOTE 12 - SUBSEQUENT EVENTS Subsequent to year end, the City entered into construction agreements totaling approximately $2,290,985 for various street and road repairs. NOTE 13 - NEW ACCOUNTING PRONOUNCEMENTS In November 2010, the GASB issued Statement No. 61, The Financial Reporting Entity: Omnibus. This statements objective is improve financial reporting entity and amends Statement No. 14, The Financial Reporting Entity, and Statement No. 34, Basic Financial Statementsand Managements Discussion and Analysisfor State and Local Governments. Statement 61 is effective for the Citys fiscal year ending December 31, 2013. The City has considered the impacts of implementing this Statement and has determined that the implementation will not have a significant effect on its financial statements. In March 2012, the GASB issued GASB Statement 66, Technical Corrections 2012, an amendment of GASB Statements No. 10 and No. 62. The objective of this Statement is to improve accounting and financial reporting for a governmental financial reporting entity by resolving conflicting guidance that resulted from the issuance of two pronouncements, Statements No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, and No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. This Statement amends Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, by removing the provision that limits fund-based reporting of an entitys risk financing activities to the general fund and the internal service fund type. As a result, governments should base their decisions about fund type classification on the nature of the activity to be reported, as required in Statement 54 and Statement No. 34, Basic Financial Statementsand Managements Discussion and Analysisfor State and Local Governments. This Statement also amends Statement 62 by modifying the specific guidance on accounting for (1) operating lease payments that vary from a straightline basis, (2) the difference between the initial investment (purchase price) and the principal amount of a purchased loan or group of loans, and (3) servicing fees related to mortgage loans that are sold when the stated service fee rate $ 478,622 180,332 (455,995) $ 202,959
$1,523,842 (775,723) $ 951,078
(Continued) 47.
NOTE 13 - NEW ACCOUNTING PRONOUNCEMENTS (Continued) differs significantly from a current (normal) servicing fee rate. These changes clarify how to apply Statement No. 13, Accounting for Operating Leases with Scheduled Rent Increases, and result in guidance that is consistent with the requirements in Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues, respectively. The provisions of this Statement are effective for the Citys fiscal year ended December 31, 2013, with earlier application being encouraged. The City has considered the impacts of implementing this Statement and has determined that the implementation will not have a significant effect on its financial statements. In June 2012, the GASB issued Statement 67, Financial Reporting for Pension Plans. This Statement replaces the requirements of Statement No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans and Statement 50 as they relate to pension plans that are administered through trusts or similar arrangements meeting certain criteria. The Statement builds upon the existing framework for financial reports of defined benefit pension plans, which includes a statement of fiduciary net position (the amount held in a trust for paying retirement benefits) and a statement of changes in fiduciary net position. Statement 67 enhances note disclosures and RSI for both defined benefit and defined contribution pension plans. Statement 67 also requires the presentation of new information about annual money-weighted rates of return in the notes to the financial statements and in 10-year RSI schedules. The provisions of this Statement are effective for the Citys Pension Funds fiscal year ending December 31, 2014. Management has not determined what impact, if any, this GASB statement might have on its financial statements. In June 2012, the GASB issued Statement 68, Accounting and Financial Reporting for Pensions. This Statement replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental Employers and Statement No. 50, Pension Disclosures, as they relate to governments that provide pensions through pension plans administered as trusts or similar arrangements that meet certain criteria. Statement 68 requires governments providing defined benefit pensions to recognize their longterm obligation for pension benefits as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits. The Statement also enhances accountability and transparency through revised and new note disclosures and required supplementary information (RSI). The provisions of this Statement are effective for the Citys financial year ending December 31, 2015. Management has not determined what impact, if any, this GASB statement might have on its financial statements. In January 2013, the GASB issued Statement 69, Government Combinations and Disposals of Government Operations. This Statement establishes accounting and financial reporting standards related to government combinations and disposals of government operations. This Statement requires the use of carrying values to measure the assets and liabilities in a government merger. This Statement also requires measurements of assets acquired and liabilities assumed generally to be based upon their acquisition values. This Statement also provides guidance for transfers of operations that do not constitute entire legally separate entities and in which no significant consideration is exchanged. This Statement defines the term operations for purposes of determining the applicability of this Statement and requires the use of carrying values to measure the assets and liabilities in a transfer of operations. This Statement provides accounting and financial reporting guidance for disposals of government operations that have been transferred or sold. This Statement requires disclosures to be made about government combinations and disposals of government operations to enable financial statement users to evaluate the nature and financial effects of those transactions. The provisions of this Statement are effective for the Citys fiscal year ended December 31, 2014, with earlier application being encouraged. Management has not determined what impact, if any, this GASB statement might have on its financial statements.
(Continued) 48.
NOTE 13 - NEW ACCOUNTING PRONOUNCEMENTS (Continued) In April 2013, the GASB issued Statement 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees. The objective of this Statement is to improve accounting and financial reporting by state and local governments that extend and receive nonexchange financial guarantees. This Statement requires a government that extends a nonexchange financial guarantee to recognize a liability when qualitative factors and historical data, if any, indicate that it is more likely than not that the government will be required to make a payment on the guarantee. This liability should be reported until legally released as an obligor. This Statement also requires a government that is required to repay a guarantor for making a payment on a guaranteed obligation or legally assuming the guaranteed obligation to continue to recognize a liability until legally released as an obligor. When released as an obligor, the government should recognize revenue as a result of being relieved of the obligation. This Statement also provides additional guidance for intra-entity nonexchange financial guarantees involving blended component units by specifying the information required to be disclosed by governments that extend nonexchange financial guarantee as well as new information to be disclosed by governments that receive nonexchange financial guarantees. The provisions of this Statement are effective for the Citys fiscal year ended December 31, 2014, with earlier application being encouraged. Management has not determined what impact, if any, this GASB statement might have on its financial statements.
NOTE 14 - CHANGE IN ACCOUNTING PRINCIPLE During the fiscal year ended December 31, 2012, the City implemented the requirements of GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position and GASB Statement 65, Items Previously Reported as Assets and Liabilities. Statement 63 is effective for the Citys fiscal year ending December 31, 2012 and provides a new statement of net position format to report all assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position (which is the net residual amount of the other elements). This Statement requires that deferred outflows of resources and deferred inflows of resources be reported separately from assets and liabilities. This Statement also amends certain provisions of GASB Statement No. 34, Basic Financial Statements -- and Managements Discussion and Analysis -- for State and Local Governments, and related pronouncements to reflect the residual measure in the statement of financial position as net position, rather than net assets. As such, the City modified its government-wide financial statement presentation to incorporate these requirements. Statement 65 is effective for the Citys fiscal year ended December 31, 2013, with earlier application being encouraged. The City has implemented this statement retroactively as of their fiscal year ended December 31, 2012. This Statement establishes accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets and liabilities. This Statement also provides other financial reporting guidance related to the impact of the financial statement elements deferred outflows of resources and deferred inflows of resources, such as changes in the determination of the major fund calculations and limiting the use of the term deferred in financial statement presentations. A specific change to the Citys financial statements relates to deferred bond issuance costs of $112,728 that was reported on the financial statements for the year ended December 31, 2011. Due to the requirements of GASB 65, this amount is no longer considered to be an asset and thus was removed from the financial statements as an adjustment to net position. A reconciliation for net position from the 2011 financial statements to beginning net position as reported on the 2012 financial statements is as follows: Beginning Net Position as Previously Reported Change in Accounting Principle for Deferred Bond Costs Beginning Net Position as Restated $ $ 44,173,948 (112,728) 44,061,220
49.
City of Burbank, Illinois Required Supplementary Information Schedule of Employer Contributions December 31, 2012
IMRF Actuarial Valuation Date 12/31/2012 12/31/2011 12/31/2010 12/31/2009 12/31/2008 12/31/2007 12/31/2006 $ Employer Contributions 259,781 244,103 221,062 159,020 154,042 159,344 172,030 $ Annual Required Contribution 259,781 259,359 260,739 159,020 154,042 159,344 172,030 Percent Contributed 100 % 94 85 100 100 100 100
Police Pension Actuarial Valuation Date 12/31/2012 12/31/2011 12/31/2010 12/31/2009 12/31/2008 12/31/2007 12/31/2006 Employer Contributions * 734,950 798,619 798,619 774,255 * 728,888 Annual Required Contribution * 972,208 793,699 793,699 706,856 * 630,685 Percent Contributed * 76 % 101 101 110 * 116
Firefighters' Pension Actuarial Valuation Date 12/31/2012 12/31/2011 12/31/2010 12/31/2009 12/31/2008 12/31/2007 12/31/2006 Employer Contributions * 502,084 495,885 495,885 461,350 * 384,892 Annual Required Contribution * 699,586 555,666 555,295 551,295 * 384,198 Percent Contributed * 71 % 89 89 84 * 100
* Information not available.
_________________________________________________________________________________________
50.
City of Burbank, Illinois Required Supplementary Information Schedule of Funding Progress December 31, 2012
Actuarial Valuation Date IMRF 12/31/2012 12/31/2011 12/31/2010 12/31/2009 12/31/2008 12/31/2007 12/31/2006 $
Actuarial Value of Assets (a)
Actuarial Accrued Liability (AAL) Entry Age (b)
Unfunded AAL (UAAL) ( b-a )
Funded Ratio ( a/b )
Covered Payroll (c)
UAAL as a Percentage of Covered Payroll (( b-a )/c )
7,394,994 6,583,852 6,268,371 6,211,878 5,727,399 6,747,593 6,425,227
8,079,535 7,612,903 6,983,319 6,898,685 6,342,867 5,921,213 5,611,682
684,541 1,029,051 714,948 686,807 615,468 (826,380) (816,545)
91.53 86.48 89.76 90.04 90.30 113.96 114.50
2,581,553 2,585,833 2,576,475 2,516,134 2,456,805 2,279,598 2,090,274
26.52 39.80 27.75 27.30 25.05 -36.25 -39.06
Police Pension 12/31/2012 12/31/2011 12/31/2010 12/31/2009 12/31/2008 12/31/2007 12/31/2006
* 29,088,918 29,025,864 25,096,638 * 22,653,880 20,193,880
* $ 38,214,099 35,753,083 32,576,069 * 27,270,259 24,174,096 $
* 9,125,181 6,727,219 7,479,431 * 4,616,379 3,980,216
* 76.10 % 81.20 77.00 * 83.10 83.50
* 3,717,438 3,621,877 4,099,953 * 3,817,068 3,448,308
* 245.50 185.70 182.40 * 120.90 115.40
Firefighters' Pension 12/31/2012 12/31/2011 12/31/2010 12/31/2009 12/31/2008 12/31/2007 12/31/2006
* 19,447,837 18,654,061 17,123,787 * 15,917,973 14,505,561
* $ 25,430,675 23,971,055 22,658,288 * 19,416,466 18,013,003 $
* 5,982,838 5,316,994 5,534,501 * 3,498,493 3,507,442
* 76.50 % 77.80 75.60 * 82.00 80.50
* 2,656,261 2,548,299 2,426,894 * 2,089,147 2,091,592
* 225.20 208.60 228.00 * 167.50 167.70
Information not available.
___________________________________________________________________________________________________
51.
City of Burbank, Illinois Required Supplementary Information Schedule of Employer Contributions and Funding Progress - Other Post Employment Benefits (OPEB) December 31, 2012
Schedule of Employer Contributions: Actuarial Valuarion Date 12/31/2012 12/31/2011 12/31/2010 12/31/2009 12/31/2008 Percentage of Annual OPEB Cost Contributed * 64.50 % 64.90 65.30 64.20
Annual OPEB Cost * 117,195 115,844 115,844 117,765
Net OPEB Obligation * 164,755 123,201 82,327 42,124
Schedule of Funding Progress: Actuarial Value of Assets (a) * $ $ Actuarial Accrued Liability (AAL) Entry Age (b) * 3,356,200 2,538,909 2,538,909 2,538,909 Unfunded AAL (UAAL) ( b-a ) * 3,356,200 2,538,909 2,538,909 2,538,909 UAAL as a Percentage of Covered Payroll (( b-a )/c ) * 0.00 0.00 0.00 0.00
Actuarial Valuation Date 12/31/2012 12/31/2011 12/31/2010 12/31/2009 12/31/2008
Funded Ratio ( a/b ) * 0.00 % 0.00 0.00 0.00
Covered Payroll (c) * $ -
Not available Fiscal year 2008 was the first year for the GASB45 actuarial valuation
___________________________________________________________________________________________________
52.
CITY OF BURBANK, ILLINOIS Required Supplementary Information Budgetary Comparison Schedule Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget (GAAP Basis) and Actual General Fund Year Ended December 31, 2012
Original and Final Budget REVENUES Property Taxes Sales Tax Home Rule Tax Income Tax Other Taxes Licenses, Permits and Fees Fines Investment Income Grants Other Revenue Total Revenues EXPENDITURES Current: Administration Building & Grounds Fire Department Police Department Civil Defense Public Works Department Building & License Enforcement Zoning Board of Appeals Liquor Commission Police & Fire Commission Total Expenditures Excess (Deficiency) of Revenues Over Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year $ $ $ 2,659,494 3,300,000 2,100,000 2,400,000 3,900,100 1,434,160 442,750 50,000 70,000 454,200 16,810,704 $
Actual 2,653,556 3,097,071 1,901,505 2,534,039 3,784,139 1,552,856 380,815 1,260 75,928 400,520 16,381,689 $
Over (Under) Budget (5,938) (202,929) (198,495) 134,039 (115,961) 118,696 (61,935) (48,740) 5,928 (53,680) (429,015)
3,084,587 148,715 4,574,395 7,348,793 52,600 1,908,993 366,404 68,147 24,364 60,380 17,637,378
3,657,248 106,879 4,374,964 8,172,047 18,891 1,735,498 282,591 46,961 29,137 25,136 18,449,352
572,661 (41,836) (199,431) 823,254 (33,709) (173,495) (83,813) (21,186) 4,773 (35,244) 811,974
(826,674)
(2,067,663)
(1,240,989)
(826,674)
344,462 (421,881) (77,419) (2,145,082) 4,754,218 2,609,136 $
344,462 (421,881) (77,419) (1,318,408)
53.
CITY OF BURBANK, ILLINOIS Required Supplementary Information Notes to Requested Supplementary Information
The City follows these procedures in establishing the budgetary data reflected in the financial statements: (A) The City's expenditures are on the Appropriation system according to Illinois law, while City revenues are budgeted. (B) The Treasurer submits to the City Council a proposed operating budget for the fiscal year. The operating budget includes proposed expenditures and the means of financing them. (C) Budget hearings are conducted. (D) The budget is legally enacted through passage of an ordinance. (E) The budget may be amended by the City Council. (F) Budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP). (G) The budget was not amended during the year. The statements represent the original and final approved budget. (H) Expenditures in any fund may not exceed the total appropriations for that fund after transfers. The Treasurer is authorized to transfer appropriations between departments within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council. (I) Appropriations not expended (i.e. disbursed or accrued) lapse at year end. The City establishes a budget for the general fund corporate account only.
54.
CITY OF BURBANK, ILLINOIS General Fund Combining Balance Sheet December 31, 2012
Corporate Account ASSETS Cash and Investments Property Taxes Receivable Other Governmental Receivables Prepaid Items Due from Fiduciary Funds Interfund Receivables Total Assets
Working Cash Account
Fire House Grant Account
79th Street Beautification Account
SSA 28 Account
Total
1,298,530 2,657,121 2,555,700 53,546 27,430 640,827 7,233,154
1,000,901 1,000,901
2,299,431 2,657,121 2,555,700 53,546 27,430 640,827 8,234,055
LIABILITIES Accounts Payable Accrued Payroll Accrued Payroll Taxes Claims Payable Other Payables Interfund Payables Due to Fiduciary Funds Total Liabilities DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Property Taxes Unavailable Revenue - Taxes Total Deferred Inflows of Resources FUND BALANCES Nonspendable Prepaid Items Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balances
442,767 461,975 54,148 951,078 29,872 149,668 130,784 2,220,292
51,745 51,745
442,767 461,975 54,148 951,078 29,872 201,413 130,784 2,272,037
2,657,121 695,761 3,352,882
2,657,121 695,761 3,352,882
53,546 1,606,434 1,659,980 $ 7,233,154 $
949,156 949,156 1,000,901 $
53,546 2,555,590 2,609,136 8,234,055
__________________________________________________________________________________________________________________________________ 55.
CITY OF BURBANK, ILLINOIS General Fund Combining Schedule of Revenues, Expenditures and Changes in Fund Balances Year Ended December 31, 2012
Corporate Account REVENUES Property Taxes Sales Tax Home Rule Tax Income Tax Other Taxes Licenses, Permits and Fees Fines Investment Income Grants Other Revenue Total Revenues EXPENDITURES Current: Administration Building & Grounds Fire Department Police Department Civil Defense Public Works Department Building & License Enforcement Zoning Board of Appeals Liquor Commission Police & Fire Commission Total Expenditures Excess (Deficiency) of Revenues Over Expenditures OTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balance Fund Balance at Beginning of Year Fund Balance at End of Year
Working Cash Account
Fire House Grant Account
79th Street Beautification Account
SSA 28 Account
Total
$ 2,653,556 3,097,071 1,901,505 2,534,039 3,784,139 1,552,856 380,815 1,221 75,928 400,520 16,381,650
38 38
1 1
2,653,556 3,097,071 1,901,505 2,534,039 3,784,139 1,552,856 380,815 1,260 75,928 400,520 16,381,689
3,657,248 106,879 4,374,964 8,172,047 18,891 1,735,498 282,591 46,961 29,137 25,136 18,449,352
3,657,248 106,879 4,374,964 8,172,047 18,891 1,735,498 282,591 46,961 29,137 25,136 18,449,352
(2,067,702)
38
(2,067,663)
41,420 (413,336) (371,916) (2,439,618) 4,099,598 $ 1,659,980 $
949,156 949,156 $
(2,661) (2,661) (2,661) 2,661 $
293,336 293,336 293,374 (293,374) $
9,706 (5,884) 3,822 3,823 (3,823) $
344,462 (421,881) (77,419) (2,145,082) 4,754,218 2,609,136
___________________________________________________________________________________________________________________________ 56.
CITY OF BURBANK, ILLINOIS Schedule of Expenditures - Budget (GAAP Basis) and Actual General Fund - Corporate Account Year Ended December 31, 2012
Original and Final Budget EXPENDITURES Current: Administration Personal Services Contractual Commodities Capital Outlay Total Administration Building & Grounds Personal Services Contractual Commodities Capital Outlay Total Buildings & Grounds Fire Department Personal Services Contractual Commodities Capital Outlay Total Fire Department Police Department Personal Services Contractual Commodities Capital Outlay Total Police Department Civil Defense Personal Services Contractual Commodities Capital Outlay Total Civil Defense
Actual
Over (Under) Budget
1,304,084 1,742,003 36,500 2,000 3,084,587
1,215,460 2,406,054 34,701 1,033 3,657,248
(88,624) 664,051 (1,799) (967) 572,661
52,745 80,670 6,800 8,500 148,715
52,798 51,073 3,008 106,879
53 (29,597) (3,792) (8,500) (41,836)
3,240,295 1,199,800 93,300 41,000 4,574,395
3,029,096 1,239,552 81,958 24,358 4,374,964
(211,199) 39,752 (11,342) (16,642) (199,431)
4,994,946 2,035,547 318,300 7,348,793
4,955,080 2,860,736 356,231 8,172,047
(39,866) 825,189 37,931 823,254
20,500 15,800 4,800 11,500 52,600
12,517 5,638 211 525 18,891
(7,983) (10,162) (4,589) (10,975) (33,709)
_________________________________________________________________________________________________ (Continued) 57.
CITY OF BURBANK, ILLINOIS Schedule of Expenditures - Budget (GAAP Basis) and Actual General Fund - Corporate Account Year Ended December 31, 2012
Original and Final Budget Public Works Department Personal Services Contractual Commodities Capital Outlay Total Public Works Department Building & License Enforcement Personal Services Contractual Commodities Total Building & License Enforcement Zoning Board of Appeals Personal Services Contractual Commodities Total Building & License Enforcement Liquor Commission Personal Services Police & Fire Commission Personal Services Contractual Commodities Total Police & Fire Commission Total Expenditures $
Actual
Over (Under) Budget
1,083,893 579,000 171,600 74,500 1,908,993
1,033,069 522,580 125,885 53,964 1,735,498
(50,824) (56,420) (45,715) (20,536) (173,495)
226,128 133,076 7,200 366,404
199,730 79,187 3,674 282,591
(26,398) (53,889) (3,526) (83,813)
44,817 22,530 800 68,147
41,746 4,766 449 46,961
(3,071) (17,764) (351) (21,186)
24,364
29,137
4,773
15,080 41,800 3,500 60,380 17,637,378 $
14,667 9,040 1,429 25,136 18,449,352 $
(413) (32,760) (2,071) (35,244) 811,974
_________________________________________________________________________________________________ (Continued) 58.
CITY OF BURBANK, ILLINOIS Combining Balance Sheet Nonmajor Governmental Funds December 31, 2012
Debt Service Fund SSA Debt Fund ASSETS Cash and Equivalents Property Taxes Receivable Interfund Receivable Total Assets LIABILITIES Interfund Payables Due to Fiduciary Funds Total Liabilities DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Property Taxes Total Deferred Inflows of Resources FUND BALANCES Restricted: Debt Service Infrastructure Projects Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balances $ Capital Projects Funds Total Nonmajor Governmental Funds
13,995 335,358 349,353
544,984 354 545,338
558,979 335,358 354 894,691
397,072 8,000 405,072
397,072 8,000 405,072
335,358 335,358
335,358 335,358
13,995 13,995 349,353 $
151,676 (11,410) 140,266 545,338 $
13,995 151,676 (11,410) 154,261 894,691
__________________________________________________________________________________________ 59.
CITY OF BURBANK, ILLINOIS Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds Year Ended December 31, 2012
Debt Service Fund Capital Projects Funds $ 259,472 1,041 260,513 Total Nonmajor Governmental Funds $ $ 259,472 1,053 260,525
SSA Debt Fund REVENUES Property Taxes Investment Income Total Revenues EXPENDITURES Current: Capital Projects Debt Service - Principal Retired Debt Service - Interest and Fees Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses) Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances at Beginning of Year Fund Balances at End of Year $ $ 12 12
1,327 251,000 83,378 335,705
40 40
1,367 251,000 83,378 335,745
(335,693)
260,473
(75,220)
324,652 324,652 (11,041) 25,036 13,995 $
(334,358) (334,358) (73,885) 214,151 140,266 $
324,652 (334,358) (9,706) (84,926) 239,187 154,261
________________________________________________________________________________________ 60.
CITY OF BURBANK, ILLINOIS Nonmajor Capital Projects Funds Combining Balance Sheet December 31, 2012
SSA 30 & 33 Fund ASSETS Cash and Equivalents Interfund Receivables Total Assets
SSA 36 Fund
Total
$ $
1,590 1,590
$ $
543,394 354 543,748
$ $
544,984 354 545,338
LIABILITIES AND FUND BALANCES Liabilities Interfund Payables Due to Fiduciary Funds Total Liabilities Fund Balances: Restricted: Street and Curb Projects Unassigned Total Fund Balances Total Liabilities and Fund Balances
5,000 8,000 13,000
392,072 392,072
397,072 8,000 405,072
(11,410) (11,410) $ 1,590 $
151,676 151,676 543,748 $
151,676 (11,410) 140,266 545,338
______________________________________________________________________________________________ 61.
CITY OF BURBANK, ILLINOIS Nonmajor Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year Ended December 31, 2012
SSA 30 & 33 Fund REVENUES Property Taxes Investment Income Total Revenues EXPENDITURES Current: Capital Projects Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses) Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances at Beginning of Year Fund Balances at End of Year $
SSA 36 Fund
Total
10,430 2 10,432
249,042 1,039 250,081
259,472 1,041 260,513
40 40
40 40
10,432
250,041
260,473
(15,600) (15,600) (5,168) (6,242) (11,410) $
(318,758) (318,758) (68,717) 220,393 151,676 $
(334,358) (334,358) (73,885) 214,151 140,266
____________________________________________________________________________________________________ 62.
CITY OF BURBANK, ILLINOIS Combining Statement of Net Position Fiduciary Funds December 31, 2012
Agency Fund Pension Trust Funds Police Firefighters' Pension Fund Pension Fund ASSETS Cash Investments Due from the City Accrued Interest Prepaid Items Total Assets LIABILITIES Accounts Payable Due to City Due to Participants/Bond Holders Total Liabilities NET POSITION Held in Trust for Employee Pension Benefits Total Liabilities and Net Position $ 159,495 30,747,369 78,087 248,382 775 31,234,108 $ 50,000 20,879,546 52,697 79,521 3,448 21,065,212 $ Performance Bond Fund $ 741,618 8,000 749,618
Total 209,495 51,626,915 130,784 327,903 4,223 52,299,320
11,545 11,545
4,292 4,292
15,837 15,837
27,430 722,188 749,618
31,222,563 31,234,108
21,060,920 21,065,212
52,283,483 52,299,320
______________________________________________________________________________________________________________
63.
CITY OF BURBANK, ILLINOIS Combining Statement of Changes in Net Position Pension Trust Funds Year Ended December 31, 2012
Police Pension Fund ADDITIONS Contributions Employer Plan Members Total Contributions Investment Income Net Appreciation in Fair Value of Investments Less Investment Expense Net Investment Income Total Additions DEDUCTIONS Benefits and Refunds Administrative Expenses Total Deductions Change in Net Position Net Position at Beginning of Year Net Position at End of Year $
Firefighters' Pension Fund
Total
770,526 574,383 1,344,909
513,661 251,509 765,170
1,284,187 825,892 2,110,079
2,175,035 (97,411) 2,077,624 3,422,533
1,576,259 (68,116) 1,508,143 2,273,313
3,751,294 (165,527) 3,585,767 5,695,846
1,242,728 46,160 1,288,888 2,133,645 29,088,918 31,222,563 $
619,788 40,442 660,230 1,613,083 19,447,837 21,060,920 $
1,862,516 86,602 1,949,118 3,746,728 48,536,755 52,283,483
_________________________________________________________________________________________________ 64.

City of Burbank Illinois Annual Financial Report 2012

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City of Burbank Illinois Annual Financial Report 2012

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CITY OF BURBANK, ILLINOIS ANNUAL FINANCIAL REPORT

December 31, 2012

CITY OF BURBANK, ILLINOIS December 31, 2012

INDEPENDENT AUDITORS REPORT

Crowe Horwath LLP Oak Brook, Illinois June 27, 2013

5.9 10.4 16.3 5.4

4.3 9.4 13.7 5.1

36.9 1.6 2.9 41.4

38.8 1.4 4.0 44.2

(2.7) 44.1 41.4 $

CITY OF BURBANK, ILLINOIS Statement of Net Position December 31, 2012

36,896,403 1,626,995 2,900,351 41,423,749

See accompanying notes to financial statements.

Fees, Fines & Charges for Services

Program Revenues Operating Grants and Contributions

Capital Grants and Contributions

4,151,361 13,552,100 4,726,654 486,013 22,916,128

1,025,467 908,204 1,933,671

75,928 704,144 780,072

(3,125,894) (12,567,968) (3,771,073) (486,013) (19,950,948)

See accompanying notes to financial statements.

442,767 461,975 54,148 951,078 29,872 201,413 130,784 2,272,037

53,546 2,555,590 2,609,136 8,234,055 $

1,626,995 1,626,995 1,631,962 $

3,243,081 3,243,081 5,682,731

See accompanying notes to financial statements.

2002 General Obligation Bond Fund $ -

2007 General Obligation Bond Fund $ 136,921 220,888 381,072 738,881

2008 General Obligation Bond Fund $ 3,104,907 53 3,104,960

Nonmajor Governmental Funds $ 558,979 335,358 354 894,691

733,625 630,252 110,888 1,474,765

397,072 8,000 405,072

1,181,359 461,975 54,148 951,078 29,872 1,307,399 138,784 110,888 4,235,503

5,432,129 695,761 55,000 6,182,890

(790,884) (790,884) 738,881 $

3,026,298 3,026,298 3,104,960 $

13,995 151,676 (11,410) 154,261 894,691 $

53,546 1,626,995 3,257,076 3,177,974 1,753,296 9,868,887 20,287,280

See accompanying notes to financial statements.

See accompanying notes to financial statements.

2,120,000 350,554 2,470,554

344,462 (421,881) (77,419) (2,145,082) 4,754,218 2,609,136 $

214,581 1,412,414 1,626,995 $

1,830,400 1,830,400 1,861,798 1,381,283 3,243,081 $

67,225 67,225 67,302 (67,302) -

See accompanying notes to financial statements.

2007 General Obligation Bond Fund $ 1,775 95,000 96,775

2008 General Obligation Bond Fund $ 12,435 12,435

Nonmajor Governmental Funds $ 259,472 1,053 260,525

285 2,475,888 2,476,173

1,367 251,000 83,378 335,745

2,306,020 (860,000) 1,446,020 (933,378) 142,494 $ (790,884) $

3,090,000 77,120 (3,256,520) (89,400) (152,145) 3,178,443 3,026,298 $

324,652 (334,358) (9,706) (84,926) 239,187 154,261 $

3,090,000 77,120 4,872,759 (4,872,759) 3,167,120 (1,171,850) 11,040,737 9,868,887

See accompanying notes to financial statements.

See accompanying notes to financial statements.

Agency Fund 741,618 8,000 749,618

27,430 722,188 749,618

See accompanying notes to financial statements.

1,284,187 825,892 2,110,079

3,751,294 (165,527) 3,585,767 5,695,846

1,862,516 86,602 1,949,118 3,746,728 48,536,755 52,283,483