HomeMy WebLinkAboutCAFR2015Village of Morton Grove
Morton Grove, Illinois
Comprehensive Annual Financial Report
For the Fiscal Year Ended December 31, 2015
VILLAGE OF MORTON GROVE, ILLINOIS
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
For the Year Ended
December 31, 2015
Prepared by Finance Department
Hanna Sullivan
Finance Director
VILLAGE OF MORTON GROVE, ILLINOIS
TABLE OF CONTENTS
Page(s)
INTRODUCTORY SECTION
Principal Officials and Officers .................................................................................... i
Organization Chart ........................................................................................................ ii
Certificate of Achievement for Excellence in Financial Reporting .............................. iii
Letter of Transmittal ..................................................................................................... iv-viii
FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT .................................................................... 1-3
GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS
Management’s Discussion and Analysis .................................................................. MD&A 1-15
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position ............................................................................... 4-5
Statement of Activities ................................................................................... 6-7
Fund Financial Statements
Governmental Funds
Balance Sheet ............................................................................................. 8-9
Reconciliation of Fund Balances of Governmental Funds to
the Governmental Activities in the Statement of Net Position ................ 10
Statement of Revenues, Expenditures and Changes in Fund Balances ..... 11-12
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Governmental
Activities in the Statement of Activities .................................................. 13-14
Proprietary Funds
Statement of Net Position .......................................................................... 15-16
Statement of Revenues, Expenses and Changes in Net Position ............... 17
Statement of Cash Flows ........................................................................... 18-19
VILLAGE OF MORTON GROVE, ILLINOIS
TABLE OF CONTENTS (Continued)
Page(s)
FINANCIAL SECTION (Continued)
GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS (Continued)
Basic Financial Statements (Continued)
Fund Financial Statements (Continued)
Fiduciary Funds
Pension Trust Funds
Statement of Fiduciary Net Position ....................................................... 20
Statement of Changes in Fiduciary Net Position .................................... 21
Notes to Financial Statements ............................................................................. 22-86
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual -
General Fund .................................................................................................. 87
Lehigh/Ferris Tax Increment Financing Fund ................................................ 88
Waukegan Road Tax Increment Financing Fund ........................................... 89
Notes to Required Supplementary Information ................................................... 90
Schedule of Funding Progress
Other Postemployment Benefit Plan .............................................................. 91
Schedule of Employer Contributions
Illinois Municipal Retirement Fund ............................................................... 92
Sheriff’s Law Enforcement Personnel Plan .................................................... 93
Municipal Employees’ Retirement Fund ........................................................ 94
Police Pension Fund ....................................................................................... 95
Firefighters’ Pension Fund ............................................................................. 96
Other Postemployment Benefit Plan .............................................................. 97
Schedule of Village’s Proportionate Share of the Net Pension Liability
Illinois Municipal Retirement Fund ............................................................... 98
Schedule of Changes in the Employer’s Net Pension Liability and
Related Ratios
Sherriff’s Law Enforcement Personnel Plan .................................................. 99
Municipal Employees’ Retirement Fund ........................................................ 100
Police Pension Fund ....................................................................................... 101
Firefighters’ Pension Fund ............................................................................. 102
VILLAGE OF MORTON GROVE, ILLINOIS
TABLE OF CONTENTS (Continued)
Page(s)
FINANCIAL SECTION (Continued)
GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS (Continued)
Required Supplementary Information (Continued)
Schedule of Investment Returns
Municipal Employees’ Retirement Fund ........................................................ 103
Police Pension Fund ....................................................................................... 104
Firefighters’ Pension Fund ............................................................................. 105
COMBINING AND INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES
MAJOR GOVERNMENTAL FUNDS
Schedule of Expenditures - Budget and Actual - General Fund.......................... 106-108
Schedule of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual
Debt Service Fund .......................................................................................... 109
Capital Projects Fund ..................................................................................... 110
NONMAJOR GOVERNMENTAL FUNDS
Combining Balance Sheet ................................................................................... 111-112
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances .......................................................................... 113-114
Schedule of Revenues, Expenditures and
Changes in Fund Balance - Budget and Actual
Motor Fuel Tax Fund ...................................................................................... 115
Commuter Parking Facility Fund ................................................................... 116
9-1-1 Emergency Telephone System Fund ..................................................... 117
Economic Development Fund ........................................................................ 118
Fire Alarm Fund ............................................................................................. 119
Seizure Fund ................................................................................................... 120
Dempster/Waukegan TIF Fund ...................................................................... 121
NONMAJOR PROPRIETARY FUNDS
Combining Statement of Net Position ................................................................. 122
Combining Statement of Revenues, Expenses
and Changes in Net Position ............................................................................. 123
Combining Statement of Cash Flows .................................................................. 124
VILLAGE OF MORTON GROVE, ILLINOIS
TABLE OF CONTENTS (Continued)
Page(s)
FINANCIAL SECTION (Continued)
COMBINING AND INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES (Continued)
FIDUCIARY FUNDS
Pension Trust Funds
Combining Statement of Plan Net Position .................................................... 125
Combining Statement of Changes in Plan Net Position ................................. 126
STATISTICAL SECTION (Unaudited)
Financial Trends
Net Position by Component ..................................................................................... 127-128
Change in Net Position............................................................................................. 129-132
Fund Balances of Governmental Funds ................................................................... 133-134
Changes in Fund Balances of Governmental Funds ................................................ 135-136
Revenue Capacity
Assessed and Actual Value of Taxable Property ..................................................... 137
Property Tax Rates - Direct and Overlapping Governments ................................... 138
Principal Property Taxpayers ................................................................................... 139
Property Tax Levies and Collections ....................................................................... 140
Debt Capacity
Ratios of Outstanding Debt by Type ........................................................................ 141
Ratios of General Bonded Debt Outstanding ........................................................... 142
Schedule of Direct and Overlapping Bonded Debt .................................................. 143
Schedule of Legal Debt Margin ............................................................................... 144
Demographic and Economic Information
Demographic and Economic Information ................................................................ 145
Principal Employers ................................................................................................. 146
Operating Information
Full-Time Equivalent Employees ............................................................................. 147
Operating Indicators ................................................................................................. 148
Capital Asset Statistics ............................................................................................. 149
COMPLIANCE SECTION
REPORT OF INDEPENDENT ACCOUNTANT’S ON COMPLIANCE ................. 150
INTRODUCTORY SECTION
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VILLAGE OF MORTON GROVE, ILLINOIS
PRINCIPAL OFFICIALS AND OFFICERS
December 31, 2015
ELECTED TITLE/POSITION TERM/APPOINTMENT ENDS
Daniel DiMaria Mayor April 2017
Bill Grear Trustee April 2017
Rita Minx Trustee April 2019
John Pietron Trustee April 2017
John Thill Trustee April 2019
Janine Witko Trustee April 2019
Ed Ramos Trustee April 2017
Connie Travis Village Clerk April 2017
APPOINTED
Ralph Czerwinski Village Administrator December 31, 2015
Hanna Sullivan Finance Director December 31, 2015
Nancy Radzevich Economic Development Director December 31, 2015
Teresa Hoffman Liston Corporation Counsel December 31, 2015
Thomas Friel Fire Chief December 31, 2015
Michael Simo Police Chief December 31, 2015
Andrew DeMonte Public Works Director December 31, 2015
Lauren Plahm Adjudication Hearing Officer December 31, 2015
Frank Tennant Village Prosecutor December 31, 2015
Village of Morton Grove
Organization Chart
2015
Village Citizens
President and Board of Trustees
Village Administrator
Administration Department Community & Economic Development
Civic Center Finance Department
Fire Department
Corporation Counsel
Police Department
Information Technology Department
Village Clerk Commissions and Committees
Advisory Commission on Aging
Appearance Commission
Board of Environmental Health
Community Relations Commission
Economic Development Commission
Fair Housing Commission
Finance Advisory Commission
Fire and Police Commission
Natural Resources Commission
Plan Commission/Zoning Board of Appeals
Traffic Safety Commission
Public Works Department
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September 16, 2016
The Citizens of the Village of Morton Grove,
Village President Dan DiMaria, Board of Trustees,
and Other Interested Parties
The Comprehensive Annual Financial Report of the Village of Morton Grove, Illinois for the year
ended December 31, 2015, is hereby submitted as mandated by both local ordinance and state
statute. These mandates require that the Village annually issue a report on its financial position
and activity presented in conformance with generally accepted accounting principles (GAAP) and
audited in accordance with generally accepted auditing standards (GAAS) by an independent firm
of certified public accountants.
Management staff assumes full responsibility for the completeness and reliability of the
information presented in this report. To provide a reasonable basis for making these
representations, management staff has established a comprehensive internal control framework
that is designed to protect the government’s assets from loss, theft, or misuse. Because the cost of
internal control should not exceed anticipated benefits, the objective is to provide reasonable
assurance, rather than absolute assurance, that the financial statements will be free of any material
misstatements. As management staff, we assert that, to the best of our knowledge and belief, this
financial report is complete and reliable in all material respects.
The Village’s financial statements have been audited by Sikich LLP, a firm of independent
certified public accountants. The independent auditor concluded that there was a reasonable basis
for rendering an unmodifed (“clean”) opinion on the Village of Morton Grove’s financial
statements for the year ended December 31, 2015. The independent auditor’s report is located at
the front of the financial section of this report.
Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s
report and provides a narrative introduction, overview and analysis of the basic financial
statements. MD&A complement this letter of transmittal and should be read in conjunction with
it.
Profile of the Village of Morton Grove
The Village of Morton Grove, incorporated in 1895, is a near north suburb of Chicago, located ten
miles northeast of O’Hare International Airport. The Village encompasses an area of five square
miles and has a population of 23,270 residents according to the 2010 census. The Village is a
diversified and balanced community of residential areas, completed by commercial and light to
medium manufacturing districts. Village residents are served by five elementary and two
secondary school districts.
Office of the Finance Director
6101 Capulina Avenue Morton Grove, IL 60053-2985
Tel: 847 965-4100 www.mortongroveil.org Fax: 847 965-4162
Board of Trustees and
Citizens of the Village of Morton Grove
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The Village of Morton Grove is governed as a home rule community under Illinois law and
operates under a President/Trustee form of government with a full time Administrator. The home
rule status was confirmed by a special referendum held on March 18, 1980.
As a home rule municipality, the Village is permitted to carry out its own governing procedures,
except where specifically prohibited by the State Legislature. The Village President and six
members Board of Trustees are elected at large for four-year terms. The President, with
concurrence from the Board, appoints the Village Administrator and all Department Directors.
The Village Administrator is the Chief Administrative Officer who oversees the day to day
operations of the Village. The Village has eight departments: police, fire, public works,
community and economic development, health and human services, code enforcement, finance
and administration.
The Village of Morton Grove Comprehensive Annual Financial Report (CAFR) includes all of its
governmental operation funds, pension trust funds (the Morton Grove Firefighters’ Pension Fund,
Morton Grove Police Pension Fund and the General Pension Fund). The accompanying financial
statements include only those funds of the Village, as there is no other organization for which it
has financial accountability. The pension funds are determined to be pension trust funds due to
their fiduciary and fiscal relationships with the Village as their sole purpose is to provide retirement
benefits to the Village’s civilian employees, sworn firefighters and police officers. The Public
Library is no longer reported as a discrete component unit with the implementation of GASB
Statement No 61.
The annual budget serves as the foundation for the Village’s financial planning and control.
Budgetary appropriations for the operations of various Village departments are established through
the adoption of an annual Budget Ordinance by the Village Board of Trustees.
On November 10, 1997, the Village Board of Trustees approved Ordinance 97-53 that changed
the fiscal year end date from April 30 to December 31. This was done to align property tax receipts
with the year they are intended to finance and allow the budget preparation process to begin when
municipal operations are generally at a more manageable level.
Local Economy
The Village of Morton Grove’s principal growth took place during the late 50’s and early 60’s
when the population increase from 7,427 to 20,533 residents. The Village primarily consists of
residential land uses. Significant industrial, office and commercial land uses are also located in
the community. Little vacant land remains for commercial and office development or light
manufacturing. Approximately twenty percent (20%) of the Village’s land area is Cook County
Forest Preserve property.
Although the Village’s population has stabilized several years ago, it remains a vibrant economic
community and is a desirable place to live. The unemployment rate remained relatively stable
over the years: however, it had risen to 8.9% in 2010 and remained the same until 2012 due to the
economic recession. Unemployment has decreased to 8.0% as of 2014.
Residents in Morton Grove enjoy a pleasant suburban environment with an easy commute into the
City of Chicago for work or entertainment.
Board of Trustees and
Citizens of the Village of Morton Grove
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The median income for a household in the village was $73,939, and the median income for a family
was $83,277. Males had a median income of $59,014 versus $54,052 for females. The per capita
income for the village was $32,676. About 5.6% of families and 6.8 % of the population were
below the poverty line, including 9.0% of those families with children under age 18 and 4.5% of
those ages 65 or over.
Like other communities, the Village of Morton Grove was affected by the prolonged national and
regional recession 2008 through 2012. Economist have declared this downturn to be a recession
as there has been a deterioration of the labor market, and declines in consumer spending, business
investments and industrial production. The economy is showing signs of improvement however
the recovery has been slow. The Federal Reserve increased the interest rates for the first time in
a decade at the end of 2015 to a current rate between 0.25-.5 percent.
There are several factors that impact the local finances of the Village. These factors include
desirability of goods and services provided by the local business community and action taken by
the Village Board. During the calendar year the Village recognized changes in the local economic
climate. The sales tax trend has shown signs of recovery. However building permits and business
license revenues have not returned to levels prior to the economic downturn.
The Village is impacted at the local level by regional, state, and national economic conditions as
well as governance of the State of Illinois and weather conditions. Several important revenue
sources are affected by economic conditions beyond the Village’s control. The State has not passed
a State budget, which could impact the local share of State revenues. Additionally, property tax
receipts collected by the Cook County are in flux as the billing and payment deadline dates are
often delayed further making it difficult to anticipate the cash flow and plan for the outstanding
debt service.
The economy is not expected to fully recover for several years. Local governments are still being
faced with the difficult choices of reducing service levels, assessing staffing levels, and
maintaining adequate reserves. The Village of Morton Grove has weathered this recession and
slow recovery very well. By re-evaluating every aspect of the Village’s operations for
opportunities for new revenues and cost containment. Some of the positive cost containment
results were due to staff reductions with limited backfill, procurement savings realized through a
municipal partnering initiative in joint proposals for goods and services, reductions in general
operating expenses as a result of re-evaluating many budgeted items and cost-sharing through new
intergovernmental agreements with neighboring communities.
The Village Board, Management and staff is pleased to report that they have been successful in
achieving their primary goal of maintaining service levels to the greatest extent possible while
taking measures to reduce their expenditures.
A number of infrastructure improvements have been completed throughout the Village in recent
years. These improvements are most prominent in the Village’s three tax increment financing
districts (TIF). The Lehigh/Ferris tax increment district has been designated for transit-oriented
development which has fostered new condominium and town home development. A main Village
arterial street is also scheduled for improvements in the upcoming years which will allow for
needed infrastructure upgrades and an improved streetscape.
Board of Trustees and
Citizens of the Village of Morton Grove
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Long-Term Financial Planning
An analysis of long range issues invariably focuses on the Village’s infrastructure. Approximately
$30 million of streets, alleys, bridges, water mains, and storm sewers are deployed throughout the
Village. Routine maintenance and restoration is a significant expense each year. The continued
viability of this infrastructure network is a priority for the Village Board.
In response to the long-range need to finance infrastructure work, the Village is very active in the
area of economic development. The Village works to attract new businesses to the community
while retaining and strengthening existing establishments. The Village has been active in its use
of tax increment financing (TIF) and private activity bonds assistance to promote economic
development. The ultimate goal is for the resulting economic growth to provide additional sales
tax and other resources to help support the existing tax base of the Village.
Major Initiatives and Accomplishments
The Village provided the framework goals to provide outstanding services and programs in a
fiscally prudent environment. The goals included continuing to improve the operating budget and
financial practices to promote efficient service delivery, fiscal responsibility and transparency,
continuing to improve operations, maximize quality of service and efficiency, enhancing the
Village’s community planning and economic development efforts, develop intergovernmental
relationships, enhancing the Village communication program to promote dissemination of
information to customers and improving the capital improvement program in an effective and
fiscally-responsible manner.
The Waukegan Road tax increment financing district has been successful in removing unsightly
properties and promoting a feeling of increased safety and pride in the community.
The Village has issued $10 million in bonds, partially to refund 6.4 million in bonds from 2007,
with the rest of the proceeds to fund the capital equipment and infrastructure improvements in and
for the Village, including waterworks and sewerage system improvements, street improvements
and the purchase of a new ambulance.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for
Excellence in Financial Reporting to the Village for its comprehensive annual financial report
(CAFR) for the fiscal year ended December 31, 2014. This was the twenty-seventh consecutive
year that the government has received this prestigious award. In order to be awarded a Certificate
of Achievement, the government must publish an easily readable and efficiently organized CAFR.
This report satisfied both generally accepted accounting principles (GAAP) and applicable legal
requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
CAFR continues to meet the Certificate of Achievement Program’s requirements and we are
submitting it to the GFOA to determine its eligibility certification.
Board of Trustees and
Citizens of the Village of Morton Grove
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The preparation of this report could not be accomplished without the efficient and dedicated
services of the entire staff of the Finance Department, and the cooperation and assistance of the
staffs of the other departments of the Village.
Finally, appreciation is expressed to the Village Administrator, Village President and Board of
Trustees for their leadership and support in planning and conducting the fiscal affairs of the Village
in a responsible manner.
Sincerely,
Hanna Sullivan
Finance Director
FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT
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INDEPENDENT AUDITOR’S REPORT
The Honorable President
Members of the Board of Trustees
Village of Morton Grove
Morton Grove, Illinois
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund and the aggregate remaining fund information of the
Village of Morton Grove, Illinois (the Village) as of and for the year ended December 31, 2015
and the related notes to financial statements, which collectively comprise the Village’s basic
financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally 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.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit . We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the Village’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Village’s internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
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Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund and the aggregate remaining fund information of the Village of Morton Grove,
Illinois, as of December 31, 2015, and the respective changes in financial position and, where
applicable, cash flows thereof for the year then ended in accordance with accounting principles
generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 13 to the financial statements, the Village adopted GASB Statement
No. 68, Accounting and Financial Reporting for Pensions - An Amendment of GASB Statement
No. 27 which established standards for measuring and recognizing liabilities, deferred inflows
and outflows of resources, and expenses; and modified certain disclosures in the notes to
financial statements and the required supplementary information. Our opinion is not modified
with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis and other required supplementary information be
presented to supplement the basic financial statements. Such information, although not a part of
the basic financial statements, is required by the Governmental Accounting Standards Board,
who considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic or historical context. We have applied certain
limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and
other knowledge we obtained during our audit of the basic financial statements. We do not
express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Village’s basic financial statements. The introductory section,
combining and individual fund financial statements and schedules and statistical section are
presented for purposes of additional analysis and are not a required part of the financial
statements. The combining and individual fund financial statements and schedules are the
responsibility of management and were derived from and relate directly to the underlying
accounting and other records used to prepare the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic financial statements
and certain additional procedures, including comparing and reconciling such information directly
to the underlying accounting and other records used to prepare the basic financial statements or
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to the basic financial statements themselves and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the
combining and individual fund financial statements are fairly stated in all material respects in
relation to the basic financial statements as a whole. The introductory and statistical sections
have not been subjected to the auditing procedures applied in the audit of the basic financial
statements and, accordingly, we do not express an opinion or provide any assurance on them.
We also have previously audited, in accordance with auditing standards generally accepted in the
United States of America, financial statements of the governmental activities, business-type
activities, each major fund and the aggregate remaining fund information of the Village as of and
for the year ended December 31, 2014 and we expressed unmodified opinions on those basic
financial statements. That audit was conducted for purposes of forming an opinion on the basic
financial statements as a whole. The 2014 comparative information included on certain
combining and individual fund statements and schedules are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such information is the
responsibility of management and was derived from and relates directly to the underlying
accounting and other records used to prepare the 2014 basic financial statements. The
information has been subjected to the auditing procedures applied in the audit of those basic
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the information is fairly stated in all material respects in relation to the
basic financial statements from which it has been derived.
Naperville, Illinois
September 16, 2016
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GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS
(See independent auditor’s report.)
MD&A 1
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS
DECEMBER 31, 2015
As management of the Village of Morton Grove, Illinois (“the Village”) or (“Morton Grove”),
we offer readers of the Village’s financial statements this narrative overview and analysis of the
financial activities of the Village for the calendar year ended December 31, 2015.
We encourage readers to consider the information presented here in conjunction with additional
information that we have furnished in our letter of transmittal, which can be found on pages iv-
viii of this report.
USING THIS ANNUAL REPORT
The accounting standards reflected in this report are designed to provide two perspectives of the
Village’s financial performance; a focus on the Village as a whole (government-wide) and a
focus on the major individual funds. Both perspectives (government-wide and major fund)
provide a broader basis upon which to compare and judge the Village’s financial accountability.
The Statement of Net Position and the Statement of Activities provided information about the
activities of the Village as a whole and present a longer-term view of the Village’s finances. For
governmental activities, these statements tell how these services were financed in the short term
as well as what is available for future spending. Fund financial statements also report the
Village’s operations in more detail than the government-wide statements by providing
information about the Village’s most significant funds. The remaining statements provide
financial information about fiduciary activities for which the Village acts solely as a trustee or
agent for the benefit of those outside of the government.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The government-wide financial statements are designed to provide readers with a broad
overview of the Village’s finances, in a manner similar to a private-sector business.
The Statement of Net Position reports information on all of the Village’s assets and deferred
outflows and liabilities and deferred inflows, 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 Village’s financial position is improving or deteriorating. Consideration of other
nonfinancial factors, such as changes in the Village’s property tax base and the condition of the
Village’s infrastructure, is needed to assess the overall health of the Village.
The Statement of Activities presents information showing how the Village’s net position
changed during the most recent calendar 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 result
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 2
in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation
leave).
Both of the government-wide financial statements distinguish functions of the Village that are
principally supported by taxes and intergovernmental revenues (governmental activities) from
other functions that are intended to recover all or a significant portion of their costs through user
fees and charges (business-type activities). The governmental activities reflect the Village’s
basic services, including general government, police, fire, public works, economic development,
senior services, emergency 911 services, fire alarm, tax increment financing districts, motor fuel
taxes and related expenditures, and capital projects. Sales tax, property tax levies, and shared
state income taxes finance the majority of these services. Business-type activities of the Village
consist of the municipal water and sewer system, solid waste and municipal parking operations.
FUND FINANCIAL STATEMENTS
A fund is a grouping of related accounts that is used to maintain control over resources that have
been segregated for specific activities or objectives. The Village, like other local governments,
uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the funds of the Village can be divided into three categories: governmental
funds, proprietary funds, and fiduciary funds.
GOVERNMENTAL FUNDS
Governmental Funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, governmental
fund financial statements focus on near-term inflows and outflows of spendable resources, as
well as on balances of spendable resources available at the end of the fiscal year. Such
information may be useful in evaluating a government’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for government funds with similar
information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the government’s near-term
financing decisions. Both the governmental fund balance sheet and the governmental funds
statement of revenues, expenditures and changes in fund balances provide a reconciliation to
facilitate the comparison between governmental funds and governmental activities.
The Village maintains twelve individual governmental funds. Information is presented separately
in the governmental funds balance sheet and in the governmental funds statement of revenues,
expenditures, and changes in fund balances for the General Fund, the Debt Service Fund, the
Lehigh/Ferris TIF Fund and the Waukegan Road TIF Fund and the Capital Projects Fund, all of
which are considered to be Major Funds. Data from the other seven governmental funds are
combined into a single, aggregated presentation. Individual fund data for each of these non-
major governmental funds is provided in the form of combining statements in a later section of
this report.
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 3
The Village adopts an Annual Budget for all funds. A budgetary comparison statement has been
provided where appropriate to demonstrate compliance with these budgets.
PROPRIETARY FUNDS
The Village maintains one type of proprietary fund. The Enterprise Fund is used to report the
same functions presented as business-type activities in the Government-Wide Financial
Statements. The Village uses an Enterprise Fund to account for its municipal water and sewer
operations, solid waste function and municipal parking lots.
Proprietary Funds provide the same type of information as the Government-Wide Financial
Statement, only in more detail. The Proprietary Fund financial statement provides separate
information for the Water and Sewer Fund, which is considered to be a major fund of the
Village. Individual fund information for non-major enterprise funds is found in combining
statements in a later section of this report.
FIDUCIARY FUNDS
Fiduciary Funds are used to account for resources held for the benefit of parties outside the
government, such as the Municipal Employees’ Retirement Fund, Police Pension Fund and
Firefighters’ Pension Fund. Fiduciary funds are not reflected in the government-wide financial
statements because the resources of those funds are not available to support the Village’s own
programs. The accounting use for fiduciary funds is much like that used for Proprietary Funds.
NOTES TO THE FINANCIAL STATEMENTS
The notes provide additional information that is essential to a full understanding of the data
provided in the Government-Wide and Fund Financial Statements. These notes can be found
beginning with page 22 of this report.
OTHER INFORMATION
In addition to the basic financial statements and accompanying notes, this report also presents
certain required supplementary information concerning the Village’s Illinois Municipal
Retirement Fund, Sherriff’s Law Enforcement Personnel Plan, Municipal Employee’s
Retirement Fund, Police and Firefighters’ Pension Fund, and Other Post-Employment Benefit
Employee Pension Obligation. The required supplementary information also contains budget to
actual comparison schedule for the General Fund, Lehigh/Ferris TIF Fund and the Waukegan
Road TIF Fund. Required supplementary information can be found on pages beginning with
page 87 of this report. The combining statements referred to earlier in connection with non-major
governmental funds are presented immediately following the required supplementary
information. Combining and individual fund statements and schedules for the Village can be
found on pages beginning with page 106 of this report.
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 4
GOVERNMENT-WIDE FINANCIAL ANALYSIS
This analysis and subsequent financial statements show a radically different net position for the
Village than in previous years. It is important to recognize that this change is attributable to the
Village of Morton Grove implementing GASB pronouncement 68, which established standards
for measuring and recognizing liabilities, deferred outflows and inflows of resources, and
expenses for defined-benefit pension plans. While this information was previously in the Notes
to Financial Statements, GASB 68 requires they be recognized as part of the entity wide financial
statements. This pronouncement has had a significant impact not only on the Village of Morton
Grove but every government agency that issues financial statements in accordance with GAAP.
The following tables show the net position of the Village of Morton Grove, December 31, 2015,
compared to December 31, 2014:
To record the liabilities for the Village’s Police, Fire, MERF, SLEP, and IMRF pensions, a
change in accounting principle was required. Governmental activities recognized a decrease to
beginning net position of $37,203,165. The change to business activities was a decrease to the
beginning net position of $935,922. Additionally, there was recognition of additional liabilities
and expenses related to the pension funds. A reconciliation between the governmental funds at
the fund level and the entity wide governmental activities is on page 10.
The Village’s net position, investment in capital assets of $50,731,224, reflects infrastructure,
land, buildings and improvements, machinery, and equipment less any related debt used to
acquire those assets that is still outstanding. The Village uses these capital assets to provide
services to citizens; consequently, these assets are not available for future spending. Although
the Village’s investment in its capital assets is reported net of related debt, it should be noted that
the resources needed to repay this debt must provide from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
Village of Morton Grove Net Position (in thousands)
Governmental Business-Type
Activities Activities Total
Category 12/31/15 12/31/14 12/31/15 12/31/14 12/31/15 12/31/14
Current and other assets 31,000$ 33,866$ 6,913$ 5,344$ 37,913$ 39,209$
Capital assets 68,207 57,430 9,167 9,427 77,375 66,856
Deferred outflows 25,339 44 1,545 - 26,884 44
Total assets and deferred outflows 124,546 91,340 17,625 14,771 142,171 106,111
Current and other Liabilities 3,073 1,855 1,399 1,135 4,472 2,990
Long-Term liabilities 120,020 42,613 8,363 3,995 128,382 46,610
Deferred inflows 11,029 10,137 160 - 11,189 10,137
Total liabilities and deferred inflows 134,122 54,605 9,922 5,130 144,044 59,735
Net position:
Net investment in capital assets 44,953 44,445 5,778 5,876 50,731 50,321
Restricted 17,293 15,894 - - 17,293 15,894
Unrestricted (71,822) (23,604) 1,925 3,764 (69,896) (19,840)
Total net position (9,575)$ 36,735$ 7,704$ 9,641$ (1,872)$ 46,374$
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 5
An additional portion, $17,293,933, of the Village’s net assets represents resources that are
subject to external restrictions on how they may be used, including restrictions for future street
improvements, debt service payments, public safety, and future capital development.
NORMAL IMPACTS
There are six basic (normal) transactions that will affect the comparability of the Statement of
Net Assets summary presentation:
1) Net Results of Activities – which will impact (increase/decrease) current assets and
unrestricted net position.
2) Borrowing for Capital – which will increase current assets and long-term debt
outstanding.
3) Spending Borrowed Proceeds on New Capital – which will reduce current assets and
increase capital assets. There is a second impact, an increase in invested in capital assets
and an increase in related net debt, which will not change the net investment in capital
assets.
4) Spending Nonborrowed Current Assets on New Capital – which will (a) reduce current
assets and increase capital assets and (b) will reduce unrestricted net position and
increase net investment in capital assets.
5) Principal Payment on Debt – which will (a) reduce current assets and reduce long-
term debt and (b) reduce unrestricted net position and increase net investment in capital
assets.
6) Reduction of Capital Assets through Depreciation – which will reduce capital assets
and reduce net investment in capital assets.
(This space intentionally left blank)
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 6
Following is a table that summarizes the change in net position of the Village at the close of the
fiscal year, with a comparison to the preceding fiscal year. Again an impact of GASB 68 is the
recognition of additional pension expense in the current year.
(This space intentionally left blank)
Village of Morton Grove Changes in Net Position (in thousands)
Governmental Business-Type
Activities Activities Total
Category 12/31/15 12/31/14 12/31/15 12/31/14 12/31/15 12/31/14
Revenues
Program revenues
Charges for services 4,369$ 4,390$ 10,764$ 10,722$ 15,133$ 15,112$
Operating Grants 1,078 829 - - 1,078 829
Capital Grants 141 159 60 58 200 218
General revenues
Taxes 26,995 25,355 - - 26,995 25,355
Investment income 18 16 2 3 20 19
Miscellaneous 236 363 321 302 557 665
Total revenues 32,836 31,112 11,147 11,085 43,984 42,197
Expenses
General government 5,122 3,750 5,122 3,750
Public safety 25,760 19,225 25,760 19,225
Streets and sidewalks 7,364 4,044 7,364 4,044
Vehicle maintenance 701 793 701 793
Health and human services 221 283 221 283
Community development 1,118 981 1,118 981
Building and inspectional services 714 795 714 795
Interest 943 781 943 781
Water and sewer 10,269 7,356 10,269 7,356
Solid Waste 1,869 1,858 1,869 1,858
Municipal Parking 11 11 11 11
Total expenses 41,943 30,652 12,149 9,225 54,092 39,877
Change in net position (9,107) 460 (1,001) 1,860 (10,108) 2,320
Prior period adjustment - - - - - -
Net position - January 1 36,735 36,275 9,640 7,781 46,375 44,056
Change In Accounting Principle (37,203) (936) (38,139)
Restated Net Position Jan 1 (468) 8,704 8,236
Net position - December 31 (9,575)$ 36,735$ 7,703$ 9,641$ (1,872)$ 46,376$
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 7
NORMAL IMPACTS
There are eight basic (normal) impacts on revenues and expenses are reflected below:
Revenues:
1) Economic Condition – which can reflect a declining, stable, or growing economic
environment and has a substantial impact on state income, sales and utility tax revenue as
well as public spending habits for building permits, elective user fees, and level of
consumption.
2) Increase/Decrease in Village-Approved Rates – while certain tax rates are set by
statute, the Village Board has significant authority to impose and periodically
increase/decrease rates (property taxes, water, sewer, impact fees, building fees, home
rule sales tax, etc.)
3) Changing Patterns in Intergovernmental and Grant Revenue (both Recurring and
Nonrecurring) – certain recurring revenues (state-shared revenues, etc.) may experience
significant changes periodically, while nonrecurring (or one-time) grants are less
predictable and often distorting on their impact on year-to-year comparisons.
4) Market Impacts on Investment Income – the Village’s investment policy is managed
using similar average maturity to most governments. Market conditions may cause
investment income to fluctuate.
Expenses:
5) Introduction of New Programs – within the functional expense categories (general
government, public works, public safety, etc.), individual programs may be added or
deleted to meet changing community needs.
6) Change in Authorized Personnel – changes in service demand may cause the Village
Board to increase/decrease authorized staffing. Personnel costs (salary and related
benefits).
7) Salary Increases (Annual Adjustments and Merit) – the ability to attract and retain
human and intellectual resources requires the Village to strive to approach a competitive
salary range position in the marketplace.
8) Inflation – while overall inflation appears to be reasonably modest, the Village is a
major consumer of certain commodities such as supplies, fuels, and parts. Some functions
may experience unusual commodity-specific increases.
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 8
GOVERNMENTAL ACTIVITIES
Revenues:
Revenues for governmental activities totaled $32,836,708 at December 31, 2015.
Property tax (and replacement tax) continues to be the Village’s largest revenue source
totaling $13,267,410 representing 40.40% of total governmental activity revenue. Sales
tax revenue was $6,801,069 or 20.71% of total governmental activity revenue. Charges
for Services revenue was $4,368,685 or 13.30% of total governmental activity revenue.
State income tax revenue was $2,476,003 or 7.54% of total governmental activity
revenue. Miscellaneous taxes revenue (local use, real estate transfer, hotel & motel tax,
food & beverage, gasoline tax and others) was $2,376,918 or 7.24% of total
governmental activity revenue. Telecommunication tax was $800,602 or 2.44% of total
governmental activity revenue. A utility tax (Electric & Natural gas tax) was $1,272,845
or 3.88% of total governmental activity revenue.
Comparison with Prior Year.
Property tax and replacement tax revenue increased by $424,231 or 3.30% from prior
year. Sales tax revenue increased by $387,214 or 6.04% from prior year. Charges for
Services revenue decreased by $21,462 or 0.49% from prior year. State income tax
revenue increased by $248,044 or 11.13% from prior year. Miscellaneous taxes revenue
(local use, real estate transfer, hotel & motel tax, food & beverage, gasoline tax and
others) increased by $516,790 or 27.78% from prior year. Telecommunication increased
by $19,436 or 2.49% from prior year. A utility tax (Electric & Natural gas tax) increased
by $43,962 or 3.58% from prior year
(This space intentionally left blank)
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 9
The following table graphically depicts the major revenue sources of the Village.
Prior Year Revenue by Source – Governmental Activities – For Comparison
Property Taxes
40.40%Investment
Income
0.05%
Telecomm Taxes
2.44%
Misc. Taxes
7.24%
Income Taxes
7.54%
Misc.
0.72%
Operating Grants
3.28%
Utility Taxes
3.88%
Cap. Grants
0.43%Sales Taxes
20.71%
Charges for
Services
13.30%
Revenues by Source -Governmental Activities
December 31, 2015
Property Taxes
41.28%
Investment
Income
0.05%
Telecomm Taxes
2.51%
Misc. Taxes
5.98%
Income Taxes
7.16%
Misc.
1.17%
Operating Grants
2.66%
Utility Taxes
3.95%
Cap. Grants
0.51%Sales Taxes
20.62%Charges for
Services
14.11%
Revenues by Source -Governmental Activities
December 31, 2014
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 10
Expenses
Expenses for governmental activities were $41,943,737 at December 31, 2015 and $30,651,969
at December 31, 2014, an increase of $11,291,768, or 36.84%.
The increase in expense for governmental activities is predominantly because the Village of
Morton Grove implemented GASB pronouncement 68, which established standards for
measuring and recognizing liabilities, deferred outflows and inflows of resources, and expenses
for defined-benefit pension plans.
The ‘Expense and Program Revenues’ table identifies those governmental functions where
program expenses exceed revenues. These deficits are expected as those governmental functions
are primarily support by General Revenues (for instance Property Taxes and Sales Taxes) rather
than the Program Revenues.
BUSINESS-TYPE ACTIVITIES
Business-Type activities posted program revenues of $10,823,843, while the costs of all
business-type activities totaled $12,149,623. Expenses exceeded revenues by $1,325,780 (prior
to miscellaneous income and investment income) primarily due to the implementation of GASB
68 as discussed above. The cash flow statement shows the proprietary funds activities generated
$1,807,053 in net cash from operating activities.
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 11
Revenues
The Village of Morton Grove purchases its water from the City of Chicago. In 2011, the City of
Chicago announced a series of rate increases over a 4 year period equal to 70%. Per Village
municipal code 7-4-5:
7-4-5-A4: whenever the City of Chicago, Illinois, increases its rates or charges for
the water sold to the Village of Morton Grove by an amount equal to or more than
one percent (1%) of its current rate or charges, the rates to be charged by the
village of Morton Grove to its customers for water shall be automatically
increased by a like percentage. Said rate increase shall become effective upon the
effective date of any rate increase by the city of Chicago.
7-4-5-A5: Additional Rate Increases: Beginning January 1, 2012, in addition to
the rate increases set forth in subsection A4 of this section, water rates will
increase by an additional three percent (3%) per year for the years 2012, 2013,
2014 and 2015
In 2015 the Village water rate increased by 8.5% but the current water rate charged to customers
of $10.81 per 1,000 Gallon remained unchanged. Water and Sewer Fund operating revenues
decreased by $231,574 or 2.58%.
The Village created the Solid Waste Fund to account for the financial activity of the Village
residential waste collection and disposal program. In May 2010 the Village’s staff assumed
responsibility for billing and residents are charged for waste removal and disposal as part of their
bi-monthly water bill. In 2014 Solid Waste operating revenues increased by $30,888 or 1.56%.
The Village created the Municipal Parking Fund to account for the Village parking lots and
monies received from permit sales. The Village staff is responsible for customers who signed a
yearly or quarterly lease for parking spaces near the Metra Station in Morton Grove. Operating
revenues for 2015 decreased by $2,102 or 3.5%. The Parking lot opened January 2011with 112
spaces available.
Expenses
Total expenses for water and sewer fund activities totaled $10,269,076, an increase of
$2,912,945, or 39.60% from prior year primarily as a result of the implementation of GASB 68.
Increase in the cost of water purchases also added to the current year expenses.
Total expenses for solid waste fund activities totaled $1,869,199, an increase of $11,276, or .61%
from prior year.
Total expenses from Municipal Parking Fund activities remained about the same as the prior year
at $11,348.
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 12
FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUND
As noted earlier, the Village uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.
GOVERNMENTAL FUNDS
The focus of the Village’s governmental funds is to provide information on the near-term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing
the Village’s financing requirement. In particular, unassigned fund balance may serve as a
useful measure of a government’s net resources available for spending at the end of the fiscal
year.
The Village’s governmental funds reported combining ending fund balances of $27,064,033,
which is $5,121,874, or 23.34% higher than last year’s total of $21,942,159. Of this $27,064,033
total, $3,031,121 or 11.20% of the fund balance constitutes unassigned fund balance.
General Fund: The General Fund reported a surplus for the year of $828,495. Revenue
exceeded the budgeted amount due to increased tax revenues. The increase in expenditures was
related to personnel costs and capital outlay purchases.
The General Fund is the chief operating fund of the Village. At December 31, 2015, unassigned
fund balance in the General Fund was $5,891,331, which represents 67.89% of the total fund
balance of the General Fund. As a measure of the General Fund’s liquidity, it is useful to
compare unassigned fund balance to total expenditures. Unassigned fund balance in General
Fund represents approximately 23.0% of total General Fund expenditures.
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 13
Lehigh Ferris TIF Fund: Reported a fund balance increase of $745,871 due to incremental
property tax revenue exceeding the expenditures for 2015.
Waukegan Road TIF Fund: Reported a fund balance declined of $455,449 as a result of debt
service costs exceeding the incremental property tax revenue.
Debt Service Fund: Reported a fund balance increase of $290,528 as a result of 2013 budget
plan to increase the home rule sales tax allocation to pay the debt service costs which exceeded
the property tax revenue allocated.
Capital Projects Fund: Reported a fund balance increase of $3,142,417 primarily as a result of
the issuance of General Obligation bonds in 2015.
PROPRIETARY FUNDS
The Village’s proprietary funds provide the same type of information found in the government -
wide financial statements, but in more detail.
The Village reports the Water and Sewer Fund a major proprietary fund. The Village reports two
non-major proprietary funds, the Solid Waste Fund and the Municipal Parking Fund. The Water
and Sewer Fund accounts for all of the operations of the municipal water system. Water is
purchased from the City of Chicago at a rate of $3.81 per thousand gallons an 8.50% increase
from 2014. Water is then sold to all residential municipal customers at a rate of $10.81 with an
additional sewer rate of 1.15 per thousand gallons. Rates for commercial customers vary based
on the gallons of water consumed. The spread between the purchase and sales rates is intended to
finance the operations of the water system, including labor costs, supplies, repair and
replacement and required infrastructure maintenance.
CAPITAL ASSETS
The Village’s investment in net capital assets for its governmental and business type activities as
of December 31, 2015 was $67,802,560 (net of accumulated depreciation). This investment in
capital assets includes land (right of way), buildings, improvements, machinery & equipment,
and infrastructure. The minimum capital threshold remained at $10,000. For more information
regarding the Village’s capital assets, please refer to Note 4 of this CAFR.
(This space intentionally left blank)
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 14
Debt Administration
Long-Term Debt
At year-end, the Village had total outstanding debt of $22,875,826, as compared to $20,833,626
the previous year, an increase of $2,425,000, or 11.64% which is due to the issuance of
$10,010,000 in bonds coupled with the refunding of $6,655,000 issued in 2007 plus principal
retirements that reduced the outstanding liability on other bonds previously issued.
The following is a comparative statement of outstanding debt (excluding intergovernmental
agreements).
For information related to the Village’s long-term debt, please refer to Note 6 of this CAFR.
12/31/15 12/31/14 12/31/15 12/31/14 12/31/15 12/31/14
Construction in Progress 1,073$ -$ 13$ 21$ 1,086$ 21$
Right of Ways 43,972 43,972 - - 43,972 43,972
Infrastructure 5,730 6,008 - - 5,730 6,008
Buildings and Improvements 5,534 5,688 8,285 8,555 13,819 14,243
Machinery, Equipment and Vehicles 2,325 1,762 870 872 3,195 2,634
58,633$ 57,431$ 9,169$ 9,447$ 67,802$ 66,878$
Capital Assets - Net of Depreciation (in thousands)
Governmental Business-Type
Total
Activities Activities Total
Type of Debt
12/31/15 12/31/14 12/31/15 12/31/14 12/31/15 12/31/14
General Obligation Bonds 18,095$ 15,488$ 3,395$ 3,577$ 21,490$ 19,065$
Revolving loans - - - - - -
Installment Notes 1,386 1,769 - - 1,386 1,769
19,482$ 17,256$ 3,395$ 3,577$ 22,876$ 20,834$ Total Long Term Debt
Long Term Debt (in thousands)
Governmental
Activities
Business-Type
Activities Total
VILLAGE OF MORTON GROVE, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(See independent auditor’s report.)
MD&A 15
Economic Factors and Future Prospects
The slow recovery of the economy and slower revenue growth remain the Village’s biggest
challenge. The Village Board continues to be sensitive to the unknown financial
circumstances of residents and businesses by reducing its operating expenditures and limiting
tax increases. Some challenges that were considered during the development of 2016 budget;
Instability of the National and local economy: Weak financial markets continue to
dictate low interest rates on investments. Real estate remained very slow particularly for
Cook County with the .17% foreclosure compared to .13% Illinois and .08% National.
Housing foreclosures, declining tax bases, and reduced state pass-through revenues have
negatively impacted the fiscal condition of the local economy.
Pension liabilities: Recent changes in pension legislation allowed the municipalities
some relief in funding the pension obligation at 90% by 2040. The Village continues to
fund the pension based on actuarial results from the Department of Insurance report or
the independent actuary the Village and Pensions hired. Additionally, the Village
adjusted its actuarial rate for Police and Fire pension return on investment from 7.25% in
2012 to 7.125% in 2013 and future years.
Total operating revenues budgeted for 2016 are $53,919,124 (excluding transfers), a .04%
increase from the 2015 budget, mostly due to declining property value (EAV). The General
fund revenues are budgeted at $27,067,692 (excluding transfers), an 803,624, or 3.0%
increase from 2015 due to a projected slight increase from state shared sales, income and
utility taxes. The Village’s total 2015 property tax levy payable in 2016 is $10,229,995, a
0% (zero) increase over the prior year’s tax levy.
Total Village spending for the 2016 budget is $62,388,785 (excluding transfers), which is
virtually no increase from the 2015 budget.
Requests for Information
This financial report is designed to provide a general overview of the Village’s finances for
all those with an interest in the Village’s operations. Questions concerning any of the
information provided in this report or request for additional financial information should be
addressed to the Office of the Finance Director, Village of Morton Grove, 6101 Capulina,
Morton Grove, Illinois, 60053.
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and cash equivalents 11,032,835$ 5,785,123$ 16,817,958$
Investments 2,503,877 1 2,503,878
Receivables (net, where applicable,
of allowances for uncollectibles)
Property taxes 10,541,361 - 10,541,361
Sales tax 1,828,733 - 1,828,733
State income tax 278,984 - 278,984
Accounts and allotments 1,227,764 1,096,501 2,324,265
Loan to developer 1,700,000 - 1,700,000
IRMA excess surplus 993,728 - 993,728
IPBC terminal reserve 594,122 - 594,122
Prepaid expenses 298,175 31,046 329,221
Land held for resale 9,572,376 - 9,572,376
Capital assets not being depreciated 45,045,445 12,889 45,058,334
Capital assets (net of
accumulated depreciation)13,589,476 9,154,750 22,744,226
Total assets 99,206,876 16,080,310 115,287,186
DEFERRED OUTFLOWS OF RESOURCES
Pension items - police pension 8,819,643 - 8,819,643
Pension items - fire pension 11,401,715 - 11,401,715
Pension items - IMRF 302,780 64,340 367,120
Pension items - SLEP 6,544 - 6,544
Pension items - MERF 4,595,633 1,480,663 6,076,296
Unamortized loss on refunding 213,078 - 213,078
Total deferred outflows of resources 25,339,393 1,545,003 26,884,396
Total assets and deferred outflows
of resources 124,546,269 17,625,313 142,171,582
Primary Government
VILLAGE OF MORTON GROVE, ILLINOIS
STATEMENT OF NET POSITION
December 31, 2015
(This statement is continued on the following page.)
- 4 -
Governmental Business-Type
Activities Activities Total
LIABILITIES
Accounts payable 1,411,154$ 1,304,213$ 2,715,367$
Accrued salaries and wages 505,113 50,946 556,059
Other payables 87,332 - 87,332
Accrued interest payable 64,087 7,883 71,970
Deposits - refundable 320,388 50 320,438
Unearned revenue 172,813 35,465 208,278
Due to fiduciary funds 510,853 - 510,853
Noncurrent liabilities
Due within one year 2,643,322 199,177 2,842,499
Due in more than one year 117,377,395 8,164,010 125,541,405
Total liabilities 123,092,457 9,761,744 132,854,201
DEFERRED INFLOWS OF RESOURCES
Pension items - IMRF 96,269 20,458 116,727
Pension items - MERF 432,645 139,393 572,038
Unearned revenue - property taxes 10,500,269 - 10,500,269
Total deferred inflows of resources 11,029,183 159,851 11,189,034
Total liabilities and deferred inflows
of resources 134,121,640 9,921,595 144,043,235
NET POSITION
Net investment in capital assets 44,953,060 5,778,164 50,731,224
Restricted for
Public safety 1,168,217 - 1,168,217
Debt service 337,367 - 337,367
Community development 15,018,344 - 15,018,344
Highways and streets 765,044 - 765,044
Restricted 4,961 - 4,961
Unrestricted (71,822,364) 1,925,554 (69,896,810)
TOTAL NET POSITION (9,575,371)$ 7,703,718$ (1,871,653)$
STATEMENT OF NET POSITION (Continued)
December 31, 2015
Primary Government
VILLAGE OF MORTON GROVE, ILLINOIS
See accompanying notes to financial statements.
- 5 -
Operating Capital
Charges Grants and Grants and
FUNCTIONS/PROGRAMS Expenses for Services Contributions Contributions
PRIMARY GOVERNMENT
Governmental Activities
General government 5,122,457$ 3,273,344$ -$ -$
Public safety 25,760,081 1,087,239 405,269 -
Streets and sidewalks 7,364,136 8,102 672,235 94,850
Vehicle maintenance 701,174 - - -
Health and human services 220,531 - - -
Community development 1,118,066 - - 46,624
Building and inspectional services 714,270 - - -
Interest 943,022 - - -
Total governmental activities 41,943,737 4,368,685 1,077,504 141,474
Business-Type Activities
Water and sewer 10,269,076 8,691,690 - 59,601
Solid waste 1,869,199 2,014,617 - -
Municipal parking 11,348 57,935 - -
Total business-type activities 12,149,623 10,764,242 - 59,601
TOTAL PRIMARY GOVERNMENT 54,093,360$ 15,132,927$ 1,077,504$ 201,075$
CHANGE IN NET POSITION
NET POSITION, JANUARY 1
NET POSITION (DEFICIT), JANUARY 1, RESTATED
Program Revenues
VILLAGE OF MORTON GROVE, ILLINOIS
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2015
- 6 -
Governmental Business-Type
Activities Activities Total
(1,849,113)$ -$ (1,849,113)$
(24,267,573) - (24,267,573)
(6,588,949) - (6,588,949)
(701,174) - (701,174)
(220,531) - (220,531)
(1,071,442) - (1,071,442)
(714,270) - (714,270)
(943,022) - (943,022)
(36,356,074) - (36,356,074)
- (1,517,785) (1,517,785)
- 145,418 145,418
- 46,587 46,587
- (1,325,780) (1,325,780)
(36,356,074) (1,325,780) (37,681,854)
General Revenues
Taxes
Property 12,861,602 - 12,861,602
Sales 6,801,069 - 6,801,069
Utility 1,272,845 - 1,272,845
Telecommunications 800,602 - 800,602
Real estate transfer 577,614 - 577,614
Hotel/motel 89,824 - 89,824
Food and beverage 428,635 - 428,635
Gasoline 340,257 - 340,257
Other 423,019 - 423,019
Intergovernmental
Income 2,476,003 - 2,476,003
Local use 517,569 - 517,569
Personal property replacement 405,808 - 405,808
Investment income 17,912 2,322 20,234
Gain on sale of capital assets - 6,300 6,300
Miscellaneous 236,286 315,446 551,732
Total 27,249,045 324,068 27,573,113
CHANGE IN NET POSITION (9,107,029) (1,001,712) (10,108,741)
NET POSITION, JANUARY 1 36,734,823 9,641,353 46,376,176
Change in accounting principle (37,203,165) (935,923) (38,139,088)
NET POSITION (DEFICIT), JANUARY 1, RESTATED (468,342) 8,705,430 8,237,088
NET POSITION (DEFICIT), DECEMBER 31 (9,575,371)$ 7,703,718$ (1,871,653)$
Primary Government
Net (Expense) Revenue and Change in Net Position
See accompanying notes to financial statements.
- 7 -
Lehigh/Ferris Waukegan Debt Capital
General TIF Road TIF Service Projects Nonmajor Total
Cash and cash equivalents 3,310,146$ 3,922,529$ -$ 152,256$ 1,784,065$ 1,863,839$ 11,032,835$
Investments - - - 169,755 2,238,847 95,275 2,503,877
Receivables
Property taxes 9,588,954 3,602 - 845,972 102,833 - 10,541,361
Sales tax 1,523,317 - - 12,500 6,250 286,666 1,828,733
State income tax 278,984 - - - - - 278,984
Accounts and allotments 1,004,505 - - - - 223,259 1,227,764
Due from other funds 275,977 - - - - - 275,977
Prepaids 192 - - - 297,983 - 298,175
Loan to developer - 1,700,000 - - - - 1,700,000
Advances to other funds 2,781,489 44,364 - - - - 2,825,853
IRMA excess surplus 993,728 - - - - - 993,728
IPBC terminal reserve 594,122 - - - - - 594,122
Land held for resale - 9,572,376 - - - - 9,572,376
TOTAL ASSETS 20,351,414$ 15,242,871$ -$ 1,180,483$ 4,429,978$ 2,469,039$ 43,673,785$
ASSETS
VILLAGE OF MORTON GROVE, ILLINOIS
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2015
- 8 -
Lehigh/Ferris Waukegan Debt Capital
General TIF Road TIF Service Projects Nonmajor Total
LIABILITIES
Accounts payable and retainage payable 522,274$ 224,527$ -$ -$ 431,929$ 232,424$ 1,411,154$
Accrued salaries and wages 505,113 - - - - - 505,113
Other payables 87,332 - - - - - 87,332
Unearned revenue 172,813 - - - - - 172,813
Deposits - refundable 320,388 - - - - - 320,388
Due to other funds - - - - - 275,977 275,977
Due to fiduciary funds 510,853 - - - - - 510,853
Advances from other funds - - 2,539,841 - - 286,012 2,825,853
Total liabilities 2,118,773 224,527 2,539,841 - 431,929 794,413 6,109,483
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - property taxes 9,554,668 - - 843,116 102,485 - 10,500,269
Total deferred inflows of resources 9,554,668 - - 843,116 102,485 - 10,500,269
Total liabilities and deferred inflows of resources 11,673,441 224,527 2,539,841 843,116 534,414 794,413 16,609,752
FUND BALANCES (DEFICIT)
Nonspendable
Advance to other funds 2,781,489 - - - - - 2,781,489
Prepaids 192 - - - 297,983 - 298,175
Restricted for
Public safety - - - - - 1,168,217 1,168,217
Debt service - - - 337,367 - - 337,367
Capital improvements - unspent bond proceeds - - - - 3,597,581 - 3,597,581
Community development - 15,018,344 - - - - 15,018,344
Highways and streets - - - - - 765,044 765,044
Retirement 4,961 - - - - - 4,961
Committed for commuter improvements - - - - - 61,734 61,734
Unassigned (deficit)5,891,331 - (2,539,841) - - (320,369) 3,031,121
Total fund balances (deficit)8,677,973 15,018,344 (2,539,841) 337,367 3,895,564 1,674,626 27,064,033
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES 20,351,414$ 15,242,871$ -$ 1,180,483$ 4,429,978$ 2,469,039$ 43,673,785$
OF RESOURCES AND FUND BALANCES
LIABILITIES, DEFERRED INFLOWS
See accompanying notes to financial statements.
- 9 -
FUND BALANCES OF GOVERNMENTAL FUNDS 27,064,033$
Amounts reported for governmental activities in the statement of net
position are different because:
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the governmental funds 58,634,921
Interest payable is not due and payable in the current period and, therefore,
not reported in the governmental funds (64,087)
Differences between expected and actual experiences, assumption changes, and
net difference between projected and actual earnings for the Police Pension
Fund are recognized as deferred outflows and inflows of resources on the
statement of net position 8,819,643
Differences between expected and actual experiences, assumption changes, and
net difference between projected and actual earnings for the Firefighters' Pension
Fund are recognized as deferred outflows and inflows of resources on the
statement of net position 11,401,715
Differences between expected and actual experiences, assumption changes, and
net difference between projected and actual earnings for the Illinois Municipal
Retirement Fund are recognized as deferred outflows and inflows of resources
on the statement of net position 206,511
Differences between expected and actual experiences, assumption changes, and
net difference between projected and actual earnings for the Sherriff's Law
Enforcement Personnel Plan are recognized as deferred outflows and inflows
of resources on the statement of net position 6,544
Differences between expected and actual experiences, assumption changes, and
net difference between projected and actual earnings for the Municipal Employers'
Retirement Plan are recognized as deferred outflows and inflows of resources
on the statement of net position 4,162,988
Long-term liabilities are not due and payable in the current period and,
therefore, are not reported in the governmental funds
General obligation bonds payable (18,095,400)
Installment notes payable (1,385,826)
Intergovernmental agreement payable (2,407,781)
Net pension liability - police pension (38,324,934)
Net pension liability - fire pension (38,809,232)
Net pension liability - IMRF (818,888)
Net pension liability - SLEP (4,381)
Net pension liability - MERF (13,258,782)
Net other postemployment benefits obligation (4,665,511)
Compensated absences (781,604)
The unamortized bond premium is not a current financial resource and,
therefore, is not reported in the governmental funds (1,472,259)
The unamortized bond discount is not a current financial resource and,
therefore, is not reported in the governmental funds 3,881
The unamortized loss on bond refunding is shown as a deferred outflow
on the statement of net position 213,078
NET POSITION OF GOVERNMENTAL ACTIVITIES (9,575,371)$
VILLAGE OF MORTON GROVE, ILLINOIS
RECONCILIATION OF FUND BALANCES OF GOVERNMENTAL FUNDS TO THE
GOVERNMENTAL ACTIVITIES IN THE STATEMENT OF NET POSITION
December 31, 2015
See accompanying notes to financial statements.
- 10 -
Lehigh/Ferris Waukegan
General TIF Road TIF
REVENUES
Taxes 18,890,590$ 2,122,746$ 430,702$
Licenses and permits 1,826,803 - -
Intergovernmental 3,498,297 - -
Surcharges - - -
Charges for services 827,482 - -
Fines 717,300 - -
Investment income 8,841 4,830 162
Cable TV franchise fees 336,620 - -
Miscellaneous 213,608 17,000 -
Total revenues 26,319,541 2,144,576 430,864
EXPENDITURES
Current
General government 3,259,332 - -
Public safety 18,075,211 - -
Streets and sidewalks 2,391,854 - -
Vehicle maintenance 701,174 - -
Health and human services 217,248 - -
Community development 260,196 276,299 803
Building and inspectional services 707,754 - -
Debt service
Principal retirement - 535,000 752,366
Interest and fiscal charges - 307,746 132,998
Capital outlay
Capital projects - 92,987 146
Total expenditures 25,612,769 1,212,032 886,313
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 706,772 932,544 (455,449)
OTHER FINANCING SOURCES (USES)
Transfers in 270,000 - -
Transfers (out)(163,783) (270,000) -
Issuance of general obligation bonds - 5,615,000 -
Premium on bonds issued - 825,848 -
Payment to escrow agent - (6,359,521) -
Proceeds from sale of capital assets 15,506 2,000 -
Total other financing sources (uses)121,723 (186,673) -
NET CHANGE IN FUND BALANCES 828,495 745,871 (455,449)
FUND BALANCES (DEFICIT), JANUARY 1 7,849,478 14,272,473 (2,084,392)
FUND BALANCES (DEFICIT), DECEMBER 31 8,677,973$ 15,018,344$ (2,539,841)$
VILLAGE OF MORTON GROVE, ILLINOIS
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2015
- 11 -
Debt Capital
Service Projects Nonmajor Total
878,286$ 125,223$ 1,147,920$ 23,595,467$
- - - 1,826,803
75,856 79,739 964,466 4,618,358
- - 283,028 283,028
- - 377,452 1,204,934
- - - 717,300
529 1,964 1,586 17,912
- - - 336,620
- 5,678 - 236,286
954,671 212,604 2,774,452 32,836,708
- - - 3,259,332
- - 416,158 18,491,369
- - 930,148 3,322,002
- - - 701,174
- - - 217,248
- - 847,814 1,385,112
- - - 707,754
377,834 - - 1,665,200
450,092 41,411 - 932,247
- 2,070,187 10,320 2,173,640
827,926 2,111,598 2,204,440 32,855,078
126,745 (1,898,994) 570,012 (18,370)
163,783 - - 433,783
- - - (433,783)
- 4,395,000 - 10,010,000
- 646,411 - 1,472,259
- - - (6,359,521)
- - - 17,506
163,783 5,041,411 - 5,140,244
290,528 3,142,417 570,012 5,121,874
46,839 753,147 1,104,614 21,942,159
337,367$ 3,895,564$ 1,674,626$ 27,064,033$
See accompanying notes to financial statements.
- 12 -
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS 5,121,874$
Amounts reported for governmental activities in the statement of activities
are different because:
Governmental funds report capital outlay as expenditures; however, they are
capitalized and depreciated in the statement of activities 2,798,609
Depreciation expense does not require the use of current financial statement
resources and, therefore, is not reported as in expenditure in the
governmental funds (1,593,302)
Governmental funds do not report compensated absences; however, they
are recognized as a reduction to expenses on the statement of activities (194,243)
The issuance of long-term debt (general obligation bonds) is reported as
an other financing source in governmental funds but as an increase of
principal outstanding in the statement of activities
Issuance of bonds (10,010,000)
Premium on issuance of bonds (1,472,259)
The repayment of the principal portion of general obligation bonds payable,
revolving notes payable and installment notes payable are reported as debt
service expenditures when due in governmental funds but as a reduction of
principal outstanding in the statement of activities 1,665,200
The payment to escrow agent for the refunding of long-term debt is reported
as an other financing use in the governmental funds but as
A decrease of principal outstanding in the statement of net position 6,120,000
A decrease of discount outstanding in the statement of net position 57,512
Loss on refunding amortized over the life of the bonds 182,009
The repayment of the principal portion of the intergovernmental agreement
payable is reported as an expenditure when due in governmental funds but
as a reduction of principal outstanding in the statement of activities 377,612
The amortization of the refunding loss is not reported in governmental funds,
but is reported in the statement of activities (12,425)
The amortization of the bond premium is not reported in governmental funds,
but is reported in the statement of activities -
The amortization of the bond discount is not reported in governmental funds,
but is reported in the statement of activities (1,331)
The change in the Police Pension Fund net pension liability and deferred
outflows/inflows of resources is not a source or use of financial resources (2,142,755)
For the Year Ended December 31, 2015
VILLAGE OF MORTON GROVE, ILLINOIS
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES TO THE
GOVERNMENTAL ACTIVITIES IN THE STATEMENT OF ACTIVITIES
(This statement is continued on the following page.)
- 13 -
Amounts reported for governmental activities in the statement of activities
are different because: (Continued)
The change in the Firefighters' Pension Fund net pension liability and deferred
outflows/inflows of resources is not a source or use of financial resources (2,721,550)$
The change in the Illinois Municipal Retirement Fund net pension liability and
deferred outflows/inflows of resources is not a source or use of financial resources (168,349)
The change in the Sheriff's Law Enforcement Personnel Plan net pension liability and
deferred outflows/inflows of resources is not a source or use of financial resources 4,433
The change in the Municipal Employers' Retirement Plan net pension liability and
deferred outflows/inflows of resources is not a source or use of financial resources (6,483,769)
The change in net other postemployment benefits obligations are reported only in
the statement of activities (637,276)
The change in the accrued interest payable on long-term debt is reported as interest
expense on the statement of activities 2,981
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES (9,107,029)$
VILLAGE OF MORTON GROVE, ILLINOIS
RECONCILIATION OF GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES TO THE
GOVERNMENTAL ACTIVITIES IN THE STATEMENT OF ACTIVITIES (Continued)
For the Year Ended December 31, 2015
See accompanying notes to financial statements.
- 14 -
Water
and Sewer Nonmajor Total
CURRENT ASSETS
Cash and cash equivalents 5,180,066$ 605,057$ 5,785,123$
Investments 1 - 1
Receivables 1,038,020 58,481 1,096,501
Prepaid expenses - 31,046 31,046
Total current assets 6,218,087 694,584 6,912,671
NONCURRENT ASSETS
Capital assets - not being depreciated 12,889 - 12,889
Capital assets - net of accumulated depreciation 9,154,750 - 9,154,750
Total noncurrent assets 9,167,639 - 9,167,639
Total assets 15,385,726 694,584 16,080,310
DEFERRED OUTFLOWS OF RESOURCES
Pension items - IMRF 64,340 - 64,340
Pension items - MERF 1,480,663 - 1,480,663
Total deferred outflows of resources 1,545,003 - 1,545,003
Total assets and deferred outflows of resources 16,930,729 694,584 17,625,313
CURRENT LIABILITIES
Accounts payable 1,135,780 168,433 1,304,213
Accrued salaries and wages 50,946 - 50,946
Accrued interest payable 7,883 - 7,883
Deposits 50 - 50
Unearned revenue - 35,465 35,465
Compensated absences - current maturities 12,177 - 12,177
Bonds payable - current maturities 187,000 - 187,000
Total current liabilities 1,393,836 203,898 1,597,734
LONG-TERM LIABILITIES
Compensated absences 109,590 - 109,590
Net pension liability - IMRF 174,015 - 174,015
Net pension liability - MERF 4,271,835 - 4,271,835
Bonds payable, net of discount 3,202,475 - 3,202,475
Net other postemployment benefit obligation 406,095 - 406,095
Total long-term liabilities 8,164,010 - 8,164,010
Total liabilities 9,557,846 203,898 9,761,744
VILLAGE OF MORTON GROVE, ILLINOIS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2015
(This statement is continued on the following page.)
- 15 -
Water
and Sewer Nonmajor Total
DEFERRED INFLOWS OF RESOURCES
Pension items - IMRF 20,458$ -$ 20,458$
Pension items - MERF 139,393 - 139,393
Total deferred inflows of resources 159,851 - 159,851
Total liabilities and deferred inflows of resources 9,717,697 203,898 9,921,595
NET POSITION
Net investment in capital assets 5,778,164 - 5,778,164
Unrestricted 1,434,868 490,686 1,925,554
TOTAL NET POSITION 7,213,032$ 490,686$ 7,703,718$
STATEMENT OF NET POSITION (Continued)
PROPRIETARY FUNDS
December 31, 2015
VILLAGE OF MORTON GROVE, ILLINOIS
See accompanying notes to financial statements.
- 16 -
Water and
Sewer Nonmajor Total
OPERATING REVENUES
Water sales 7,880,315$ -$ 7,880,315$
Sewer charges 797,433 - 797,433
Waste charges - 2,014,617 2,014,617
Meter and connection fees 13,942 - 13,942
Parking charges - 57,935 57,935
Miscellaneous 111,247 - 111,247
Total operating revenues 8,802,937 2,072,552 10,875,489
OPERATING EXPENSES
Personal services 4,017,973 - 4,017,973
Contractual services and other charges 1,090,261 1,869,551 2,959,812
Water purchases 3,926,564 - 3,926,564
Capital outlay 77,729 - 77,729
Commodities 375,117 796 375,913
Administrative fees 142,500 10,200 152,700
Utilities 69,923 - 69,923
Total operating expenses 9,700,067 1,880,547 11,580,614
OPERATING INCOME (LOSS) BEFORE DEPRECIATION (897,130) 192,005 (705,125)
Depreciation 373,232 - 373,232
OPERATING INCOME (LOSS)(1,270,362) 192,005 (1,078,357)
NON-OPERATING REVENUES (EXPENSES)
Rental income 204,199 - 204,199
Investment income 2,317 5 2,322
Gain on sale of capital assets 6,300 - 6,300
Interest expense and fiscal agent fees (195,777) - (195,777)
Total non-operating revenues (expenses)17,039 5 17,044
NET INCOME (LOSS) BEFORE CAPITAL GRANTS (1,253,323) 192,010 (1,061,313)
CAPITAL GRANTS 59,601 - 59,601
CHANGE IN NET POSITION (1,193,722) 192,010 (1,001,712)
NET POSITION, JANUARY 1 9,342,677 298,676 9,641,353
Change in accounting principle (935,923) - (935,923)
NET POSITION, JANUARY 1, RESTATED 8,406,754 298,676 8,705,430
NET POSITION, DECEMBER 31 7,213,032$ 490,686$ 7,703,718$
VILLAGE OF MORTON GROVE, ILLINOIS
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
PROPRIETARY FUNDS
For the Year Ended December 31, 2015
See accompanying notes to financial statements.
- 17 -
Water and
Sewer Nonmajor Total
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users 8,679,700$ 2,072,329$ 10,752,029$
Receipts from miscellaneous revenues 111,247 - 111,247
Payments to suppliers (5,236,869) (1,898,993) (7,135,862)
Payments to employees (1,777,861) - (1,777,861)
Payments to other funds (142,500) - (142,500)
Net cash from operating activities 1,633,717 173,336 1,807,053
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Rental receipts 204,199 - 204,199
Net cash from noncapital
financing activities 204,199 - 204,199
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Intergovernmental 59,601 - 59,601
Purchase of capital assets (93,388) - (93,388)
Proceeds from sale of capital assets 6,300 - 6,300
Bond principal payments (182,234) - (182,234)
Interest payments (195,528) - (195,528)
Net cash from capital and
related financing activities (405,249) - (405,249)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 2,317 5 2,322
Purchase of investment 498,799 - 498,799
Net cash from investing activities 501,116 5 501,121
NET INCREASE IN CASH AND
CASH EQUIVALENTS 1,933,783 173,341 2,107,124
CASH AND CASH EQUIVALENTS, JANUARY 1 3,246,283 431,716 3,677,999
CASH AND CASH EQUIVALENTS, DECEMBER 31 5,180,066$ 605,057$ 5,785,123$
VILLAGE OF MORTON GROVE, ILLINOIS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended December 31, 2015
(This statement is continued on the following page.)
- 18 -
Water and
Sewer Nonmajor Total
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH FLOWS FROM OPERATING ACTIVITIES
Operating income (loss)(1,270,362)$ 192,005$ (1,078,357)$
Adjustments to reconcile operating income (loss) to net
cash from operating activities
Depreciation 373,232 - 373,232
Changes in operating assets and liabilities
Receivables (11,990) 22,072 10,082
Prepaid expenses - 9,418 9,418
Refundable deposits - - -
Accounts payable 302,725 (27,864) 274,861
Accrued salaries and wages 10,925 - 10,925
Net pension liability - IMRF 39,603 - 39,603
Pension items - IMRF (3,827) - (3,827)
Net pension liability - MERF 1,683,714 - 1,683,714
Pension items - MERF 405,285 - 405,285
Compensated absences 40,337 - 40,337
Other postemployment benefit obligation 64,075 - 64,075
Unearned revenues - (22,295) (22,295)
NET CASH FROM OPERATING ACTIVITIES 1,633,717$ 173,336$ 1,807,053$
SCHEDULE OF NONCASH TRANSACTIONS
None -$ -$ -$
PROPRIETARY FUNDS
For the Year Ended December 31, 2015
VILLAGE OF MORTON GROVE, ILLINOIS
STATEMENT OF CASH FLOWS (Continued)
See accompanying notes to financial statements.
- 19 -
VILLAGE OF MORTON GROVE, ILLINOIS
STATEMENT OF FIDUCIARY NET POSITION
PENSION TRUST FUNDS
December 31, 2015
Cash and cash equivalents 1,737,097$
Investments, at fair value
Equities 32,039,391
Corporate bonds 5,765,241
Annuity contracts 8,997,726
U.S. Treasury obligations 8,461,196
U.S. agency obligations 10,381,175
Municipal bonds 2,407,169
Receivables
Accrued interest 165,733
Other 420,713
Due from primary government 510,853
Prepaid expenses 6,397
Total assets 70,892,691
LIABILITIES
Accounts payable 40,481
Total liabilities 40,481
NET POSITION RESTRICTED FOR
PENSIONS 70,852,210$
ASSETS
See accompanying notes to financial statements.
- 20 -
VILLAGE OF MORTON GROVE, ILLINOIS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
PENSION TRUST FUNDS
For the Year Ended December 31, 2015
ADDITIONS
Contributions
Employer 4,836,617$
Employee 850,618
Total contributions 5,687,235
Investment income
Net depreciation in fair value
of investments (1,502,018)
Interest 2,116,240
Total investment income 614,222
Less investment expense (135,418)
Net investment income 478,804
Total additions 6,166,039
DEDUCTIONS
Retirement benefits 5,915,888
Duty/nonduty disability benefits 684,885
Surviving spouse benefits 583,354
Refunds 55,593
Administrative expenses 123,507
Total deductions 7,363,227
NET DECREASE (1,197,188)
NET POSITION RESTRICTED
FOR PENSIONS
January 1 72,049,398
December 31 70,852,210$
See accompanying notes to financial statements.
- 21 -
- 22 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Village of Morton Grove, Illinois (the Village) have been
prepared in conformity with accounting principles generally accepted in the United States
of America (hereinafter referred to as generally accepted accounting principles (GAAP)),
as applied to government units. The Governmental Accounting Standards Board (GASB) is
the accepted standard-setting body for establishing governmental accounting and financial
reporting principles. The more significant of the Village’s accounting policies are
described below.
a. Reporting Entity
The Village is a municipal corporation governed by an elected president and a
six-member Board of Trustees. As required by generally accepted accounting
principles, these financial statements present the Village (the primary government)
and its component units.
Based on the criteria of GASB Statement No 61, The Financial Reporting Entity:
Omnibus - an amendment of GASB Statements No. 14 and No. 34, there are no
component units for which the Village is considered to be financially accountable
for.
The Village’s financial statements include pension trust funds.
Municipal Employees’ Retirement Fund (MERF)
The Village’s municipal employees participate in the Municipal Employees ’
Retirement Fund (MERF). MERF functions for the benefit of these employees and is
governed by the Village Board of Trustees. The Village and MERF participants are
obligated to fund all MERF costs based upon actuarial valuations. The Village is
authorized to approve the actuarial assumptions used in the determination of
contribution levels. Although it possesses many of the characteristics of a legally
separate government, MERF is reported as if it were part of the primary government
because its sole purpose is to finance and administer the pensions of the Village ’s
municipal employees that are not members of the Police Pension Employees
Retirement System or the Firefighters’ Pension Employees Retirement System and
because of the fiduciary nature of such activities. MERF is reported as a pension trust
fund.
- 22 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 23 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
a. Reporting Entity (Continued)
Police Pension Employees Retirement System (PPERS)
The Village’s police employees participate in the Police Pension Employees
Retirement System (PPERS). PPERS functions for the benefit of these employees
and is governed by a five-member pension board. Two members appointed by the
Village’s President, one elected pension beneficiary and two elected police
employees constitute the pension board. The Village and PPERS participants are
obligated to fund all PPERS costs based upon actuarial valuati ons. The State of
Illinois is authorized to establish benefit levels and the Village is authorized to
approve the actuarial assumptions used in the determination of contribution levels.
Although it possesses many of the characteristics of a legally separat e government,
PPERS is reported as if it were part of the primary government because its sole
purpose is to finance and administer the pensions of the Village ’s police employees,
and because of the fiduciary nature of such activities. PPERS is reported as a pension
trust fund.
Firefighters’ Pension Employees Retirement System (FPERS)
The Village’s firefighters participate in the Firefighters’ Pension Employees
Retirement System (FPERS). FPERS functions for the benefit of these employees
and is governed by a five-member pension board. Two members appointed by the
Village’s President, one elected pension beneficiary and two elected fire employees
constitute the pension board. The Village and FPERS participants are obligate d to
fund all FPERS costs based upon actuarial valuations. The State of Illinois is
authorized to establish benefit levels and the Village is authorized to approve the
actuarial assumptions used in the determination of contribution levels. Although it
possesses many of the characteristics of a legally separate government, FPERS is
reported as if it were part of the primary government because its sole purpose is to
finance and administer the pensions of the Village’s firefighters, and because of the
fiduciary nature of such activities. FPERS is reported as a pension trust fund.
b. Fund Accounting
The Village uses funds to report on its financial position, changes in its financial
position and cash flows. Fund accounting is designed to demonstrate legal
compliance and to aid financial management by segregating transactions related to
certain government functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts.
Funds are classified into the following categories: governmental, proprietary and
fiduciary.
- 23 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 24 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
b. Fund Accounting (Continued)
Governmental funds are used to account for all or most of a government ’s general
activities, including the collection and disbursement of restricted, committed or
assigned monies (special revenue funds), the funds restricted, committed or assigned
for the acquisition or construction of capital assets (capital projects funds) and the
funds restricted, committed or assigned for servicing of governmental long-term debt
(debt service funds).
Proprietary funds are used to account for activities similar to those found in the
private sector, where the determination of net income is necessary or useful to sound
financial administration. Goods or services from such activities can be provided
either to outside parties (enterprise funds) or to other departments or agencies
primarily within the Village (internal service funds).
Fiduciary funds are used to account for assets held on behalf of outside part ies,
including other governments, or on behalf of other funds within the Village.
c. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the
statement of activities) report information on all of the nonfiduciary activities of the
Village. The effect of material interfund activity has been eliminated from these
statements. Interfund services provided and used between funds has not been
eliminated in the process of consolidation. Governmental activities which normally
are supported by taxes and intergovernmental revenues are reported separately from
business-type activities, which rely to a significant extent on fees and charges for
support.
The statement of activities demonstrates the degree to which the direct expenses of a
given function, segment or program are offset by program revenues. Direct expenses
are those that are clearly identifiable with a specific function or segment. Program
revenues include (1) charges to customers or applicants who purchase, use or directly
benefit from goods, services or privileges provided by a given function and (2) grants
and shared revenues that are restricted to meeting the operational or capital
requirements of a particular function. Taxes and other items are not properly
included among program revenues but are reported instead as general revenues.
Separate financial statements are provided for governmental funds. Major individual
governmental funds are reported as separate columns in the fund financial
statements.
- 24 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 25 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
c. Government-Wide and Fund Financial Statements (Continued)
The Village reports the following major governmental funds:
The General Fund is the Village’s primary operating fund. It accounts for all
financial resources of the Village, except those accounted for in another fund.
Lehigh/Ferris Tax Increment Financing Fund accounts for tax increment
revenue and other financial resources received along with the costs related to
the Village’s Tax Increment Financing (TIF) District. The fund entails the TIF
District along Lehigh and Ferris Avenues. The TIF District is authorized by
state law and is created to promote redevelopment of certain parcels declared
as “blighted” into a higher and more productive land use.
The Waukegan Road Tax Increment Financing Fund accounts for tax
increment revenue and other financial resources received along with the costs
related to the Village’s Tax Increment Financing (TIF) District. The fund
entails the TIF District along Waukegan Road. The TIF District is authorized
by state law and is created to promote redevelopment of certain parcels
declared as “blighted” into a higher and more productive land use.
The Debt Service Fund is used to account for the payment of governmental
long-term debt. The Village has elected to report the fund as major.
The Capital Projects Fund accounts for property taxes levied and other
resources restricted, committed or assigned primarily for major infrastructure
and other capital improvements.
The Village reports the following major proprietary fund:
The Water and Sewer Fund accounts for the provision of water and sewer
services to the residents of the Village. All activities necessary to provide such
services are accounted for in this fund, including administration, operations,
maintenance, financing and billing and collection.
The Village reports the following fiduciary funds:
The Village reports Pension Trust Funds as fiduciary funds to account for the
Municipal Employees’ Retirement Fund, the Police Pension Fund and the
Firefighter’s Pension Fund.
- 25 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 26 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
d. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund
and fiduciary fund financial statements. Revenues and additions are recorded when
earned and expenses and deductions are recorded when a liability is incurred. Grants
and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met. Operating revenues and expenses are
directly attributable to the operation of the proprietary funds. Non-operating
revenue/expenses are incidental to the operations of these funds.
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting. Under
the modified accrual basis of accounting, revenues are recognized when susceptible
to accrual (i.e., when they become both measurable and available). “Measurable”
means the amount of the transaction can be determ ined and “available” means
collectible within the current period or soon enough thereafter to be used to pay
liabilities of the current period, usually 60 days, except for sales tax and
telecommunication taxes which use a 90-day period. The Village recognizes property
taxes when they become both measurable and available in the year intended to
finance. Expenditures are recorded when the related fund liability is incurred.
Principal and interest on general long-term debt are recorded as expenditures when
due.
Sales taxes owed to the state at year end, franchise taxes, licenses, charges for
services and interest associated with the current fiscal period are all considered to be
susceptible to accrual and are recognized as revenues of the current fiscal period .
Income and motor fuel taxes and fines collected and held by the state or county at
year end on behalf of the Village also are recognized as revenue. Fines and permit
revenues are not susceptible to accrual because generally they are not measurable
until received in cash.
In applying the susceptible to accrual concept to intergovernmental revenues, the
legal and contractual requirements of the numerous individual programs are used as
guidelines. Monies that are virtually unrestricted as to purpose of expenditure, which
are usually revocable only for failure to comply with prescribed compliance
requirements, are reflected as revenues at the time of receipt or earlier if the
susceptible to accrual criteria are met.
- 26 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 27 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
d. Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
The Village reports unearned revenue and unavailable revenue on its financial
statements. Unearned revenue and unavailable revenue arises w hen a potential
revenue does not meet both the measurable and available or earned criteria for
recognition in the current period. Unearned revenue also arises when resources are
received by the Village before it has a legal claim to them, as when grant mon ies are
received prior to the incurrence of qualifying expenditures. In subsequent periods,
when both revenue recognition criteria are met, or when the Village has a legal claim
to the resources, the liability or deferred inflow of resources for unearned revenue or
unavailable revenue is removed from the financial statements and revenue is
recognized.
All proprietary funds and pension trust funds are accounted for on a flow of
economic resources measurement focus. With this measurement focus, all assets and
all liabilities associated with the operation of these funds are included on the
statement of net position. Proprietary fund operating statements present increases
(i.e., revenues) and decreases (i.e., expenses) in net position.
e. Cash and Investments
For purposes of the statement of cash flows, the Village ’s proprietary fund considers
all highly liquid investments with an original maturity of three months or less when
purchased to be cash equivalents.
f. Investments
Investments with a maturity of less than one year when purchased and non-negotiable
certificates of deposit are stated at cost or amortized cost. Investments with a
maturity greater than one year when purchased and all investments of the pension
trust funds are stated at fair value. Fair value is based on quoted market prices at
December 31 for debt securities, equity securities and mutual funds and contract
values for insurance contracts.
g. Interfund Transactions
During the course of operations, numerous transactions occur between individual
funds for goods provided or services rendered. These receivables and payables are
classified as “due from other funds” or “due to other funds” on the balance sheet.
Short-term interfund loans, if any, are classified as “interfund receivables/payables.”
- 27 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 28 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
g. Interfund Transactions (Continued)
Internal service transactions are accounted for as revenues, expenditures or expenses.
Transactions that constitute reimbursements to a fu nd for expenditures/expenses
initially made from it that are properly applicable to another fund are recorded as
expenditures/expenses in the reimbursing fund and as reductions of
expenditures/expenses in the fund that is reimbursed.
All other interfund transactions, except for interfund services provided and used are
reported as transfers.
Advances between funds, if any, are offset by nonspendable fund balance in
applicable governmental funds to indicate they are not available for appropriation
and are not expendable available financial resources.
h. Prepaid Items/Expenses
Payments made to vendors for services that will benefit periods beyond the date of
this report are recorded as prepaid items/expenses using the consumption method.
i. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets
(e.g., roads, bridges, storm sewers and similar items), are reported in the applicable
governmental or business-type activities columns in the government-wide financial
statements. Capital assets are defined by the Village as assets with an initial,
individual cost of more than $10,000 and an estimated useful life in excess of one
year. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated capital assets are recorded at estimated fair
market value at the date of donation.
The costs of normal maintenance and repairs, including street overlays, that do not
add to the value or service capacity of the asset or materially extend asset lives are
not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are
constructed. Interest incurred during the construction phase of capital assets of
business-type activities is included as part of the capitalized value of the assets
constructed. Property, plant and equipment is depreciated using the straight -line
method over the following estimated useful lives:
- 28 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 29 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
i. Capital Assets (Continued)
Years
Buildings, reservoirs, pump house, water mains and improvements 50
Garage and fence 50
Office building, remodeling and improvements 10-50
Improvements to water system 20
Vehicles 3-10
Equipment 3-10
Water meters 10-15
Infrastructure
Streets 50
Alleys 10
Signals 25
Infrastructure acquired prior to fiscal years ended June 30, 1980 is also reported.
j. Compensated Absences
Vested or accumulated vacation leave that is matured is reported as an expenditure
and a fund liability of the governmental fund that will pay it in the governmental
fund financial statements. Vested or accumulated vacation leave of proprietary funds
and governmental activities is recorded as an expense and liability of those funds as
the benefits accrue to employees. No liability is recorded for nonvesting
accumulating rights to receive sick pay benefits. However, an expenditure is reported
and a liability is recognized for that portion of accumulating sick leave benefits that it
is estimated will be taken as “terminal leave” at retirement.
In prior years, the General and Water and Sewer Funds have been used to liquidate
the liability for compensated absences.
In addition, the Village has recorded $703,521 for sick time payments to be made in
the future to all civilian employees who are at least age 50 or are any age, but have 30
years of service and sworn personnel who are at least age 50 and have 20 years of
service.
k. Rebatable Arbitrage
The Village reports rebatable arbitrage, if any, as a liability and expense in the
governmental activities column in the government -wide financial statements.
- 29 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 30 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
l. Long-Term Obligations
In the government-wide financial statements and proprietary fund in the fund
financial statements, long-term debt and other long-term obligations are reported as
liabilities in the applicable governmental activities, business -type activities or
proprietary fund financial statements. Bond premiums and discounts, gains/losses or
refundings, as well as issuance costs, are deferred and amortized over the life of the
bonds. Bonds payable are reported net of the applicable bond premium or discount
and gains/losses or refundings. Issuance costs, whether or not withheld from the
actual debt proceeds received, are reported as expenses.
In the fund financial statements, governmental funds recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount
of debt issued is reported as other financing sources. Premiums received on debt
issuances are reported as other financing sources while discounts on debt issuances
are reported as other financing uses. Issuance costs, whether or not withheld from the
actual debt proceeds received, are reported as expenditures.
m. Fund Balance/Net Position
In the fund financial statements, governmental funds report nonspendable fund
balance for amounts that are either not in spendable form or are legally or
contractually required to be maintained intact. Restrictions of fund balance are
reported for amounts constrained by legal restrictions from outside parties for use for
a specific purpose or externally imposed by outside entities or from enabling
legislation adopted by the Village. Committed fund balance is constrained by formal
actions of the Village’s Board of Trustees, which is considered the Village ’s highest
level of decision-making authority. Formal actions include ordinances approved by
the Board of Trustees. Assigned fund balance represents amounts constrained by the
Village’s intent to use them for a specific purpose. The authority to assign fund
balance has been delegated to the Finance Director. Any residual fund balance in the
General Fund and any deficit fund balance of any other governmental fund are
reported as unassigned.
The Village has not yet adopted a flow of fund s policy; therefore, in accordance with
GASB Statement No. 54, the default flow of funds has been applied which prescribes
that the funds with the highest level of constraint are expended first. If restricted or
unrestricted funds are available for spending, the restricted funds are spent first.
Additionally, if different levels of unrestricted funds are available for spending the
Village considers committed funds to be expended first followed by assigned funds
and then unassigned funds.
- 30 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 31 -
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
m. Fund Balance/Net Position (Continued)
In the government-wide financial statements, restricted net positions are legally
restricted by outside parties for a specific purpose. None of the Village’s net
positions are restricted as a result of enabling legislation adopted by the Village. Net
investment in capital assets represents the book value of capital assets less any
long-term debt principal outstanding issued to construct capital assets.
n. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a
separate section for deferred outflows of resources. This separate financial statement
element, deferred outflows of resources, represents a consumption of net position
that applies to a future period(s) and so will not be recognized as an outflow of
resources (expense/expenditure) until then . In addition to liabilities, the statement of
financial position will sometimes report a separate section for deferred inflows of
resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to a future period(s) and so will
not be recognized as an inflow of resources (revenue) until that time.
o. Accounting Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of continge nt
assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenditures/expenses during the reporting period. Actual results
could differ from those estimates.
2. DEPOSITS AND INVESTMENTS
Permitted Deposits and Investments - The Village’s investment policy authorizes the
Village to make deposits/invest in insured commercial banks, savings and loan institutions,
obligations of the U.S. Treasury and U.S. agencies, insured credit union shares, money
market mutual funds with portfolios of securities issued or guaranteed by the United States
Government or agreements to repurchase these same obligations, repurchase agreements,
short-term commercial paper rated within the three highest classifications by at lea st two
standard rating services, Illinois Funds and derivatives consistent with the Government
Finance Officers Association (GFOA) Recommended Practice on Use of Derivatives by
state and local governments. Pension funds may also invest in certain non-U.S. obligations,
Illinois municipal corporations tax anticipation warrants, veteran ’s loans, obligations of the
State of Illinois and its political subdivisions, and Illinois insurance company general and
separate accounts, mutual funds and equity securities.
- 31 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 32 -
2. DEPOSITS AND INVESTMENTS (Continued)
Illinois Funds is an investment pool managed by the State of Illinois, Office of the
Treasurer, which allows governments within the state to pool their funds for investment
purposes. Illinois Funds is not registered with the SEC as an investment company, but does
operate in a manner consistent with Rule 2a7 of the Investment Company Act of 19 40.
Investments in Illinois Funds are valued at Illinois Funds ’ share price, the price for which
the investment could be sold.
Illinois Metropolitan Investment Fund (IMET) is a no t-for-profit investment trust formed
pursuant to the Illinois Municipal Code and managed by a Board of Trustees elected from
the participating members. IMET is not registered with the SEC as an investment company.
Investments in IMET are valued at IMET ’s share price, the price for which the investment
could be sold.
It is the investment credit risk policy of the Village to invest its funds in a manner which
will provide the highest investment return with the maximum security while meeting the
daily cash flow demands of the Village and conforming to all state and local statutes
governing the investment of public funds, using the “prudent person” standard for
managing the overall portfolio. The primary objective of the policy is legality, safety
(preservation of capital and protection of investment principal), liquidity and yield.
Village Deposits
Custodial credit risk for deposits with financial institutions is the risk that in the event of a
bank’s failure, the Village’s deposits may not be returned to it. The Village’s investment
policy requires pledging of collateral with a fair value of 110% of all bank balances in
excess of federal depository insurance with the collateral held by an agent of the Village in
the Village’s name.
Village Investments
As of December 31, 2015, the Village had the following debt security investments and
maturities.
Investment Maturities (in Years)
Less More
Fair Value than 1 1-5 6-10 than 10
IMET (1-3 year fund) $ 265,030 $ - $ 265,030 $ - $ -
Negotiable CDs 2,238,847 2,238,847 - - -
TOTAL $ 2,503,877 $ 2,238,847 $ 265,030 $ - $ -
- 32 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 33 -
2. DEPOSITS AND INVESTMENTS (Continued)
Village Investments (Continued)
In accordance with its investment policy, the Village limits its exposure to interest rate risk
by structuring the portfolio so that securities mature to mee t cash requirements for ongoing
operations, thereby avoiding the need to sell securities on the open market prior to maturity
and by investing operating funds primarily in shorter-term securities. However, securities
may be sold prior to maturity if the sale minimizes the loss of principal in a declining credit
market, a security swap would improve the quality, yield or target duration of the portfolio
or for liquidity needs of the portfolio. Investments reserve funds may be purchased with
maturities to match future projects or liability requirements.
The Village limits its exposure to credit risk, the risk that the issuer of a debt security will
not pay its par value upon maturity, by primarily investing in obligations guaranteed by the
United States Government or securities issued by agencies of the United States
Government that are explicitly or implicitly guaranteed by the United States Government
or in pools. IMET is rated AAA.
Custodial credit risk for investments is the risk that, in the event of the failure of the
counterparty to the investment, the Village will not be able to recover the value of its
investments that are in possession of an outside party. To limit its exposure, the Village’s
investment policy requires all security transactions that are exposed to custodial credit risk
to be processed on a delivery versus payment (DVP) basis with the underlying investments
held by a third party acting as the Village’s agent separate from where the investment was
purchased or by the trust department of the bank where purchased, in the Village’s name.
Illinois Funds and IMET are not subject to custodial credit risk.
Concentration of credit risk - The Village’s investment policy does not contain any specific
guidelines on the diversification of the inve stment portfolio. At December 31, 2015, the
Village had 25% in negotiable certificate of deposits (CDs) and 3% in IMET.
3. RECEIVABLES
a. Property Taxes
Property taxes for 2015 attach as an enforceable lien on January 1, 2015 on property
values assessed as of the same date. Taxes are levied by December of the fiscal year
(by passage of a Tax Levy Ordinance). Tax bills are prepared by the County and
issued on or about February 1, 2015 and August 1, 2015 and are payable in two
installments, on or about March 1, 2015 and September 1, 2015. The County collects
such taxes and remits them periodically. The allowance for uncollectible taxes has
been stated at 3% of the tax levy, to reflect actual collection experience. Since the
2015 levy is intended to fund the 2016 fiscal year, the levy has been recorded as a
receivable and unavailable or deferred revenue.
- 33 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 34 -
3. RECEIVABLES (Continued)
b. Loan Receivable - Developer
In December 2010, the Village executed a loan of $1,700,000 to a developer in return
for the developer agreeing to build and operate a senior living facility in the
Lehigh/Ferris TIF District. The loan will be repaid upon sale or refinancing the
development. In addition, the Village will reimburse the developer up to $1,100,00 0
from new incremental taxes generated by the development during the life of the TIF
District.
4. CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2015 was as follows:
Beginning
Balances
January 1
Additions
Retirements
Ending
Balances
December 31
GOVERNMENTAL ACTIVITIES
Capital assets not being depreciated
Land (including right of ways) $ 43,972,244 $ - $ - $ 43,972,244
Construction in progress - 1,073,201 - 1,073,201
Total capital assets not being depreciated 43,972,244 1,073,201 - 45,045,445
Capital assets being depreciated
Buildings and improvements 18,175,872 446,955 - 18,622,827
Vehicles and equipment 6,562,347 1,009,916 139,826 7,432,437
Infrastructure 30,759,292 268,537 - 31,027,829
Total capital assets being depreciated 55,497,511 1,725,408 139,826 57,083,093
Less accumulated depreciation for
Buildings and improvements 12,487,617 601,741 - 13,089,358
Vehicles and equipment 4,800,196 446,311 139,826 5,106,681
Infrastructure 24,752,328 545,250 - 25,297,578
Total accumulated depreciation 42,040,141 1,593,302 139,826 43,493,617
Total capital assets being depreciated, net 13,457,370 132,106 - 13,589,476
GOVERNMENTAL ACTIVITIES
CAPITAL ASSETS, NET
$ 57,429,614
$ 1,205,307
$ -
$ 58,634,921
Depreciation expense was charged to functions/programs of the governmental activities as
follows:
GOVERNMENTAL ACTIVITIES
General government $ 444,530
Public safety 360,871
Streets and sidewalks 787,901
TOTAL DEPRECIATION EXPENSE - GOVERNMENTAL ACTIVITIES $ 1,593,302
- 34 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 35 -
4. CAPITAL ASSETS (Continued)
Beginning
Balances
January 1
Additions
Retirements
Ending
Balances
December 31
BUSINESS-TYPE ACTIVITIES
Capital assets not being depreciated
Construction in progress $ 20,608 $ 12,889 $ 20,608 $ 12,889
Total capital assets not being depreciated 20,608 12,889 20,608 12,889
Capital assets being depreciated
Buildings and improvements 16,258,310 - - 16,258,310
Equipment 2,315,554 101,107 33,838 2,382,823
Total capital assets being depreciated 18,573,864 101,107 33,838 18,641,133
Less accumulated depreciation for
Buildings and improvements 7,703,264 270,213 - 7,973,477
Equipment 1,443,725 103,019 33,838 1,512,906
Total accumulated depreciation 9,146,989 373,232 33,838 9,486,383
Total capital assets being
depreciated, net
9,426,875
(272,125)
-
9,154,750
BUSINESS-TYPE ACTIVITIES
CAPITAL ASSETS, NET
$ 9,447,483
$ (259,236)
$ 20,608
$ 9,167,639
5. RISK MANAGEMENT
The Village is exposed to various risks of loss related to torts; theft of, damage to and
destruction of assets; errors and omissions; injuries to employees ; employee health; and
natural disasters.
These risks (except employee health) are covered by the Village’s participation in
Intergovernmental Risk Management Association (IRMA), an organization of
municipalities and special villages in Northeastern Illinois which have formed an
association under the Illinois Intergovernmental Cooperations Statute to pool its risk
management needs. The agency administers a mix of self-insurance and commercial
insurance coverages; property/casualty and workers’ compensation claim administration/
litigation management services; unemployment claim administration/litigation
management services; unemployment cla im administration; extensive risk management/
loss control consulting and training programs ; and a risk information system and financial
reporting service for its members.
- 35 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 36 -
5. RISK MANAGEMENT (Continued)
The Village’s payments to IRMA are displayed on the financial statements as
expenditures/expenses in appropriate funds. Each member assumes the first $2,500 of each
occurrence and IRMA has a mix of self -insurance and commercial insurance at various
amounts above that level. Each member appoints one delegate, along with an alternate
delegate, to represent the member on the Board of Directors. The Village does not exercise
any control over the activities of IRMA beyond its representation on the Board of
Directors. The Village paid an original contribution that was based on the Village’s eligible
revenue as defined in the by-laws of IRMA and experience modification factors based on
past member loss experience.
The Village has a contractual obligation to fund any deficit o f IRMA attributable to a
membership year during which the Village was a member. Supplemental contributions may
be required to fund these deficits. No supplemental contributions were due at
December 31, 2015. The Village has recorded a receivable for the excess surplus balance
of $993,728 in the General Fund as of December 31, 2015.
The Village participates in the Intergovernmental Personnel Benefit Cooperative (IPBC).
IPBC is a public entity risk pool established by certain units of local government in Illinois
to administer some or all of the personnel benefit programs (primarily medical, dental and
life insurance coverage) offered by its members to their officers and employees and to the
officers and employees of certain other governmental, quasi governmental and nonprofit
public service entities. Risk of loss is retained by the Village, except that IPBC purchases
excess coverage policies. The Village had terminal reserve net of any deficits of other
subaccounts as of June 30, 2015 (most recent available) of $594,122. This amount was
declared as a dividend to the Village and, therefore, has been recorded as a receivable in
the General Fund.
Management consists of a Board of Directors comprised of one appointed representative
from each member. In addition, there are three officers, a Benefit Administrator and a
Treasurer. The Village does not exercise any control over activities of IPBC beyond its
representation on the Board of Directors.
6. LONG-TERM DEBT
a. General Obligation Bonds
The Village issues general obligation bonds to provide funds for the acquisition and
construction of major capital facilities. General obligation bonds have been issued
for both general government and proprietary activities. These bonds, therefore, are
reported in the proprietary fund if they are expected to be repaid from proprietary
revenues. In addition, general obligation bonds have been issued to refund general
obligation bonds.
- 36 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 37 -
6. LONG-TERM DEBT (Continued)
a. General Obligation Bonds (Continued)
General obligation bonds are direct obligations and pledge the full faith and credit of
the Village. General obligation bonds currently outstanding are as follows:
Fund Debt
Retired By
Balances
January 1
Additions
Reductions
Balances
December 31
Due Within
One Year
$9,200,000 General
Obligation Bonds Series
2007 dated November 1,
2007, due in annual
installments of $270,000
to $560,000 plus interest
at 4%, due on June 1 and
December 1 of each year.
Lehigh/
Ferris TIF
$ 6,655,000
$ -
$ 6,655,000
$ -
$ -
$4,920,000 General
Obligation Bonds, Series
2009A dated October 1,
2009, due in annual
installments of $355,000
to $600,000 plus interest
at 3.000% to 4.125%,
due on June 1 and
December 1 of each year.
Waukegan
Road
TIF
2,865,000
-
515,000
2,350,000
540,000
$8,130,000 Taxable
General Obligation
Bonds Series 2010B
dated March 31, 2010,
due in annual
installments of $415,000
to $1,870,000 plus
interest at 3.2% to 6.0%,
due on June 15 and
December 15 of each
year.
Debt
Service
Water
and
Sewer
4,552,800
3,577,200
-
-
232,400
182,600
4,320,400
3,394,600
238,000
187,000
$1,415,000 General
Obligation Bonds Series
2014 dated March 25,
2014, due in annual
installments of $470,000
to $475,000 plus interest
at 2.395% due on
June 15 and
December 15 of each
year.
Debt
Service
1,415,000
-
-
1,415,000
-
- 37 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 38 -
6. LONG-TERM DEBT (Continued)
a. General Obligation Bonds (Continued)
Fund Debt
Retired By
Balances
January 1
Additions
Reductions
Balances
December 31
Due Within
One Year
$10,010,000 General
Obligation Bonds Series
2015 dated March 18,
2015, due in annual
installments of $560,000
to $810,000 plus interest
at 4.000% due on June 1
and December 1 of each
year.
Debt
Service
and Lehigh
TIF
$ -
$ 10,010,000
$ -
$ 10,010,000
$ 985,000
TOTAL $ 19,065,000 $ 10,010,000 $ 7,585,000 $ 21,490,000 $ 1,950,000
b. Installment Notes Payable
The Village issues installment notes payable to provide funds for the acquisition of
property and the development of the tax increment financing villages. Installment
notes payable have been issued for both general government and proprietary
activities.
Fund Debt
Retired By
Balances
January 1
Additions
Reductions
Balances
December 31
Due Within
One Year
$3,165,000 General
Obligation Bank
Promissory Note for
projects related to the
Tax Increment Financing
Fund and the Economic
Development Fund
principal due
semiannually through
2018 with interest at
5.32%.
Waukegan
Road
TIF
$ 851,209
$ -
$ 237,366
$ 613,843
$ 247,158
$1,060,000 General
Obligation Bank
Promissory note, Series
2013 for land purchase,
principal is payable
annually over seven
years. Interest is at 2%
and is due beginning
May 31, 2014.
General
917,417
-
145,434
771,983
148,343
TOTAL $ 1,768,626 $ - $ 382,800 $ 1,385,826 $ 395,501
- 38 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 39 -
6. LONG-TERM DEBT (Continued)
c. Intergovernmental Agreement with School District 67
In 1996, the Village entered into an agreement with Morton Grove School
District 67. The agreement calls for the Village to remit to the school district a
portion of the proposed tax revenue due to projected growth in the equalized assessed
valuation for existing properties located on Waukegan Ro ad and existing on the date
when the TIF was formed. Payments are made December 31 of each year and shall
continue until the conclusion of the TIF at which time all future growth in the
equalized assessed valuation will be released for distribution of prop erty tax revenues
to the overlapping taxing jurisdictions. During the year ended December 31, 2015,
the Village made total intergovernmental payments of $236,891 from general (non-
TIF) revenues. The tax revenue is determined on an annual basis and the esti mated
future liability is shown below.
d. Intergovernmental Agreement with School District 70
In 2000, the Village entered into a second intergovernmental agreement, this time
with Morton Grove School District 70. The agreement calls for the Village to remit
to the school district a portion of the proposed tax revenue due to projected growth in
the equalized assessed valuation for existing properties located in the Lehigh/Ferris
TIF and existing on the date when the TIF was formed. As with the agreement with
School District 67, payments are made December 31 of each year and shall continue
until the conclusion of the TIF at which time all future growth in the equalized
assessed valuation will be released for distribution of property tax revenues to the
overlapping taxing jurisdictions. During the year ended December 31, 2015, the
Village made total intergovernmental payments of $140,720 from general (non-TIF)
revenues. The tax revenue is determined on an annual basis and the estimated future
liability is shown below.
Year
Ending
School
District 67
School
District 70
Total
2016 $ 253,938 $ 152,723 $ 406,661
2017 271,625 165,114 436,739
2018 289,975 177,909 467,884
2019 - 191,117 191,117
2020-2023 - 905,380 905,380
TOTAL $ 815,538 $ 1,592,243 $ 2,407,781
- 39 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 40 -
6. LONG-TERM DEBT (Continued)
e. Debt Service Requirements to Maturity
General Obligation Bonds
Year Governmental Activities Business-Type Activities
Ending Principal Interest Total Principal Interest Total
2016 $ 1,763,000 $ 834,735 $ 2,597,735 $ 187,000 $ 177,362 $ 364,362
2017 1,850,800 756,442 2,607,242 189,200 170,630 359,830
2018 2,038,600 671,747 2,710,347 191,400 163,062 354,462
2019 2,014,800 593,773 2,608,573 200,200 154,066 354,266
2020 2,098,800 506,041 2,604,841 211,200 144,657 355,857
2021 2,195,000 414,151 2,609,151 220,000 134,730 354,730
2022 2,136,800 317,615 2,454,415 233,200 124,390 357,590
2023 1,038,000 210,033 1,248,033 242,000 112,147 354,147
2024 1,089,200 157,209 1,246,409 250,800 99,321 350,121
2025 330,400 109,012 439,412 259,600 85,653 345,253
2026 341,600 90,675 432,275 268,400 71,245 339,645
2027 352,800 71,375 424,175 277,200 56,080 333,280
2028 411,600 50,736 462,336 323,400 39,864 363,264
2029 434,000 26,040 460,040 341,000 20,460 361,460
TOTAL $ 18,095,400 $ 4,809,584 $ 22,904,984 $ 3,394,600 $ 1,553,667 $ 4,948,267
Total Installment Notes Payable
Year Governmental Activities
Ending Principal Interest Total
2016 $ 395,501 $ 38,178 $ 433,679
2017 408,776 24,902 433,678
2018 263,555 11,691 275,246
2019 157,423 6,360 163,783
2020 160,571 3,211 163,782
TOTAL $ 1,385,826 $ 84,342 $ 1,470,168
- 40 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 41 -
6. LONG-TERM DEBT (Continued)
f. Changes in Long-Term Liabilities
During the fiscal year, the following changes occurred in liabilities reported on the
schedule of long-term liabilities payable by governmental funds:
Balances
January 1,
Restated
Additions
Reductions
Balances
December 31
Due Within
One Year
GOVERNMENTAL ACTIVITIES
General obligation bonds
payable
$ 15,487,800
$ 10,010,000
$ 7,402,400
$ 18,095,400
$ 1,763,000
Unamortized premium on bonds 57,511 1,472,259 57,511 1,472,259 -
Unamortized discount on bonds (5,212) - (1,331) (3,881) -
Installment notes payable 1,768,626 - 382,800 1,385,826 395,501
Intergovernmental agreement
payable
2,785,393
-
377,612
2,407,781
406,661
Net pension liability - IMRF 632,523 186,365 - 818,888 -
Net pension liability - SLEP 2,270 2,111 - 4,381 -
Net pension liability - MERF 8,032,928 5,225,854 - 13,258,782 -
Net pension liability - police
pension
27,362,536
10,962,398
-
38,324,934
-
Net pension liability - firefighters’
pension
24,685,967
14,123,265
-
38,809,232
-
Net other postemployment
benefit obligation
4,028,235
637,276
-
4,665,511
-
Compensated absences payable 587,361 338,084 143,841 781,604 78,160
TOTAL GOVERNMENTAL
ACTIVITIES DEBT
$ 85,425,938
$ 42,957,612
$ 8,362,833
$ 120,020,717
$ 2,643,322
As discussed in Note 12, beginning balances were restated to remove the net pension
obligation for the Municipal Employees’ Retirement (MERF), police pension and
firefighters’ pension and to record the opening net pension liability amounts for
IMRF, SLEP, MERF and Police and Firefighters ’ Pension Funds.
Governmental activities’ compensated absences, net pension liabilities for IMRF,
SLEP, MERF, police pension, firefighters ’ pension and net other postemployment
benefit obligation are liquidated by the General Fund, the fund in which the related
salary has been charged.
- 41 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 42 -
6. LONG-TERM DEBT (Continued)
f. Changes in Long-Term Liabilities (Continued)
Balances
January 1,
Restated
Additions
Reductions
Balances
December 31
Due Within
One Year
BUSINESS-TYPE ACTIVITIES
General obligation bonds
payable
$ 3,577,200
$ -
$ 182,600
$ 3,394,600
$ 187,000
Unamortized discount on bonds (5,491) - (366) (5,125) -
Net pension liability - IMRF 134,412 39,603 - 174,015 -
Net pension liability - MERF 2,588,121 1,683,714 - 4,271,835 -
Net other postemployment
benefit obligation
342,020
64,075
-
406,095
-
Compensated absences payable 81,430 48,480 8,143 121,767 12,177
TOTAL BUSINESS-TYPE DEBT $ 6,717,692 $ 1,835,872 $ 190,377 $ 8,363,187 $ 199,177
Business-type activities’ net other postemployment benefit obligation and
compensated absences are liquidated by the Water and Sewer Fund, the fund in
which the related salary has been charged.
g. Legal Debt Margin
The Village is a home rule municipality.
Article VII, Section 6(k) of the 1970 Illinois Constitution governs computation of the
legal debt margin.
“The General Assembly may limit by law the amount and require referendum
approval of debt to be incurred by home rule municipalities, payable from ad
valorem property tax receipts, only in excess of the following percentages of the
assessed value of its taxable property . . . (2) if its population is more than 25,000 and
less than 500,000 an aggregate of one percent: . . . indebtedness which is outstanding
on the effective date (July 1, 1971) of this constitution or which is thereafter
approved by referendum . . . shall not be included in the foregoing percentage
amounts.”
To date the General Assembly has set no limits for home rule municipalities.
- 42 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 43 -
6. LONG-TERM DEBT (Continued)
h. Refunding Bonds
On October 1, 2009, the Village issued $4,920,000 Series 2009A General Obligation
Refunding Bonds to advance refund $4,785,000 of the General Obligation
Promissory Note, Series 2002. The proceeds of the 2009 issuance were placed in an
irrevocable trust to provide all future debt service payments on the old bonds.
Accordingly, the trust account assets and the liability for the defeased bonds are not
included in the financial statements. The defeased bonds are due annually on June 1
through June 1, 2022, and are callable anytime after June 1, 2016. At Dece mber 31,
2015, $3,095,000 of the refunded notes were outstanding.
On March 18, 2015, the Village issued $10,010,000 General Obligation Bonds Series
2015 to advance refund $6,120,000 of the General Obligation Bonds, Series 2007
and for capital projects. A portion of the proceeds of the 2015 issuance were placed
in an irrevocable trust to provide all future debt service payments on the old bonds.
Accordingly, the trust account assets and the liability for the defeased bonds are not
included in the financial statements. Through the defeasance, the Village had a cash
flow savings of $406,088 and an economic gain of $370,443. The refunded bonds of
$6,120,000 were all paid from escrow on December 1, 2015.
i. Economic Development and Redevelopment Agreements
1. CVS, Inc.
During June 2006, CVS, Inc. (CVS) purchased the Osco Drug (Osco) store
with which the Village had previously entered into an economic development
agreement that stated that the total amount paid will not exceed $250,000 . It
was determined by legal counsel that the economic agreement that the Village
had with Osco remains applicable with CVS. Payment to Osco during 2006
through date of sale totaled $3,971. No amounts were due to CVS under the
terms of the agreement for the year ended December 31, 2015.
2. Gary D. McGrath Audi
On December 9, 2013, the Village entered into a redevelopment agreement
with Gary D. McGrath, a local auto dealership owner. The agreement calls for
Mr. McGrath to provide new jobs, substantial new property taxes, sales taxes,
and economic development for the Village. The Village will waive certain
permit fees, contribute $250,000 to the construction costs, and share sales tax
revenue generated by the Audi dealership as follows: the dealership will
receive 75% of sales taxes paid to the Village for the first ten years after the
dealership opens up to a maximum of $5,000,000. Amounts paid under the
terms of the agreement were $250,000 for year ended December 31, 2015.
- 43 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 44 -
6. LONG-TERM DEBT (Continued)
i. Economic Development and Redevelopment Agreements (Continued)
3. Bond Drug Company of Illinois, dba Walgreens and MRD - Morton Grove, LP
On June 1, 1999, the Village entered into a redevelopment agreement with
Bond Drug Company of Illinois (Walgreens) and MRD - Morton Grove, LP to
develop a site for a Walgreens Drug Store in the Village. The Village has
required, as part of the redevelopment agreement, that certain infrastructure
improvements be constructed. In order to comply with the Village’s
requirements for infrastructure improvement, the Village has agreed to enter
into a sales tax revenue sharing program upon the commencement of retail
operations to be public. The program will continue until the developer’s receipt
of $253,320 or ten years following the opening of the store, whichever comes
first. The first $110,000 of sales tax revenue of the $253,320 shall be retained
by the Village. The Village will retain 100% of the sales tax on the first
$2,000,000 of annual sales and will share equally in the sales tax on annual
sales exceeding $2,000,000. No amounts were due to Walgreens under the
terms of the agreement for the year ended December 31, 2015.
4. L & K Restaurants of Morton Grove LLC
On August 31, 2010, the Village entered into a development a greement with
L & K Restaurants of Morton Grove LLC to develop a new Culver ’s
Restaurant (Culver’s). The agreement requires the Village to reimburse the
developer 100% of sales taxes paid by the business for the first year after the
Culver’s store is open, and 50% of the sales taxes paid by the business from
year two through ten up to total revenue of $125,000 with additional property
tax and performance related payments up to an additional $100,00 0. No
amounts were due under the terms of the agreement for the year ended
December 31, 2015.
j. Noncommitment Debt
Industrial Revenue Bonds
On December 14, 2007, the Village approved the sale of $30,000,000 Cultural
Facility Variable Rate Demand Revenue Bonds, Series 2007 to be used for the
construction of a Holocaust Museum in Skokie, Illinois by a not-for-profit agency.
These bonds are industrial revenue bonds and are secured solely by the property
financed. The bonds are payable solely by the property owners. The Village is not
obligated in any manner for the repayment of the bonds. Accordingly, the bonds
outstanding are not reported as a liability in these financial statements.
- 44 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 45 -
7. INDIVIDUAL FUND DISCLOSURES
a. Due From/To Other Funds
Receivable Fund Payable Fund Amount
GOVERNMENTAL FUNDS
General 9-1-1 Emergency Telephone System $ 22,310
General Economic Development 253,667
TOTAL $ 275,977
Significant amounts due from/to other funds at December 31, 2015 are as follows:
$253,667 due from the Economic Development Fund to the General Fund to
eliminate a deficit cash position. Repayment is expected within one year.
$22,310 due from the 9-1-1 Emergency Telephone System Fund to the General
Fund to eliminate a deficit cash position. Repayment is expected within one
year.
b. Due From/To Fiduciary Funds
Receivable Fund Payable Fund Amount
PENSION TRUST FUNDS
Municipal Employees Retirement General $ 510,853
TOTAL $ 510,853
Significant amounts due from/to fiduciary funds at December 31, 2015 are as
follows:
$510,853 due from General Fund to the Municipal Employees Retirement
Pension Trust Fund are for amounts received by the pension plan after year end
for employer contributions.
- 45 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 46 -
7. INDIVIDUAL FUND DISCLOSURES (Continued)
c. Advances
As of December 31, 2015, individual fund advances between funds were as follows:
Receivable Fund Payable Fund Amount
General Waukegan Road TIF $ 2,539,841
General Dempster/Waukegan TIF 241,648
Lehigh/Ferris TIF Dempster/Waukegan TIF 44,364
TOTAL $ 2,825,853
Significant amounts of advances at December 31, 2015 are as follows:
$2,539,841 was advanced by the General Fund as initial costs of the Waukegan
Road TIF. This amount will be repaid in future years from incremental
property tax revenues of the TIF.
d. Transfers
For the year ended December 31, 2015, individual fund transfers between funds were
as follows:
Transferred to Transferred from Amount
General Lehigh/Ferris TIF $ 270,000
Debt Service General 163,783
TOTAL $ 433,783
Significant amounts of transfers during the year ended December 31, 2015 are as
follows:
$270,000 was transferred from the Lehigh/Ferris TIF Fund to the General Fund
for administrative costs. This amount will not be repaid.
$163,783 was transferred from the General Fund to the Debt Service Fund to
fund a deficit. This amount will not be repaid.
- 46 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 47 -
7. INDIVIDUAL FUND DISCLOSURES (Continued)
e. Deficit Fund Balances
As of December 31, 2015, individual funds with deficit fund balances were as
follows:
Fund Deficit
Major Governmental
Waukegan Road TIF $ 2,539,841
Nonmajor Governmental
Economic Development 29,241
Dempster/Waukegan TIF 291,128
8. CONTINGENT LIABILITIES
a. Litigation
The Village is a defendant in various lawsuits. Although the outcome of these
lawsuits is not presently determinable, in the opinion of the Village ’s attorney, the
resolution of these matters will not have a material adverse effect on the financial
condition of the Village.
b. Grants
The Village participates in numerous federally assisted programs, on both a direct
and state pass-through basis, as well as on a service provider basis. Principal among
these are the Federal Aid Highway Program and Highway Planning and
Construction.
In connection with these grants, the Village is required to comply with specific terms
and agreements, as well as applicable federal and state laws and regulations. Such
compliance is subject to review and audit by the grantors and their representatives.
In the opinion of management, the Village has complied with all requirements.
However, since such programs are subject to future audit or review, the possibility of
disallowed expenditures exists. In the event of any disallowance of claimed
expenditures, the Village expects the resulting liability to be immaterial.
- 47 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 48 -
9. JOINT VENTURES
Solid Waste Agency of Northern Cook County (SWANCC)
The Village is a member of the Solid Waste Agency of Northern Cook County (SWANCC)
which consists of 23 municipalities. SWANCC is a municipal corporation and public body
politic and corporate established pursuant to the Intergovernmental Cooperation Act of the
State of Illinois. SWANCC is empowered to plan, construct, finance, operate and maintain
a solid waste disposal system to serve its members.
SWANCC is governed by a Board of Directors which consists of the mayor or president
from each member municipality. Each director has an equal vote. The officers of
SWANCC are appointed by the Board of Directors. The Board of Directors determines the
general policy of SWANCC, makes all appropriations, approves contracts, provides for the
issuance of debt, adopts by-laws, rules and regulations and exercises such powers and
performs such duties as may be prescribed in the agency agreement or the by-laws.
Complete financial statements for SWANCC can be obtained from the SWANCC’s
administrative office at 2700 Patriot Boulevard, Suite 110, Glenview, Illinois 60026.
SWANCC’s outstanding bonds are revenue obligations. They are limited obligations of
SWANCC with a claim for payment solely from and secured by a pledge of the revenues of
the system and amounts in various funds and accounts established by SWANCC
resolutions. The bonds are not the debt of any member. SWANCC has no power to levy
taxes.
Revenues of the system consist of (1) all receipts derived from solid waste disposal
contracts or any other contracts for the disposal of waste; (2) all income derived from the
investment of monies; and (3) all income, fees, service charges and all grants, rents a nd
receipts derived by SWANCC from the ownership and operation of the system. SWANCC
covenants to establish fees and charges sufficient to provide revenues to meet all its
requirements.
SWANCC has entered into solid waste disposal contracts with the memb er municipalities.
The contracts are irrevocable and may not be terminated or amended except as provided for
in the contract. Each member is obligated, on a “take or pay” basis, to deliver a minimum
amount of solid waste to the system. The obligation of the Village to make all payments as
required by this contract is unconditional and irrevocable, without regard to performance or
nonperformance by SWANCC of its obligations under the contract. The contract does not
constitute an indebtedness of the Village within the meaning of any statutory or
constitutional limitation.
In accordance with the contract, the Village made payments totaling $435,776 to
SWANCC in 2015, which includes payment for debt contribution. The Village does not
have an equity interest in SWANCC at December 31, 2015.
- 48 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 49 -
9. JOINT VENTURES (Continued)
Solid Waste Agency of Northern Cook County (SWANCC) (Continued)
Commencing in 2008, the annual expense will be subject to change based upon the actual
tonnage of refuse disposed of and current SWANCC costs. Beginning in 2004, the cost of
brush collection was transferred to the residents. The Village continues to pay tipping fees
averaging about $36,314 a month or $435,776 a year.
10. JOINTLY GOVERNED ORGANIZATION
Regional Emergency Dispatch Center
The Regional Emergency Dispatch Center (the Center) is a governmental joint venture of
Illinois municipalities which is used to account for the resources involved in dispatching
fire and medical emergency services to a seven-community area. The fund is supported by
contributions by the eight-member departments.
Management consists of a Board of Directors comprised of one elected officer from each
member. There is also a Joint Chiefs Authority which is comprised of the fire chief from
each member, which takes care of day-to-day activities.
The Village does not exercise any control over the activities of the Center beyond its
representation on the Board of Directors and Joint Chiefs Authority.
Annual contributions are determined each year based on the estimated number of fire calls
for the upcoming year. Each year, the members sign a contract which denotes the amount
of the contribution for the year. The Board of Directors has the power to levy a special
assessment should a deficit or emergency arise.
Complete separate financial statements for the Center may be obtained at the Center ’s
office located at 1842 Shermer Road, Northbrook, Illinois 60062.
11. OTHER POSTEMPLOYMENT BENEFITS
a. Plan Description
In addition to providing the pension benefits described, the Village provides other
postemployment health care benefits (OPEB) for retired employees through a single -
employer defined benefit plan (the Plan). The benefits, benefit levels, employee
contributions and employer contributions are governed by the Village and can be
amended by the Village through its personnel manual and union contracts. The Plan
is not accounted for as a trust fund, as an irrevocable trust has not been established to
account for the Plan. The Plan does not issue a separate report. The activity of the
Plan is reported in the Village’s governmental and business-type activities.
- 49 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 50 -
11. OTHER POSTEMPLOYMENT BENEFITS (Continued)
b. Benefits Provided
The Village provides pre and post-Medicare postretirement health insu rance to
retirees, their spouses and dependents (enrolled at time of employee ’s retirement). To
be eligible for benefits, the employee must qualify for retirement under one of the
Village’s four retirement plans. The Village provides a subsidy of 50% of the
blended healthcare premium to retired members with ten or more years of service.
Police officers and firefighters who became disabled in the line of duty during an
emergency receive continuation of healthcare benefits at no cost to the member.
Upon a retiree becoming eligible for Medicare, the amount payable under the
Village’s health plan will be reduced by the amount payable under Medicare for
those expenses that are covered under both.
c. Membership
At December 31, 2015, membership consisted of:
Retirees and beneficiaries currently receiving
benefits 39
Terminated employees entitled
to benefits but not yet receiving them -
Active employees 145
TOTAL 184
Participating employers 1
d. Funding Policy
The Village is not required to and currently does not advance fund the cost of
benefits that will become due and payable in the future. Active employees do not
contribute to the Plan until retirement.
- 50 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 51 -
11. OTHER POSTEMPLOYMENT BENEFITS (Continued)
e. Annual OPEB Costs and Net OPEB Obligation
The Village’s annual OPEB cost, the percentage of annual OPEB cost contributed to
the Plan and the net OPEB obligation was as follows:
Fiscal
Year
Ended
Annual
OPEB
Cost
Employer
Contributions
Percentage of
Annual OPEB
Cost
Contributed
Net OPEB
Obligation
December 31, 2013 $ 1,415,247 $ 660,352 46.7% $ 3,696,276
December 31, 2014 1,481,863 807,884 54.5% 4,370,255
December 31, 2015 1,247,821 546,470 43.8% 5,071,606
The net OPEB obligation as of December 31, 2015 was calculated as follows:
Annual required contribution $ 1,207,192
Interest on net OPEB obligation 196,661
Adjustment to annual required contribution (156,032)
Annual OPEB cost 1,247,821
Contributions made 546,470
Increase in net OPEB obligation 701,351
Net OPEB obligation, beginning of year 4,370,255
NET OPEB OBLIGATION, END OF YEAR $ 5,071,606
Funded Status and Funding Progress: The projected funded status and funding
progress of the Plan as of December 31, 2015 was as follows:
Actuarial accrued liability (AAL) $ 15,546,065
Actuarial value of plan assets -
Unfunded actuarial accrued liability (UAAL) 15,546,065
Funded ratio (actuarial value of plan assets/AAL) 0.00%
Covered payroll (active plan members) $ 12,332,744
UAAL as a percentage of covered payroll 126.06%
- 51 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 52 -
11. OTHER POSTEMPLOYMENT BENEFITS (Continued)
e. Annual OPEB Costs and Net OPEB Obligation (Continued)
Actuarial valuations of an ongoing plan involve estimates of the value o f reported
amounts and assumptions about the probability of occurrence of events far into the
future. Examples include assumptions about future employment, mortality and the
healthcare cost trend. Amounts determined regarding the funded status of the Plan
and the annual required contributions of the employer are subject to continual
revision as actual results are compared with past expectations and new estimates are
made about the future. The schedule of funding progress, presented as required
supplementary information following the notes to financial statements, presents
multi-year trend information that shows whether the actuarial value of plan assets is
increasing or decreasing over time relative to the actuarial accrued liabilities for
benefits.
Actuarial methods and assumptions - projections of benefits for financial reporting
purposes are based on the substantive plan (the Plan as understood by the employer
and plan members) and include the types of benefits provided at the time of each
valuation and the historical pattern of sharing of benefit costs between the employer
and plan members to that point. The actuarial methods and assumptions used include
techniques that are designed to reduce short-term volatility in actuarial accrued
liabilities and the actuarial value of assets, consistent with the long -term perspective
of the calculations.
In the December 31, 2015 actuarial valuation, the entry-age normal actuarial cost
method was used. The actuarial assumptions included a 4.5% investment rate of
return and a healthcare cost trend rate of 7.39% with an ultimate healthcare inflation
rate of 4.5%. Both rates include a 4% wage inflation assumption. The actuarial value
of assets was not determined as the Village has not advance funded its obligation.
The Plan’s unfunded actuarial accrued liability is being amortized as a level
percentage of projected payroll on an open basis. The remaining amortization period
at January 1, 2015 was 30 years.
12. DEFINED BENEFIT PENSION PLANS
a. Plan Descriptions
The Village contributes to five defined benefit pension plans, the Illinois Municipal
Retirement Fund (IMRF), an agent multiple-employer public employees retirement
system; the Sheriff’s Law Enforcement Personnel Fund (SLEP), which is
administered by IMRF, an agent multiple-employer public employee retirement
system; the Municipal Employees’ Retirement Fund (MERF), an agent
- 52 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 53 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
multiple-employer plan consisting of the Village and the Morton Grove Public
Library (the Library); the Police Pension Plan which is a single-employer pension
plan; and the Firefighters’ Pension Plan which is also a single-employer pension
plan. The benefits, benefit levels, employee contributions and emp loyer contributions
for the Police and Firefighters’ Pension Plans are governed by Illinois Compiled
Statutes (ILCS) and can only be amended by the Illinois General Assembly. None of
the pension plans issue separate reports on the pension plans. The Morton Grove
Public Library also participates in IMRF and MERF. A portion of the liability for
IMRF and MERF relates to the Library. A separate actuarial valuation is not
provided for the Library’s share of the IMRF liability. However, a separate actuarial
valuation is provided for the Library’s share of the MERF liability.
Illinois Municipal Retirement Fun
Plan Administration
All employees (other than those covered by the Police and Firefighters’ Pension
Plan) hired in positions that meet or exceed the prescribed annual hourly standard
must be enrolled in IMRF effective January 1, 2005, as participating members.
The plan is accounted for on the economic resources measurement focus and the
accrual basis of accounting. Employer and employee contribution s are recognized
when earned in the year that the contributions are required, benefits and refunds are
recognized as an expense and liability when due and payable.
Plan Membership
At December 31, 2015, IMRF membership consisted of:
Inactive employees or their beneficiaries
currently receiving benefits 6
Inactive employees entitled to but not yet receiving benefits 47
Active employees 66
TOTAL 119
The IMRF data included in the table above includes membership of both the Village
and Library.
- 53 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 54 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Illinois Municipal Retirement Fund (Continued)
Benefits Provided
IMRF provides two tiers of pension benefits. Employees hired prior to January 1,
2011, are eligible for Tier 1 benefits. For Tier 1 employees, pension benefits vest
after eight years of service. Participating members who retire at age 55 (reduced
benefits) or after age 60 (full benefits) with eight years of credited service are entitled
to an annual retirement benefit, payable monthly for life, in an amount equal to 1
2/3% of their final rate of earnings, for each year of credited service up to 15 years,
and 2% for each year thereafter.
Employees hired on or after January 1, 2011, are eligible for Tier 2 benefits. For
Tier 2 employees, pension benefits vest after ten years of service. Participating
members who retire at age 62 (reduced benefits) or after age 67 (full benefits) with
ten years of credited service are entitled to an annual retirement b enefit, payable
monthly for life, in an amount equal to 1 2/3% of their final rate of earnings, for each
year of credited service up to 15 years, and 2% for each year thereafter.
IMRF also provides death and disability benefits. These benefit provisions a nd all are
established by state statute.
Contributions
Participating members are required to contribute 4.5% of their annual salary to
IMRF. The Village is required to contribute the remaining amounts necessary to fund
IMRF as specified by statute. The employer contribution rate for the year ended
December 31, 2015 was 9.69% of covered payroll.
Actuarial Assumptions
The Village’s net pension liability was measured as of December 31, 2015 and the
total pension liability used to calculate the net pe nsion liability was determined by an
actuarial valuation performed as of the same date using the following actuarial
methods and assumptions.
- 54 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 55 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Illinois Municipal Retirement Fund (Continued)
Actuarial Assumptions (Continued)
Actuarial valuation date December 31, 2015
Actuarial cost method Entry-age normal
Assumptions
Inflation 2.75%
Salary increases 3.75% to 14.50%
Interest rate 7.50%
Cost of living adjustments 3.00%
Asset valuation method Market Value
For nondisabled retirees, an IMRF specific mortality table was used with fully
generational projection scale MP-2014 (base year 2014). IMRF specific rates were
developed from the RP-2014 Blue Collar Health Annuitant Mortality Table with
adjustments to match current IMRF experience. For disabled retirees, an IMRF
specific mortality table was used with fully generational projection scale MP -2014
(base year 2014). IMRF specific rates were developed from the RP-2014 Disabled
Retirees Mortality Table applying the same adjustment that were applied for
nondisabled lives. For active members, an IMRF specific mortality table was used
with fully generational projection scale MP -2014 (base year 2014). IMRF specific
rates were developed from the RP -2014 Employee Mortality Table with adjustments
to match current IMRF experience.
Discount Rate
The discount rate used to measure the total pension liability was 7.49%. The
projection of cash flows used to determine the discount rate assumed that member
contributions will be made at the current contribution rate and that the Village
contributions will be made at rates equal to the difference between actuarially
determined contribution rates and the member rate. Based on those assumptions, the
IMRF’s fiduciary net position was not projected to be available to make all projected
- 55 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 56 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Illinois Municipal Retirement Fund (Continued)
Discount Rate (Continued)
future benefit payments of current plan members. Therefore, the long -term expected
rate of return on pension plan investments of 7.50% was blended with the index rate
of 3.57% for tax exempt general obligation municipal bo nds rated AA or better at
December 31, 2015 to arrive at a discount rate of 7.47% used to determine the total
pension liability.
Changes in the Net Pension Liability
(a)
Total
Pension
(b)
Plan
Fiduciary
(a) - (b)
Net Pension
Liability Net Position Liability
BALANCES AT
JANUARY 1, 2015
$ 5,272,987
$ 4,239,209
$ 1,033,778
Changes for the period
Service cost 429,566 - 429,566
Interest 409,549 - 409,549
Difference between expected
and actual experience (186,773) - (186,773)
Changes in assumptions - - -
Employer contributions - 389,954 (389,954)
Employee contributions - 177,773 (177,773)
Net investment income - 22,516 (22,516)
Benefit payments and refunds (39,656) (39,656) -
Administrative expense - - -
Other (net transfer) - (242,491) 242,491
Net changes 612,686 308,096 304,590
BALANCES AT
DECEMBER 31, 2015
$ 5,885,673
$ 4,547,305
$ 1,338,368
- 56 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 57 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Illinois Municipal Retirement Fund (Continued)
Changes in the Net Pension Liability (Continued)
The table presented above includes amounts for both the Village and Library. The
Village’s proportionate share of the net pension liability at January 1, 2015, the
employer contributions and the net pension liability at December 31, 2015 was
$766,935, $289,298 and $992,903, respectively. The Library’s proportionate share of
the net pension liability at January 1, 2015, the employer contributions and the net
pension liability at December 31, 2015 was $266,843, $100,656 and $345,465,
respectively.
Changes in assumptions related to retirement age and mortality were made since the
prior measurement date.
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources
For the year ended December 31, 2015, the Village recognized pension expense of
$493,423.
At December 31, 2015, the Village reported deferred outflows of resources and
deferred inflows of resources related to IMRF from the following sources:
Deferred
Outflows of
Deferred
Inflows of
Resources Resources
Difference between expected and actual experience $ 67,270 $ 157,340
Changes in assumption 151,375 -
Net difference between projected and actual earnings
on pension plan investments 276,208 -
TOTAL $ 494,853 $ 157,340
The deferred outflows presented in the table above include amounts for both the
Village and Library. The Village’s proportionate share of the deferred outflows and
inflows of resources at December 31, 2015 was $367,120 and $116,727, respectively.
The Library’s proportionate share of the deferred outflows and inflows of resources
at December 31, 2015 was $127,733 and $40,613, respectively.
- 57 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 58 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Illinois Municipal Retirement Fund (Continued)
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources (Continued)
Amounts reported as deferred outflows of resources and deferred inflows of
resources related to IMRF will be recognized in pension expense by the Village as
follows:
Period Ended
December 31,
2016 $ 66,707
2017 66,707
2018 66,709
2019 58,967
2020 (1,148)
Thereafter (7,549)
TOTAL $ 250,393
Discount Rate Sensitivity
The following is a sensitive analysis of the net pension liability to changes in the
discount rate. The table below presents the pension liability of the Vil lage and
Library calculated using the discount rate of 7.49% as well as what the Village and
Library’s net pension liability would be if it were calculated using a discount rate that
is 1 percentage point lower (6.49%) or 1 percentage point higher (8.49%) than the
current rate:
1% Decrease
Current
Discount Rate
1% Increase
(6.49%) (7.49%) (8.49%)
Net pension liability - Village $ 1,766,755 $ 992,903 $ 373,489
Net pension liability - library 614,714 345,465 129,949
NET PENSION LIABILITY -
TOTAL
$ 2,381,469
$ 1,338,368
$ 503,438
- 58 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 59 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Sheriff’s Law Enforcement Personnel
Plan Administration
The plan is accounted for on the economic resources me asurement focus and the
accrual basis of accounting. Employer and employee contributions are recognized
when earned in the year that the contributions are required, benefits and refunds are
recognized as an expense and liability when due and payable.
Plan Membership
At December 31, 2015, SLEP membership consisted of:
Inactive employees or their beneficiaries
currently receiving benefits 2
Inactive employees entitled to but not yet receiving benefits -
Active employees -
TOTAL 2
Benefits Provided
Sheriff’s Law Enforcement Personnel having accumulated at least 20 years of SLEP
service and terminating IMRF participation or after January 1, 1988, may elect to
retire at or after age 50 with no early retirement discount penalty. IMRF provides two
tiers of pension benefits. Employees hired prior to January 1, 2011, are eligible for
Tier 1 benefits. SLEP members meeting the two qualifications described in the first
sentence of this paragraph are entitled to an annual retirement benefit payable
monthly for life, in an amount equal to 2 1/2% of their final rate of earnings for each
year of credited. For SLEP members retiring with less than 20 years of SLEP service,
the regular IMRF pension formula applies.
Employees hired on or after January 1, 2011, are eligible for Tier 2 benefits. For
Tier 2 employees, pension benefits vest after ten years of service. Participating
members who retire at age 55 with ten years of Tier 2 service credit are entitled to an
annual retirement benefit, payable monthly for life, in an amount equal to 2 1/2% of
their final rate of earnings for each year of credited. The pension for participating
members who retire between age 50 and 55 will be reduced by ½% for each month
under age 55. SLEP also provides death and disability benefits. These benefit
provisions and all other requirements are established by ILCS.
- 59 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 60 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Sheriff’s Law Enforcement Personnel (Continued)
Contributions
Participating members are required to contribute 6.5% of their annual salary to
SLEP. The Village is required to contribute the remaining amounts necessary to fund
the SLEP as specified by statute. The employer contribution rate for the year ended
December 31, 2015 was 13.69% of covered payroll.
Actuarial Assumptions
The Village’s net pension liability was measured as of December 31, 2015 and the
total pension liability used to calculate the net pension liability was determined by an
actuarial valuation performed as of the same date using the following actuarial
methods and assumptions.
Actuarial valuation date December 31, 2015
Actuarial cost method Entry-age normal
Assumptions
Inflation 2.75%
Salary increases 3.75% to 14.50%
Interest rate 7.50%
Cost of living adjustments 3.00%
Asset valuation method Market Value
For nondisabled retirees, an IMRF specific mortality table was used with fully
generational projection scale MP-2014 (base year 2014). IMRF specific rates were
developed from the RP-2014 Blue Collar Health Annuitant Mortality Table with
adjustments to match current IMRF experience. For disabled retirees, an IMRF
specific mortality table was used with fully generational projection scale MP -2014
(base year 2014). IMRF specific rates were developed from the RP-2014 Disabled
Retirees Mortality Table applying the same adjustment that were applied for
nondisabled lives. For active members, an IMRF specific mortality table was used
with fully generational projection scale MP -2014 (base year 2014). IMRF specific
rates were developed from the RP -2014 Employee Mortality Table with adjustments
to match current IMRF experience.
- 60 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 61 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Sheriff’s Law Enforcement Personnel (Continued)
Discount Rate
The discount rate used to measure the total pension liability was 7.45%. The
projection of cash flows used to determine the discount rate assumed that member
contributions will be made at the current contribution rate and that the Village
contributions will be made at rates equal to the difference between actuarially
determined contribution rates and the member rate. Base d on those assumptions, the
SLEP’s fiduciary net position was not projected to be available to make all projected
future benefit payments of current plan members. Therefore, the long -term expected
rate of return on pension plan investments of 7.50% was blended with the index rate
of 3.57% for tax exempt general obligation municipal bonds rated A A or better at
December 31, 2015 to arrive at a discount rate of 7.45% used to determine the total
pension liability.
Changes in the Net Pension Liability
(a)
Total
Pension
(b)
Plan
Fiduciary
(a) - (b)
Net Pension
Liability Net Position Liability
BALANCES AT
JANUARY 1, 2015
$ 104,794
$ 102,524
$ 2,270
Changes for the period
Service cost - - -
Interest 7,550 - 7,550
Difference between expected
and actual experience 830 - 830
Changes in assumptions 415 - 415
Employer contributions - 1,005 (1,005)
Employee contributions - - -
Net investment income - 495 (495)
Benefit payments and refunds (7,982) (7,982) -
Administrative expense - - -
Other (net transfer) - 5,184 (5,184)
Net changes 813 (1,298) 2,111
BALANCES AT
DECEMBER 31, 2015
$ 105,607
$ 101,226
$ 4,381
- 61 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 62 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Sheriff’s Law Enforcement Personnel (Continued)
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources
For the year ended December 31, 2015, the Village recognized pension expense of
($3,428). At December 31, 2015, the Village reported deferred outflow s of resources
and deferred inflows of resources related to SLEP from the following sources:
Deferred
Outflows of
Deferred
Inflows of
Resources Resources
Difference between expected and actual experience $ - $ -
Changes in assumption - -
Net difference between projected and actual earnings
on pension plan investments 6,544 -
TOTAL $ 6,544 $ -
Amounts reported as deferred outflows of resources and deferred infl ows of
resources related to SLEP will be recognized in pension expense as follows:
Period Ended
December 31,
2016 $ 1,706
2017 1,706
2018 1,705
2019 1,427
2020 -
Thereafter -
TOTAL $ 6,544
- 62 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 63 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Sheriff’s Law Enforcement Personnel (Continued)
Discount Rate Sensitivity
The following is a sensitive analysis of the net pension liability to changes in the
discount rate. The table below presents the pension liability of the Village calculated
using the discount rate of 7.45% as well as what the Village’s net pension liability
would be if it were calculated using a discount rate that is 1 percentage point lower
(6.45%) or 1 percentage point higher (8.45%) than the current rate:
1% Decrease
Current
Discount Rate
1% Increase
(6.45%) (7.45%) (8.45%)
Net pension liability (asset) $ 15,554 $ 4,381 $ (5,046)
Municipal Employees’ Retirement Fund
All employees (other than those covered by the Police or Firefighters ’ plans) hired in
positions that meet or exceed the prescribed annual hourly standard (1,000 hours)
were enrolled in MERF as participating members through January 1, 2005. The plan
is closed to new members. Pension benefits vest after ten years of service.
Participating members who retire after 30 years of creditable service or at or after age
60 with five years of credited service are entitled to an annual retirement benefit,
payable monthly for life, in an amount equal to 1 2/3% of average compensation for
each of the first 15 years of service, plus 2% of average compensation for each year
of service in excess of 15 years. Average compensation is defined as the average of
the four calendar years (within the preceding ten years of participation) during which
the participant received the highest compensation. Participating members are
required to contribute 2% of their annual salary to ME RF. The Village is required to
contribute the remaining amounts necessary to fund MERF as specified by the plan.
The employer contribution for the year ended December 31, 2015 was 45.07% of
covered payroll.
Plan Administration
The plan is accounted for on the economic resources measurement focus and the
accrual basis of accounting. Employer and employee contributions are recognized
when earned in the year that the contributions are required, benefits and refunds are
recognized as an expense and liability when due and payable.
- 63 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 64 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Municipal Employees’ Retirement Fund (Continued)
Plan Membership
At December 31, 2015, MERF membership consisted of:
Inactive employees or their beneficiaries
currently receiving benefits 21
Inactive employees entitled to but not yet receiving benefits 19
Active employees 26
TOTAL 66
Investment Policy
MERF’s investment policy establishes the following target allocation across asset
classes:
Asset Class
Target
Long-Term
Expected Real
Rate of Return
Annuity Contracts 100% 6.45%
The long-term expected rate of return on MERF’s investments was determined using
a building block method conducted by MERF’s actuary in which best estimate ranges
of expected future real rates of return (net of pension plan investment expense and
inflation) were developed for each major assets class. These ranges were combined to
produce the long-term expected rate of return by weighting the expected future real
rates of return by the target asset allocation percentage and by adding expected
inflation. Best estimates of arithmetic real rates of return for each major asset class
included in MERF’s target asset allocation as of December 31, 2015 are listed in the
table above.
Investment Rate of Return
For the year ended December 31, 2015, the annual money-weighted rate of return on
MERF plan investments, net of pension plan investment expense, was 2.59%. The
money-weighted rate of return expresses investment performance, net of investment
expense, adjusted for the changing amounts actually invested.
- 64 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 65 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Municipal Employees’ Retirement Fund (Continued)
Actuarial Assumptions
The Village’s net pension liability was measured as of December 31, 2015 and the
total pension liability used to calculate the net pension liability was determined by an
actuarial valuation performed as of the same date using the following actuarial
methods and assumptions.
Actuarial valuation date December 31, 2015
Actuarial cost method Entry-age normal
Assumptions
Inflation 2.50%
Salary increases 4.50%
Interest rate 5.50%
Cost of living adjustments 3.00%
Asset valuation method Market Value
The actuary used the rates from the December 10, 2014 IMRF Experience Study. For
nondisabled retirees, an IMRF specific mortality table was used with fully
generational projection scale MP-2014 (base year 2014). IMRF specific rates were
developed from the RP-2014 Blue Collar Health Annuitant Mortality Table with
adjustments to match current IMRF experience. F or disabled retirees, an IMRF
specific mortality table was used with fully generational projection scale MP -2014
(base year 2014). IMRF specific rates were developed from the RP -2014 Disabled
Retirees Mortality Table applying the same adjustment that were applied for
nondisabled lives. For active members, an IMRF specific mortality table was used
with fully generational projection scale MP -2014 (base year 2014). IMRF specific
rates were developed from the RP -2014 Employee Mortality Table with adjustments
to match current IMRF experience.
- 65 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 66 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Municipal Employees’ Retirement Fund (Continued)
Discount Rate
The discount rate used to measure the total pension liability was 4.7 3%. The
projection of cash flows used to determine the discount rate assumed that member
contributions will be made at the current contribution rate and that the Village
contributions will be made at rates equal to the difference between actuarially
determined contribution rates and the member rate. Based on those assumptions, the
MERF’s fiduciary net position was not projected to be available to make all
projected future benefit payments of current plan members. Therefore, the long -term
expected rate of return on pension plan investments of 5.50% was blended with the
index rate of 3.57% for tax exempt general obligation municipal bonds rated AA or
better at December 31, 2015 to arrive at a discount rate of 4.73% used to determine
the total pension liability.
Changes in the Net Pension Liability
(a)
Total
Pension
(b)
Plan
Fiduciary
(a) - (b)
Net Pension
Liability Net Position Liability
BALANCES AT
JANUARY 1, 2015
$ 18,959,198
$ 8,338,149
$ 10,621,049
Changes for the period
Service cost 283,482 - 283,482
Interest 868,067 - 868,067
Difference between expected
and actual experience (745,910) - (745,910)
Changes in assumptions 7,685,672 - 7,685,672
Employer contributions - 921,727 (921,727)
Employee contributions - 44,270 (44,270)
Net investment income - 215,747 (215,747)
Benefit payments and refunds (1,213,649) (1,213,649) -
Administrative expense - - -
Other (net transfer) - - -
Net changes 6,877,662 (31,905) 6,909,567
BALANCES AT
DECEMBER 31, 2015
$ 25,836,860
$ 8,306,244
$ 17,530,616
- 66 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 67 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Municipal Employees’ Retirement Fund (Continued)
Changes in the Net Pension Liability (Continued)
The table above includes the total pension liability and the plan fiduciary net position
for the Village only. The portion of the plan fiduciary net position that has been
allocated to the Library is $1,617,887.
Changes in assumptions related to retirement age and mortality were made since the
prior measurement date. Also, the discount rate was changed from 7.00% to 4.73%.
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources
For the year ended December 31, 2015, the Village recognized pension expense of
$9,494,495.
At December 31, 2015, the Village reported deferred outflows of resources and
deferred inflows of resources related to MERF from the following sources:
Deferred
Outflows of
Deferred
Inflows of
Resources Resources
Difference between expected and actual experience $ - $ 572,038
Changes in assumption 5,894,140 -
Net difference between projected and actual earnings
on pension plan investments 182,156 -
TOTAL $ 6,076,296 $ 572,038
- 67 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 68 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Municipal Employees’ Retirement Fund (Continued)
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources (Continued)
Amounts reported as deferred outflows of resources and deferred inflows of
resources related to MERF will be recognized in pension expense by the Village as
follows:
Period Ended
December 31,
2016 $ 1,663,200
2017 1,663,200
2018 1,663,200
2019 514,658
2020 -
Thereafter -
TOTAL $ 5,504,258
Discount Rate Sensitivity
The following is a sensitive analysis of the net pension liability to changes in the
discount rate. The table below presents the pension liability of the Village calculate d
using the discount rate of 4.73% as well as what the Village’s net pension liability
would be if it were calculated using a discount rate that is 1 percentage point lower
(3.73%) or 1 percentage point higher (5.73%) than the current rate:
1% Decrease
Current
Discount Rate
1% Increase
(3.73%) (4.73%) (5.73%)
Net pension liability - Village $ 22,289,755 $ 17,530,616 $ 13,706,459
- 68 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 69 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Police Pension Plan
Plan Administration
Police sworn personnel are covered by the Police Pension Plan. Although this is a
single-employer pension plan, the defined benefits and employee and employer
contribution levels are governed by Illinois Compiled Statutes (40 ILCS 5/3 -1) and
may be amended only by the Illinois legislature. The Village accounts for the plan as
a pension trust fund.
The plan is governed by a five-member Board of Trustees. Two members of the
Board of Trustees are appointed by the Village President, one member is elected by
pension beneficiaries, and two members are elected by active police employees.
The plan is accounted for on the economic resources measurement focus and the
accrual basis of accounting. Employer and employee contributions are recognized
when earned in the year that the contributions are required, benefits and refunds are
recognized as an expense and liability when due and payable.
Plan Membership
At December 31, 2015, the Police Pension Plan membership consisted of:
Inactive plan members currently receiving benefits 53
Inactive plan members entitled to but not yet
receiving benefits -
Active plan members 45
TOTAL 98
Benefits Provided
The Police Pension Plan provides retirement benefits as well as death and disability
benefits. Tier 1 employees (those hired prior to January 1, 2011) attaining the age of
50 or older with 20 or more years of creditable service are entitled to receive an
annual retirement benefit equal to one-half of the salary attached to the rank held on
the last day of service, or for one year prior to the last day, whichever is greater. The
annual benefit shall be increased by 2.5% of such salary for each additional year of
- 69 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 70 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Police Pension Plan (Continued)
Benefits Provided (Continued)
service over 20 years up to 30 years to a maximum of 75% of such salary. Employees
with at least eight years but less than 20 years of credited service may retire at or
after age 60 and receive 2.5% of salary for each year of service. The monthly benefit
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.
Tier 2 employees (those hired on or after January 1, 2011) attaining the age of 55 or
older with ten or more years of creditable service are entitled to receive an annu al
retirement benefit equal to the average monthly salary obtained by dividing the total
salary of the police officer during the 96 consecutive months of service within the
last 120 months of service in which the total salary was the highest by the number of
months of service in that period. Police officers’ salary for pension purposes is
capped at $106,800, plus the lesser of ½ of the annual change in the Consumer Price
Index or 3% compounded. The annual benefit shall be increased by 2.5% of such
salary for each additional year of service over 20 years up to 30 years to a maximum
of 75% of such salary. Employees with at least ten years may retire at or after age 50
and receive a reduced benefit (i.e., ½% for each month under 55). The monthly
benefit of a Tier 2 police officer shall be increased annually at age 60 on the
January 1st after the police officer retires, or the first anniversary of the pension
starting date, whichever is later.
Contributions
Employees are required by ILCS to contribute 9.91% of their base salary to the
Police Pension Plan. If an employee leaves covered employment with less than 20
years of service, accumulated employee contributions may be refunded without
accumulated interest. The Village is required to contribute the remaining amounts
necessary to finance the plan and the administrative costs as actuarially determined
by an enrolled actuary. Effective January 1, 2011, the Village has until the year 2040
to fund 90% of the past service cost for the Police Pension Plan. For the year ended
December 31, 2015, the Village’s contribution was 44.04% of covered payroll.
- 70 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 71 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Police Pension Plan (Continued)
Investment Policy
ILCS limit the Police Pensi on Fund’s (the Fund) investments to those allowable by
ILCS and require the Fund’s Board of Trustees to adopt an investment policy which
can be amended by a majority vote of the Board of Trustees. The Fund ’s investment
policy authorizes the Fund to make deposits/invest in insured commercial banks,
savings and loan institutions, obligations of the U.S. Treasury and U.S. agencies,
insured credit union shares, money market mutual funds with portfolios of securities
issued or guaranteed by the United States Government or agreements to repurchase
these same obligations, repurchase agreements, short-term commercial paper rated
within the three highest classifications by at least two standard rating services,
investment grade corporate bonds and Illinois Funds. The Fund may also invest in
certain non-U.S. obligations, Illinois municipal corporations tax anticipation
warrants, veteran’s loans, obligations of the State of Illinois and its political
subdivisions, Illinois insurance company general and separate accounts , mutual funds
and corporate equity securities and real estate investment trusts. During the year, the
following changes to the investment policy were approved by the Board of Trustees:
allowing investments in real estate investment trusts and the global t actical asset
allocation mutual fund. In addition, target allocations across asset classes were
adjusted.
The Fund’s investment policy, in accordance with ILCS, establishes the following
target allocation across asset classes:
Asset Class
Target
Long-Term
Expected
Rate of
Return
Inflation +
Expenses
Long-Term
Expected
Real Rate of
Return
Fixed Income 48.0% 2.3% 2.3% 0.0%
Large Cap Domestic Equities 27.0% 7.4% 2.3% 5.1%
Mid Cap Domestic Equities 9.0% 7.8% 2.3% 5.5%
Small Cap Domestic Equities 6.0% 8.0% 2.3% 5.7%
International Equities 10.0% 7.8% 2.3% 5.5%
- 71 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 72 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Police Pension Plan (Continued)
Investment Policy (Continued)
ILCS limit the Fund’s investments in equities, mutual funds and variable annuities to
65%. Securities in any one company should not exceed 5% of the total fund. The
blended asset class is comprised of all other asset classes to allow for rebalancing the
portfolio.
Investment Valuations
All investments in the plan are stated at fair value and are recorded as of the trade
date. Fair value is based on quoted market prices at December 31 for debt securities,
equity securities and mutual funds and contract values for insurance contract s.
Illinois Funds, an investment pool created by the state legislature under the control of
the State Treasurer, is a money market mutual fund that maintains a $1 per share
value.
Investment Concentrations
There are no significant investments (other than U.S. Government guaranteed
obligations) in any one organization that represent 5% or more of the Fund ’s
investments.
Investment Rate of Return
For the year ended December 31, 2015, the annual money-weighted rate of return on
pension plan investments, net of pension plan investment expense, was (0.46%). The
money-weighted rate of return expresses investment performance, net of investment
expense, adjusted for the changing amounts actually invested.
Deposits with Financial Institutions
Custodial credit risk for deposits with financial institutions is the risk that in the
event of a bank’s failure, the Fund’s deposits may not be returned to them. The
Fund’s investment policy requires all bank balances to be covered by federal
depository insurance.
- 72 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 73 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Police Pension Plan (Continued)
Interest Rate Risk
The following table presents the investments and maturities of the Fund ’s debt
securities as of December 31, 2015:
Investment Maturities (in Years)
Less More
Fair Value than 1 1-5 6-10 than 10
Municipal bonds $ 537,109 $ - $ - $ 509,129 $ 27,980
U.S. Treasury obligations 5,866,415 1,222,379 2,747,693 1,896,343 -
U.S agency obligations 1,356,294 - 49,781 365,644 940,869
Corporate bonds 5,765,241 138,840 2,183,651 2,399,845 1,042,905
TOTAL $ 13,525,059 $ 1,361,219 $ 4,981,125 $ 5,170,961 $ 2,011,754
In accordance with its investment policy, the Fund l imits its exposure to interest rate
risk by structuring the portfolio to provide liquidity for operating funds and
maximizing yields for funds not needed for expected current cash flows. The
investment policy does not limit the maximum maturity length of i nvestments in the
Fund.
Credit Risk
The Fund limits its exposure to credit risk, the risk that the issuer of a debt security
will not pay its par value upon maturity, by primarily investing in obligations
guaranteed by the United States Government or securities issued by agencies of the
United States Government that are explicitly or implicitly guaranteed by the United
States Government or in municipal or corporate bonds. The government bond index
fund is not rated by the commercial ratings agencies. The range of quality ratings of
securities held in the fund is AAA-BBB-.
Discount Rate
The discount rate used to measure the total pension liability was 6.32 %. The
projection of cash flows used to determine the discount rate assumed that member
contributions will be made at the current contribution rate and that the Village
contributions will be made at rates equal to the difference between actuarially
determined contribution rates and the member rate. Based on those assumptions, the
- 73 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 74 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Police Pension Plan (Continued)
Discount Rate (Continued)
Police Pension Fund’s fiduciary net position was not projected to be available to
make all projected future benefit payments o f current plan members. Therefore, the
long-term expected rate of return on pension plan investments of 7.00% was blended
with the index rate of 3.57% for tax exempt general obligation municipal bonds rated
AA or better at December 31, 2015 to arrive at a discount rate of 6.32% used to
determine the total pension liability.
Changes in the Net Pension Liability
(a)
Total
Pension
(b)
Plan
Fiduciary
(a) - (b)
Net Pension
Liability Net Position Liability
BALANCES AT
JANUARY 1, 2015
$ 59,527,590
$ 32,165,054
$ 27,362,536
Changes for the period
Service cost 1,204,804 - 1,204,804
Interest 3,656,752 - 3,656,752
Difference between expected
and actual experience 4,148,200 - 4,148,200
Changes in assumptions 3,982,348 - 3,982,348
Employer contributions - 1,819,397 (1,819,397)
Employee contributions - 412,809 (412,809)
Net investment income - (160,038) 160,038
Benefit payments and refunds (3,335,184) (3,335,184) -
Administrative expense - (42,462) 42,462
Net Changes 9,656,920 (1,305,478) 10,962,398
BALANCES AT
DECEMBER 31, 2015
$ 69,184,510
$ 30,859,576
$ 38,324,934
Changes in assumptions that were made during the year included mortalit y rates,
mortality improvement rates, retirement rates, disability rates, and termination rates .
In addition, the discount rate changed from 7.125% to 6.32%.
- 74 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 75 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Police Pension Plan (Continued)
Actuarial Assumptions
The total pension liability above was determined by an actuarial valuation performed
as of December 31, 2015 using the following actuarial methods and assumptions.
Actuarial valuation date December 31, 2015
Actuarial cost method Entry-age normal
Assumptions
Inflation 2.50%
Salary increases 4.00% to 12.08%
Interest rate 7.00%
Cost of living adjustments 2.50%
Asset valuation method Market
The L&A 2016 Illinois Police Mortality Rates were used for retirement and survivor
pensioners. For disability pensioners, the L&A 2016 Illinois Police Disability Rates
were used.
Discount Rate Sensitivity
The following is a sensitive analysis of the net pension liability to changes in the
discount rate. The table below presents the pension liability of the Village calculated
using the discount rate of 6.32% as well as what the Village’s net pension liability
would be if it were calculated using a discount rate that is 1 percentage poin t lower
(5.32%) or 1 percentage point higher (7.32%) than the current rate:
1% Decrease
Current
Discount Rate
1% Increase
(5.32%) (6.32%) (7.32%)
Net pension liability $ 48,338,122 $ 38,324,934 $ 30,180,494
- 75 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 76 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Police Pension Plan (Continued)
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources
For the year ended December 31, 2015, the Village recognized pension expense of
$3,962,152. At December 31, 2015, the Village reported deferred outflows of
resources and deferred inflows of resources related to the police pension from the
following sources:
Deferred
Outflows of
Deferred
Inflows of
Resources Resources
Difference between expected and actual experience $ 3,531,825 $ -
Changes in assumptions 3,390,618 -
Net difference between projected and actual earnings
on pension plan investments 1,897,200 -
TOTAL $ 8,819,643 $ -
Amounts reported as deferred outflows of resources and deferred inflows of
resources related to the police pension will be recognized in pension expense as
follows:
Period Ended
December 31,
2016 $ 1,682,407
2017 1,682,407
2018 1,682,407
2019 1,682,403
2020 1,208,106
Thereafter 881,913
TOTAL $ 8,819,643
- 76 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 77 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Firefighters’ Pension Plan
Plan Administration
Firefighter sworn personnel are covered by the Firefighters’ Pension Plan, a single-
employer defined benefit pension plan sponsored by the Village. The defined benefits
and employee and minimum employer contribution levels are governed by Illinois
Compiled Statutes (40 ILCS 5/4 -101) and may be amended only by the Illinois
legislature. The Village accounts for the Firefighters’ Pension Plan as a pension trust
fund.
The plan is governed by a five-member Board of Trustees. Two members of the
Board of Trustees are appointed by the Village President, one member i s elected by
pension beneficiaries and two members are elected by active firefighter employees.
The plan is accounted for on the economic resources measurement focus and the
accrual basis of accounting. Employer and employee contributions are recognize d
when earned in the year that the contributions are required, benefits and refunds are
recognized as an expense and liability when due and payable.
Plan Membership
At December 31, 2015, the measurement date, membership consisted of:
Inactive plan members currently receiving
benefits 46
Inactive plan members entitled to but not
yet receiving benefits -
Active members 41
TOTAL 87
Benefits Provided
The following is a summary of benefits of the plan as provided for in ILC S:
The Firefighters’ Pension Plan provides retirement benefits as well as death and
disability benefits. Tier 1 employees (those hired prior to January 1, 2011) attaining
the age of 50 or older with 20 or more years of creditable service are entitled to
receive an annual retirement benefit equal to one -half of the salary attached to the
rank held at the date of retirement.
- 77 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 78 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Firefighters’ Pension Plan (Continued)
Benefits Provided (Continued)
The annual benefit shall be increased by 2.5% of such salary for each additional year
of service over 20 years up to 30 years to a maximum of 75% of such salary.
Employees with at least ten years but less than 20 years of credit ed service may retire
at or after age 60 and receive a reduced benefit. The monthly benefit 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 pensio n and 3%
compounded annually thereafter.
Tier 2 employees (those hired on or after January 1, 2011) attaining the age of 55 or
older with ten or more years of creditable service are entitled to receive an annual
retirement benefit equal to the average monthly salary obtained by dividing the total
salary of the firefighter during the 96 consecutive months of service within the last
120 months of service in which the total salary was the highest by the number of
months of service in that period.
Firefighters’ salary for pension purposes is capped at $106,800, plus the lesser of ½
of the annual change in the Consumer Price Index or 3% compounded. The annual
benefit shall be increased by 2.5% of such salary for each additional year of service
over 20 years up to 30 years to a maximum of 75% of such salary. Employees with at
least ten years may retire at or after age 50 and receive a reduced benefit (i.e., ½% for
each month under 55). The monthly benefit of a Tier 2 firefighter shall be increased
annually at age 60 on the January 1st after the firefighter retires, or the first
anniversary of the pension starting date, whichever is later. Noncompounding
increases occur annually, each January thereafter. The increase is the lesser of 3% or
½ of the change in the Consumer Price Index for the proceeding calendar year.
Contributions
Covered employees are required to contribute 9.455% of their base salary to the
Firefighters’ Pension Plan. If an employee leaves covered employment with fewer
than 20 years of service, accumulated employee contributions may be refunded
without accumulated interest. Contributions are recognized when due pursuant to
formal commitments, as well as statutory or contractual requirements. Benefits and
refunds are recognized when due and payable in accordance with the terms of the
Firefighters’ Pension Plan. The costs of administering the Firefighters ’ Pension Plan
- 78 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 79 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Firefighters’ Pension Plan (Continued)
Contributions (Continued)
are financed through investment earnings. The Village is required to finance the
Firefighters’ Pension Plan as actuarially determined by an enrolled actuary. Effective
January 1, 2011, the Village has until the year 2040 to fund 90% of the past service
cost for the Firefighters’ Pension Plan. For the year ended December 31, 2015, the
Village’s contribution was 47.53% of covered payroll.
Investment Policy
Permitted Deposits and Investments - Statutes and the Firefighter’s Pension Fund’s
(the Fund) investment policy authorize the Fund to make deposits/invest in insured
commercial banks, savings and loan institutions, obligations of the U.S. Treasury and
U.S. agencies, insured credit union shares, money market mutual funds with
portfolios of securities issued or guaranteed by the United States Government or
agreements to repurchase these same obligations, repurchase agreements, short -term
commercial paper rated within the three highest classifications by at least two
standard rating services, investment grade corporate bonds and Illinois Funds. The
Fund may also invest in certain non-U.S. obligations, Illinois municipal corporations
tax anticipation warrants, veteran ’s loans, obligations of the State of Illinois and its
political subdivisions, Illinois insurance company general and separate accounts,
mutual funds and corporate equity securities. During the year, the following changes
to the investment policy were approved by the Board of Trustees: allowing
investments in real estate investment trusts and the global tactical asset allocation
mutual fund. In addition, target allocations across asset classes were adjusted.
The Fund’s investment policy in accordance with ILCS establishes the following
target allocation across asset classes:
Asset Class
Target
Long-Term
Expected
Rate of
Return
Inflation +
Expenses
Long-Term
Expected
Real Rate of
Return
Large Cap Domestic Equities 35% 10.1% 3.15% 6.95%
Small Cap Domestic Equities 10% 12.2% 3.15% 9.05%
International Equities 5% 10.3% 3.15% 7.15%
Fixed Income 50% 5.3% 3.15% 2.15%
- 79 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 80 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Firefighters’ Pension Plan (Continued)
Investment Policy (Continued)
ILCS limit the Fund’s investments in equities, mutual funds and variable annuities to
65%. Securities in any one company should not exceed 5% of the total fund. The
blended asset class is comprised of all other asset classes to allow for rebalancing the
portfolio.
The long-term expected rate of return on the Fund’s investments was determined
using an asset allocation study conducted by the Fund ’s investment management
consultant in which best estimate ranges of expected future real rates of return (net of
pension plan investment expense and inflation) were developed for each major assets
class. These ranges were combined to produce the long-term expected rate of return
by weighting the expected future real rates of return by the target asset allocation
percentage and by adding expected inflation. Best estimates or arithmetic real rates of
return excluding inflation for each major asset class included in the Fund ’s target
asset allocation as of December 31, 2015 are listed in the table above.
Concentrations
There are no significant investments (other than U.S. Government guaranteed
obligations) in any one organization that represent 5% or more of the Fund ’s
investments.
Rate of Return
For the year ended December 31, 2015, the annual money-weighted rate of return on
pension plan investments, net of pension plan investment expense, was 1.21%. The
money-weighted rate of return expresses investment performance, net of investment
expense, adjusted for the changing amounts actually invested.
Deposits with Financial Institutions
Custodial credit risk for deposits with financial institutions is the risk that in the
event of a bank’s failure, the Fund’s deposits may not be returned to them. The
Fund’s investment policy requires all bank balances to be covered by federal
depository insurance.
- 80 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 81 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Firefighters’ Pension Plan (Continued)
Interest Rate Risk
The following table presents the investments and maturities of the Fund ’s debt
securities as of December 31, 2015:
Investment Maturities (in Years)
Less More
Fair Value than 1 1-5 6-10 than 10
Municipal bonds $ 1,870,060 $ - $ 411,318 $ 928,248 $ 530,494
U.S. Treasury obligations 2,594,781 561,500 1,832,937 200,344 -
U.S agency obligations 9,024,881 251,239 1,526,098 6,485,655 761,889
TOTAL $ 13,489,722 $ 812,739 $ 3,770,353 $ 7,614,247 $ 1,292,383
In accordance with its investment policy, the Fund limits its exposure to interest rate
risk by structuring the portfolio to provide liquidity for operating funds and
maximizing yields for funds not needed for expected current cash flows. The
investment policy does not limit the maximum maturity length of investments in the
Fund.
Credit Risk
The Fund limits its exposure to credit risk, the risk that the issuer of a debt security
will not pay its par value upon maturity, by primarily investing in obligations
guaranteed by the United States Government or securities issued by agencies of the
United States Government that are explicitly or implicitly guaranteed by the United
States Government. The municipal bonds were rated from AA+ to Aa2. The ratings
for the U.S. agency investments all were rated AA+.
Custodial Credit Risk
Custodial credit risk for investments is the risk that, in the event of the failure of the
counterparty to the investment, the Fund will not be able to recover the value of its
investments that are in possession of an outside party. To limit its exposure, the
Fund’s investment policy requires all security transactions that are exposed to
custodial credit risk to be processed on a delivery versus payment (DVP) basis with
the underlying investments held by a third party acting as the Fund ’s agent separate
from where the investment was purchased or by the trust department of the bank
where purchased, in the Fund’s name. Illinois Funds and the money market mutual
funds are not subject to custodial credit risk.
- 81 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 82 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Firefighters’ Pension Plan (Continued)
Discount Rate
The discount rate used to measure the total pension liability was 5.96 %. The
projection of cash flows used to determine the discount rate assumed that member
contributions will be made at the current contribution rate and that the Village
contributions will be made at rates equal to the difference between actuarially
determined contribution rates and the member rate. Based on those assumptions, the
Firefighters’ Pension Fund’s fiduciary net position was not projected to be available
to make all projected future benefit payments of current plan members. Therefore,
the long-term expected rate of return on pension plan investments of 7.00% was
blended with the index rate of 3.57% for tax ex empt general obligation municipal
bonds rated AA or better at December 31, 2015 to arrive at a discount rate of 5.96%
used to determine the total pension liability.
Changes in the Net Pension Liability
(a)
Total
Pension
(b)
Plan
Fiduciary
(a) - (b)
Net Pension
Liability Net Position Liability
BALANCES AT
JANUARY 1, 2015
$ 54,645,387
$ 29,959,420
$ 24,685,967
Changes for the period
Service cost 1,356,812 - 1,356,812
Interest 3,181,468 - 3,181,468
Difference between expected
and actual experience 928,412 - 928,412
Changes in assumptions 11,295,766 - 11,295,766
Employer contributions - 1,949,493 (1,949,493)
Employee contributions - 387,408 (387,408)
Net investment income - 363,152 (363,152)
Benefit payments and refunds (2,530,110) (2,530,110) -
Administrative expense - (60,860) 60,860
Net changes 14,232,348 109,083 14,123,265
BALANCES AT
DECEMBER 31, 2015
$ 68,877,735
$ 30,068,503
$ 38,809,232
- 82 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 83 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Firefighters’ Pension Plan (Continued)
Changes in the Net Pension Liability (Continued)
Changes in actuarial assumptions that were made during the year included mortality
rates, mortality improvement rates, retirement rates, disability rates, and termination
rates. In addition, the discount rate changed from 7.125% to 5.96%.
Actuarial Assumptions
The total pension liability above was determined by an actuarial valuation performed
as of December 31, 2015 using the following actuarial methods and assumptions.
Actuarial valuation date December 31, 2015
Actuarial cost method Entry-age normal
Assumptions
Inflation 2.50%
Salary increases 4.00% to 11.66%
Interest rate 7.00%
Cost of living adjustments 2.50%
Asset valuation method Market
The L&A 2016 Illinois Firefighters’ Mortality Rates were used for retirement and
survivor pensioners. For disability pensioners, the L&A 2016 Illinois Firefighters’
Disability Rates were used.
Discount Rate Sensitivity
The following is a sensitive analysis of the net pension liability to changes in the
discount rate. The table below presents the pension liability of the Village ca lculated
using the discount rate of 5.96% as well as what the Village’s net pension liability
would be if it were calculated using a discount rate that is 1 percentage point lower
(4.96%) or 1 percentage point higher (6.96%) than the current rate:
- 83 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 84 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Firefighters’ Pension Plan (Continued)
Discount Rate Sensitivity (Continued)
1% Decrease
Current
Discount Rate
1% Increase
(4.96%) (5.96%) (6.96%)
Net pension liability $ 47,221,306 $ 38,809,232 $ 29,000,099
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources
For the year ended December 31, 2015, the Village recognized pension expense of
$4,671,044. At December 31, 2015, the Village reported deferred outflows of
resources and deferred inflows of resources related to the firefighters’ pension from
the following sources:
Deferred
Outflows of
Deferred
Inflows of
Resources Resources
Difference between expected and actual experience $ 761,130 $ -
Changes in assumption 9,260,493 -
Net difference between projected and actual earnings
on pension plan investments 1,380,092 -
TOTAL $ 11,401,715 $ -
Changes in the net pension liability related to the differ ence in actual and expected
experience, or changes in assumptions regarding future events, are recognized in
pension expense over the expected remaining service life of all employees (active
and retired) in the plan. Differences in projected and actual ear nings over the
measurement period are recognized over a five-year period.
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VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 85 -
12. DEFINED BENEFIT PENSION PLANS (Continued)
a. Plan Descriptions (Continued)
Firefighters’ Pension Plan (Continued)
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources (Continued)
Amounts reported as deferred outflows of resources and deferred inflows of
resources related to the firefighters’ pension will be recognized in pension expense as
follows:
Period Ended
December 31,
2016 $ 2,547,579
2017 2,547,579
2018 2,547,579
2019 2,547,579
2020 1,211,399
Thereafter -
TOTAL $ 11,401,715
13. CHANGE IN ACCOUNTING PRINCIPLE
Increase
(Decrease)
CHANGE IN ACCOUNTING PRINCIPLE - GOVERNMENTAL
ACTIVITIES
Change in accounting principle
To write-off the Police Pension, Fire Pension, and MERF Plans
net pension obligations
$ 17,903,661
To record the Fire Pension Plan net pension liability (24,685,967)
To record the Police Pension Plan net pension liability (27,362,536)
To record the IMRF net pension liability (632,523)
To record the IMRF deferred outflows 188,495
To record the SLEP net pension liability (2,270)
To record the MERF net pension liability (8,032,928)
To record the MERF deferred outflows 5,985,050
To record the MERF deferred inflows (564,147)
TOTAL CHANGE IN ACCOUNTING PRINCIPLE -
GOVERNMENTAL ACTIVITIES
$ (37,203,165)
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VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO FINANCIAL STATEMENTS (Continued)
- 86 -
13. CHANGE IN ACCOUNTING PRINCIPLE (Continued)
Increase
(Decrease)
CHANGE IN ACCOUNTING PRINCIPLE - BUSINESS-TYPE
ACTIVITIES
To record the IMRF net pension liability $ (134,412)
To record the IMRF deferred outflows 40,055
To record the MERF net pension liability (2,588,121)
To record the MERF deferred outflows 1,928,318
To record the MERF deferred inflows (181,762)
TOTAL CHANGE IN ACCOUNTING PRINCIPLE -
BUSINESS-TYPE ACTIVITIES
$ (935,922)
With the implementation of GASB Statement No. 68, the Village retroactively record ed the
net pension liability for each of its pension plans and the related deferred inflows and
deferred outflows. The Village also wrote off the net pension obligation for each of the
applicable pension plans.
- 86 -
REQUIRED SUPPLEMENTARY INFORMATION
Original and
Final Budget Actual
REVENUES
Sales taxes 5,700,000$ 5,578,149$
Property taxes 9,324,568 9,379,645
Telecommunications taxes 730,000 800,602
Utility taxes 1,245,000 1,272,845
Other taxes 1,400,300 1,859,349
Licenses and permits 1,750,500 1,826,803
Intergovernmental
State income taxes 2,500,000 2,476,003
Local use taxes 430,000 517,569
Personal property replacement tax 380,000 372,693
Grants 232,000 132,032
Charges for services 918,150 827,482
Fines 892,000 717,300
Investment income 5,000 8,841
Cable TV franchise fees 330,000 336,620
Miscellaneous 381,550 213,608
Total revenues 26,219,068 26,319,541
EXPENDITURES
Current
General government 3,973,241 3,259,332
Public safety 17,326,703 18,075,211
Streets and sidewalks 2,673,580 2,391,854
Vehicle maintenance 817,735 701,174
Health and human services 296,390 217,248
Community development 330,600 260,196
Buildings and inspection services 894,595 707,754
Total expenditures 26,312,844 25,612,769
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (93,776) 706,772
OTHER FINANCING SOURCES (USES)
Issuance of general obligation bonds - -
Proceeds from sale of capital assets 45,000 15,506
Transfers in 310,000 270,000
Transfers (out)(163,783) (163,783)
Total other financing sources (uses)191,217 121,723
NET CHANGE IN FUND BALANCE 97,441$ 828,495
FUND BALANCE, JANUARY 1 7,849,478
FUND BALANCE, DECEMBER 31 8,677,973$
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND
For the Year Ended December 31, 2015
(See independent auditor's report.)
- 87 -
Original and
Final Budget Actual
REVENUES
Property taxes 2,000,000$ 2,122,746$
Investment income 3,500 4,830
Miscellaneous - 17,000
Total revenues 2,003,500 2,144,576
EXPENDITURES
Current
Community development
Personal services 69,700 57,888
Commodities 3,600 7,714
Contractual services 264,710 210,697
Debt service
Principal retirement 535,000 535,000
Interest and fiscal charges 266,200 307,746
Capital outlay 6,050,000 92,987
Total expenditures 7,189,210 1,212,032
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (5,185,710) 932,544
OTHER FINANCING SOURCES (USES)
Transfers (out)(270,000) (270,000)
Issuance of general obligation bonds - 5,615,000
Premium on bonds issued - 825,848
Payment to escrow agent - (6,359,521)
Proceeds from sale of capital assets 1,000,000 2,000
Total other financing sources (uses)730,000 (186,673)
NET CHANGE IN FUND BALANCE (4,455,710)$ 745,871
FUND BALANCE, JANUARY 1 14,272,473
FUND BALANCE, DECEMBER 31 15,018,344$
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
LEHIGH/FERRIS TAX INCREMENT FINANCING FUND
For the Year Ended December 31, 2015
(See independent auditor's report.)
- 88 -
Original and
Final Budget Actual
REVENUES
Property taxes 550,000$ 430,702$
Investment income 200 162
Total revenues 550,200 430,864
EXPENDITURES
Current
Community development
Professional services 20,750 803
Commodities 500,000 -
Debt service
Principal 752,366 752,366
Interest and fiscal charges 132,998 132,998
Capital outlay 350,000 146
Total expenditures 1,756,114 886,313
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (1,205,914) (455,449)
OTHER FINANCING SOURCES (USES)
Transfers (out)(40,000) -
Total other financing sources (uses)(40,000) -
NET CHANGE IN FUND BALANCE (1,245,914)$ (455,449)
FUND BALANCE (DEFICIT), JANUARY 1 (2,084,392)
FUND BALANCE (DEFICIT), DECEMBER 31 (2,539,841)$
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
WAUKEGAN ROAD TAX INCREMENT FINANCING FUND
For the Year Ended December 31, 2015
(See independent auditor's report.)
- 89 -
- 79 -
VILLAGE OF MORTON GROVE, ILLINOIS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2015
LEGAL COMPLIANCE AND ACCOUNTABILITY
a. Budgets
Budgets are adopted on a basis consistent with generally accepted accounting principles.
Annual appropriated budgets are adopted (at the department level) for the General, Special
Revenue, Debt Service, Capital Projects Funds on the modified accrual basis and for the
Enterprise and Pension Trust Funds on the accrual basis. The annual appropriated budget is
legally enacted and provides for a legal level of control at the fund level for all funds. All
annual appropriations lapse at fiscal year end.
All departments of the Village submit requests for appropriation to the Village
Administrator so that a budget ma y be prepared. The budget is prepared by fund and
includes information on the past year, current year estimates and requested appropriations
for the next fiscal year. All annual appropriations lapse at fiscal year end.
The proposed budget is presented to the governing body for review. The governing body
holds public hearings and may add to, subtract from or change appropriations, but may not
change the form of the budget. No amendments were made in the current year.
The administrator is authorized to tr ansfer budgeted amounts between departments within
the General Fund and at the fund level for all other funds; however, any revisions that alter
the total expenditures of any fund must be approved by the governing body. Expenditures
may not legally exceed budgeted appropriations at the fund level.
b. Excess of Actual Expenditures/Expenses over Budget in Individual Funds
The following funds had an excess of actual expenditures/expenses (exclusive of
depreciation and amortization) over budget for the fiscal year:
Fund Excess
Debt Service $ 111,022
Commuter Parking 2,790
Capital Projects 1,024,098
- 90 -
(6)
Underfunded
Actuarial
Accrued
(2)(4) Liability
(1)Actuarial Unfunded as a
Actuarial Actuarial Accrued (3)Actuarial (5)Percentage
Valuation Value of Liability Percentage Accrued Annual of Covered
Date Plan (AAL)Funded Liability Covered Payroll
December 31,Assets Entry-Age (1) / (2) (2) - (1)Payroll (4) / (5)
2010 -$ 14,235,463$ 0.00%14,235,463$ 11,416,724$ 124.69%
2011 - 14,949,354 0.00%14,949,354 11,873,393 125.91%
2012 - 19,567,488 0.00%19,567,488 11,585,243 168.90%
2013 - 20,464,527 0.00%20,464,527 12,048,653 169.85%
2014 N/A N/A N/A N/A N/A N/A
2015 - 15,546,065 0.00%15,546,065 12,332,744 126.06%
N/A - Valuation not performed.
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF FUNDING PROGRESS
OTHER POSTEMPLOYMENT BENEFIT PLAN
December 31, 2015
(See independent auditor's report.)
- 91 -
2015
Actuarially determined contribution 289,298$
Contributions in relation to the actuarially
determined contribution 289,298
CONTRIBUTION DEFICIENCY (Excess)-$
Covered-employee payroll 3,950,495$
Contributions as a percentage of
covered-employee payroll 7.32%
Notes to Required Supplementary Information
ILLINOIS MUNICIPAL RETIREMENT FUND
SCHEDULE OF EMPLOYER CONTRIBUTIONS
VILLAGE OF MORTON GROVE, ILLINOIS
December 31, 2015
The information presented was determined as part of the actuarial valuations as of December 31,
2013.Additional information as of the latest actuarial valuation presented is as follows:the
actuarial cost method was entry-age normal;the amortization method was level percent of pay,
closed,and the amortization period was 28 years;the asset valuation method was five-year
smoothed market;and the significant actuarial assumptions were an investment rate of return at
7.5%annually,projected salary increases assumption of 4.4%to 16.0%compounded annually,
and postretirement benefit increases of 3.0% compounded annually.
(See independent auditor's report.)
- 92 -
2015
Actuarially determined contribution 1,005$
Contributions in relation to the actuarially
determined contribution 1,005
CONTRIBUTION DEFICIENCY (Excess)-$
Covered-employee payroll -$
Contributions as a percentage of
covered-employee payroll 0.00%
Notes to Required Supplementary Information
The information presented was determined as part of the actuarial valuations as of December 31,
2013.Additional information as of the latest actuarial valuation presented is as follows:the
actuarial cost method was entry-age normal;the amortization method was level percent of pay,
closed,and the amortization period was 28 years;the asset valuation method was five-year
smoothed market;and the significant actuarial assumptions were an investment rate of return at
7.5%annually,projected salary increases assumption of 4.4%to 16.0%compounded annually,
and postretirement benefit increases of 3.0% compounded annually.
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF EMPLOYER CONTRIBUTIONS
SHERIFF'S LAW ENFORCEMENT PERSONNEL PLAN
December 31, 2015
(See independent auditor's report.)
- 93 -
2015
Actuarially determined contribution 987,061$
Contributions in relation to the actuarially
determined contribution 921,727
CONTRIBUTION DEFICIENCY (Excess)65,334$
Covered-employee payroll 2,044,912$
Contributions as a percentage of
covered-employee payroll 45.07%
Notes to Required Supplementary Information
The information presented was determined as part of the actuarial valuations as of January 1 of
the prior fiscal year.Additional information as of the latest actuarial valuation presented is as
follows:the actuarial cost method was entry-age normal;the amortization method was level
percent of pay,closed and the amortization period was 29 years;the asset valuation method
was five-year smoothed market;and the significant actuarial assumptions were an investment
rate of return at 7.5%annually,projected salary increases assumption of 4.4%to 16.0%
compounded annually and postretirement benefit increases of 3.0% compounded annually.
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF EMPLOYER CONTRIBUTIONS
MUNICIPAL EMPLOYERS' RETIREMENT FUND
December 31, 2015
(See independent auditor's report.)
- 94 -
2015 2014
Actuarially determined contribution 2,230,643$ 2,114,444$
Contribution in relation to the actuarially
determined contribution 1,819,397 1,746,014
CONTRIBUTION DEFICIENCY (Excess)411,246$ 368,430$
Covered-employee payroll 4,131,663$ 4,017,422$
Contributions as a percentage of
covered-employee payroll 44.04%43.46%
Notes to the Required Supplementary Information:
The information presented was determined as part of the actuarial valuations as of January 1 of
the prior fiscal year.Additional information as of the latest actuarial valuation presented is as
follows:the actuarial cost method was entry-age normal;the amortization method was level
percent of pay,closed and the amortization period was 25 years;the asset valuation method was
at market value;and the significant actuarial assumptions were an investment rate of return of
7.00%annually,projected salary increase assumption of 4.00%to12.08%compounded
annually and postretirement benefit increases of 3.00% compounded annually.
VILLAGE OF MORTON GROVE, ILLINOIS
POLICE PENSION FUND
SCHEDULE OF EMPLOYER CONTRIBUTIONS
December 31, 2015
(See independent auditor's report.)
- 95 -
2015 2014
Actuarially determined contribution 2,190,316$ 2,180,622$
Contribution in relation to the actuarially
determined contribution 1,949,493 1,914,705
CONTRIBUTION DEFICIENCY (Excess)240,823$ 265,917$
Covered-employee payroll 4,101,744$ 3,707,686$
Contributions as a percentage of
covered-employee payroll 47.53%51.64%
Notes to the Required Supplementary Information:
VILLAGE OF MORTON GROVE, ILLINOIS
FIREFIGHTERS' PENSION FUND
SCHEDULE OF EMPLOYER CONTRIBUTIONS
December 31, 2015
The information presented was determined as part of the actuarial valuations as of January 1 of
the prior fiscal year.Additional information as of the latest actuarial valuation presented is as
follows:the actuarial cost method was entry-age normal;the amortization method was level
percent of pay,closed and the amortization period was 25 years;the asset valuation method was
at market value;and the significant actuarial assumptions were an investment rate of return of
7.00%annually,projected salary increase assumption of 4.00%to 11.66%compounded
annually and postretirement benefit increases of 3.00% compounded annually.
(See independent auditor's report.)
- 96 -
Annual
Required
Calendar Employer Contribution Percentage
Year Contributions (ARC)Contributed
2010 560,463$ 1,060,889$ 52.83%
2011 521,940 1,101,892 47.37%
2012 623,335 1,151,127 54.15%
2013 660,352 1,387,902 47.58%
2014 807,884 1,447,500 55.81%
2015 546,470 1,207,192 45.27%
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF EMPLOYER CONTRIBUTIONS
OTHER POSTEMPLOYMENT BENEFIT PLAN
December 31, 2015
(See independent auditor's report.)
- 97 -
2015
TOTAL PENSION LIABILITY
Employer's proportion of net pension liability 74.19%
Employer's proportionate share of net pension liability 992,903$
Employer's covered-employee payroll 2,930,872
Employer's proportionate share of the net pension liability
as a percentage of its covered-employee payroll 33.88%
Plan fiduciary net position as a percentage of the total
pension liability 77.26%
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF THE VILLAGE'S PROPORTIONATE
SHARE OF THE NET PENSION LIABILITY
ILLINOIS MUNICIPAL RETIREMENT FUND
December 31, 2015
(See independent auditor's report.)
- 98 -
2015
TOTAL PENSION LIABILITY
Service cost -$
Interest 7,550
Changes of benefit terms -
Differences between expected and actual experience 830
Changes of assumptions 415
Benefit payments, including refunds of member contributions (7,982)
Net change in total pension liability 813
Total pension liability - beginning 104,794
TOTAL PENSION LIABILITY - ENDING 105,607$
PLAN FIDUCIARY NET POSITION
Contributions - employer 1,005$
Contributions - member -
Net investment income 495
Benefit payments, including refunds of member contributions (7,982)
Administrative expense 5,184
Net change in plan fiduciary net position (1,298)
Plan net position - beginning 102,524
PLAN NET POSITION - ENDING 101,226$
EMPLOYER'S NET PENSION LIABILITY 4,381$
Plan fiduciary net position
as a percentage of the total pension liability 95.90%
Covered-employee payroll -$
Employer's net pension liability
as a percentage of covered-employee payroll 0.00%
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF CHANGES IN THE EMPLOYER'S
NET PENSION LIABILITY AND RELATED RATIOS
SHERIFF'S LAW ENFORCEMENT PERSONNEL PLAN
December 31, 2015
(See independent auditor's report.)
- 99 -
2015
TOTAL PENSION LIABILITY
Service cost 283,482$
Interest 868,067
Changes of benefit terms -
Differences between expected and actual experience (745,910)
Changes of assumptions 7,685,672
Benefit payments, including refunds of member contributions (1,213,649)
Net change in total pension liability 6,877,662
Total pension liability - beginning 18,959,198
TOTAL PENSION LIABILITY - ENDING 25,836,860$
PLAN FIDUCIARY NET POSITION
Contributions - employer 921,727$
Contributions - member 50,401
Net investment income 215,747
Benefit payments, including refunds of member contributions (1,213,649)
Administrative expense -
Net change in plan fiduciary net position (25,774)
Plan net position - beginning 8,338,149
PLAN NET POSITION - ENDING 8,312,375$
EMPLOYER'S NET PENSION LIABILITY 17,524,485$
Plan fiduciary net position
as a percentage of the total pension liability 32.20%
Covered-employee payroll 2,044,912$
Employer's net pension liability
as a percentage of covered-employee payroll 857.00%
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF CHANGES IN THE EMPLOYER'S
NET PENSION LIABILITY AND RELATED RATIOS
MUNICIPAL EMPLOYERS' RETIREMENT FUND
December 31, 2015
(See independent auditor's report.)
- 100 -
2014 2015
TOTAL PENSION LIABILITY
Service cost 999,888$ 1,204,804$
Interest 4,067,424 3,656,752
Changes of benefit terms - -
Differences between expected and actual experience 1,780,289 4,148,200
Changes of assumptions - 3,982,348
Benefit payments, including refunds of member contributions (3,284,173) (3,335,184)
Net change in total pension liability 3,563,428 9,656,920
Total pension liability - beginning 55,964,162 59,527,590
TOTAL PENSION LIABILITY - ENDING 59,527,590$ 69,184,510$
PLAN FIDUCIARY NET POSITION
Contributions - employer 1,746,014$ 1,819,397$
Contributions - member 399,590 412,809
Net investment income 1,972,181 (160,038)
Benefit payments, including refunds of member contributions (3,284,173) (3,335,184)
Administrative expense (47,891) (42,462)
Net change in plan fiduciary net position 785,721 (1,305,478)
Plan net fiduciary position - beginning 31,379,333 32,165,054
PLAN NET FIDUCIARY POSITION - ENDING 32,165,054$ 30,859,576$
EMPLOYER'S NET PENSION LIABILITY 27,362,536$ 38,324,934$
Plan fiduciary net position
as a percentage of the total pension liability 54.00%44.60%
Covered-employee payroll 4,017,422$ 4,131,663$
Employer's net pension liability
as a percentage of covered-employee payroll 681.10%927.60%
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF CHANGES IN THE EMPLOYER'S
NET PENSION LIABILITY AND RELATED RATIOS
POLICE PENSION FUND
December 31, 2015
(See independent auditor's report.)
- 101 -
2014 2015
TOTAL PENSION LIABILITY
Service cost 1,067,954$ 1,356,812$
Interest 3,811,312 3,181,468
Changes of benefit terms - -
Differences between expected and actual experience (661,128) 928,412
Changes of assumptions - 11,295,766
Benefit payments, including refunds of member contributions (2,406,899) (2,530,110)
Net change in total pension liability 1,811,239 14,232,348
Total pension liability - beginning 52,834,148 54,645,387
TOTAL PENSION LIABILITY - ENDING 54,645,387$ 68,877,735$
PLAN FIDUCIARY NET POSITION
Contributions - employer 1,914,705$ 1,949,493$
Contributions - member 376,279 387,408
Net investment income 1,695,835 363,152
Benefit payments, including refunds of member contributions (2,441,253) (2,530,110)
Administrative expense (42,228) (60,860)
Net change in plan fiduciary net position 1,503,338 109,083
Plan net fiduciary position - beginning 28,456,082 29,959,420
PLAN NET FIDUCIARY POSITION - ENDING 29,959,420$ 30,068,503$
EMPLOYER'S NET PENSION LIABILITY 24,685,967$ 38,809,232$
Plan fiduciary net position
as a percentage of the total pension liability 54.80%43.70%
Covered-employee payroll 3,707,686$ 4,101,744$
Employer's net pension liability
as a percentage of covered-employee payroll 665.80%946.20%
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF CHANGES IN THE EMPLOYER'S
NET PENSION LIABILITY AND RELATED RATIOS
FIREFIGHTERS' PENSION FUND
December 31, 2015
(See independent auditor's report.)
- 102 -
2014 2015
Annual money-weighted rate of return,
net of investment expense 2.80%2.89%
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF INVESTMENT RETURNS
MUNICIPAL EMPLOYERS' RETIREMENT FUND
December 31, 2015
(See independent auditor's report.)
- 103 -
2014 2015
Annual money-weighted rate of return,
net of investment expense 6.12%(0.46%)
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF INVESTMENT RETURNS
POLICE PENSION FUND
December 31, 2015
(See independent auditor's report.)
- 104 -
2014 2015
Annual money-weighted rate of return,
net of investment expense 6.00%1.21%
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF INVESTMENT RETURNS
FIREFIGHTERS' PENSION FUND
December 31, 2015
(See independent auditor's report.)
- 105 -
COMBINING AND INDIVIDUAL FUND
FINANCIAL STATEMENTS AND SCHEDULES
MAJOR GOVERNMENTAL FUNDS
GENERAL FUND
The General Fund is used to account for resources traditionally associated with governments
which are accounted for in another fund. It receives a greater variety and amount of revenues and
finances a wider range of governmental activities than any other fund. Major functions financed
by the General Fund include:
Legislative Administrative
Legal Finance
Management Information Systems Police
Fire/ESDA Public Works
Vehicle Maintenance Solid Waste Disposal
Health and Human Services Community Development
Building and Inspectional Services
DEBT SERVICE FUND
The Debt Service Fund is used to account for the payment of governmental long-term debt. The
Debt Service Fund accounts for the principal and interest payments of all long-term debt incurred
by the Village, except for the Water Revenue Bonds and various installment notes, which are
accounted for in the Proprietary Fund.
CAPITAL PROJECTS FUND
The Capital Projects Fund is used to account for the financial resources used for major
infrastructure and other capital improvements (other than those financed by the Proprietary
Fund) within the Village. Bond issues used to finance a specific capital project, are separately
accounted for in this fund. The description of the Capital Projects Fund is as follows:
Capital Projects Fund - accounts for property taxes levied and other resources accumulated
primarily for major infrastructure and other capital improvements.
MAJOR GOVERNMENTAL FUNDS (Continued)
LEHIGH/FERRIS TAX INCREMENT FINANCING FUND
Lehigh/Ferris Tax Increment Financing Fund accounts for tax increment revenue and other
financial resources received along with the costs related to the Village’s Tax Increment
Financing (TIF) District. The fund entails the TIF District along Lehigh and Ferris Avenues. The
TIF District is authorized by state law and is created to promote redevelopment of certain parcels
declared as “blighted” into a higher and more productive land use.
WAUKEGAN ROAD TAX INCREMENT FINANCING FUND
The Waukegan Road Tax Increment Financing Fund accounts for tax increment revenue and
other financial resources received along with the costs related to the Village’s Tax Increment
Financing (TIF) District. The fund entails the TIF District along Waukegan Road. The TIF
District is authorized by state law and is created to promote redevelopment of certain parcels
declared as “blighted” into a higher and more productive land use.
Original Final 2014
Budget Budget Actual Actual
GENERAL GOVERNMENT
Legislative
Personal services 66,400$ 66,400$ 58,783$ 56,004$
Contractual services 47,550 47,550 33,501 36,457
Commodities 13,500 13,500 1,818 698
Total legislative 127,450 127,450 94,102 93,159
Administrative
Personal services 582,900 582,900 590,329 638,862
Contractual services 135,725 135,725 70,459 53,222
Commodities 3,000 3,000 2,658 2,599
Total administrative 721,625 721,625 663,446 694,683
Finance
Personal services 1,274,346 1,274,346 1,239,971 948,633
Contractual services 896,380 896,380 519,366 520,388
Commodities 8,500 8,500 9,954 4,132
Less administrative fees
Municipal Parking Fund (10,200) (10,200) (10,200) (10,000)
Water and Sewer Fund (153,000) (153,000) (153,000) (150,000)
Total finance 2,016,026 2,016,026 1,606,091 1,313,153
Management information services
Professional services 236,900 236,900 155,943 150,324
Contractual services 432,440 432,440 383,372 310,404
Capital outlay 63,300 63,300 50,553 27,832
Total management information services 732,640 732,640 589,868 488,560
Legal
Contractual services 175,500 175,500 86,375 114,808
Other expenditures
Other 200,000 200,000 219,450 141,150
Total other expenditures 200,000 200,000 219,450 141,150
Total general government 3,973,241 3,973,241 3,259,332 2,845,513
PUBLIC SAFETY
Police
Personal services 8,281,375 8,281,375 8,217,158 8,149,053
Contractual services 862,470 862,470 795,505 865,296
Commodities 126,965 126,965 107,504 132,471
Capital outlay 184,880 184,880 153,373 177,467
Total police 9,455,690 9,455,690 9,273,540 9,324,287
2015
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL
GENERAL FUND
For the Year Ended December 31, 2015
(with prior year actual for 2014)
(This schedule is continued on the following pages.)
- 106 -
Original Final 2014
Budget Budget Actual Actual
PUBLIC SAFETY (Continued)
Fire
Personal services 7,398,478$ 7,398,478$ 7,739,894$ 7,556,399$
Contractual services 346,520 346,520 334,853 327,205
Commodities 116,400 116,400 99,261 102,531
Capital outlay - - 625,961 83,942
Total fire 7,861,398 7,861,398 8,799,969 8,070,077
Civil preparedness
Personal services - - - 108
Contractual services 6,615 6,615 1,702 2,745
Commodities 3,000 3,000 - -
Total civil preparedness 9,615 9,615 1,702 2,853
Total public safety 17,326,703 17,326,703 18,075,211 17,397,217
STREETS AND SIDEWALKS
Streets and sidewalks
Personal services 1,798,400 1,798,400 1,685,834 1,727,596
Contractual services 599,750 599,750 452,011 445,227
Commodities 163,950 163,950 170,190 146,691
Capital outlay 10,100 10,100 19,803 607,503
Less administrative fees
Motor Fuel Tax Fund (196,970) (196,970) (196,970) (191,700)
Commuter Parking Facility Fund (120,000) (120,000) (120,000) (116,800)
Total streets and sidewalks 2,255,230 2,255,230 2,010,868 2,618,517
Engineering
Personal services 379,900 379,900 370,386 400,177
Contractual services 35,550 35,550 8,490 6,354
Commodities 2,900 2,900 2,110 3,216
Total engineering 418,350 418,350 380,986 409,747
Total streets and sidewalks 2,673,580 2,673,580 2,391,854 3,028,264
VEHICLE MAINTENANCE
Personal services 318,100 318,100 304,275 307,211
Contractual services 113,900 113,900 101,734 80,169
Commodities 385,735 385,735 295,165 405,723
Total vehicle maintenance 817,735 817,735 701,174 793,103
HEALTH AND HUMAN SERVICES
Family and senior services
Personal services 118,400 118,400 102,363 121,522
Contractual services 164,690 164,690 106,496 147,965
Commodities 13,300 13,300 8,389 13,410
Total health and human services 296,390 296,390 217,248 282,897
COMMUNITY DEVELOPMENT
(with prior year actual for 2014)
2015
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL (Continued)
GENERAL FUND
For the Year Ended December 31, 2015
(This schedule is continued on the following page.)
- 107 -
Original Final 2014
Budget Budget Actual Actual
(with prior year actual for 2014)
2015
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL (Continued)
GENERAL FUND
For the Year Ended December 31, 2015
Personal services 264,000$ 264,000$ 247,563$ 177,415$
Contractual services 62,600 62,600 12,333 11,670
Commodities 4,000 4,000 300 624
Total community development 330,600 330,600 260,196 189,709
BUILDING AND INSPECTION SERVICES
Building and inspectional services
Personal services 491,900 491,900 459,678 429,659
Contractual services 98,525 98,525 14,601 32,467
Commodities 5,400 5,400 1,141 1,546
Capital outlay - - - 26,480
Total building and inspectional services 595,825 595,825 475,420 490,152
Municipal buildings
Personal services 29,200 29,200 23,080 22,355
Contractual services 237,900 237,900 185,754 184,711
Commodities 8,000 8,000 5,736 5,540
Capital outlay 23,670 23,670 17,764 87,498
Total municipal buildings 298,770 298,770 232,334 300,104
Total building and inspection services 894,595 894,595 707,754 790,256
TOTAL EXPENDITURES 26,312,844$ 26,312,844$ 25,612,769$ 25,326,959$
(See independent auditor's report.)
- 108 -
Original and 2014
Final Budget Actual Actual
REVENUES
Property taxes 456,904$ 828,286$ 985,364$
Sales taxes 50,000 50,000 550,000
Intergovernmental 70,500 75,856 75,693
Investment income 500 529 880
Total revenues 577,904 954,671 1,611,937
EXPENDITURES
Debt service
Principal retirement 377,834 377,834 1,634,083
Interest and fiscal charges 339,070 450,092 337,829
Total expenditures 716,904 827,926 1,971,912
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (139,000) 126,745 (359,975)
OTHER FINANCING SOURCES (USES)
Transfers in 163,783 163,783 492,263
Total other financing sources (uses)163,783 163,783 492,263
NET CHANGE IN FUND BALANCE 24,783$ 290,528 132,288
FUND BALANCE (DEFICIT), JANUARY 1 46,839 (85,449)
FUND BALANCE, DECEMBER 31 337,367$ 46,839$
2015
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
DEBT SERVICE FUND
For the Year Ended December 31, 2015
(with prior year actual for 2014)
(See independent auditor's report.)
- 109 -
Original and 2014
Final Budget Actual Actual
REVENUES
Property taxes 100,000$ 100,223$ 50,634$
Sales taxes 25,000 25,000 25,000
Intergovernmental
Personal property replacement tax 34,100 33,115 35,282
Other intergovernmental 645,000 46,624 -
Investment income 5,000 1,964 1,311
Miscellaneous revenue - 5,678 -
Total revenues 809,100 212,604 112,227
EXPENDITURES
General government
Contractual services - - 124,145
Debt service
Interest and fiscal charges 20,000 41,411 -
Capital outlay
Capital projects
Construction 822,500 1,780,640 296,422
Machinery and equipment - 262,466 -
Engineering 245,000 27,081 16,569
Total expenditures 1,087,500 2,111,598 437,136
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (278,400) (1,898,994) (324,909)
OTHER FINANCING SOURCES (USES)
Issuance of general obligation bonds - 4,395,000 -
Premium on bonds issued - 646,411 -
Total other financing sources (uses)- 5,041,411 -
NET CHANGE IN FUND BALANCE (278,400)$ 3,142,417 (324,909)
FUND BALANCE, JANUARY 1 753,147 1,078,056
FUND BALANCE, DECEMBER 31 3,895,564$ 753,147$
2015
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CAPITAL PROJECTS FUND
For the Year Ended December 31, 2015
(with prior year actual for 2014)
(See independent auditor's report.)
- 110 -
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for the proceeds of specific revenue sources (other
than for major capital projects) that are legally restricted to expenditures for specific purposes.
Seven individual funds are reported within the Special Revenue Funds as follows:
Motor Fuel Tax Fund - accounts for monies received from the state levied tax on the sale of
fuels and the expenditures for capitalized construction, improvements or general maintenanc e
to the Village roadway system.
Commuter Parking Facility Fund - accounts for the cost of major improvements and general
maintenance to the commuter parking facility on Lehigh Avenue. Revenues are primarily
received from the daily parking fee imposed on the users of the facility.
9-1-1 Emergency Telephone System Fund - accounts for telephone surcharge fees collected
for the 9-1-1 emergency telephone system. The funds are to be disbursed for the purchase
and subsequent maintenance of that system.
Economic Development Fund - accounts for expenditures related to promoting economic
development throughout the Village. The fund also accounts for non-TIF redevelopment
costs including those that support an existing TIF but whose redevelopment is not directly
within a TIF established district.
Fire Alarm Fund - accounts for expenditures related to fire alarm costs for the Regional
Emergency Dispatch Center. The funds are to be disbursed for the purchase and subsequent
maintenance of fire alarms.
Seizure Fund - accounts for expenditures related to public safety. Revenues are primarily
received from the seizure of assets within the Village limits.
Dempster/Waukegan TIF Fund - accounts for expenditures related to promoting economic
redevelopment in the Prairie View Shopping Center within the Dempster/Waukegan TIF
District.
9-1-1
Commuter Emergency
Motor Parking Telephone
Fuel Tax Facility System
Cash and cash equivalents 729,077$ 62,391$ -$
Investments - - -
Sales tax receivable - - -
Accounts, miscellaneous and
allotments receivable 98,619 - 124,640
TOTAL ASSETS 827,696$ 62,391$ 124,640$
LIABILITIES
Accounts payable and retainage payable 62,652$ 657$ 1,952$
Due to other funds - - 22,310
Advances from other funds - - -
Total liabilities 62,652 657 24,262
FUND BALANCES
Restricted for
Public safety - - 100,378
Highways and streets 765,044 - -
Committed for commuter improvements - 61,734 -
Unassigned (deficit)- - -
Total fund balances (deficit)765,044 61,734 100,378
TOTAL LIABILITIES AND
FUND BALANCES 827,696$ 62,391$ 124,640$
ASSETS
LIABILITIES AND FUND BALANCES
VILLAGE OF MORTON GROVE, ILLINOIS
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2015
Special Revenue Funds
- 111 -
Economic Fire Dempster/
Development Alarm Seizure Waukegan TIF Total
-$ 323,555$ 748,816$ -$ 1,863,839$
95,275 - - - 95,275
286,666 - - - 286,666
- - - - 223,259
381,941$ 323,555$ 748,816$ -$ 2,469,039$
157,515$ 4,532$ -$ 5,116$ 232,424$
253,667 - - - 275,977
- - - 286,012 286,012
411,182 4,532 - 291,128 794,413
- 319,023 748,816 - 1,168,217
- - - - 765,044
- - - - 61,734
(29,241) - - (291,128) (320,369)
(29,241) 319,023 748,816 (291,128) 1,674,626
381,941$ 323,555$ 748,816$ -$ 2,469,039$
Special Revenue Funds
(See independent auditor's report.)
- 112 -
9-1-1
Commuter Emergency
Motor Parking Telephone
Fuel Tax Facility System
REVENUES
Sales taxes -$ -$ -$
Intergovernmental 663,741 - -
Surcharge fees - - 283,028
Charges for services - 172,919 -
Investment income 217 - -
Total revenues 663,958 172,919 283,028
EXPENDITURES
Current
Public safety - - 258,710
Streets and sidewalks 759,108 171,040 -
Community development - - -
Capital outlay - - -
Total expenditures 759,108 171,040 258,710
NET CHANGE IN FUND BALANCES (95,150) 1,879 24,318
FUND BALANCES (DEFICIT), JANUARY 1 860,194 59,855 76,060
FUND BALANCES (DEFICIT), DECEMBER 31 765,044$ 61,734$ 100,378$
COMBINING STATEMENT OF REVENUES, EXPENDITURES
VILLAGE OF MORTON GROVE, ILLINOIS
Special Revenue Funds
For the Year Ended December 31, 2015
NONMAJOR GOVERNMENTAL FUNDS
AND CHANGES IN FUND BALANCES
- 113 -
Economic Fire Dempster/
Development Alarm Seizure Waukegan TIF Total
1,147,920$ -$ -$ -$ 1,147,920$
- - 300,725 - 964,466
- - - - 283,028
- 204,533 - - 377,452
452 - 917 - 1,586
1,148,372 204,533 301,642 - 2,774,452
- 50,522 106,926 - 416,158
- - - - 930,148
753,352 - - 94,462 847,814
- 10,320 - - 10,320
753,352 60,842 106,926 94,462 2,204,440
395,020 143,691 194,716 (94,462) 570,012
(424,261) 175,332 554,100 (196,666) 1,104,614
(29,241)$ 319,023$ 748,816$ (291,128)$ 1,674,626$
Special Revenue Funds
(See independent auditor's report.)
- 114 -
Original and 2014
Final Budget Actual Actual
REVENUES
Intergovernmental
Motor fuel taxes 565,461$ 568,891$ 576,464$
Miscellaneous 97,000 94,850 158,042
Investment income 50 217 85
Total revenues 662,511 663,958 734,591
EXPENDITURES
Streets and sidewalks
Materials 668,350 516,686 252,653
Lighting 80,000 45,452 67,971
Administrative fees
General Fund 196,970 196,970 191,700
Total expenditures 945,320 759,108 512,324
NET CHANGE IN FUND BALANCE (282,809)$ (95,150) 222,267
FUND BALANCE, JANUARY 1 860,194 637,927
FUND BALANCE, DECEMBER 31 765,044$ 860,194$
2015
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
MOTOR FUEL TAX FUND
For the Year Ended December 31, 2015
(with prior year actual for 2014)
(See independent auditor's report.)
- 115 -
Original and 2014
Final Budget Actual Actual
REVENUES
Charges for services 140,000$ 172,919$ 145,953$
Investment income 250 - 105
Total revenues 140,250 172,919 146,058
EXPENDITURES
Streets and sidewalks
Utilities and maintenance
of street lighting 15,700 18,424 45,866
Commodities 22,050 22,116 18,685
Administrative fees
General Fund 120,000 120,000 116,800
Water and Sewer Fund 10,500 10,500 10,500
Total expenditures 168,250 171,040 191,851
NET CHANGE IN FUND BALANCE (28,000)$ 1,879 (45,793)
FUND BALANCE, JANUARY 1 59,855 105,648
FUND BALANCE, DECEMBER 31 61,734$ 59,855$
2015
(with prior year actual for 2014)
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
COMMUTER PARKING FACILITY FUND
For the Year Ended December 31, 2015
(See independent auditor's report.)
- 116 -
Original and 2014
Final Budget Actual Actual
REVENUES
Telecommunications surcharges 253,000$ 283,028$ 246,727$
Investment income 50 - 26
Total revenues 253,050 283,028 246,753
EXPENDITURES
Public safety
Contractual services 258,800 258,710 250,839
Total expenditures 258,800 258,710 250,839
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (5,750) 24,318 (4,086)
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets - - 7,010
Total other financing sources (uses)- - 7,010
NET CHANGE IN FUND BALANCE (5,750)$ 24,318 2,924
FUND BALANCE, JANUARY 1 76,060 73,136
FUND BALANCE, DECEMBER 31 100,378$ 76,060$
2015
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
9-1-1 EMERGENCY TELEPHONE SYSTEM FUND
For the Year Ended December 31, 2015
(with prior year actual for 2014)
(See independent auditor's report.)
- 117 -
Original and 2014
Final Budget Actual Actual
REVENUES
Sales taxes 1,165,000$ 1,147,920$ 554,355$
Investment income 150 452 490
Total revenues 1,165,150 1,148,372 554,845
EXPENDITURES
Community development
Contractual services 917,611 745,448 802,402
Capital outlay 60,000 7,904 -
Total expenditures 977,611 753,352 802,402
NET CHANGE IN FUND BALANCE 187,539$ 395,020 (247,557)
FUND BALANCE (DEFICIT), JANUARY 1 (424,261) (176,704)
FUND BALANCE (DEFICIT), DECEMBER 31 (29,241)$ (424,261)$
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF REVENUES, EXPENDITURES AND
2015
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ECONOMIC DEVELOPMENT FUND
For the Year Ended December 31, 2015
(with prior year actual for 2014)
(See independent auditor's report.)
- 118 -
Original and 2014
Final Budget Actual Actual
REVENUES
Charges for services 124,000$ 204,533$ 178,987$
Investment income 100 - 311
Total revenues 124,100 204,533 179,298
EXPENDITURES
Public safety
Personal services 20,400 20,345 18,938
Contractual services 36,400 30,177 28,903
Capital outlay 22,000 10,320 -
Total expenditures 78,800 60,842 47,841
NET CHANGE IN FUND BALANCE 45,300$ 143,691 131,457
FUND BALANCE, JANUARY 1 175,332 43,875
FUND BALANCE, DECEMBER 31 319,023$ 175,332$
2015
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FIRE ALARM FUND
For the Year Ended December 31, 2015
(with prior year actual for 2014)
(See independent auditor's report.)
- 119 -
Original and 2014
Final Budget Actual Actual
REVENUES
Intergovernmental 37,500$ 300,725$ 181,643$
Investment income 350 917 564
Total revenues 37,850 301,642 182,207
EXPENDITURES
Public safety
Contractual services 134,050 106,926 9,271
Total expenditures 134,050 106,926 9,271
NET CHANGE IN FUND BALANCE (96,200)$ 194,716 172,936
FUND BALANCE, JANUARY 1 554,100 381,164
FUND BALANCE, DECEMBER 31 748,816$ 554,100$
2015
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SEIZURE FUND
For the Year Ended December 31, 2015
(with prior year actual for 2014)
(See independent auditor's report.)
- 120 -
Original and 2014
Final Budget Actual Actual
REVENUES
Property taxes 500,000$ -$ -$
Investment income 100 - -
Total revenues 500,100 - -
EXPENDITURES
Community development
Personnel services 34,300 19,912 18,162
Contractual services 213,800 74,550 56,880
Capital outlay 3,250,000 - -
Total expenditures 3,498,100 94,462 75,042
NET CHANGE IN FUND BALANCE (2,998,000)$ (94,462) (75,042)
FUND BALANCE (DEFICIT), JANUARY 1 (196,666) (121,624)
FUND BALANCE (DEFICIT), DECEMBER 31 (291,128)$ (196,666)$
2015
VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
DEMPSTER/WAUKEGAN TIF FUND
For the Year Ended December 31, 2015
(with prior year actual for 2014)
(See independent auditor's report.)
- 121 -
NONMAJOR PROPRIETARY FUNDS
Solid Waste Fund - accounts for the operation of the Village waste collection services. All
activities necessary to provide such services mainly involve the collection and disposition of
waste and recyclable items.
Municipal Parking Fund - accounts for the operation of the Village parking lots and monies
received from permit sales. All activities necessary to provide such services are accounted for
in this fund, including but not limited to operations, maintenance and improvements.
Solid Municipal
Waste Parking Total
CURRENT ASSETS
Cash and cash equivalents 373,013$ 232,044$ 605,057$
Receivables 58,431 50 58,481
Prepaid expenses 31,046 - 31,046
Total current assets 462,490 232,094 694,584
Total assets 462,490 232,094 694,584
CURRENT LIABILITIES
Accounts payable 167,587 846 168,433
Unearned revenue - 35,465 35,465
Total current liabilities 167,587 36,311 203,898
Total liabilities 167,587 36,311 203,898
NET POSITION
Unrestricted 294,903 195,783 490,686
TOTAL NET POSITION 294,903$ 195,783$ 490,686$
NONMAJOR PROPRIETARY FUNDS
December 31, 2015
VILLAGE OF MORTON GROVE, ILLINOIS
COMBINING STATEMENT OF NET POSITION
(See independent auditor's report.)
- 122 -
Total
Solid Municipal Nonmajor
Waste Parking Enterprise
OPERATING REVENUES
Waste charges 2,014,617$ -$ 2,014,617$
Parking charges - 57,935 57,935
Total operating revenues 2,014,617 57,935 2,072,552
OPERATING EXPENSES
Contractual services and other charges 1,869,199 352 1,869,551
Commodities - 796 796
Administrative fees - 10,200 10,200
Total operating expenses 1,869,199 11,348 1,880,547
OPERATING INCOME 145,418 46,587 192,005
NON-OPERATING REVENUES
Interest income 5 - 5
CHANGE IN NET POSITION 145,423 46,587 192,010
NET POSITION, JANUARY 1 149,480 149,196 298,676
NET POSITION, DECEMBER 31 294,903$ 195,783$ 490,686$
VILLAGE OF MORTON GROVE, ILLINOIS
COMBINING STATEMENT OF REVENUES, EXPENSES
NONMAJOR PROPRIETARY FUNDS
For the Year Ended December 31, 2015
AND CHANGES IN NET POSITION
(See independent auditor's report.)
- 123 -
Solid Municipal
Waste Parking Total
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users 2,016,544$ 55,785$ 2,072,329$
Payments to suppliers (1,887,991) (11,002) (1,898,993)
Net cash from operating activities 128,553 44,783 173,336
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
None - - -
Net cash from noncapital
financing activities - - -
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
None - - -
Net cash from capital and
related financing activities - - -
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 5 - 5
Net cash from investing activities 5 - 5
NET INCREASE IN CASH AND
CASH EQUIVALENTS 128,558 44,783 173,341
CASH AND CASH EQUIVALENTS, JANUARY 1 244,455 187,261 431,716
CASH AND CASH EQUIVALENTS, DECEMBER 31 373,013$ 232,044$ 605,057$
RECONCILIATION OF OPERATING INCOME TO NET
CASH FLOWS FROM OPERATING ACTIVITIES
Operating income 145,418$ 46,587$ 192,005$
Adjustments to reconcile operating income to net
cash from operating activities
Changes in operating assets and liabilities
Receivables 1,927 20,145 22,072
Prepaid expenses 9,418 - 9,418
Payables (28,210) 346 (27,864)
Unearned revenues - (22,295) (22,295)
NET CASH FROM OPERATING ACTIVITIES 128,553$ 44,783$ 173,336$
SCHEDULE OF NONCASH TRANSACTIONS
None -$ -$ -$
VILLAGE OF MORTON GROVE, ILLINOIS
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR PROPRIETARY FUNDS
For the Year Ended December 31, 2015
(See independent auditor's report.)
- 124 -
FIDUCIARY FUNDS
PENSION TRUST FUNDS
Municipal Employees’ Retirement Fund - accounts for the accumulation of resources to be used
for retirement and disability pensions for the Village’s municipal employees.
Police Pension Fund - accounts for the accumulation of resources to be used for retirement and
disability pensions for the Village’s sworn police personnel. Most rules and regulations of the
fund are established by the pension division of the Illinois Department of Insurance.
Firefighters’ Pension Fund - accounts for the accumulation of resources to be used for retirement
and disability pensions for the Village’s sworn fire personnel. Most rules and regulations of the
fund are established by the pension division of the Illinois Department of Insurance.
VILLAGE OF MORTON GROVE, ILLINOIS
COMBINING STATEMENT OF PLAN NET POSITION
PENSION TRUST FUNDS
December 31, 2015
Municipal
Employees' Police Firefighters'
Retirement Pension Pension Total
Cash and cash equivalents -$ 1,243,330$ 493,767$ 1,737,097$
Investments, at fair value
Equitites - 16,017,914 16,021,477 32,039,391
Corporate bonds - 5,765,241 - 5,765,241
Annuity contracts 8,997,726 - - 8,997,726
U.S. Treasury obligations - 5,866,415 2,594,781 8,461,196
U.S. agency obligations - 1,356,294 9,024,881 10,381,175
Municipal bonds - 537,109 1,870,060 2,407,169
Receivables
Accrued interest - 83,620 82,113 165,733
Other 415,552 1,106 4,055 420,713
Due from primary government 510,853 - - 510,853
Prepaid expenses - 4,217 2,180 6,397
Total assets 9,924,131 30,875,246 30,093,314 70,892,691
LIABILITIES
Accounts payable - 15,670 24,811 40,481
Total liabilities - 15,670 24,811 40,481
NET POSITION RESTRICTED FOR
PENSIONS 9,924,131$ 30,859,576$ 30,068,503$ 70,852,210$
ASSETS
(See independent auditor's report.)
- 125 -
Municipal
Employees' Police Firefighters'2014
Retirement Pension Pension Total Actual
ADDITIONS
Contributions
Employer 1,067,727$ 1,819,397$ 1,949,493$ 4,836,617$ 4,455,737$
Employee 50,401 412,809 387,408 850,618 818,986
Total contributions 1,118,128 2,232,206 2,336,901 5,687,235 5,274,723
Investment income
Net appreciation (depreciation) in
fair value of investments - (824,383) (677,635) (1,502,018) 2,633,283
Interest 277,956 721,623 1,116,661 2,116,240 1,479,183
Total investment income 277,956 (102,760) 439,026 614,222 4,112,466
Less investment expense (2,266) (57,278) (75,874) (135,418) (164,193)
Net investment income 275,690 (160,038) 363,152 478,804 3,948,273
Total additions 1,393,818 2,072,168 2,700,053 6,166,039 9,222,996
DEDUCTIONS
Retirement benefits 1,374,426 2,859,392 1,682,070 5,915,888 5,132,732
Duty/nonduty disability benefits - 140,768 544,117 684,885 681,243
Surviving spouse benefits - 279,431 303,923 583,354 552,711
Refunds - 55,593 - 55,593 208,308
Administrative expenses 20,185 42,462 60,860 123,507 90,119
Total deductions 1,394,611 3,377,646 2,590,970 7,363,227 6,665,113
NET INCREASE (DECREASE)(793) (1,305,478) 109,083 (1,197,188) 2,557,883
NET POSITION RESTRICTED
FOR PENSIONS
January 1 9,924,924 32,165,054 29,959,420 72,049,398 69,491,515
December 31 9,924,131$ 30,859,576$ 30,068,503$ 70,852,210$ 72,049,398$
2015
(with prior year actual for 2014)
VILLAGE OF MORTON GROVE, ILLINOIS
COMBINING STATEMENT OF CHANGES IN PLAN NET POSITION
PENSION TRUST FUNDS
For the Year Ended December 31, 2015
(See independent auditor's report.)
- 126 -
STATISTICAL SECTION (Unaudited)
This part of the Village of Morton Grove, Illinois’ comprehensive annual financial report
presents detailed information as a context for understanding what the information in the financial
statements, note disclosures and required supplementary information displays about the Village’s
overall financial health.
Contents Page(s)
Financial Trends
These schedules contain trend information to help the reader understand
how the Village’s financial performance and well-being have been changed
over time.
127-136
Revenue Capacity
These schedules contain information to help the reader assess the Village’s
most significant local revenue source, the property tax.
137-140
Debt Capacity
The schedules present information to help the reader assess the
affordability of the Village’s current levels of outstanding debt and the
Village’s ability to issue additional debt in the future.
141-144
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the
reader understand the environment within which the Village’s financial
activities take place.
145-146
Operating Information
These schedules contain service and infrastructure data to help the reader
understand how the information in the Village’s financial report relates to
the services the Village provides and the activities it performs.
147-149
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year.
Fiscal Year 2006 2007 2008 2009
GOVERNMENTAL ACTIVITIES
Net investment in capital assets 49,824,312$ 50,519,769$ 46,369,992$ 43,660,888$
Restricted 1,618,149 1,320,956 1,490,542 15,697,500
Unrestricted (16,684,584) (15,865,423) (12,451,299) (24,936,412)
TOTAL GOVERNMENTAL ACTIVITIES 34,757,877$ 35,975,302$ 35,409,235$ 34,421,976$
BUSINESS-TYPE ACTIVITIES
Net investment in capital assets 431,305$ 779,852$ 1,194,967$ 1,918,346$
Restricted - - - -
Unrestricted 1,518,474 1,557,185 1,396,375 928,429
TOTAL BUSINESS-TYPE ACTIVITIES 1,949,779$ 2,337,037$ 2,591,342$ 2,846,775$
PRIMARY GOVERNMENT
Net investment in capital assets 50,255,617$ 51,299,621$ 47,564,959$ 45,579,234$
Restricted 1,618,149 1,320,956 1,490,542 15,697,500
Unrestricted (15,166,110) (14,308,238) (11,054,924) (24,007,983)
TOTAL PRIMARY GOVERNMENT 36,707,656$ 38,312,339$ 38,000,577$ 37,268,751$
Note: The Village implemented GASB Statement No. 68 in 2015.
Data Source
Audited Financial Statements
VILLAGE OF MORTON GROVE, ILLINOIS
NET POSITION BY COMPONENT
Last Ten Fiscal Years
- 127 -
2010 2011 2012 2013 2014 2015
40,455,570$ 44,804,287$ 44,017,021$ 45,225,759$ 44,444,400$ 44,953,060$
19,784,173 11,645,390 13,415,241 14,644,385 15,893,795 17,293,933
(23,196,704) (18,379,105) (20,475,242) (23,595,025) (23,603,372) (71,822,364)
37,043,039$ 38,070,572$ 36,957,020$ 36,275,119$ 36,734,823$ (9,575,371)$
3,844,337$ 4,490,571$ 4,108,087$ 4,945,237$ 5,875,794$ 5,778,164$
- - - - - -
177,104 409,939 2,044,418 2,835,446 3,765,559 1,925,554
4,021,441$ 4,900,510$ 6,152,505$ 7,780,683$ 9,641,353$ 7,703,718$
44,299,907$ 45,414,747$ 48,125,108$ 50,170,996$ 50,320,194$ 50,731,224$
19,784,173 11,645,390 13,415,241 14,644,385 15,893,795 17,293,933
(23,019,600) (14,089,055) (18,430,824) (20,759,579) (19,837,813) (69,896,810)
41,064,480$ 42,971,082$ 43,109,525$ 44,055,802$ 46,376,176$ (1,871,653)$
- 128 -
Fiscal Year 2006 2007 2008 2009
EXPENSES
Governmental activities
General government 3,556,886$ 4,390,997$ 4,587,340$ 3,987,630$
Public safety 13,752,166 14,558,399 15,324,442 16,452,967
Streets and highways 3,205,566 3,187,348 4,196,379 3,815,984
Sanitation 411,845 627,214 632,928 646,686
Vehicle maintenance 752,462 872,991 932,625 752,089
Health and human services 557,683 669,564 679,218 717,693
Community development 2,023,898 2,433,222 2,047,185 778,130
Building and inspectional services 710,282 718,784 693,218 812,585
Interest 745,013 1,180,450 1,254,168 879,876
Total governmental activities expenses 25,715,801 28,638,969 30,347,503 28,843,640
Business-type activities
Water and sewer 4,026,028 4,047,889 4,550,240 4,995,861
Solid waste - - - -
Municipal parking - - - -
Total business-type activities expenses 4,026,028 4,047,889 4,550,240 4,995,861
TOTAL PRIMARY GOVERNMENT
EXPENSES 29,741,829$ 32,686,858$ 34,897,743$ 33,839,501$
PROGRAM REVENUES
Governmental activities
Charges for services
General government 2,202,037$ 2,289,270$ 2,151,555$ 2,068,374$
Public safety 314,940 469,729 439,602 478,189
Other activities 135,589 88,338 83,477 77,835
Operating grants and contributions 1,099,295 826,813 699,862 804,094
Capital grants and contributions 216,256 339,372 55,729 1,244
Total governmental activities
program revenues 3,968,117 4,013,522 3,430,225 3,429,736
Business-type activities
Charges for services
Water and sewer 4,174,016 4,239,458 4,596,060 4,990,281
Solid waste - - - -
Municipal parking - - - -
Capital grants and contributions - - - -
Total business-type activities
program revenues 4,174,016 4,239,458 4,596,060 4,990,281
TOTAL PRIMARY GOVERNMENT
PROGRAM REVENUE 8,142,133$ 8,252,980$ 8,026,285$ 8,420,017$
NET (EXPENSE) REVENUE
Governmental activities (21,747,684)$ (24,625,447)$ (26,917,278)$ (25,413,904)$
Business-type activities 147,988 191,569 45,820 (5,580)
TOTAL PRIMARY GOVERNMENT
NET (EXPENSE) REVENUE (21,599,696)$ (24,433,878)$ (26,871,458)$ (25,419,484)$
VILLAGE OF MORTON GROVE, ILLINOIS
CHANGE IN NET POSITION
Last Ten Fiscal Years
- 129 -
2010 2011 2012 2013 2014 2015
3,394,369$ 2,989,799$ 5,634,828$ 3,826,691$ 3,749,953$ 5,122,457$
16,785,158 18,359,859 18,526,759 18,773,860 19,225,281 25,760,081
4,312,475 4,685,104 3,547,591 5,823,268 4,043,649 7,364,136
74,942 - - - - -
720,434 738,039 816,073 846,686 793,103 701,174
383,133 254,522 266,405 270,450 282,897 220,531
695,599 331,224 470,695 467,393 980,882 1,118,066
511,905 533,941 699,282 845,669 794,883 714,270
1,018,423 1,043,389 862,272 805,158 781,321 943,022
27,896,438 28,935,877 30,823,905 31,659,175 30,651,969 41,943,737
5,204,329 5,371,031 6,286,120 6,770,519 7,356,131 10,269,076
1,352,270 1,818,505 1,820,057 1,869,140 1,857,923 1,869,199
- - 370 11,721 11,380 11,348
6,556,599 7,189,536 8,106,547 8,651,380 9,225,434 12,149,623
34,453,037$ 36,125,413$ 38,930,452$ 40,310,555$ 39,877,403$ 54,093,360$
2,928,022$ 2,889,549$ 2,870,140$ 3,120,247$ 3,426,448$ 3,273,344$
522,603 722,977 668,063 905,530 961,296 1,087,239
98,009 7,981 3,657 8,306 2,403 8,102
978,467 882,240 1,002,278 758,925 829,051 1,077,504
216,450 278,738 157,618 462,298 158,042 141,474
4,743,551 4,781,485 4,701,756 5,255,306 5,377,240 5,587,663
5,451,711 5,773,298 7,106,948 7,857,661 8,678,471 8,691,690
1,207,409 1,830,623 1,888,288 1,956,253 1,983,404 2,014,617
- 13,660 44,325 54,091 59,633 57,935
811,519 64,122 64,122 59,024 59,473 59,601
7,470,639 7,681,703 9,103,683 9,927,029 10,780,981 10,823,843
12,214,190$ 12,463,188$ 13,805,439$ 15,182,335$ 16,158,221$ 16,411,506$
(23,152,887)$ (24,154,392)$ (26,122,149)$ (26,403,869)$ (25,274,729)$ (36,356,074)$
914,040 492,167 997,136 1,275,649 1,555,547 (1,325,780)
(22,238,847)$ (23,662,225)$ (25,125,013)$ (25,128,220)$ (23,719,182)$ (37,681,854)$
- 130 -
Fiscal Year 2006 2007 2008 2009
GENERAL REVENUES AND OTHER
CHANGES IN NET POSITION
Governmental activities
Taxes
Property 11,485,489$ 11,677,488$ 12,737,951$ 12,799,051$
Sales 7,788,874 7,061,621 6,370,839 5,604,221
Utility 1,185,594 1,213,165 1,206,890 1,144,676
Other 2,222,985 2,497,113 2,401,921 2,308,750
Intergovernmental
Income 1,839,485 1,987,153 2,125,301 1,824,794
Local use 293,618 297,200 331,713 272,041
Personal property replacement 363,585 441,693 434,614 368,208
Investment earnings 467,427 630,288 394,088 304,129
Miscellaneous 95,025 138,578 574,371 295,348
Gain on disposal of capital assets - - - -
Transfers - - - -
Total governmental activities 25,742,082 25,944,299 26,577,688 24,921,218
Business-type activities
Investment earnings 11,993 3,652 12,188 3,469
Contributions - - - 108,134
Miscellaneous 200,274 192,037 196,297 250,925
Gain on disposal of capital assets - - - -
Transfers - - - -
Total business-type activities 212,267 195,689 208,485 362,528
TOTAL PRIMARY GOVERNMENT 25,954,349$ 26,139,988$ 26,786,173$ 25,283,746$
CHANGE IN NET POSITION
Governmental activities 3,994,398$ 1,318,852$ (339,590)$ (492,686)$
Business-type activities 360,255 387,258 254,305 356,948
TOTAL PRIMARY GOVERNMENT
CHANGE IN NET POSITION 4,354,653$ 1,706,110$ (85,285)$ (135,738)$
Data Source
Audited Financial Statements
Last Ten Fiscal Years
VILLAGE OF MORTON GROVE, ILLINOIS
CHANGE IN NET POSITION (Continued)
- 131 -
2010 2011 2012 2013 2014 2015
13,005,988$ 12,796,737$ 12,620,923$ 12,559,743$ 12,444,336$ 12,861,602$
5,576,524 5,602,819 5,940,931 6,277,412 6,413,855 6,801,069
1,159,513 1,154,124 1,119,227 1,166,101 1,228,883 1,272,845
2,280,628 2,231,857 2,471,292 2,287,247 2,186,679 2,659,951
1,766,942 1,797,158 2,044,675 2,217,174 2,227,959 2,476,003
303,687 338,416 366,352 400,868 454,615 517,569
395,543 348,557 349,197 387,116 398,843 405,808
114,990 73,661 26,846 12,248 15,843 17,912
1,170,135 813,078 262,112 414,059 363,420 236,286
- 25,518 - - - -
- - - - - -
25,773,950 25,181,925 25,201,555 25,721,968 25,734,433 27,249,045
6,296 15,454 13,740 2,665 2,966 2,322
8,100 - - - - -
246,230 297,636 296,582 300,864 284,657 315,446
- - - 49,000 17,500 6,300
- - - - - -
260,626 313,090 310,322 352,529 305,123 324,068
26,034,576$ 25,495,015$ 25,511,877$ 26,074,497$ 26,039,556$ 27,573,113$
2,621,063$ 1,027,533$ (920,594)$ (681,901)$ 459,704$ (9,107,029)$
1,174,666 805,257 1,307,458 1,628,178 1,860,670 (1,001,712)
3,795,729$ 1,832,790$ 386,864$ 946,277$ 2,320,374$ (10,108,741)$
- 132 -
Fiscal Year 2006 2007 2008 2009
GENERAL FUND
Nonspendable
Advance to other funds 55,457$ 1,667,406$ 1,614,804$ 1,588,930$
Prepaid items - - - 6,626
Restricted for
Public safety - - - -
Retirement - - - -
Specific property tax levies - - - -
Unrestricted/unassigned 9,492,148 8,890,161 8,477,050 5,794,060
TOTAL GENERAL FUND 9,547,605$ 10,557,567$ 10,091,854$ 7,389,616$
ALL OTHER GOVERNMENTAL FUNDS
Nonspendable
Prepaid items -$ -$ -$ 22,336$
Advance to other funds - - - -
Restricted for
Public safety - - 180,400 196,590
Capital improvements - unspent bond proceeds - - 550,497 488,113
Community development 5,495,470 5,003,627 6,003,872 14,452,122
Economic development - - 7,282,950 -
Highways and streets - - 35,727 46,069
Debt service - - 468,461 492,270
Unrestricted
Committed for community development - - - -
Assigned for commuter improvements - - 133,254 164,233
Assigned for capital improvements - - - -
Special Revenue Funds 197,035 9,264,692 - -
Unassigned - - (1,103,419) (975,505)
TOTAL ALL OTHER
GOVERNMENTAL FUNDS 5,692,505$ 14,268,319$ 13,551,742$ 14,886,228$
Data Source
Audited Financial Statements
VILLAGE OF MORTON GROVE, ILLINOIS
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
- 133 -
2010 2011 2012 2013 2014 2015
1,549,007$ 1,508,930$ 1,546,190$ 1,506,190$ 1,514,751$ 2,781,489$
- - 103,495 - 589,507 192
- 116,805 116,805 14,559 - -
- - - - - 4,961
- - 7,357 - - -
5,931,760 5,684,663 5,093,952 5,744,509 5,745,220 5,891,331
7,480,767$ 7,310,398$ 6,867,799$ 7,265,258$ 7,849,478$ 8,677,973$
-$ -$ -$ -$ -$ 297,983$
- - 35,714 - 44,364 -
191,843 459,385 482,443 498,175 805,492 1,168,217
6,483,518 4,284,205 2,481,828 1,078,056 18 3,597,581
12,671,491 10,771,232 12,360,035 13,493,724 14,228,109 15,018,344
- - - - - -
204,343 297,968 448,601 637,927 860,194 765,044
232,978 - - - - 337,367
- 133,110 - - - -
167,904 189,114 180,440 105,648 59,855 61,734
- 683,421 543,242 - - -
- - - - - -
(1,079,187) (1,494,055) (1,956,874) (2,150,549) (1,905,351) (2,860,210)
18,872,890$ 15,324,380$ 14,575,429$ 13,662,981$ 14,092,681$ 18,386,060$
- 134 -
Fiscal Year 2006 2007 2008 2009
REVENUES
Taxes 22,455,761$ 22,209,713$ 22,424,327$ 21,586,089$
Licenses and permits 1,375,358 1,194,285 1,115,215 1,029,669
Intergovernmental 3,812,238 3,902,475 3,647,439 3,270,381
Surcharge fees 227,181 239,671 293,273 270,610
Charges for services 700,674 983,358 982,042 873,261
Fines and forfeitures 273,543 327,835 281,457 346,754
Lease and rental income - - - -
Investment income 467,426 620,046 393,869 304,129
Cable TV 197,272 215,606 224,026 233,278
Miscellaneous 200,746 264,832 628,427 436,783
Total revenues 29,710,199 29,957,821 29,990,075 28,350,954
EXPENDITURES
General government 3,099,624 3,176,009 3,829,837 3,235,134
Public safety 12,918,063 14,809,880 14,878,141 15,393,475
Streets and sidewalks 2,268,649 3,027,875 3,236,324 3,029,454
Sanitation 405,715 627,214 632,928 644,771
Vehicle maintenance 752,462 872,991 932,625 752,089
Health and human services 560,598 669,564 679,218 718,045
Community development 1,582,343 605,286 2,047,185 529,407
Building and inspection services 719,296 718,083 687,918 807,146
Debt service
Principal 1,766,127 1,940,203 1,701,086 10,144,327
Interest 690,343 999,340 1,304,359 1,084,892
Other charges - 101,800 - 94,346
Capital outlay 958,947 2,025,571 1,034,105 975,791
Total expenditures 25,722,167 29,573,816 30,963,726 37,408,877
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 3,988,032 384,005 (973,651) (9,057,923)
OTHER FINANCING SOURCES (USES)
Transfers in 83,829 2,496,092 137,162 136,945
Transfers (out)(83,829) (2,496,092) (137,162) (136,945)
Issuance of bonds 2,831,000 9,200,000 - 10,657,500
Premium on bonds issued - - - -
Discount on debt issuance - - - (11,975)
Payment to bond escrow - - - (5,661,824)
Issuance of refunding installment note - - - 2,685,000
Issuance of installment note - - - -
Other - 103,198 - -
Proceeds from sale of capital assets - - 17,838 21,470
Total other financing sources (uses)2,831,000 9,303,198 17,838 7,690,171
NET CHANGE IN FUND BALANCES 6,819,032$ 9,687,203$ (955,813)$ (1,367,752)$
DEBT SERVICE AS A PERCENTAGE OF
NONCAPITAL EXPENDITURES 9.92%10.47%9.96%30.68%
Data Source
Audited Financial Statements
VILLAGE OF MORTON GROVE, ILLINOIS
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
- 135 -
2010 2011 2012 2013 2014 2015
21,775,843$ 21,551,420$ 21,879,247$ 22,290,504$ 22,273,754$ 23,595,467$
1,569,517 1,587,662 1,472,977 1,498,507 1,741,148 1,826,803
3,661,090 3,645,110 4,010,271 4,290,145 4,250,153 4,618,358
246,812 234,115 273,226 249,121 246,727 283,028
1,014,532 1,152,456 1,067,979 1,061,973 1,139,875 1,204,934
561,349 531,010 609,450 835,461 827,515 717,300
- - - - - -
114,990 73,661 26,846 12,248 15,843 17,912
260,205 259,862 322,937 322,822 340,991 336,620
1,313,163 902,535 240,378 416,493 275,667 236,286
30,517,501 29,937,831 29,903,311 30,977,274 31,111,673 32,836,708
2,941,777 2,299,975 2,960,966 2,983,917 2,969,658 3,259,332
15,899,654 16,948,038 16,841,291 16,871,340 17,705,168 18,491,369
2,754,279 2,752,341 2,974,086 3,147,491 3,732,439 3,322,002
74,942 - - - - -
720,434 738,039 816,073 846,686 793,103 701,174
395,984 255,880 263,187 284,289 282,897 217,248
557,192 545,904 766,988 765,500 1,322,606 1,385,112
514,832 555,482 698,263 858,707 790,256 707,754
2,434,899 5,390,149 2,649,987 2,627,833 2,846,995 1,665,200
1,081,772 1,026,638 859,489 793,459 783,179 932,247
- - - - - -
4,680,419 3,173,842 2,342,331 3,431,829 315,560 2,173,640
32,056,184 33,686,288 31,172,661 32,611,051 31,541,861 32,855,078
(1,538,683) (3,748,457) (1,269,350) (1,633,777) (430,188) (18,370)
62,630 - - - - -
(62,630) - - - - -
5,586,000 - - - - 10,010,000
- - - - - 1,472,259
(3,371) - - - - -
- - - - - (6,359,521)
- - - - - -
- - - 1,060,000 1,415,000
- - - - - -
33,867 29,578 77,800 58,788 29,108 17,506
5,616,496 29,578 77,800 1,118,788 1,444,108 5,140,244
4,077,813$ (3,718,879)$ (1,191,550)$ (514,989)$ 1,013,920$ 5,121,874$
12.21%19.95%11.36%11.02%11.84%8.64%
- 136 -
VILLAGE OF MORTON GROVE, ILLINOIS
ASSESSED AND ACTUAL VALUE OF TAXABLE PROPERTY
Last Ten Levy Years
Total Estimated Estimated
Less:Total Taxable Direct Actual Actual
Levy Residential Farm Commercial Industrial Tax-Exempt Assessed Tax Taxable Taxable
Year Property Property Property Property Property Value Rate Value Value
2005 534,079,256$ -$ 102,275,899$ 164,166,151$ -$ 800,521,306$ 1.122 2,401,563,918$ 33.333%
2006 545,691,470 - 107,797,552 154,382,871 - 807,871,893 1.159 2,423,615,679 33.333%
2007 690,027,687 - 110,013,043 168,985,460 - 969,026,190 0.996 2,907,078,570 33.333%
2008 758,998,259 - 109,264,039 187,025,722 - 1,055,288,020 0.915 3,165,864,060 33.333%
2009 784,203,243 115,060 98,422,952 147,319,741 - 1,030,060,996 0.937 3,090,182,988 33.333%
2010 701,075,231 103,019 105,399,747 146,339,223 - 952,917,220 1.021 2,858,751,660 33.333%
2011 660,244,991 103,019 89,873,325 127,153,891 - 877,375,226 1.139 2,632,125,678 33.333%
2012 606,992,305 103,019 87,545,734 116,476,425 - 811,117,483 1.231 2,433,352,449 33.333%
2013 502,751,427 87,861 84,511,239 101,866,766 - 689,217,293 1.449 2,067,651,879 33.333%
2014 498,219,161 89,479 128,260,405 75,359,033 - 701,928,078 1.503 2,105,784,234 33.333%
Note: Property in the Village is reassessed each year. Property is assessed at 33% of actual value.
Data Source
Office of the County Clerk
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Tax Levy Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
VILLAGE DIRECT RATES
General 0.940 0.660 0.559 0.486 0.465 0.528 0.597 0.658 0.725 0.779
Police pension - 0.142 0.132 0.138 0.162 0.179 0.182 0.191 0.258 0.265
Fire pension - 0.176 0.151 0.157 0.179 0.199 0.205 0.216 0.284 0.284
Bonds and interest 0.070 0.068 0.058 0.053 0.049 0.075 0.126 0.136 0.143 0.121
IMRF - - - - - - 0.021 0.022 0.030 0.041
Purchase agreement 0.002 0.002 0.002 0.002 0.052 0.002 0.002 0.002 0.003 -
IEPA agreement 0.065 0.064 0.053 0.049 - 0.027 - - - -
Capital improvement 0.045 0.047 0.040 0.029 0.030 0.011 0.006 0.006 0.008 0.015
Total direct rates 1.122 1.159 0.995 0.914 0.937 1.021 1.139 1.231 1.449 1.505
OVERLAPPING RATES
Morton Grove Library 0.288 0.307 0.266 0.259 0.269 0.335 0.349 0.377 0.444 0.458
School District #68 2.149 2.258 1.931 1.882 1.999 2.133 2.452 2.723 3.144 3.121
School District #69 3.335 3.527 3.124 3.247 3.768 4.357 4.866 5.481 6.214 5.926
School District #67 2.041 2.094 1.859 1.807 1.943 2.203 2.449 2.961 3.497 3.427
School District #63 2.542 2.617 2.276 2.233 2.235 2.499 2.775 3.100 3.864 3.811
School District #70 2.729 2.846 2.506 2.484 2.574 2.890 3.261 3.669 4.351 4.344
High School District #207 1.757 1.826 1.602 1.577 1.617 1.782 1.995 2.215 2.722 2.739
High School District #219 2.007 2.374 2.114 2.120 2.267 2.538 2.904 3.256 3.707 3.650
Community College District #535 0.158 0.166 0.141 0.140 0.140 0.160 0.196 0.219 0.256 0.258
Cook County 0.533 0.500 0.446 0.415 0.394 0.423 0.462 0.531 0.560 0.568
Cook County Forest Preserve 0.060 0.057 0.053 0.051 0.049 0.051 0.058 0.063 0.069 0.069
Consolidated Elections - - 0.012 - 0.021 - 0.025 0.531 0.031 -
Metro Water Reclamation District 0.315 0.028 0.263 0.252 0.261 0.274 0.320 0.370 0.417 0.430
Morton Grove Park District 0.325 0.328 0.289 0.272 0.284 0.311 0.365 0.382 0.468 0.463
Skokie Park District 0.407 0.436 0.375 0.386 0.383 0.423 0.476 0.518 0.581 0.477
Glenview Park District 0.490 0.511 0.429 0.429 0.422 0.483 0.538 0.579 0.662 0.661
Maine Township 0.121 0.127 0.114 0.112 0.117 0.131 0.149 0.168 0.210 0.210
Niles Township 0.031 0.034 0.030 0.030 0.032 0.036 0.042 0.048 0.056 0.057
Suburban T.B. Sanitary District 0.005 0.005 - - - - - - - -
North Shore Mosquito Abatement 0.008 0.009 0.008 0.008 0.008 0.009 0.010 0.010 0.007 0.011
Data Source
Office of the County Clerk
VILLAGE OF MORTON GROVE, ILLINOIS
PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Levy Years
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VILLAGE OF MORTON GROVE, ILLINOIS
PRINCIPAL PROPERTY TAXPAYERS
Current Year and Nine Years Ago
Percentage Percentage
of Total of Total
Village Village
EAV Taxable EAV Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Valuation Value Rank Valuation
CRP Holdings CLP 14,419,203$ 1 2.05%19,124,549$ 2 2.39%
Schwinge Family Ltd.11,514,393 2 1.64%11,565,995 5 1.44%
Tower Real Estate 9,630,393 3 1.37%20,572,986 1 2.57%
9000 Waukegan LLC 8,822,254 4 1.26%12,402,547 3 1.55%
Menards 7,444,522 5 1.06%12,300,304 4 1.54%
Bell & Gossett (Fluid Handling LLC)7,290,161 6 1.04%10,142,254 6 1.27%
Avon Products Inc.7,266,011 7 1.04%10,109,600 7 1.26%
Schwartz Paper Co - 0.00%8,701,678 8 1.09%
Lawnware Products - 0.00%6,204,875 10 0.78%
John Crane Inc.6,172,973 8 0.88%- 0.00%
Public Storage 5,598,469 9 0.80%8,008,438 9 1.00%
Kraft 5,151,134 10 0.73%- 0.00%
83,309,513$ 11.87%119,133,226$ 14.89%
Data Source
Office of the County Clerk
2014 2005
Note: Every effort has been made to seek out and report the largest taxpayers. However, many of the taxpayers contain multiple
parcels and it is possible that some parcels and their valuations have been overlooked.
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VILLAGE OF MORTON GROVE, ILLINOIS
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Levy Years
Collections
Levy Percentage in Subsequent Percentage
Year Tax Levied Amount of Levy Years Amount of Levy
2005 8,983,978$ 8,861,648$ 98.64%-$ 8,861,648$ 98.64%
2006 9,368,298 9,160,127 97.78%- 9,160,127 97.78%
2007 9,649,253 9,455,259 97.99%- 9,455,259 97.99%
2008 9,649,253 9,312,628 96.51%- 9,312,628 96.51%
2009 9,649,253 9,346,622 96.86%- 9,346,622 96.86%
2010 9,986,977 9,544,078 95.57%- 9,544,078 95.57%
2011 9,986,977 9,756,941 97.70%- 9,756,941 97.70%
2012 9,986,976 9,784,931 97.98%- 9,784,931 97.98%
2013 9,986,976 9,821,777 98.35%- 9,821,777 98.35%
2014 10,556,998 10,374,750 98.27%- 10,374,750 98.27%
Note: Property in the Village is reassessed each year. Property is assessed at 33% of actual value.
Data Source
Office of the County Clerk
Collected within the
Fiscal Year of the Levy Total Collections to Date
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Governmental Activities Business-Type Activities
Fiscal General Revolving Installment Intergovernmental General Revolving Installment Total Percentage of
Year Obligation Loans Notes Agreements Obligation Loans Notes Primary Personal Per
Ended Bonds Payable Payable Payable Bonds Payable Payable Government Income*Capita*
2006 7,657,500$ 2,431,075$ 14,280,939$ 4,867,208$ 2,552,500$ 292,771$ 486,778$ 32,568,771$ 5.20%1,450.66$
2007 16,182,500 2,039,279 13,015,702 4,682,533 2,327,500 222,283 370,161 38,839,958 6.20%1,729.99
2008 15,481,250 1,633,332 12,015,866 4,482,974 2,093,750 150,021 250,081 36,107,274 5.76%1,608.27
2009 19,283,750 1,212,720 4,648,818 4,260,718 1,856,250 75,943 51,148 31,389,347 5.01%1,398.13
2010 23,124,800 776,917 4,394,673 4,014,958 5,855,200 - - 38,166,548 6.08%1,640.16
2011 21,072,950 325,372 1,507,919 3,753,704 5,347,050 - - 32,006,995 5.10%1,375.46
2012 18,958,300 - 1,297,954 3,457,411 4,766,700 - - 28,480,365 4.54%1,223.91
2013 16,549,300 - 2,139,121 3,134,950 4,175,700 - - 25,999,071 4.14%1,117.28
2014 15,487,800 - 1,768,626 2,785,393 3,577,200 - - 23,619,019 3.10%1,015.00
2015 18,095,400 - 1,385,826 2,407,781 3,394,600 - - 25,283,607 3.14%1,086.53
* See the schedule of Demographic and Economic Information on page 145 for personal income and population data.
Note: Details of the Village's outstanding debt can be found in the notes to financial statements.
VILLAGE OF MORTON GROVE, ILLINOIS
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
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Percentage of
Less: Amounts Estimated
General Business Type Available Actual Taxable
Fiscal Obligation General Obligation In Debt Value of Per
Year Bonds Bonds Service Fund Total Property*Capita
2006 7,657,500$ 2,552,500$ 597,680$ 9,612,320$ 1.20%428.15$
2007 16,182,500 2,327,500 417,525 18,092,475 2.24%805.86
2008 15,481,250 2,093,750 468,461 17,106,539 1.77%761.95
2009 19,283,750 1,856,250 492,269 20,647,731 1.96%887.31
2010 23,124,800 5,855,200 232,978 28,747,022 2.79%1,235.37
2011 21,072,950 5,347,050 - 26,420,000 2.77%1,135.37
2012 18,958,300 4,766,700 - 23,725,000 2.70%1,019.55
2013 16,549,300 4,175,700 - 20,725,000 2.56%890.63
2014 15,487,800 3,577,200 46,839 19,018,161 2.76%817.28
2015 18,095,400 3,394,600 337,367 21,152,633 3.01%909.01
* See the schedule of Assessed and Actual Value of Taxable Property on page 137 for property value data.
User fees/charges are the main source in repayment of the General Obligation Bonds - Business-Type.
VILLAGE OF MORTON GROVE, ILLINOIS
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
Last Ten Fiscal Years
Notes: Details of the Village's outstanding debt can be found in the notes to financial statements.
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VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF DIRECT AND OVERLAPPING BONDED DEBT
December 31, 2015
(1) (2)
Percentage
of Debt
Gross Applicable to Government's
Governmental Unit Bonded Debt Government Share of Debt
Village of Morton Grove 25,283,607$ 100%25,283,607$
Total direct debt 25,283,607 25,283,607
SCHOOLS
School District #63 14,513,421 14.15%2,053,649
School District #67 12,020,470 72.46%8,710,033
School District #68 2,085,000 0.56%11,676
School District #69 9,665,000 16.84%1,627,586
School District #70 3,630,000 98.41%3,572,283
Community College District #535 35,370,000 7.03%2,486,511
High School District #207 8,570,000 3.39%290,523
High School District #219 146,823,952 15.29%22,449,382
Total schools 232,677,843 41,201,643
OTHERS
Cook County 3,466,976,750 0.61%21,148,558
Cook County Forest Preserve 118,610,000 0.61%723,521
Metropolitan Metro Water Reclamation
District of Greater Chicago 2,619,000,317 0.62%16,237,802
Glenview Park District 13,075,000 0.18%23,535
Morton Grove Park District 750,000 99.34%745,050
Skokie Park District 4,515,000 0.48%21,672
Total others 6,222,927,067 38,900,138
Total overlapping debt 6,455,604,910 80,101,781
TOTAL DIRECT AND OVERLAPPING DEBT 6,480,888,517$ 105,385,388$
Overlapping debt percentages based on 2014 EAV, the most recent available.
(2)
(1)
Date Source
Cook County Clerk
Percentages are calculated by comparing the equalized assessed value (EAV)of the overlapping entity that falls
within the boundaries of the Village to its total EAV.
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VILLAGE OF MORTON GROVE, ILLINOIS
SCHEDULE OF LEGAL DEBT MARGIN
December 31, 2015
Under the 1970 Illinois Constitution, there is no legal limit for home rule municipalities except
as set by the General Assembly.
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Per
Capita
Fiscal Personal Personal Unemployment
Year Population Income Income Rate
2006 22,451 626,360,449$ 27,899$ 3.8%
2007 22,451 626,360,449 27,899 3.8%
2008 22,451 626,360,449 27,899 3.9%
2009 22,451 626,360,449 27,899 6.5%
2010 23,270 626,358,590 26,917 8.1%
2011 23,270 627,661,710 26,973 8.9%
2012 23,270 627,661,710 26,973 8.9%
2013 23,270 627,661,710 26,973 8.9%
2014 23,270 762,278,660 32,758 8.7%
2015 23,270 805,886,640 34,632 5.8%
Data Sources
U.S. Bureau of Census
Department of Labor
Village records
VILLAGE OF MORTON GROVE, ILLINOIS
DEMOGRAPHIC AND ECONOMIC INFORMATION
Last Ten Fiscal Years
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% of % of
Total Village Total Village
Employer Rank Employees Population Employer Rank Population
John Crane Inc 1 700 3.0%Avon Products Inc 1 3.1%
Xylem 2 650 2.8%ITT Bell & Gossett 2 3.1%
Schwartz Paper Co 3 347 1.5%John Crane Inc 3 3.0%
Shore Koenig Training Center 4 205 0.9%Sunstone 4 1.3%
Morton Grove Pharmaceuticals Inc 5 190 0.8%Lawnware Products 5 0.8%
Quantum Group 6 170 0.7%Menards 6 0.7%
TSI Accessory Group 7 165 0.7%Schwartz Paper Co 7 0.7%
Integrated Mechandising System LLC 8 150 0.6%Quantum Group 8 0.6%
Catering by Michael's 9 120 0.5%Morton Grove Pharmaceuticals Inc 9 0.6%
Lifeway Foods Inc 10 100 0.4%Dominicks Finer Foods 10 0.6%
Village Population = 23,270 Village Population = 22,451
Note: 2006 number of employees is unavailable.
Data Sources
Village business licences
2014 Illinois Manufacturers Directory and 2014 Illinois Services Directory
2015 2007
VILLAGE OF MORTON GROVE, ILLINOIS
PRINCIPAL EMPLOYERS
Current Year and Eight Years Ago
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Function/Program 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
GENERAL GOVERNMENT
Administrative 5.0 4.5 4.5 3.5 3.0 3.0 4.0 4.0 4.5 4.0
Community development 1.5 1.5 1.5 1.5 1.0 1.0 1.0 1.0 2.5 2.0
Legal 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Management information 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Finance 7.5 6.5 6.0 5.5 5.5 5.5 5.0 6.0 6.0 6.0
Health and human services - - - - - - 0.5 0.5
Family services 12.0 12.0 9.5 11.5 4.5 4.5 4.5 3.5 2.5 2.5
Building/code enforcement 9.0 8.5 8.0 7.0 4.0 4.0 2.5 4.0 5.0 4.0
PUBLIC SAFETY
Police
Officers 46.0 46.0 46.0 45.0 45.0 46.0 45.0 45.0 46.0 46.0
Civilians 23.5 23.5 23.0 22.0 20.0 18.5 18.5 21.0 17.0 15.0
Fire
Firefighters and officers 44.0 44.0 42.0 40.0 41.0 41.0 40.0 42.0 41.0 39.0
Civilians 3.0 3.0 3.0 30.0 2.5 2.5 1.5 3.5 3.0 2.5
PUBLIC WORKS
Street maintenance 16.5 16.5 16.5 17.5 17.5 17.5 17.5 17.5 20.0 20.0
Engineering 3.2 3.2 3.2 3.0 3.0 3.0 3.0 3.0 3.0 3.0
Vehicle maintenance 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0
Water/sewer 13.3 13.3 13.3 12.0 12.0 12.0 12.0 12.0 12.0 13.5
TOTAL 190.0 188.0 182.0 204.0 164.5 164.0 160.0 168.0 168.5 163.5
Data Source
Village budget office
VILLAGE OF MORTON GROVE, ILLINOIS
FULL-TIME EQUIVALENT EMPLOYEES
Last Ten Fiscal Years
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Function/Program 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
PUBLIC SAFETY
Police
Physical arrests 710 635 550 651 647 574 580 513 551 438
Parking violations 3,866 5,210 5,171 6,075 8,331 8,933 6,751 6,465 4,530 3,814
Traffic violations 7,681 4,598 4,367 5,092 4,587 4,440 3,686 3,849 3,072 3,292
Fire
Emergency responses 3,246 3,384 3,594 3,249 3,265 3,419 3,360 3,470 3,631 3,694
Fires extinguished 36 38 22 70 59 60 48 63 69 39
PUBLIC WORKS
Street resurfacing (miles)1.41 1.81 0.63 1.33 3.03 4.90 6.65 5.70 1.50 3.90
Pothole repairs (in tons)71.50 121.50 120.00 180.00 189.00 170.75 12.50 132.00 160.00 104.00
WATER
New connections 27 70 23 1 27 8 9 7 9 -
Water main breaks 55 85 67 91 81 64 70 122 80 72
Average daily consumption 3,050,000 3,180,000 3,500,000 2,999,484 2,969,923 2,670,613 2,745,553 2,601,227 2,869,367 2,698,000
Peak daily consumption 4,964,000 4,955,000 6,200,000 4,374,000 4,167,000 4,498,000 4,412,000 4,238,000 3,628,000 5,086,000
WASTEWATER
Average daily treatment N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Data Source
Various Village departments
VILLAGE OF MORTON GROVE, ILLINOIS
OPERATING INDICATORS
Last Ten Fiscal Years
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Function/Program 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
PUBLIC SAFETY
Police
Stations 1 1 1 1 1 1 1 1 1 1
Area patrols 3 3 3 3 3 3 3 3 3 3
Patrol units 15 15 15 15 15 15 15 15 15 15
Fire
Fire stations 2 2 2 2 2 2 2 2 2 2
Fire engines 2 2 2 2 2 2 2 2 2 2
PUBLIC WORKS
Arterial streets (miles)19 19 19 19 19 19 19 19 19 19
Residential streets (miles)86 86 86 86 86 86 86 86 86 86
Streetlights 372 372 357 357 357 357 357 357 357 357
Traffic signals 13 13 13 13 13 13 13 13 13 13
WATER
Water mains (miles)98.9 98.9 98.9 98.9 98.9 98.9 98.9 98.9 98.9 98.9
Fire hydrants 1,093 1,093 1,093 1,093 1,093 1,093 1,093 1,093 1,093 1,093
Storage capacity (gallons)8,550,000 8,550,000 8,550,000 8,550,000 8,550,000 8,550,000 8,550,000 8,550,000 8,550,000 8,550,000
WASTEWATER
Sanitary sewers (miles)47.9 47.9 47.9 47.9 47.9 47.9 47.9 47.9 47.9 47.9
Storm sewers (miles)70.6 70.6 70.6 70.6 70.6 70.6 70.6 70.6 70.6 70.6
Combined sewers (miles)23.6 23.6 23.6 23.6 23.6 23.6 23.6 23.6 23.6 23.6
Treatment capacity (gallons)N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Data Source
Various Village departments
VILLAGE OF MORTON GROVE, ILLINOIS
CAPITAL ASSET STATISTICS
Last Ten Fiscal Years
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COMPLIANCE SECTION
- 133 -
REPORT OF INDEPENDENT ACCOUNTANT’S ON COMPLIANCE
The Honorable President
Members of the Board of Trustees
Village of Morton Grove, Illinois
We have examined management’s assertion, included in its representation letter dated
September 16, 2016 that the Village of Morton Grove, Illinois (the Village) complied with the
provisions of subsection (q) of Section 11-74.4-3 of the Illinois Tax Increment Redevelopment
Allocation Act (Illinois Public Act 85-1142) during the year ended December 31, 2015.
Management is responsible for the Village’s assertion and for compliance with those
requirements. Our responsibility is to express an opinion on management’s assertion about the
Village compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the
American Institute of Certified Public Accountants and, accordingly, included examining, on a
test basis, evidence about the Village’s compliance with those requirements and performing such
other procedures as we considered necessary in the circumstances. We believe that our
examination provides a reasonable basis for our opinion. Our examination does not provide a
legal determination on the Village’s compliance with statutory requirements.
In our opinion, management’s assertion that the Village of Morton Grove, Illinois complied with
the aforementioned requirements for the year ended December 31, 2015 is fairly stated, in all
material respects.
This report is intended solely for the information and use of the Village President, the Board of
Trustees and management of the Village, the Illinois State Comptroller’s Office and the joint
review boards. Accordingly, this communication is not suitable for any other purpose.
Naperville, Illinois
September 16, 2016
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