village of north aurora, illinoisgfoa.net/cafr/coa2012/northaurorail.pdf · the village of north...

VILLAGE OF NORTH AURORA, ILLINOIS

COMPREHENSIVE ANNUAL FINANCIAL REPORT

FOR FISCAL YEAR ENDED MAY 31, 2012


COMPREHENSIVE ANNUAL

FINANCIAL REPORT

For the Year Ended

May 31, 2012

Prepared by:

William D. Hannah

Finance Director

Mandy Flatt

Senior Accountant


TABLE OF CONTENTS

Page(s)

INTRODUCTORY SECTION

Principal Officials ....................................................................................................... i

Organizational Chart ................................................................................................... ii

Certificate of Achievement for Excellence

in Financial Reporting ............................................................................................... iii

Letter of Transmittal ................................................................................................... iv-x

FINANCIAL SECTION

INDEPENDENT AUDITOR’S REPORT .................................................................. 1-2

GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS

Management’s Discussion and Analysis .................................................................... MD&A 1-12

Basic Financial Statements

Government-Wide Financial Statements

Statement of Net Assets .................................................................................... 3

Statement of Activities ...................................................................................... 4-5

Fund Financial Statements

Governmental Funds

Balance Sheet ............................................................................................... 6

Reconciliation of Fund Balances of Governmental Funds to

the Governmental Activities in the Statement of Net Assets .................... 7

Statement of Revenues, Expenditures and Changes in Fund Balances ...... 8

Reconciliation of the Governmental Funds Statement of Revenues,

Expenditures and Changes in Fund Balances to the Governmental

Activities in the Statement of Activities .................................................... 9


TABLE OF CONTENTS (Continued)

Page(s)

FINANCIAL SECTION (Continued)

GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS (Continued)

Basic Financial Statements (Continued)

Fund Financial Statements (Continued)

Proprietary Funds

Statement of Net Assets ............................................................................... 10

Statement of Revenues, Expenses and Changes in Net Assets ................... 11

Statement of Cash Flows .............................................................................. 12-13

Fiduciary Funds

Statement of Fiduciary Net Assets ............................................................... 14

Statement of Changes in Fiduciary Net Assets ............................................ 15

Notes to Financial Statements ........................................................................... 16-51

Required Supplementary Information

Schedule of Revenues, Expenditures and Changes in

Fund Balance - Budget and Actual

General Fund ................................................................................................ 52

Schedule of Funding Progress

Illinois Municipal Retirement Fund ............................................................. 53

Police Pension Fund ..................................................................................... 54

Other Postemployment Benefit Plan ............................................................ 55

Schedule of Employer Contributions

Illinois Municipal Retirement Fund ............................................................. 56

Police Pension Fund ..................................................................................... 57

Other Postemployment Benefit Plan ............................................................ 58

Notes to Required Supplementary Information ................................................. 59



Page(s)


COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES

MAJOR GOVERNMENTAL FUNDS

General Fund

Schedule of Revenues - Budget and Actual ................................................. 60-61

Schedule of Expenditures - Budget and Actual ............................................ 62

Schedule of Detailed Expenditures - Budget and Actual ............................. 63-68

Major Capital Projects Funds



Capital Projects Fund ............................................................................... 69

Major Debt Service Funds



Library Debt Service Fund ....................................................................... 70

NONMAJOR GOVERNMENTAL FUNDS

Combining Balance Sheet ................................................................................. 71-72

Combining Statement of Revenues, Expenditures

and Changes in Fund Balances ........................................................................ 73-74

Schedule of Revenues, Expenditures and Changes

in Fund Balance - Budget and Actual

Motor Fuel Tax Fund .................................................................................... 75

Sperry TIF Fund............................................................................................ 76

North Lincolnway TIF Fund ......................................................................... 77

Route 31 TIF Fund ....................................................................................... 78

Community Development Loan Fund .......................................................... 79

Special Service Areas Fund .......................................................................... 80

Insurance Fund.............................................................................................. 81

Sanitary Sewer Fund ..................................................................................... 82

Tourism Fund ............................................................................................... 83

North Aurora Activity Center Fund .............................................................. 84

Police Station Debt Service Fund ................................................................. 85



Page(s)



STATEMENTS AND SCHEDULES (Continued)

PROPRIETARY FUNDS

Enterprise Fund

Waterworks Operations Fund

Schedule of Revenues, Expenses and Changes in Net

Assets - Budget and Actual .................................................................... 86

Schedule of Operations Expenses - Budget and Actual........................... 87-88

Internal Service Funds

Combining Statement of Net Assets ............................................................. 89

Combining Statement of Revenues, Expenses and

Changes in Net Assets ................................................................................ 90

Combining Statement of Cash Flows ........................................................... 91

Mobile Equipment Fund

Schedule of Revenues, Expenses and Changes in

Net Assets - Budget and Actual ............................................................. 92

FIDUCIARY FUNDS

Police Pension Trust Fund

Schedule of Changes in Net Assets - Budget and Actual ............................. 93

Agency Funds

Combining Statement of Changes in Assets and

Liabilities .................................................................................................... 94-95

OTHER SUPPLEMENTARY INFORMATION

LONG-TERM DEBT PAYABLE

Schedule of General Long-Term Debt .............................................................. 96



Page(s)


OTHER SUPPLEMENTARY INFORMATION (Continued)

LONG-TERM DEBT REQUIREMENTS

General Obligation Alternate Revenue Source Bond Series 2003 .................... 97



General Obligation Refunding Library Bond Series 2009 ................................ 100

Kane County Loan Payable ............................................................................... 101

STATISTICAL SECTION (Unaudited)

Financial Trends

Net Assets by Component ........................................................................................... 102-103

Changes in Net Assets ................................................................................................. 104-107

Fund Balances of Governmental Funds ...................................................................... 108

Changes in Fund Balances of Governmental Funds ................................................... 109-110

Revenue Capacity

Assessed Value and Actual Value of Taxable Property ............................................. 111

Property Tax Rates - Direct and Overlapping Governments ...................................... 112

Principal Property Taxpayers ...................................................................................... 113

Property Tax Levies and Collections .......................................................................... 114

Total Sales Taxes by Category .................................................................................... 115

Direct and Overlapping Sales Tax Rates .................................................................... 116

Debt Capacity

Ratios of Outstanding Debt by Type ........................................................................... 117

Ratios of General Bonded Debt Outstanding ............................................................. 118

Direct and Overlapping Governmental Activities Debt ............................................. 119

Legal Debt Margin Information .................................................................................. 120

Pledged-Revenue Coverage ........................................................................................ 121

Demographic and Economic Information

Demographic and Economic Information ................................................................... 122

Principal Employers .................................................................................................... 123

Operating Information

Full-Time Equivalent Employees ............................................................................... 124

Operating Indicators .................................................................................................... 125

Capital Assets Statistics .............................................................................................. 126

INTRODUCTORY SECTION

- i -

VILLAGE OF NORTH AURORA LIST OF PRINCIPAL OFFICIALS

VILLAGE PRESIDENT

Dale Berman

BOARD OF TRUSTEES Laura Curtis

Chris Faber

Mark Gaffino

Mark Guethle

Ryan Lambert

Vince Mancini

VILLAGE CLERK Lori Murray

INTERIM VILLAGE ADMINISTRATOR

David Summer

FINANCE DIRECTOR

William Hannah

Officials listed as of the date of the preparation of the Comprehensive Annual Financial Report.

Elect

- Public Facilities

- Public Safety

Appoint

- Collective Bargaining

- Prosecution

Village Departments

Community Development

- Building Inspections - Budgeting/Financial Planning - Police Patrol - Street Maintenance - Meter Readings

- Building Permits - Accouting and Finance - Community Programs - Fleet Maintenance - Water Conveyance

- Business Licensing - Risk Management - Crime Prevention - Mosquito Abatement - Water Testing

- Code Enforcement - Payroll/Employee Benefits - Investigations - Sidewalk Maintenance - Water Treatment

- Planning/Zoning - Accounts Payable/Receivable - Parking Enforcement - Snow Plowing - Water Well Provision

- Property Maintenance - Debt Management - Animal Control - Facility Maintenance - Watermain Maint/Replace

- Utility Billing/Collection - Records Management - Tree/Parkway Maint.

- Finance

- Engineering Services

Clerk

Administrator

Village

Attorney(s) Engineer

Village

Trustee Committees

- Development

WaterFinance

Village

Public Works

- CIP Project Coord.

- Legal Services - Village Management

Village of North AuroraOrganization Chart

Police CommissionVillage Treasurer Plan Commission

Voters of the

Village of North Aurora

Village President

& Board of Trustees

Village

- Cash Management/Investing

- Development Review

Police

- Economic Development

- Community Relations

- Water Storage

- Traffic Enforcement - Sanitary/Storm Sewer Maint

- ii -

- iii -

wcappadora

Rectangle

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Profile of the Government, Services and Reporting Entity The Village was incorporated in 1905 and operates under the trustee/administrator form of government. Policymaking and legislative authority are vested in the Village Board, which consists of a Village President and a six-member Board of Trustees. The President and Trustees are elected on an at-large basis to overlapping four-year terms. Various committees consisting of three Village Board members are also created from time-to-time to focus on specific projects or functional areas. The Village Administrator is appointed by the Village Board and is responsible for carrying out the policies of the Village Board and for overseeing the day-to-day administration of the Village. The Village is a non-home rule community as defined by the Illinois Constitution. Located approximately 36 miles west of the City of Chicago in southeast Kane County, the Village occupies a land area of 7.4 square miles. The Village has experienced rapid growth in the last twenty years from a population of 5,490 in 1990 to a 2010 census count of 16,760. The Village is projected to reach a population of 22,000 by 2025 at which time it is estimated that most of the significant residential growth in the Village will be completed given the current incorporated boundaries and boundary agreements. The Village provides a full range of services including police protection and investigation, maintenance of streets and infrastructure, water provision, treatment and service, water lines and maintenance of sanitary and storm sewer lines, building inspection and code enforcement, and general administrative/finance services. The Village has a total authorized employment level of 54.26 full-time equivalents. Solid waste collection and recycling services are administered by the Village through a contract with a private firm. Fire protection services are provided by the North Aurora Fire Protection District and Batavia Fire District, both separate governmental entities. Sanitary sewer treatment service is provided by the Fox Metropolitan Water Reclamation District, an independent unit of government. Recreational services are provided primarily by the Fox Valley Park District. The financial reporting of the Village of North Aurora is comprised of all funds of the primary government (i.e., the Village of North Aurora as legally defined) and its pension trust fund, the North Aurora Police Pension Fund. The Police Pension Fund was determined to be a pension trust fund due to its fiduciary and fiscal relationship with the Village as their sole purpose is to provide retirement benefits to the Village’s sworn police officers. Discretely presented component units are reported in a separate column in the government-wide financial statements to emphasize that they are legally separate from the primary government and to differentiate their financial position and changes in financial position from those of the primary government. The Messenger Public Library is reported as a discretely presented component unit. Budgeting System and Control The annual budget serves as the foundation for the Village of North Aurora’s financial planning and control. The budget process typically begins in January with the issuance of

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budget worksheets and budget formulation instructions to Department Heads from the Finance Director who is appointed as the Budget Officer. Appointment of a Budget Officer is required per State statute for municipalities who have adopted the Budget Act in lieu of the Appropriations Act. Department Heads are required to submit a proposed budget to the Finance Director and Village Administrator in February of each year. The proposed budgets from each department are discussed and revisions made based on the projected financial outlook and Village priorities. Summaries of the proposed budgets are made and discussed with the Finance Committee. The draft budget is then prepared and issued in March. The draft budget is then discussed with the Village Board and any additions, deletions and changes are made at subsequent Committee of the Whole and Village Board meetings. Finally, a required public hearing is held on the draft budget prior to budget adoption in May. The final budget must be adopted prior to the beginning of the fiscal year. The annual budget is prepared by fund and department and includes information on past fiscal years, current year budget and projected and requested budget for next fiscal year. The Budget Officer may transfer budget amounts between objects; however, transfers between departments in the General Fund, transfers between funds or increases/decreases in the total budget of a fund must be approved by the Village Board. Expenditures may not legally exceed budget at the department level for the General Fund and at the fund level for other funds. Budget-to-actual comparisons are provided in this report for each fund for which a budget is adopted. For the General Fund, this comparison is presented on page 52 as part of the required supplementary information. For other funds with appropriated budgets, this comparison is presented in the combining and individual fund financial statements and schedules. Factors Affecting Financial Conditions The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the Village of North Aurora operates. Local Economy and Revenues. The Village of North Aurora has a diversified commercial and retail base balanced with various industrial uses. This is due to the strategic location of the Village along Interstate I-88 with access from both State Rt. 31 and Orchard Road. Other major roads providing access to the Village include Rt.25 running parallel along the Fox River, Rt. 56 to the East and Randall Road. The Village has experienced not only significant residential growth over the last twenty years but significant commercial development. Despite the difficult economic environment over the last few years the Village has continued to experience development of vacant land within the Village, and redevelopment interest of various sites within the Village. The Village has also continued planning processes for unincorporated areas through the development of annexations and annexation agreements in order to continue a balanced approach of planning for continued increases in residential, commercial and industrial growth into the future. As expected, the significant decline in real estate prices and valuations experienced throughout the region continued to affect North Aurora’s total taxable equalized assessed

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valuation (EAV). Although real estate prices have declined for over four years, EAV’s are based on an average of sales for the preceding three years, resulting in the delayed recognition of a decline. The Village’s taxable EAV declined 8.6% from the 2010 tax year to the 2011 tax year, resulting in an EAV of $496,294,706. In previous years, the EAV increased from $318,338,788 in 2003 to $574,582,884 in 2009, an average increase of 13% per year over a six-year period primarily due to significant new residential growth, which has over the last ten years increased the Village’s population from 10,585 in 2000 to an official count of 16,760 for the 2010 census. The Village maintains and continues to maintain a developed land area with a balanced mix of residential (80%), commercial (13%) and industrial (7%) activity. The Village’s underlying financials remain strong despite the lingering effects of the most recent recession which not only decreased real estate prices but decreased major revenue sources like sales tax and income tax. The Village’s location and participation in the greater metropolitan Chicagoland economy along with its existing diversified tax base have enabled the Village to “weather the storm” better than many other local governments. The Village has been able to resolve many issues related to the completion of new developments even though residential and commercial developers are still struggling to maintain adequate financing in historically difficult credit markets. Although new building permit activity has slowed over the last three years, new permits are still being issued by the Village. During the year, 22 new single family home permits were issued along with 16 new commercial permits and 542 other types of building permits. General Fund sales tax revenue for the year increased 8.8% from the prior year, the second consecutive year-over-year increase. Sales tax revenues began increasing in 2010 across most categories indicating a broad recovery. At the North Aurora Auto Mall, a new car dealership opened in March, 2011 leaving only one vacancy amongst the seven buildings at the Mall. Sales of cars and other vehicles continue to do very well at the Auto Mall as well as sales of gasoline. Sales tax revenue from other categories also increased significantly in food, restaurant and manufacturing indicating the continuation of a broad recovery in sales. New businesses are being built this fall including a CVS drugstore at Randall and Orchard Road and a new Speedway filling station at Rt. 31 and Sullivan later this fiscal year. State-shared income tax revenue increased significantly during the year increasing $196,097 or 15.5% to $1,420,009, partially due to the economic recovery in receipts collected by the State, and part due to increased receipts as a result of reduced withholding in the beginning of 2011 being collected on tax returns filed in 2012, adjustments resulting from the State of Illinois income tax increase effective January 2011 and adjustments made to distributions to municipalities to ensure that the entire increase went only to the State. Although positive changes in major revenues occurred during the year, continuing concerns exist with the overall financial condition of the State of Illinois. The State continues to exist with significant structural funding issues and suggestions have been made for policy proposals which would reduce municipal revenues in order to benefit and address State-level financial issues. In addition, the State continues to discuss, but so far has not addressed, long-term public pension funding issues.

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The long-term, future outlook for the Village remains positive, however, given the Village’s location along Interstate 88 and developable area for both commercial and residential uses. The Village’s underlying bond rating from Standard and Poor’s was confirmed at AA- for the 2009 General Obligation Refunding bond issuance. S&P cited the Village’s positive economic fundamentals, strong income and wealth levels, moderate overall debt burden, and good financial management practices as reasons for the excellent rating confirmation. The Village continues to move forward advancing goals and objectives, planning for needs into the future while maintaining financial strength Accomplishments. In addition to maintaining and strengthening the Village’s overall financial condition, the Village continued to advance numerous goals and objectives of the Village Board during the year including, but not limited to:

• Completion of the Village Hall renovation and remodeling process in the Spring of

2012 within budget and timelines and held a Village Hall Open House for the public • Completion of 1.12 miles of street reconstruction/resurfacing improvements on

Acorn, Cottonwood, Butternut, Sharon, Hill and Laurel roads • Almost one (1) mile of watermain replacement completed prior to the 2012 road

program on Poplar, Pierce, Banbury, Cedar and Princeton roads • Construction of an interactive water stream feature at Village Hall funded by grants

and contributions • Completion of sidewalk construction along Rt. 31 with grant funds improving

pedestrian safety and access • Acquisition of parcels necessary for the future reconstruction of Smoketree Plaza

within the TIF District • Continued with long-term planning for future deep water well and water tower to

enhance capacity, pressure and fire suppression needs • Completed in October 2011 the implementation of the Municipal Electric

Aggregation process which resulted in electrical savings for residents and small businesses of 25% off the standard ComEd rate for electric supply

• Updated the long-term, 20-year road and watermain replacement program and related funding

• Completed the update and passage of the new Zoning Ordinance in August 2012 • Established the new North Lincolnway TIF District in October 2011 • Entered into a three-year collective bargaining agreement with the Fraternal Order of

Police (FOP) for Police Sergeants and the Metropolitan Alliance of Police (MAP) for police officers

• Continued to coordinate and work with developers on the completion of public improvements for various developments within the Village

• Opening of new businesses within the Village and redevelopment proposals within the Village’s Route 31 tax-increment financing (TIF) district

• Continued to provide efficient and effective police, public works, community development, water and finance/administrative services to the community within current resources

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Long-Term Financial Planning. The Village maintains long-term financial projections that assist in planning for the financing of major capital improvements, purchase and replacement of capital equipment, and analyzing the impact of changes in operating needs and services. As part of this on-going process, the Village analyzes and projects all revenues, expenditures, fund balances and other resources on a multi-year basis. This allows the Village to forecast the effects of potential changes in the economy impacting the ability of the Village to fund operations and capital projects while maintaining a strong financial position identified as a high-priority goal of the Village. Other plans in place include the long-term road and watermain improvement program and the multi-year vehicle replacement program funded with an annual charge to all operating departments. The Village also completed during 2008 several strategic planning sessions with the Village Board and staff to determine long-term and short-term Village goals. This process resulted in a prioritized list of goals used as a resource to guide the development of future operating and capital budgets. The Village has also established various revenue, expenditure, debt, cash management and fund balance policies which provide guidance in managing the financial and budgetary affairs of the Village. These policies were updated in 2012 and include a requirement for the maintenance of a minimum fund balance in the General Fund of 40% to 50% of annual expenditures and transfers of resources out of the General Fund for the purpose of debt repayment. This requirement was not only met but exceeded at the end of the year. Awards and Acknowledgements. The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Village of North Aurora for its comprehensive annual financial report for the fiscal year ended May 31, 2011. This was the tenth consecutive year that the government has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. In addition, the Village of North Aurora received for the 7th year in a row the GFOA’s Distinguished Budget Presentation Award for the fiscal year 2012-2013 Budget. In order to qualify for this award, a governmental unit must publish and present a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device. The preparation of this report on a timely basis would not have been possible without the efficient and dedicated services of Finance Department and other Village staff throughout the year, especially Senior Accountant Mandy Flatt. I would like to extend my appreciation to the President and Trustees of the Village Board for their interest and support in supporting

FINANCIAL SECTION

INDEPENDENT AUDITOR’S REPORT

GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS

MD&A 1


MANAGEMENT’S DISCUSSION AND ANALYSIS

MAY 31, 2012

As the management of the Village of North Aurora (the “Village”), we offer readers of the Village’s financial statements this narrative overview and analysis of the financial activities of the Village for the fiscal year ended May 31, 2012. Since the Management’s Discussion and Analysis (MD&A) is designed to focus on the current year’s activities, resulting changes and currently known facts, please read it in conjunction with the Letter of Transmittal on pages iv through x and the Village’s financial statements beginning on page 1. Overview of the Financial Statements The focus of the financial statements is on the Village as a whole (government-wide) and on the major individual funds (major fund). Both perspectives (government-wide and major fund) allow the user to address relevant questions, broaden the basis for comparison (year to year or government to government) and enhance the Village’s accountability. This discussion and analysis is intended to serve as an introduction to the Village’s basic financial statements. The Village’s basic financial statements comprise three components: government-wide financial statements, fund financial statements, and notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. 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 Assets presents information on all of the Village’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Village is improving or deteriorating. The Statement of Activities presents information showing how the Village’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.

MD&A 2

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, public safety, public works and health and welfare. The business-type activities include the Village’s water provision operations. The government-wide financial statements can be found on pages 3 through 5 of this report. 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 state and 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, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as 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 governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Village maintains fourteen (14) individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Capital Projects Fund and Library Debt Service Fund which are considered to be major funds. Data from the other eleven (11) governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The Village adopts an annual budget for its General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget.

MD&A 3

Proprietary Funds. The Village maintains two different types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The Village uses separate enterprise funds to account for its water system. Internal service funds are an accounting device used to accumulate and allocate costs internally among the Village’s various functions. The Village uses internal service funds to account for the cost of accumulating funds to replace Village vehicles and to account for compensated absences related to governmental funds. Because all of these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statement provides information for the Waterworks Operations Fund. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages 10 through 13 of this report. Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside of the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the Village’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The Village maintains five fiduciary funds. The basic fiduciary fund financial statements can be found on pages 14 and 15 of this report. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 16 through 51 of this report. Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning budget to actual comparisons for the General Fund and the Village’s progress in funding its obligation to provide pension and other postemployment benefits to its employees. Required supplementary information can be found on pages 52 to 59.

The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information on pensions. Combining and individual fund statements and schedules can be found on pages 61 through 97 of this report.

MD&A 4

Financial Analysis of the Village as a Whole Beyond presenting current-year financial information in the government-wide and major individual fund formats, the Village also presents comparative information from the prior year in the Management’s Discussion and Analysis. By doing so, the Village believes that it is providing the best means of analyzing its financial condition and position as of May 31, 2012. Net Assets. The following table reflects the condensed Statement of Net Assets.

The Village’s total net assets increased from $106,828,862 to $115,107,598, an increase of $8,278,736 or 7.75%. Of this increase, $1,107,741 is attributable to business-type activities and $7,170,995 is attributable to governmental activities. The increase in net assets for governmental activities was due primarily to an increase in Net Assets Invested in Capital Assets Net of Related Debt of $8,143,827 as the Village accepted $6,636,251 in public improvements for streets and subdivisions during the year. The increase in business-type activities was due to an increase in Net Assets Invested in Capital Assets Net of Related Debt of $657,279 as the Village accepted $754,260 in water-related public improvements. The Village also realized positive operations during the year as unrestricted net assets for the business-type activities increased 43.1% to $1,493,850. Of the Village’s total net assets at May 31, 2012, 89.1% are investments in capital assets (buildings, land, infrastructure, equipment). As of May 31, 2012, the Village is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities which was the same situation as last fiscal year. For more detailed information, see the Statement of Net Assets on page 3.

Table 1Statement of Net Assets

As of May 31, 2012

2012 2011 2012 2011 2012 2011

Current and Other Assets 17,194,307$ 17,746,682$ 1,900,874$ 2,303,817$ 19,095,181$ 20,050,499$ Capital Assets 93,669,573 87,217,376 23,639,531 22,756,161 117,309,104 109,973,537 Total Assets 110,863,880 104,964,058 25,540,405 25,059,978 136,404,285 130,024,036

Long-Term Liabilities 12,665,680 13,977,842 2,414,988 3,669,040 15,080,668 17,646,882 Other Liabilities 5,345,442 5,304,453 870,577 243,839 6,216,019 5,548,292 Total Liabilities 18,011,122 19,282,295 3,285,565 3,912,879 21,296,687 23,195,174

Net Assets:Invested in Capital Assets, Net of Debt 81,798,254 73,654,427 20,760,990 20,103,711 102,559,244 93,758,138 Restricted 3,572,015 4,108,032 - - 3,572,015 4,108,032 Unrestricted 7,482,489 7,919,304 1,493,850 1,043,388 8,976,339 8,962,692 Total Net Assets 92,852,758$ 85,681,763$ 22,254,840$ 21,147,099$ 115,107,598$ 106,828,862$

Governmental-Activities Total Primary GovernmentBusiness-Type Activities

MD&A 5

Activities. The following table summarizes revenue and expenses of the Village’s activities.

Total revenues for governmental activities decreased 41.7% or $14,031,697 to $19,642,019 due to a decrease in Capital Grants and Contributions of $14,501,827. This is due to a decrease in the dollar amount of public improvements accepted by the Village as compared to the prior year. Excluding capital grants and contributions, total governmental activities revenues increased 3.9% or $470,130 from $12,117,922 to $12,588,052, due primarily to an increase in sales taxes of 8.1% or $354,696. Other taxes which include utility taxes, telecommunication taxes and other taxes increased $156,097 or 6.2% during the year. Shared income taxes increased 15.4% due to

Table 2Changes in Net Assets

For the Fiscal Year Ended May 31, 2012

2012 2011 2012 2011 2012 2011

REVENUESProgram Revenues: Charges for Services 1,297,628$ 1,305,244$ 2,547,310$ 2,442,003$ 3,844,938$ 3,747,247$ Operating Grants 526,517 598,055 - - 526,517 598,055 Capital Grants/Contributions 7,053,967 21,555,794 754,260 1,882,337 7,808,227 23,438,131 General Revenues: - - Property & Repl Taxes 3,212,355 3,192,341 - - 3,212,355 3,192,341 Sales Taxes 4,747,193 4,392,497 - - 4,747,193 4,392,497 Other Taxes 1,266,221 1,300,221 - - 1,266,221 1,300,221 Shared Income Taxes 1,420,009 1,229,912 - - 1,420,009 1,229,912 Other 118,129 99,652 13,542 18,229 131,671 117,881 Total Revenues 19,642,019 33,673,716 3,315,112 4,342,569 22,957,131 38,016,285

EXPENSESGeneral Government 2,781,256 2,367,118 - - 2,781,256 2,367,118 Public Safety 4,864,872 3,589,938 - - 4,864,872 3,589,938 Public Works 3,736,393 3,644,191 - - 3,736,393 3,644,191 Sanitation 510,422 359,733 - - 510,422 359,733 Health and Welfare 65,094 72,277 - - 65,094 72,277 Interest 512,987 537,322 - - 512,987 537,322 Waterworks 2,207,371 2,155,414 2,207,371 2,155,414 Total Expenses 12,471,024 10,570,579 2,207,371 2,155,414 14,678,395 12,725,993

Change in Net Assets 7,170,995$ 23,103,137$ 1,107,741$ 2,187,155$ 8,278,736$ 25,290,292$

Net Assets, June 1 85,681,763$ 63,044,457$ 21,147,099$ 18,959,944$ 106,828,862$ 82,004,401$ Prior Period Adjustment (465,831)$ - (465,831) Net Assets, June 1 Restated 85,681,763$ 62,578,626$ 21,147,099$ 18,959,944$ 106,828,862$ 81,538,570$

Net Assets, May 31 92,852,758$ 85,681,763$ 22,254,840$ 21,147,099$ 115,107,598$ 106,828,862$

Governmental Activities Business-Type Activities Total Primary Government

MD&A 6

increased receipts and withholding adjustments from the prior year. Other categories showed minimal increase or decrease from the prior year. Expenses for governmental activities increased by 18% or $1,900,445 to $12,471,024. General Government expenses increased $414,138 or 17.5% due primarily to an increase in non-capitalized expenses associated with capital projects. Total general governmental expenses before adjustments for depreciation and capital asset additions increased 4% for the year. Expenses for Public Safety increased $1,274,934 or 35.6% to $4,864,872. This was due to a significant offset to expenses in the prior year for capital asset additions for public safety. Some of the increase, or $438,154 was due to an increase in public safety operational costs due to increased dispatch fees and personnel costs awarded through arbitration. Public Works expenses increased 2.5% to $3,736,393 due to an increase in operations and depreciation expense for the year. Revenues for business-type activities decreased $1,027,457 or 23.7% to $3,315,112 due to a decrease in capital grants and contributions. Excluding capital grants and contributions, which vary year-to-year, revenues increased $100,620 or 4.1% from $2,460,232 to $2,560,852 due primarily to an increase in water usage during the year, and a two-month period from the prior year at the previous water rate. Expenses for business-type activities increased $51,957 or 2.4% primarily due to an increase in depreciation expense of 8.9% or $62,714. Operating expenses decreased 5.9% to $1,332,923 due to a decrease in the purchase of water meter-related equipment, electricity costs and other operating expenses.

Chart 1 Statement of Activities

For the Fiscal Year Ended May 31, 2012

$0$4,000,000$8,000,000

$12,000,000$16,000,000$20,000,000$24,000,000$28,000,000

Total Revenues Total Expenses

Total Revenues 19,642,019 3,315,112 22,957,131

Total Expenses 12,471,024 2,207,371 14,678,395

Governmental Activities

Business-Type Activities

Primary Government

Revenues. Total primary government revenues for the fiscal year ended May 31, 2012, were $22,957,131. As the chart below shows, 36.3% was from operating and capital grants and contributions, 16.7% was from charges for services, 20.7% was from sales taxes and 14% was from property taxes. Operating and capital grants are the largest

MD&A 7

revenue due to the capital contributions from developers related to the acceptance of public improvements. Charges for services consist primarily of, circuit court fines at $262,701, cable franchise fees at $200,879, sanitary sewer collections at $173,501 and water usage sales at $2,336,684. Sales taxes were the largest source of taxes received at $4,747,193 and property taxes, levied to support various purposes, special service areas or received as TIF revenues, were $3,212,355.

Chart 2 Revenues by Source

Total Primary Government For the Fiscal Year Ended May 31, 2012

$22,957,131

Other Taxes, 2,686,230 , 11.7%

Sales Taxes, 4,747,193 , 20.7%

Property Taxes, 3,212,355 , 14.0%

Operating and Capital Grants,

8,334,744 , 36.3%

Charges for Services,

3,844,938 , 16.7%

Other, 131,671 , 0.6%

Expenses. Village expenses for the year were $14,678,395, an increase of 15.3% from the prior year. Public Works expenses related to the Village’s street maintenance and capital projects accounted for 25.5% of the total expenses. Public Safety expenses related to the Village’s Police Department operations accounted for 33.1% of total expenses and the Village’s waterworks operations accounted for 15%. Together, these three operational areas account for 73.6% of total expenses.

MD&A 8

Chart 3 Expenses by Function

Total Primary Government For the Fiscal Year Ended May 31, 2012

$14,678,395

Sanitation, 510,422 , 3.5%

Public Works, 3,736,393 , 25.5%

Interest, 512,987 , 3.5%

Waterworks, 2,207,371 , 15.0%

General Government,

2,781,256 , 18.9%

Public Safety, 4,864,872 , 33.1%

Health and Welfare, 65,094 ,

0.4%

Financial Analysis of the Village’s Funds 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 near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the Village’s financing requirements. In particular, unrestricted fund balance serves as a useful measure of the Village’s net resources available for spending at the end of the fiscal year. For the fiscal year ended May 31, 2012, the governmental funds reported total combined ending fund balances of $11,290,658, a decrease of $73,340 from the total beginning governmental fund balances of $11,363,998. Of the total ending fund balances of $11,290,658, $47,782 is nonspendable in form, $3,572,015 is restricted for various purposes, $2,314,949 is assigned for various purposes and the remaining $5,355,912 is unassigned. General Fund. The General Fund is the major operating fund of the Village providing for most Village operating services to the community including police protection, public works, and Village Hall services including finance, community development and administrative. The primary sources of funding for these services are sales taxes, state-shared income taxes and property taxes. At the end of the year, unassigned fund balance of the General Fund was $5,358,408, while total fund balance was $5,423,837. 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 and as a measure of the General Fund’s liquidity. At the end of the year, unassigned fund balance represents 62.4% of

MD&A 9

total General Fund expenditures plus transfers out. Both measures are in line with the Village’s policy of maintaining a 40% to 50% fund balance (exclusive of nonspendable portions). During the year, General Fund revenues increased from $8,351,817 to $8,840,335. This was due to an increase in sales tax revenues of $309,069 or 8.8% from the prior year to $3,811,397 and an increase in property taxes of $48,973 to $1,844,732. General Fund expenditures were $555,333 or 7.7% more than the prior year at $7,775,069. Public safety expenditures for police department operations were $433,940 or 10.7% higher than the prior year due to increased dispatch costs and personnel-related costs resulting from arbitration awards. General government expenditures were $111,166 or 5.9% higher than the prior year due primarily to increased sales tax rebates to developers. Public works expenditures increased $17,410 or 1.4% as decreases in snow removal costs from the prior year were partially offset by normal increases in the cost of operations. Transfers out were primarily for required debt service payments for $685,635. The net increase in fund balance for the year was $271,077. Revenues were over final budget by $238,135 and expenditures were under final budget by $540,331. Capital Projects Fund. The Capital Projects Fund received revenues totaling $2,026,490. Of this amount, $935,797 was from the Village’s 0.50% non-home rule sales tax and $770,042 was from the 3.0% utility tax on gas, electricity (kilowatt-hour equivalency) and telecommunications. Total expenditures during the year were $3,062,329 which included $1,235,166 in expenditures for the annual road program and $1,679,599 for Village facilities expenditures related to the renovation of the Village Hall. The total fund balance decreased $985,839 to $975,978. Library Debt Service Fund. The Library Debt Service Fund received property taxes in the amount of $488,512 for the year to pay the annual debt service and related expenditures for the year of $485,545. The total fund balance for the year is $87,492. Business-Type Activities. Total Waterworks operating revenues were $2,433,012 an increase of $100,794 or 4.3% due primarily to an increase in billed water revenue during the year. Total operating expenses were $2,094,773 a decrease of $21,241 or 1% due to a decrease in operational expenses partially offset by an increase in depreciation expenses resulting in a total operating income of $338,239. Total net nonoperating revenues/(expenses) were $15,242 which increased operating income to a net income of $353,481. Developer contributions of $754,260 resulted in a total increase in net assets of $1,107,741 for total net assets at the end of the year of $22,254,840. General Fund Budget. For the year, five budget amendments were passed. Four of these amendments affected the General Fund. These amendments increased total General Fund expenditures from $7,836,850 to $8,315,400. Highlights and dollar amounts of the significant budget amendments are as follows:

• Land purchase and related costs in the amount of $120,000 • Increase of $52,000 for Parkway Tree Planting and Removal • Transfer of funds for the replacement of squad car video equipment totaling

$58,000 • Increase in costs for Police Department retro pay in the amount of $120,000 • Increase in sales tax rebates payable of $50,000

MD&A 10

• Transfer of $50,000 from the General Fund to the Capital Projects Fund and $50,000 from the General Fund to the Insurance Fund

Capital Assets and Debt Administration The Village’s investment in capital assets for both its governmental and business-type activities as of May 31, 2012 is $117,309,104 (net of accumulated depreciation). This investment in capital assets includes land, buildings, vehicles and equipment, infrastructure, sewer lines, water lines, water towers, water wells and water treatment facilities as well as intangible assets. The total increase in the Village’s investment in capital assets net of accumulated depreciation for the current fiscal year was 6.7% (a 7.4% increase for governmental activities and a 3.9% increase for business-type activities). The following schedule reflects the Village’s capital asset balances as of May 31, 2012.

Major capital asset acquisitions during fiscal year 2012 included: • Completion of the renovation of Village Hall for $1,542,146 • Road rehabilitation of 0.40 miles for $903,892 • Acceptance of developer curb, street, right-of-way, sewer lines, water lines and

other related infrastructure at a value of $7,390,511 primarily for the Mirador, Windstone, Oak Creek, Mooselakes Unit III and Liberty Business Park land

• Watermain replacement in progress of $823,708 for the 2012 watermain replacement program

Additional information on the Village’s capital assets can be found in Note 5. Long-Term Debt. As of May 31, 2012, the Village had total debt outstanding of $15,010,032 (excluding amounts deferred for issuance premiums, discounts and costs, compensated absences, the net other post employment benefits obligation, the net pension obligation and unamortized accounting loss on refunding). This amount is comprised of

Table 3Capital Assets

As of May 31, 2012

2012 2011 2012 2011 2012 2011

Land and Land Right of Way 24,267,809$ 20,803,609$ 476,703$ 476,703$ 24,744,512$ 21,280,312$ Buildings 18,601,220 17,433,420 - - 18,601,220 17,433,420 Construction in Progress - - 823,708 - 823,708 - Public Improvements - CIP - 563,994 - - - 563,994 Vehicles and Equipment 2,728,384 2,615,023 72,200 91,000 2,800,584 2,706,023 Infrastructure 50,962,411 47,990,790 - - 50,962,411 47,990,790 Sewer Lines 22,344,056 20,647,194 - - 22,344,056 20,647,194 Water Towers and Wells - - 4,788,956 4,788,956 4,788,956 4,788,956 Water Treatment Facilities - - 6,852,559 6,852,559 6,852,559 6,852,559 Water Lines - - 20,225,314 19,498,851 20,225,314 19,498,851 Less: - Accumulated Depreciation (25,234,307) (22,836,654) (9,599,909) (8,951,908) (34,834,216) (31,788,562) Total Assets 93,669,573$ 87,217,376$ 23,639,531$ 22,756,161$ 117,309,104$ 109,973,537$


MD&A 11

one general obligation bond issuance, three general obligation bond alternate revenue source issuances and one general obligation alternate revenue source loan payable. Of the total amount outstanding:

• $3,855,000 is to be retired with a library debt service property tax levy • $3,040,032 is to be retired with water service charges revenue • $8,115,000 is to be retired with sales tax revenue

The following schedule summarizes the Village’s bonded and similar indebtedness.

The Village is a non-home rule community and as such is subject to a legal debt limit of 8.625% of the equalized assessed value (EAV) of the Village. At May 31, 2012, the taxable EAV of the Village was $496,294,706 which resulted in a total legal debt limit of $42,805,418. At the end of the fiscal year, the Village has $3,855,000 in debt applicable to the debt limit, resulting in a debt to EAV ratio of 0.78%. In 2009, the Village’s outstanding bond rating with Standard and Poor’s was confirmed at AA- prior to the 2009 General Obligation Refunding Issuance. Additional information on the long-term debt of the Village can be found in Note 6. Economic Factors and Next Year’s Budgets and Rates The Village has taken many steps over the last several years to reduce expenditures in response to the recession that caused a significant decrease in major revenue sources. Through prudent financial management the Village has been able to maintain its strong financial position and ability to address future challenges when they come. Over the last two years the Village has begun to see an increase in some major revenue sources. It is anticipated for FY ’13 that the Village will realize overall balanced operations while continuing to advance the operational and capital needs of the organization and the Village. The Village continues to limit increases in operational expenditures by maintaining high operational efficiencies and limiting increases in personnel costs. The Village will also continue to monitor the regional, state and national economy as financial issues at those levels of government will affect the Village as problems and lack of immediate solutions continue to persist. The Village is subject to the property tax extension limitation law which limits the increase in the Village property tax extension to the increase in the consumer price index. For the 2011 levy collected in calendar 2012, this increase was 1.5%. For the 2012 levy collected in 2013, the applicable CPI factor is 3.0%.

Table 4Bonded and Similar Indebtedness

As of May 31, 2012

2012 2011 2012 2011 2012 2011

General Obligation Bonds 3,855,000 4,200,000 - - 3,855,000 4,200,000 General Obligation Bonds/Loans 8,115,000 8,435,000 3,040,032 3,663,785 11,155,032 12,098,785 (Alternative Revenue Source) - - Total 11,970,000$ 12,635,000$ 3,040,032$ 3,663,785$ 15,010,032$ 16,298,785$


MD&A 12

The Village continues to aggressively invest in the replacement of its roads and related infrastructure using committed and restricted funds as well as applying for grants where possible. The 2012 road improvement program is estimated to cost $1,580,000 for almost one mile of road improvements and related infrastructure. The Village also replaces when necessary aging watermain in conjunction with the road program. The overall financial health of the Waterworks Fund continued to improve for a second year in a row. The Village continues to analyze and plan on a long-term basis for additional water capacity and storage. The Village is also planning for infrastructure improvements within the Route 31 TIF District in order to spur redevelopment activities within that corridor. Contacting the Village’s Financial Management This financial report is designed to provide our citizens, customers, investors and creditors with a general overview of the Village’s finances and to demonstrate the Village’s accountability of the money it receives. Questions concerning this report or requests for additional financial information should be directed to William D. Hannah, Finance Director, Village of North Aurora, 25 East State Street, North Aurora, IL 60542.

Component

Unit

Governmental Business-Type Messenger

Activities Activities Total Public Library

ASSETS

Cash and Cash Equivalents 8,498,803$ 1,070,832$ 9,569,635$ 2,128,026$

Restricted Cash and Cash Equivalents - 154,468 154,468 -

Cash with Paying Agent - 208,595 208,595 -

Investments 3,398,342 - 3,398,342 -

Receivables (Net, Where Applicable, of

Allowances for Uncollectibles)

Property Taxes 2,920,734 - 2,920,734 1,382,527

Other Taxes 1,443,613 - 1,443,613 -

Accounts 68,852 416,548 485,400 -

Intergovernmental 513,571 6 513,577 17,187

Loans 148,308 - 148,308 -

Accrued Interest 5,976 - 5,976 -

Other 60,756 - 60,756 -

Prepaid Items 20,282 10,506 30,788 15,556

Deferred Charges 79,890 39,919 119,809 -

Inventory 17,680 - 17,680 834

Assets Held for Sale 17,500 - 17,500 -

Capital Assets

Nondepreciable 24,267,809 1,300,411 25,568,220 600,000

Depreciable, Net of Accumulated Depreciation 69,401,764 22,339,120 91,740,884 92,910

Total Assets 110,863,880 25,540,405 136,404,285 4,237,040

LIABILITIES

Accounts Payable 1,194,597 171,310 1,365,907 125

Retainage Payable 12,176 - 12,176 -

Accrued Payroll 11,846 348 12,194 26,309

Accrued Interest Payable 203,466 48,225 251,691 -

Unearned Property Taxes 3,090,932 - 3,090,932 1,473,400

Other Unearned Taxes 32,577 - 32,577 -

Due to Others 26,011 7,850 33,861 -

Noncurrent Liabilities

Due Within One Year 773,837 642,844 1,416,681 23,778

Due in More than One Year 12,665,680 2,414,988 15,080,668 7,554

Total Liabilities 18,011,122 3,285,565 21,296,687 1,531,166

NET ASSETS

Invested in Capital Assets, Net of Related Debt 81,798,254 20,760,990 102,559,244 692,910

Restricted for

Debt Service 372,218 - 372,218 -

Public Safety 20,047 - 20,047 -

Highways and Streets 1,092,798 - 1,092,798 -

Economic Development 1,803,100 - 1,803,100 -

Subdivision Improvements 137,219 - 137,219 -

Tort Purposes 146,633 - 146,633 79,612

Unrestricted 7,482,489 1,493,850 8,976,339 1,933,352

TOTAL NET ASSETS 92,852,758$ 22,254,840$ 115,107,598$ 2,705,874$

Primary Government


STATEMENT OF NET ASSETS

May 31, 2012

See accompanying notes to financial statements.- 3 -

Capital

Charges Operating Grants and

Expenses for Services Grants Contributions

FUNCTIONS/PROGRAMS

PRIMARY GOVERNMENT


General Government 2,781,256$ 631,909$ -$ -$

Public Safety 4,864,872 427,228 17,908 -

Public Works 3,736,393 50,790 508,609 7,053,967

Sanitation 510,422 187,701 - -

Health and Welfare 65,094 - - -

Interest 512,987 - - -

Total Governmental Activities 12,471,024 1,297,628 526,517 7,053,967


Waterworks 2,207,371 2,547,310 - 754,260

Total Business-Type Activities 2,207,371 2,547,310 - 754,260

TOTAL PRIMARY GOVERNMENT 14,678,395$ 3,844,938$ 526,517$ 7,808,227$

COMPONENT UNIT

Messenger Public Library 1,261,499$ 38,559$ 17,187$ -$

CHANGE IN NET ASSETS

NET ASSETS, JUNE 1

NET ASSETS, MAY 31

Program Revenues


STATEMENT OF ACTIVITIES

For the Year Ended May 31, 2012

- 4 -

Component

Unit

Messenger

Governmental Business-Type Public

Activities Activities Total Library

(2,149,347)$ -$ (2,149,347)$ -$

(4,419,736) - (4,419,736) -

3,876,973 - 3,876,973 -

(322,721) - (322,721) -

(65,094) - (65,094) -

(512,987) - (512,987) -

(3,592,912) - (3,592,912) -

- 1,094,199 1,094,199 -

- 1,094,199 1,094,199 -

(3,592,912) 1,094,199 (2,498,713) -

- - - (1,205,753)

General Revenues

Taxes

Property and Replacement 3,212,355 - 3,212,355 1,451,441

Sales 4,747,193 - 4,747,193 -

Telecommunications 363,748 - 363,748 -

Utility 497,232 - 497,232 -

Amusement 76,438 - 76,438 -

Other 328,803 - 328,803 407

Shared Income Taxes 1,420,009 - 1,420,009 -

Investment Income 54,747 1,189 55,936 1,621

Miscellaneous 63,382 12,353 75,735 14,287

Total 10,763,907 13,542 10,777,449 1,467,756

CHANGE IN NET ASSETS 7,170,995 1,107,741 8,278,736 262,003

NET ASSETS, JUNE 1 85,681,763 21,147,099 106,828,862 2,443,871

NET ASSETS, MAY 31 92,852,758$ 22,254,840$ 115,107,598$ 2,705,874$

Primary Government

Net (Expense) Revenue and Change in Net Assets


Nonmajor Total

Capital Library Governmental Governmental

General Projects Debt Service Funds Funds

Cash and Cash Equivalents 2,383,649$ 444,027$ 118,507$ 4,801,614$ 7,747,797$

Investments 2,380,161 325,608 - - 2,705,769

Receivables (Net, Where Applicable,

of Allowances for Uncollectibles)

Property Taxes 1,894,320 - 472,119 554,295 2,920,734

Other Taxes 1,072,879 333,029 - 37,705 1,443,613

Accounts - 32,853 - 35,999 68,852

Intergovernmental 471,071 42,500 - - 513,571

Loans - - - 148,308 148,308

Accrued Interest 4,981 184 - - 5,165

Other 60,756 - - - 60,756

Advances to Other Funds 10,000 - - - 10,000

Assets Held for Sale 17,500 - - - 17,500

Prepaid Items 17,882 - - 2,400 20,282

TOTAL ASSETS 8,313,199$ 1,178,201$ 590,626$ 5,580,321$ 15,662,347$

LIABILITIES

Accounts Payable 833,619$ 169,646$ -$ 184,882$ 1,188,147$

Retainage Payable - - - 12,176 12,176

Accrued Payroll 11,846 - - - 11,846

Deferred Property Taxes 2,018,836 - 503,134 568,962 3,090,932

Other Deferred Revenue - 32,577 - - 32,577

Advances from Other Funds - - - 10,000 10,000

Due to Others 25,061 - - 950 26,011

Total Liabilities 2,889,362 202,223 503,134 776,970 4,371,689

FUND BALANCES

Nonspendable in Form - Assets Held for Sale 17,500 - - - 17,500

Nonspendable in Form - Advances 10,000 - - - 10,000

Nonspendable in Form - Prepaid Items 17,882 - - 2,400 20,282

Restricted for Public Safety 12,228 - - - 12,228

Restricted for DUI Enforcement 7,819 - - - 7,819

Restricted for Debt Service - - 87,492 284,726 372,218

Restricted for Highways and Streets - - - 1,092,798 1,092,798

Restricted for Economic Development - - - 1,803,100 1,803,100

Restricted for Subdivision Improvements - - - 137,219 137,219

Restricted for Tort Purposes - - - 146,633 146,633

Unrestricted

Assigned for Roads, Infrastructure,

and Capital Projects - 975,978 - - 975,978

Assigned for Buffer Repair/Replacement - - - 41,698 41,698

Assigned for Sanitary Sewers - - - 1,168,563 1,168,563

Assigned for Tourism - - - 19,692 19,692

Assigned for Activity Center - - - 109,018 109,018

Unassigned (Deficit) 5,358,408 - - (2,496) 5,355,912

Total Fund Balances 5,423,837 975,978 87,492 4,803,351 11,290,658

TOTAL LIABILITIES AND

FUND BALANCES 8,313,199$ 1,178,201$ 590,626$ 5,580,321$ 15,662,347$

ASSETS

LIABILITIES AND FUND BALANCES


GOVERNMENTAL FUNDS

BALANCE SHEET

May 31, 2012


FUND BALANCES OF GOVERNMENTAL FUNDS 11,290,658$

Amounts reported for governmental activities in the

statement of net assets are different because:

Capital assets used in governmental activities are

not financial resources and, therefore, are not

reported in the governmental funds 93,669,573

Less Internal Service Funds (613,271)

Accrued interest payable is not recorded in governmental

funds but is recorded on the statement of net assets (203,466)

Long-term liabilities are not due and payable in the current period

and, therefore, are not reported in the governmental funds

Bonds Payable (11,970,000)

Net Pension Obligation (1,143,547)

Net Other Postemployment Benefits Obligation (109,301)

Discount on bonds is recorded on the statement of net assets 72,857

Loss on refunding of bonds is recorded on the statement of net assets 76,939

Issuance costs are capitalized and amortized at the government-wide level 79,890

Premium on bonds is recorded on the statement of net assets (51,115)

The net assets of the internal service funds are included in the

governmental activities in the statement of net assets 1,753,541

NET ASSETS OF GOVERNMENTAL ACTIVITIES 92,852,758$

May 31, 2012


RECONCILIATION OF FUND BALANCES OF GOVERNMENTAL FUNDS TO THE

GOVERNMENTAL ACTIVITIES IN THE STATEMENT OF NET ASSETS



GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES


Total

Capital Library Nonmajor Governmental

General Projects Debt Service Governmental Funds

REVENUES

Taxes 6,306,927$ 1,705,839$ 488,512$ 724,491$ 9,225,769$

Licenses and Permits 327,643 - - 98,913 426,556

Intergovernmental 1,437,917 115,875 - 508,609 2,062,401

Charges for Services 433,955 - - 255,524 689,479

Fines and Forfeits 291,247 - - - 291,247

Developer Contributions - 19,833 - - 19,833

Contributions/Donations - 43,353 - - 43,353

Impact Fees - 135,377 - - 135,377

Investment Income 38,961 6,213 443 9,130 54,747

Miscellaneous 3,685 - - 31,375 35,060

Total Revenues 8,840,335 2,026,490 488,955 1,628,042 12,983,822

EXPENDITURES

Current

General Government 1,989,921 - - 260,460 2,250,381

Public Safety 4,498,949 - - 112,105 4,611,054

Public Works 1,221,105 - - 365,821 1,586,926

Sanitation - - - 63,329 63,329

Health and Welfare 65,094 - - - 65,094

Capital Outlay - 3,062,329 - 268,006 3,330,335

Debt Service

Principal Retirement - - 345,000 320,000 665,000

Interest - - 140,050 365,969 506,019

Fiscal Charges - - 495 475 970

Total Expenditures 7,775,069 3,062,329 485,545 1,756,165 13,079,108

EXCESS (DEFICIENCY) OF REVENUES

OVER EXPENDITURES 1,065,266 (1,035,839) 3,410 (128,123) (95,286)

OTHER FINANCING SOURCES (USES)

Transfers In - 50,000 - 755,635 805,635

Transfers (Out) (805,635) - - - (805,635)

Insurance Claim Reimbursement 11,446 - - 10,500 21,946

Total Other Financing Sources (Uses) (794,189) 50,000 - 766,135 21,946

NET CHANGE IN FUND BALANCES 271,077 (985,839) 3,410 638,012 (73,340)

FUND BALANCES, JUNE 1 5,152,760 1,961,817 84,082 4,165,339 11,363,998

FUND BALANCES, MAY 31 5,423,837$ 975,978$ 87,492$ 4,803,351$ 11,290,658$


NET CHANGES IN FUND BALANCES -

TOTAL GOVERNMENTAL FUNDS (73,340)$

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 2,852,162

The loss on the disposal of capital assets does not require the use of current financial

resources and, therefore, are not reported as expenditures in governmental funds (227,699)

Depreciation expense does not require the use of current financial resources and,

therefore, is not reported as an expenditure in governmental funds (2,858,658)

Less amounts included in internal service funds below 144,807

The contribution of a capital asset is not an inflow of a current financial resource

and, therefore, is not reported in governmental funds but is shown as a capital

contribution on the statement of activities 6,636,251

The repayment of the principal portion long-term debt is reported as an expenditure when due

in governmental funds but as a reduction of principal outstanding in the statement of activities 665,000

The amortization of premium on long-term debt is reported as an

expense on the statement of activities 5,680

The amortization of discount on long-term debt does not provide current financial resources

and, therefore, is not reported as revenue in the governmental funds (4,285)

The amortization of bond issuance costs on long-term debt is reported as an expense

on the statement of activities (6,220)

The amortization of loss on refunding on long-term debt is reported as an

expense on the statement of activities (8,548)

The decrease in accrued interest payable is shown as an increase of expense on the

statement of activities 7,375

The increase in the net pension obligation is shown as an increase of expense on the

statement of activities (33,765)

The change in net other postemployment benefits obligations are reported only in the

statement of activities (46,657)

The change in net assets in internal service funds is shown as a governmental activity on

the statement of activities 118,892

CHANGES IN NET ASSETS OF GOVERNMENTAL ACTIVITIES 7,170,995$



RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,

GOVERNMENTAL ACTIVITIES IN THE STATEMENT OF ACTIVITIES

EXPENDITURES AND CHANGES IN FUND BALANCES TO THE



PROPRIETARY FUNDSSTATEMENT OF NET ASSETS

May 31, 2012

GovernmentalBusiness-Type Activities

Activities Internal Waterworks Service Funds

CURRENT ASSETS

Cash and Cash Equivalents 1,070,832$ 751,006$ Investments - 692,573 Restricted Cash and Cash Equivalents 154,468 -

Cash with Paying Agent 208,595 - Receivables Accounts 416,548 -

Accrued Interest 6 811 Deferred Charges 39,919 - Prepaid Items 10,506 - Inventory - 17,680

Total Current Assets 1,900,874 1,462,070

CAPITAL ASSETSNondepreciable 1,300,411 15,800

Depreciable, Net of Accumulated Depreciation 22,339,120 597,471

Total Capital Assets 23,639,531 613,271

Total Assets 25,540,405 2,075,341

CURRENT LIABILITIESAccounts Payable 171,310 6,450 Accrued Payroll 348 - Interest Payable 48,225 - Due to Others 7,850 - Compensated Absences Payable 4,332 78,837 General Obligation Alternate Revenue

Source Bonds Payable 638,512 -

Total Current Liabilities 870,577 85,287

LONG-TERM LIABILITIESCompensated Absences Payable 12,997 236,513 Other Postemployment Benefits Payable 7,494 - General Obligation Alternate Revenue Source Bonds Payable 2,401,520 - Unamortized Loss on Refunding (7,023) -

Total Long-Term Liabilities 2,414,988 236,513

Total Liabilities 3,285,565 321,800

NET ASSETS

Invested in Capital Assets, Net of Related Debt 20,760,990 613,271 Unrestricted 1,493,850 1,140,270

TOTAL NET ASSETS 22,254,840$ 1,753,541$



PROPRIETARY FUNDS

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN NET ASSETS


Governmental


Activities Internal

Waterworks Service Funds

OPERATING REVENUES

Water Sales 2,336,684$ -$

Water Meters 14,204 -

Water Permits 61,055 -

Meter Reads 17,289 -

Impact Fees 2,306 -

Building Permits 1,474 -

Charges for Services - 294,190

Total Operating Revenues 2,433,012 294,190

OPERATING EXPENSES

Operations 1,332,923 46,264

Depreciation 761,850 144,807

Total Operating Expenses 2,094,773 191,071

OPERATING INCOME (LOSS) 338,239 103,119

NONOPERATING REVENUES (EXPENSES)

Investment Income 1,189 7,746

Tower Rent 114,298 -

Miscellaneous 12,353 -

Insurance Claim Reimbursement 9,364 -

Gain (Loss) on Disposal of Capital Assets (2,508) 8,027

Interest Expense (119,454) -

Total Nonoperating Revenues (Expenses) 15,242 15,773

CHANGE IN NET ASSETS BEFORE CONTRIBUTIONS 353,481 118,892

CONTRIBUTIONS 754,260 -

CHANGE IN NET ASSETS 1,107,741 118,892

NET ASSETS, JUNE 1 21,147,099 1,634,649

NET ASSETS, MAY 31 22,254,840$ 1,753,541$



PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS


Governmental


Activities Internal


CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from Customers and Users 2,418,609$ -$

Receipts from Tower Rental 111,896 -

Receipts from Internal Service Transactions - 294,190

Payments to Suppliers (1,000,398) (5,533)

Payments to Employees (343,762) -

Net Cash from Operating Activities 1,186,345 288,657

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES

None - -

Net Cash from Noncapital Financing Activities - -

CASH FLOWS FROM CAPITAL AND RELATED


Proceeds from the Sale of Capital Assets - 8,027

Proceeds from Insurance Claim Reimbursements 9,365 -

Purchase of Capital Assets (893,468) (57,346)

Interest on Long-Term Debt (115,188) -

Principal on Long-Term Debt (623,753) -

Net Cash from Capital and Related

Financing Activities (1,623,044) (49,319)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Investments - (690,298)

Interest Received 1,177 4,660

Net Cash from Investing Activities 1,177 (685,638)

NET INCREASE IN CASH

AND CASH EQUIVALENTS (435,522) (446,300)

CASH AND CASH EQUIVALENTS, JUNE 1 1,869,417 1,197,306

CASH AND CASH EQUIVALENTS, MAY 31 1,433,895$ 751,006$

(This statement is continued on the following page.)- 12 -


PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS (Continued)


Governmental


Activities Internal


SCHEDULE OF CASH AND CASH EQUIVALENTS

Cash and Cash Equivalents 1,070,832$ 751,006$

Restricted Cash and Cash Equivalents 154,468 -

Cash with Paying Agent 208,595 -

TOTAL CASH AND CASH EQUIVALENTS 1,433,895$ 751,006$

RECONCILIATION OF OPERATING INCOME

TO NET CASH FLOWS FROM

OPERATING ACTIVITIES

Operating Income 338,239$ 103,119$

Adjustments to Reconcile Operating Income

to Net Cash from Operating Activities

Depreciation 761,850 144,807

Tower Rent 114,298 -

Miscellaneous 12,353 -

(Increase) Decrease in

Accounts Receivable (28,207) -

Inventory - 1,631

Prepaid Items (10,506) -

Increase (Decrease) in

Accounts Payable (6,337) -

Accrued Payroll 85 -

Other Deferred Revenue (2,402) -

Due to Others 1,451 -

Compensated Absences 2,427 39,100

Other Postemployment Benefits 3,094 -

NET CASH FROM OPERATING ACTIVITIES 1,186,345$ 288,657$

NONCASH TRANSACTIONS

Contributions of Capital Assets 754,260$ -$

Change in fair value of investments - 2,275

TOTAL NONCASH TRANSACTIONS 754,260$ 2,275$



FIDUCIARY FUNDS

STATEMENT OF FIDUCIARY NET ASSETS

May 31, 2012

Pension

Trust

Police Agency

Pension Funds

ASSETS

Cash and Cash Equivalents 94,741$ 1,610,250$

Investments

U.S. Agency Obligations 3,894,274 -

U.S. Treasury Obligations 205,672 -

Equity Mutual Funds 3,515,216 -

Municipal Bonds 749,379 -

Corporate Bonds 527,454 -

Money Market Mutual Funds 502,897 -

Equities 250,478 -

Receivables

Accrued Interest 62,785 -

Contributions - -

Total Assets 9,802,896 1,610,250$

LIABILITIES

Due to Others 50 1,610,250$

Total Liabilities 50 1,610,250$

NET ASSETS

Net Assets Held in Trust for Pension Benefits 9,802,846

TOTAL NET ASSETS 9,802,846$


FIDUCIARY FUND

STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS


Police

Pension

ADDITIONS

Contributions

Employer 530,000$

Employee 218,628

Total Contributions 748,628

Investment Income

Net Appreciation in

Fair Value of Investments (106,447)

Interest 305,195

Total Investment Income 198,748

Less Investment Expense (34,148)

Net Investment Income 164,600

Total Additions 913,228

DEDUCTIONS

Benefits and Refunds 474,119

Administrative 11,713

Total Deductions 485,832

NET INCREASE 427,396

NET ASSETS HELD IN TRUST

FOR PENSION BENEFITS

June 1 9,375,450

May 31 $ 9,802,846



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NOTES TO FINANCIAL STATEMENTS

May 31, 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Village of North Aurora, Illinois (the Village) was incorporated in 1905. The Village

operates under a Trustee - Administrator form of government. The Village Board is composed of the Village Mayor and six trustees. The Village provides services to the community that includes: police, water, community development, planning and zoning, street maintenance and general services.

The accounting policies of the Village conform to accounting principles generally accepted

in the United States of America, as applicable to governments (hereinafter referred to as generally accepted accounting principles (GAAP)). The Government Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the more significant policies:

a. Reporting Entity As defined by generally accepted accounting principles established by the

Governmental Accounting Standards Board, the financial reporting entity consists of the primary government, as well as its component units, which are legally separate organizations for which the elected officials of the primary government are financially accountable. Financial accountability is defined as:

1. Appointment of a voting majority of the component unit’s board, and either (a)

the ability to impose will by the primary government, or (b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government; or

2. Fiscal dependency on the primary government. Discretely Presented Component Unit The component unit column in the government-wide financial statements includes

the financial data of the Village’s component unit. It is reported in a separate column to emphasize that it is legally separate from the Village.

The financial data of the Messenger Public Library (the Library) is included in the

Village’s reporting entity because of the significance of its financial relationships with the Village. The Library is governed by a seven member Board of Trustees elected separately by the residents of the Village. The Library is financially accountable to the Village as the Village’s approval is needed for the Library to issue bonded debt as well as for the budget and tax levy of the Library. Separate audited financial statements as of May 31, 2012 are available from the Library’s Administrative Office, 14 East State Street, North Aurora, Illinois 60542.

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NOTES TO FINANCIAL STATEMENTS (Continued)

- 18 -

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

b. Fund Accounting

The Village uses funds to report its financial position and the changes in financial

position. 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.

Governmental funds are used to account for all or most of a government’s general

activities, including the collection and disbursement of restricted or committed

monies (special revenue funds), the funds committed, restricted or assigned for the

acquisition or construction of capital assets (capital projects funds) and the funds

committed, restricted or assigned for the servicing of long-term debt (debt service

funds). The general fund is used to account for all activities of the Village not

accounted for in some other fund.

Proprietary funds are used to account for activities similar to those found in the

private sector, where the determination of net income is necessary or useful for 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 government (internal service funds). Pursuant to GASB

Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and

Other Government Entities That Use Proprietary Fund Accounting, the Village has

chosen to apply all GASB pronouncements as well as those FASB pronouncements

issued on or before November 30, 1989 to account for its enterprise funds.

Fiduciary funds are used to account for assets held on behalf of outside parties,

including other governments, or on behalf of other funds within the government.

The Village utilizes pension trust funds which are generally used to account for

assets that the Village holds in a fiduciary capacity and agency funds which are used

to account for funds held by the Village in an agent capacity.

c. Government-Wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net assets and the

statement of activities) report information on all of the nonfiduciary activities of the

Village. The effect of material interfund activity, except interfund service

transactions, has been eliminated from these statements. Governmental activities,

which normally are supported by taxes and intergovernmental revenues, are reported

separately from business-type activities, which rely to a significant extent on fees and

charges for support.

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- 19 -

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) c. Government-Wide and Fund Financial Statements (Continued) The statement of activities demonstrates the degree to which the direct expenses of a

given function, segment or program are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment and (2) grants and standard revenues that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds,

and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

The Village reports the following major governmental funds: The General Fund is the general operating fund of the Village and is used to

account for all financial resources of the Village unless accounted for in another fund.

The Capital Projects Fund accounts for the major capital projects undertaken

by the Village each year funded by restricted, committed, and assigned sources. The Library Debt Service Fund accounts for the debt service activity related to

the 2009 General Obligation Refunding Bonds used to construct the Messenger Public Library building.

The Village reports the following major enterprise funds: The Waterworks Operations Fund accounts for the provision of water services

to the residents and businesses of the Village financed by user fees. Additionally, the Village reports the following internal service funds: The Mobile Equipment Fund is used to account for the accumulation of

department service charges to replace obsolete Village vehicles and the costs to replace the vehicles. The Employee Compensated Absences Fund is used to account for the governmental funds portion of compensated absences owed to employees.

- 18 -



- 20 -


c. Government-Wide and Fund Financial Statements (Continued)

Finally, the Village reports the following fiduciary funds

The Village reports a pension trust fund as a fiduciary fund to account for the

Police Pension Plan. Agency funds are used to account for; special

assessments to accumulate resources for payment of special assessment bonds

which, are not an obligation of the Village, developer’s and building escrow to

account for building bond deposits, developer’s deposits and corresponding

development costs and land cash escrows to account for the accumulation and

distribution of other taxing districts land/cash impact fees.

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 funds’ fund financial statements (except the agency funds, which do

not have a measurement focus). Revenues and additions are recorded when earned

and expenses and deductions are recorded when a liability is incurred. Property taxes

are recognized as revenues in the year for which they are levied (i.e., intended to

finance). Grants and similar items are recognized as revenue as soon as all eligibility

requirements imposed by the provider have been met. Operating revenues/expenses

include all revenues/expenses directly related to providing enterprise fund services.

Incidental revenues/expenses are reported as nonoperating.

Governmental fund financial statements are reported using the current financial

resources measurement focus and the modified accrual basis of accounting. Revenues

are recognized as soon as they are both measurable and available. Revenues are

considered to be available when they are collectible within the current period or soon

enough thereafter to pay liabilities of the current period. The Village considers revenues

to be available if they are collected within 60 days of the end of the current fiscal period,

except for sales and telecommunication taxes which use a 90 day period. Expenditures

generally are recorded when a fund liability is incurred. However, debt service

expenditures are recorded only when payment is due.

Property taxes, sales and telecommunication taxes owed to the state at year end,

motor fuel taxes, 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. Fines and permit

revenue are considered to be measurable and available only when cash is received by

the Village.

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- 21 -

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) d. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued) In applying the susceptible to accrual concept to intergovernmental revenues (i.e.,

federal and state grants), the legal and contractual requirements of the numerous individual programs are used as guidance. There are, however, essentially two types of these revenues. In one, monies must be expended on the specific purpose or project before any amounts will be paid to the Village; therefore, revenues are recognized based upon the expenditures/expenses recorded. In the other, monies are virtually unrestricted as to purpose of expenditure/expense and are generally revocable only for failure to comply with prescribed eligibility requirements, such as equal employment opportunity. These resources are reflected as revenues at the time of receipt or earlier if they meet the availability criterion.

The Village reports unearned/deferred revenue on its financial statements.

Unearned/deferred revenues arise when a potential revenue does not meet both the measurable and available or earned criteria for recognition in the current period. Unearned/deferred revenues also arise when resources are received by the Village before it has a legal claim to them or prior to the provision of services, as when grant monies are received prior to the incurrence of qualifying expenditures/expenses. In subsequent periods, when both revenue recognition criteria are met, or when the Village has a legal claim to the resources, the liability for unearned/deferred revenue is removed from the financial statements and revenue is recognized.

e. Cash and Investments For purposes of the statement of cash flows, the Village considers all highly liquid

investments with a maturity of three months or less when purchased to be cash equivalents. In accordance with Governmental Accounting Standards Board Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, nonnegotiable certificates of deposit and investments with maturity of less than one year at date of purchase are stated at amortized cost. All other investments are stated at fair value. All investments of the pension trust fund are stated at fair value. Fair value has been based on quoted market prices at May 31, 2012 for debt and equity securities.

f. Interfund Receivables/Payables During the course of operations, numerous transactions occur between individual

funds for goods provided or services rendered. These receivables and payables are classified as “due from other funds” or “due to other funds” on the balance sheet. Short-term interfund loans, if any, are classified as “interfund receivables/payables.” Long-term portions are classified as “advances from other funds” or “advances to other funds.”

- 20 -



- 22 -


g. Unbilled Receivables

Estimated sales for water usage prior to May 31, 2012, which are unbilled at year

end, are recognized as current year revenue and are included in accounts receivable.

h. Inventory/Prepaid Items/Expenses

Inventories are valued at cost, which approximates market, using the first-in/first-out

(FIFO) method. The costs of governmental fund inventories are recorded as

expenditures when purchased. Payments made to vendors for services that will

benefit periods beyond the date of this report are recorded as prepaid items/expenses.

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:

Vehicles 3-10 years

Equipment 3-10 years

Water System 10-40 years

Buildings 25-50 years

Infrastructure 20-40 years

j. Compensated Absences

The Village accrues a liability for vacation and compensatory benefits as these

benefits are earned by employees in proprietary funds and governmental activities at

the entity-wide level and in the employee compensated absences Internal Service

Fund.

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- 23 -


k. Long-Term Obligations

In the government-wide financial statements, and proprietary funds in the fund

financial statements, long-term debt and other long-term obligations are reported as

liabilities in the applicable governmental activities, business-type activities or

proprietary fund financial statements. Bond premiums and discounts, as well as

issuance costs, and losses on refundings are deferred and amortized over the life of

the bonds. Bonds payable are reported net of the applicable bond premium or

discount. Bond issuance costs are reported as deferred charges and amortized over

the term of the related debt.

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.

l. Fund Balance/Net Assets

In the fund financial statements, governmental funds report nonspendable fund

balance for amounts that are either not spendable in form or legally or contractually

required to be maintained intact. Restrictions of fund balance are reported for

amounts constrained by legal restrictions from outside parties for use for a specific

purpose, or externally imposed by outside entities. None of the restricted fund

balance result 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 resolutions and ordinances approved by the Board. 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 by the Board of Trustees. Any residual fund balance in the general fund and

any deficit fund balances of other governmental funds is reported as unassigned.

The Village’s flow of funds assumption prescribes that the funds with the highest

level of constraint are expended first. If restricted or unrestricted funds are available

for spending, the restricted funds are spent first. Additionally, if different levels of

unrestricted funds are available for spending the Village considers committed funds

to be expended first followed by assigned and then unassigned funds.

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- 24 -


l. Fund Balance/Net Assets (Continued)

The Village has established fund balance reserve policies for the General Fund at

40% to 50% of annually adopted expenditures. The Village has established

minimum fund balance reserve policies in the Motor Fuel Tax Fund of 25% of

annual expenditures.

In the government-wide financial statements, restricted net assets are legally

restricted by outside parties for a specific purpose. Invested in capital assets, net of

related debt is the book value of the capital assets, net of any debt outstanding that

was issued to construct or acquire the capital assets and unspent debt proceeds.

m. Interfund Transactions

Interfund services are accounted for as revenues, expenditures or expenses in the

effected funds. Transactions that constitute reimbursements to a fund for

expenditures/expenses initially made from it that are properly applicable to another

fund, are recorded as expenditures/expenses in the reimbursing fund and as

reductions of expenditures/expenses in the fund that is reimbursed. All other

interfund transactions are reported as transfers.

n. Use of 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 contingent

assets and liabilities at the date of the financial statements and the reported amounts

of revenues and expenditures/expenses during the reporting period. Actual results

could differ from those estimates.

2. PROPERTY TAXES

Property taxes are levied each calendar year on all taxable real property located in the

Village. For governmental funds, property taxes which are collected within 60 days

subsequent to year end of the year intended to finance are recorded as revenue.

The County Assessor is responsible for assessment of all taxable real property within Kane

County (the County) except for certain railroad property which is assessed directly by the

State. Some portion of the County is reassessed each year on a repeating schedule

established by the County Assessor. The County Clerk computes the annual tax for each

parcel of real property and prepares tax books used by the County Collector as the basis for

issuing tax bills to all taxpayers in the County.

- 23 -



- 25 -

2. PROPERTY TAXES (Continued)

Property taxes are collected by the County Collector and are submitted to the County

Treasurer, who remits to the units their respective share of the collections. Taxes levied in

one year become due and payable in two installments on June 1 and September 1 during

the following year. The levy becomes an enforceable lien against the property as of

January 1 of the levy year. The 2011 levy was adopted on December 5, 2011 and is

recorded as a receivable and offset by deferred revenue since it is intended to finance the

subsequent fiscal year. No allowance for uncollectible taxes has been established since

historically the Village has collected approximately 100% of the levy.

The 2012 tax levy, which attached as an enforceable lien on property as of January 1, 2012,

has not been recorded as a receivable as of May 31, 2012 as the tax has not yet been levied

by the Village and will not be levied until December 2012, and therefore, the levy is not

measurable at May 31, 2012.

3. CASH AND INVESTMENTS

State statutes and the Village’s investment policy authorize the Village to make

deposits/invest in insured commercial banks, savings and loan institutions, obligations of

the U.S. Treasury and U.S. agencies, insured credit union shares, money market mutual

funds with portfolios of securities issued or guaranteed by the United States or agreements

to repurchase these same obligations, short-term commercial paper rated within the highest

classifications by at least two standard rating services, Illinois Funds and the Illinois

Metropolitan Investment Fund. It is the policy of the Village to invest its funds in a

manner which will provide the highest investment return with the maximum security while

meeting the daily cash flow demands of the Village and conforming to all state and local

statutes governing the investment of public funds, using the “prudent person” standard for

managing the overall portfolio. The primary objective of the policy is safety (preservation

of capital and protection of investment principal), liquidity and yield.

The Police Pension Fund’s investment policy allows the same investments as the Village

plus 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 and equity mutual funds and equity

securities.

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

1940. Investments in Illinois Funds are valued at Illinois Fund’s share price, which is the

price for which the investment could be sold.

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- 26 -

3. CASH AND INVESTMENTS (Continued)

Illinois Metropolitan Investment Fund (IMET) is a non-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, which is the price for

which the investment could be sold.

Village Deposits with Financial Institutions

Custodial credit risk for deposits with financial institutions is the risk that in the event of a

bank’s failure, the Village’s deposits may not be returned to it. The Village’s investment

policy requires pledging of collateral with a fair value of 105% 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

The following table presents the investments and maturities of the Village’s debt securities

as of May 31, 2012:

Investment Maturities in Years

Investment Type Fair Value Less than 1 1-5 6-10 Greater than 10

FFCB $ 1,006,107 $ - $ 1,006,107 $ - $ -

FHLB 746,139 - 746,139 - -

Negotiable CD’s 1,646,096 - 1,646,096 - -

TOTAL $ 3,398,342 $ - $ 3,398,342 $ - $ -

In accordance with its investment policy, the Village limits its exposure to interest rate risk

by structuring the portfolio to provide liquidity for operating funds and maximizing yields

for funds not needed within a three year period. The investment policy limits the

maximum maturity length of investments for unreserved funds to three years from date of

purchase. Investments of reserved funds may be purchased with maturities to match future

projects or liability requirements funded by the reserves, if separately approved by the

Village Administrator.

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

U.S. Government or securities issued by agencies of the U.S. Government that are

explicitly or implicitly guaranteed by the U.S. Government. Investments in commercial

paper are allowed if rated within the highest classifications by at least two standard rating

services. The FFCB, FHLB, Illinois Funds and IMET are rated AAA.

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- 27 -


Village Investments (Continued)

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 limits investments the

amount of the portfolio that can be invested in any one investment vehicle as follows: no

more than 75% of the portfolio can be with one financial institution, no more than 50% in

U.S. Government agencies (and no more than 25% in one agency), no more than 65% in

Illinois Funds, no more than 30% in IMET (1-3 year portion) no more than 35% in

brokered certificates of deposit and no more than 10% in commercial paper.

The Village’s investment policy allows the Village to invest in derivatives, upon written

approval of the Village Administrator (other than U.S. Treasury Strips).

Police Pension Fund Deposits with Financial Institutions

Custodial credit risk for deposits with financial institutions is the risk that in the event of a

banks failure, the Police Pension Funds’ deposits may not be returned to them. The Police

Pension Funds’ investment policies do not require pledging of collateral for all bank

balances in excess of federal depository insurance, since flow-through FDIC insurance is

available for the Police Pension Funds’ deposits with financial institutions.

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- 28 -


Police Pension Fund Investments

The following table presents the investments and maturities of the Police Pension Fund’s

debt securities as of May 31, 2012:

Investment Maturities in Years

Investment Type Fair Value Less than 1 1-5 6-10 Greater than 10

GNMA $ 7,716 $ - $ - $ 4,764 $ 2,952

FHLMC 604,478 - 290,413 314,065 -

FNMA 600,256 - 600,256 - -

FFCB 1,306,465 - 251,943 1,054,522 -

FHLB 1,375,359 - 615,280 569,081 190,998

Municipal Bonds 749,379 50,316 217,258 397,092 84,713

Corporate Bonds 527,454 - 322,466 204,988 -

U.S. Treasury

Obligations

205,672

-

167,370

38,302

-

TOTAL $ 5,376,779 $ 50,316 $ 2,464,986 $ 2,582,814 $ 278,663

In accordance with its investment policy, the Police Pension 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 within a one year period. The investment policy

targets the maturity of fixed income investments at 5 years and in the range of 2 to 7 years.

In accordance with its investment policy, the Police Pension 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 U.S. Government or

securities issued by agencies of the U.S. Government that are explicitly or implicitly

guaranteed by the U.S. Government. The FHLMC, FNMA, FFCB, and FHLB investments

are rated AA+. The municipal bonds ratings range from Aa3 to Aaa. Total market values

for municipal bonds, at May 31, 2012, rated Aaa are $140,919, Aa1 are $246,446, Aa2 are

$172,235, and Aa3 are $189,779.

Custodial credit risk for investments is the risk that, in the event of the failure of the

counterparty to the investment, the Police Pension Fund will not be able to recover the

value of its investments that are in possession of an outside party. The Police Pension

Fund’s investment policy requires all securities to be held and accounted for to clearly

indicate ownership by the Police Pension Fund. Illinois Funds and the money market

mutual funds and mutual funds are not subject to custodial credit risk.

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- 29 -


Police Pension Fund Investments (Continued)

Concentration of credit risk - The Police Pension Funds’ investment policy limits the

amount of the portfolio that can be invested in any one investment vehicle as follows:

Equities are limited to a maximum of 50% of the portfolio based on state statutes.

Within fixed income and equities diversification is required as noted below:

FIXED INCOME Target Range

Cash, money market, IL funds 0% 0-10%

Bank certificates of deposit 0% 0-10%

U.S. Treasury securities 10% 0-40%

U.S. Agency Securities 50% 0-75%

U.S. Agency Securities (MBS) 0% 0-20%

Municipal Securities 10% 0-20%

Investment Grade Corporate Bonds 30% 0-50%

EQUITIES Target Range

U.S. Large Company Stocks 55% 0-75%

U.S. Mid-sized Company Stocks 10% 0-15%

U.S. Small Company Stocks 10% 0-20%

International Equity Funds 15% 0-25%

Real Estate 5% 0-10%

Alternative Investment 5% 0-20%

4. RECEIVABLES

a. Notes Receivable - Economic Development

The Village has a Community Development Loan Fund from the proceeds of a

Community Development Block Grant received through the Department of

Commerce and Economic Opportunities of the State of Illinois. This fund is used to

account for these grant funds which are to be loaned to new or expanding local

business ventures which enhance economic development of the Village. Proceeds

(principal and interest) received from such economic development loans made by the

Village are to be used to capitalize a revolving economic development loan fund.

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- 30 -

4. RECEIVABLES (Continued)

b. Loans Receivable

During the fiscal year 2009, the Village entered into a loan in the amount of

$200,000. The loan shall be repaid in five monthly installments of interest of $417

and 120 monthly installments of principal and interest of $1,885, with all payments

applied first to interest and then to principal. As of May 31, 2012, the balance

outstanding is $148,308. The loan receivable outstanding is as follows:

Fiscal

Year Principal Interest Total

2013 $ 19,376 $ 3,249 $ 22,625

2014 19,866 2,759 22,625

2015 20,368 2,257 22,625

2016 20,883 1,742 22,625

2017 21,411 1,214 22,625

2018 21,953 672 22,625

2019 14,943 140 15,083

Subtotal 138,800 12,033 150,833

In arrears 9,508 1,804 11,312

TOTAL $ 148,308 $ 13,837 $ 162,145

c. Other Taxes Receivable

The following receivables are included in Other Taxes Receivable on the Statement

of Net Assets:

GOVERNMENTAL ACTIVITIES

Sales Tax $ 1,194,667

Simplified Telecommunications Tax 96,045

Local Use Tax 62,956

Motor Fuel Tax 36,245

Utility Taxes 31,522

Amusement Tax 7,944

OTB Handle Tax 12,774

Hotel Tax 1,460

TOTAL GOVERNMENTAL ACTIVITIES $ 1,443,613

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- 31 -

5. CAPITAL ASSETS

The following is a summary of changes in capital assets during the fiscal year:

Beginning

Balances

Increases

Decreases

Ending

Balances


Capital Assets not Being Depreciated

Land $ 4,412,147 $ 666,800 $ - $ 5,078,947

Land Right of Way 16,391,462 2,797,400 - 19,188,862

Public Improvements Construction in Progress 563,994 - 563,994 -

Total Capital Assets not Being Depreciated 21,367,603 3,464,200 563,994 24,267,809

Capital Assets Being Depreciated

Buildings 17,433,420 1,620,346 452,546 18,601,220

Vehicles and Equipment 2,615,023 203,656 90,295 2,728,384

Infrastructure 47,990,790 3,117,485 145,864 50,962,411

Sewer Lines 20,647,194 1,696,862 - 22,344,056

Total Capital Assets Being Depreciated 88,686,427 6,638,349 688,705 94,636,071

Less Accumulated Depreciation for

Buildings and Improvements 2,340,348 443,169 228,023 2,555,494

Vehicles and Equipment 1,368,574 206,818 87,977 1,487,415

Infrastructure 13,292,320 1,733,818 145,006 14,881,132

Sewer Lines 5,835,412 474,854 - 6,310,266

Total Accumulated Depreciation 22,836,654 2,858,659 461,006 25,234,307

Total Capital Assets Being

Depreciated, Net

65,849,773

3,779,690

227,699

69,401,764


CAPITAL ASSETS, NET $ 87,217,376 $ 7,243,890 $ 791,693 $ 93,669,573

BUSINESS-TYPE ACTIVITIES


Land $ 476,703 $ - $ - $ 476,703

Construction in Progress - 823,708 - 823,708

Total Capital Assets not Being Depreciated 476,703 823,708 - 1,300,411


Equipment 71,900 - 18,800 53,100

Vehicles 19,100 - - 19,100

Water Treatment Facilities 6,852,559 - - 6,852,559

Water Towers and Wells 4,788,956 - - 4,788,956

Water Lines 19,498,851 824,020 97,557 20,225,314

Total Capital Assets Being Depreciated 31,231,366 824,020 116,357 31,939,029

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- 32 -

5. CAPITAL ASSETS (Continued)

Beginning Balances

Increases

Decreases

Ending Balances

BUSINESS-TYPE ACTIVITIES (Continued) Less Accumulated Depreciation for Equipment $ 35,278 $ 9,063 $ 16,292 $ 28,049 Vehicles 19,100 - - 19,100 Water Treatment Facilities 588,986 171,314 - 760,300 Water Tower and Wells 1,622,358 131,997 - 1,754,355 Water Lines 6,686,186 449,476 97,557 7,038,105

Total Accumulated Depreciation 8,951,908 761,850 113,849 9,599,909

Total Capital Assets Being Depreciated, Net

22,279,458

62,170

2,508

22,339,120

BUSINESS-TYPE ACTIVITIES CAPITAL ASSETS, NET $ 22,756,161 $ 885,878 $ 2,508 $ 23,639,531

Depreciation expense was charged to the governmental activities functions/programs as

follows:

GOVERNMENTAL ACTIVITIES General Government $ 216,346 Public Safety 328,638 Public Works 1,987,570 Sanitation 326,105

TOTAL DEPRECIATION EXPENSE - GOVERNMENTAL ACTIVITIES $ 2,858,659

6. LONG-TERM DEBT A summary of changes in long-term debt reported in the governmental activities of the

Village for the year ended May 31, 2012 is as follows: a. Governmental Activities Long-Term Debt

Issue

Fund Debt Retired by

Balances May 31,

2011

Issuances

Retirements/ Refundings

Balances May 31,

2012

Current Portion

General Obligation Bonds $9,000,000 General Obligation (Alternate Revenue Source) Bonds dated December 15, 2008, due in annual installments of $255,000 - $675,000 through January 1, 2029, interest payable each July 1 and January 1 at 3.25% - 5.00%

Police Station Debt

Service

$ 8,435,000

$ -

$ 320,000

$ 8,115,000

$ 330,000

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- 33 -

6. LONG-TERM DEBT (Continued)

a. Governmental Activities Long-Term Debt (Continued)

Issue

Fund Debt

Retired by

Balances

May 31,

2011

Issuances

Retirements/

Refundings

Balances

May 31,

2012

Current

Portion

$4,525,000 General

Obligation Refunding Bonds

dated November 17, 2009,

due in annual installments of

$325,000 - $395,000 through

January 1, 2021, interest

payable each July 1 and

January 1 at 2.00% - 3.75%

Library

Debt

Service

$ 4,200,000

$ -

$ 345,000

$ 3,855,000

$ 365,000

Total Bonds 12,635,000 - 665,000 11,970,000 695,000

Less Deferred Amounts For

Issuance Discounts (77,142) - (4,285) (72,857) -

Loss on Refunding (85,487) - (8,548) (76,939) -

Plus Issuance Premiums 56,795 - 5,680 51,115 -

Net Bonds 12,529,166 - 657,847 11,871,319 695,000

Compensated Absences General 276,250 108,163 69,063 315,350 78,837

Net Other Postemployment

Benefits Obligation

General

62,644

46,657

-

109,301

-

Net Pension Obligation General 1,109,782 33,765 - 1,143,547 -

TOTAL GOVERNMENTAL

LONG-TERM DEBT

$ 13,977,842

$ 188,585

$ 726,910

$ 13,439,517

$ 773,837

b. Business-Type Activities

Issue

Fund Debt

Retired by

Balances

May 31,

2011

Issuances

Retirements/

Refundings

Balances

May 31,

2012

Current

Portion

$1,770,000 General

Obligation Alternate Revenue

Source Bonds dated

February 15, 2003, due in

annual installments of

$155,000 - $190,000 plus

interest at 2.00% - 3.40%

through June 1, 2012

Water

$ 340,000

$ -

$ 170,000

$ 170,000

$ 170,000

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- 34 -

6. LONG-TERM DEBT (Continued)

b. Business-Type Activities (Continued)

Issue

Fund Debt

Retired by

Balances

May 31,

2011

Issuances

Retirements/

Refundings

Balances

May 31,

2012

Current

Portion

$3,500,000 General

Obligation Alternate Revenue

Source Bonds dated April 15,

2006, due in annual

installments of $285,000 -

$415,000 plus interest at

3.70% through December 1,

2016

Water

$ 2,290,000

$ -

$ 360,000

$ 1,930,000

$ 375,000

$1,033,785 Kane County

Loan Payable dated

December 14, 2010, due in

annual installments of

$93,512 - $120,551 plus

interest at 2.02% - 3.07%

through December 15, 2020

Water

1,033,785

-

93,753

940,032

93,512

Total Bonds and Loan 3,663,785 - 623,753 3,040,032 638,512

Less Unamortized Accounting

Loss on Refunding (14,047) - (7,024) (7,023) -

Net Bonds and Loan 3,649,738 - 616,729 3,033,009 638,512

Compensated Absences 14,902 6,380 3,953 17,329 4,332

Net Other Postemployment

Benefits Obligation

4,400

3,094

-

7,494

-

TOTAL BUSINESS-TYPE

LONG-TERM DEBT $ 3,669,040 $ 9,474 $ 620,682 $ 3,057,832 $ 642,844

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6. LONG-TERM DEBT (Continued) c. Debt Service to Maturity The annual requirements to amortize all debt outstanding of the Village, except the

net pension obligation, net OPEB obligation and compensated absences as of May 31, 2012 are as follows:

Governmental Activities Business-Type Activities

Fiscal General Obligation Bonds

General Obligation Bonds/Kane County Loan Payable

Year Principal Interest Total Principal Interest Total

2013 $ 695,000 $ 488,319 $ 1,183,319 $ 638,512 $ 95,312 $ 733,824 2014 725,000 467,231 1,192,231 459,915 77,649 537,564 2015 760,000 443,844 1,203,844 476,955 62,836 539,791 2016 795,000 416,894 1,211,894 494,476 47,164 541,640 2017 830,000 387,194 1,217,194 517,560 30,575 548,135 2018 870,000 355,094 1,225,094 106,252 12,858 119,110 2019 905,000 321,456 1,226,456 110,502 10,138 120,640 2020 945,000 286,469 1,231,469 115,309 7,062 122,371 2021 855,000 249,381 1,104,381 120,551 3,702 124,253 2022 485,000 215,019 700,019 - - - 2023 505,000 194,406 699,406 - - - 2024 530,000 172,944 702,944 - - - 2025 555,000 148,431 703,431 - - - 2026 585,000 122,763 707,763 - - - 2027 610,000 94,975 704,975 - - - 2028 645,000 66,000 711,000 - - - 2029 675,000 33,750 708,750 - - -

TOTAL $ 11,970,000 $ 4,464,170 $ 16,434,170 $ 3,040,032 $ 347,296 $ 3,387,328

d. Pledged Revenues The Village has issued Alternate Revenue Source Bonds for which they have pledged

future revenue streams. The Series 2003 and Series 2006 General Obligation Alternate Revenue Source Bonds, issued for the refunding of the 1993 Water revenue bonds and various water system improvements, respectively, are payable from a pledge of the Village’s water operations revenue. The 2003 and 2006 bonds have a remaining total pledge of $172,890 and $2,148,300, respectively, with the bonds maturing June 1, 2012 and December 1, 2016. During the current fiscal year, the pledge of water revenues for the 2003 bonds of $178,585 was approximately 7.34% of total water revenues. The pledge of water revenues for the 2006 bonds of $444,730 was approximately 18.28% of total water revenues. The 2008 General Obligation Alternate Revenue Source Bonds, issued for the construction of the police department, are payable from a pledge of sales tax and use tax, with a remaining total pledge of $11,852,094 and the bonds maturing January 1, 2029. During the current fiscal year, the pledge of sales tax and use tax of $685,969 was approximately 16.91% of total sales and use tax.

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7. 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; and net income losses. To insure against the losses, the Village participates in the Illinois Municipal League Risk Management Association (IMLRMA), a public entity risk pool with transfers of risk. The Village pays an annual premium to IMLRMA for its coverage. The Village is not aware of any additional premiums owed to IMLRMA as of May 31, 2012, for the current or prior claim years. In addition, the Village provides health insurance to its employees through a third party indemnity policy. The Village pays monthly premiums to the insurance company for its coverage. Settled claims have not exceeded coverage in the current or prior two fiscal years.

8. INDIVIDUAL FUND DISCLOSURES a. Individual fund transfers are as follows:

Transfers In Transfers Out

General $ - $ 805,635 Nonmajor Governmental 805,635 -

TOTAL $ 805,635 $ 805,635

The purpose of significant transfers are as follows: Transfer of $685,635 from the General Fund to the Nonmajor Governmental Funds

to fund future debt service payments. These amounts will not be repaid. Transfer of $50,000 from the General Fund to the Nonmajor Governmental Funds to

fund tort liability payments. These amounts will not be repaid. Transfer of $50,000 from the General Fund to the Capital Projects Fund to fund

capital expenditures. These amounts will not be repaid. Transfer of $20,000 from the General Fund to the Nonmajor Governmental Funds to

fund operations related to North Aurora Days. These amounts will not be repaid. b. Individual fund advances are as follows:

Advances to Advances from

General $ - $ 10,000 Nonmajor Governmental 10,000 -

TOTAL $ 10,000 $ 10,000

The purpose of the $10,000 advance is to fund the North Lincolnway TIF Fund.

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9. COMMITMENTS AND CONTINGENCIES

a. Litigation

There are several pending lawsuits in which the Village is involved. Management

believes that the potential claims against the Village resulting from such litigation

will not materially affect the financial position of the Village.

b. Construction Contracts

The Village has entered into contracts for the construction or renovation of various

facilities as follows:

Purpose

Expended

to Date

Total

Commitment

2012 Road Program $ - $ 1,306,350

10. SALES TAX REBATES

The Village has entered into economic incentives with three developers as an inducement

to locate shopping centers within the Village. The first agreement, with a rebate period

beginning January 2007, requires that the Village receives the first $250,000 of the sales

tax revenues generated annually, reimburses 100% of the next $250,000 of sales tax

revenues and reimburses 50% of the sales tax rebates remaining. These thresholds are

increased to $300,000 after five years and $350,000 for the final five years of the

agreement. The maximum amount to be paid to the developer is $5,196,000 over 15 years.

$1,895,689 has been paid as of May 31, 2012. The second agreement, with a rebate period

beginning November 2006, requires the Village to rebate 50% of the sales tax revenue

generated by the development in quarterly payments. The maximum amount to be paid to

the developer is $15,000,000 over 15 years. $1,498,861 has been paid as of May 31, 2012.

The third agreement, with a rebate period beginning April 2007, requires the Village to

rebate 50% of the sales tax revenue generated by the developer in semiannual payments for

the first five years of the agreement and all sales tax revenue generated over $500,000

annually for the second five years of the agreement. $346,848 has been paid as of May 31,

2012. A liability for current rebates collected but not yet remitted to the developers has

been recorded related to all three incentive agreements as of May 31, 2012.

11. TAX INCREMENT FINANCING INCENTIVES

The Village has created three tax increment financing districts (TIFs) to encourage

redevelopment within the TIFs. A component of the redevelopment plans approved by the

Village allows for the reimbursement to property owners of qualifying redevelopment costs

from a percentage of future incremental property revenues generated by the TIF, if any.

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- 38 -

11. TAX INCREMENT FINANCING INCENTIVES (Continued)

During fiscal year 2005, the Village entered into a redevelopment agreement that provides

for reimbursement of up to $2,000,000 in eligible redevelopment costs over the life of the

Route 31 TIF for redevelopment of a specific property in the TIF. The reimbursement is

limited to 98% of the incremental property taxes generated by the development. During

the current fiscal year, the Village paid $45,315 towards the redevelopment. Total

payments to date are $384,653.

During fiscal year 2008, the Village entered into a redevelopment agreement that provides

for reimbursement of up to $610,000 in eligible redevelopment costs over the life of the

TIF. The reimbursement is limited to 90% of the incremental property taxes generated by

the development. During the current fiscal year, the Village paid $5,845 towards the

redevelopment. Total payments to date are $8,412.

12. DEFINED BENEFIT PENSION PLANS

The Village contributes to two defined benefit pension plans, the Illinois Municipal

Retirement Fund (IMRF), an agent multiple-employer public employee retirement system;

and the Police Pension Plan which is a single-employer pension plan. The benefits, benefit

levels, employee contributions and employer contributions for the two plans are governed

by Illinois Compiled Statutes and can only be amended by the Illinois General Assembly.

The pension plan does not issue a separate report. However, IMRF does issue a publicly

available report that includes financial statements and supplementary information for the

plan as a whole, but not for individual employers. That report can be obtained from IMRF,

on-line at www.imrf.org.

a. Plan Descriptions

Illinois Municipal Retirement Fund

All employees (other than those covered by the Police or Firefighters’ Pension Plans)

hired in positions that meet or exceed the prescribed annual hourly standard must be

enrolled in IMRF as participating members. Pension benefits vest after eight years of

service. Participating members are required to contribute 4.5% of their annual salary

to IMRF. 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.

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- 39 -

12. DEFINED BENEFIT PENSION PLANS (Continued) a. Plan Descriptions (Continued)

Illinois Municipal Retirement Fund (Continued)

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 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. The Village is required to contribute the remaining amounts necessary to fund IMRF as specified by statute. The employer contribution for the calendar year ended December 31, 2011 was 11.59% of covered payroll.

Police Pension Plan 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. At May 31, 2012, the Police Pension Plan membership consisted of:

Retirees and Beneficiaries Currently Receiving Benefits and Terminated Employees Entitled to Benefits but not yet Receiving Them 12 Current Employees Vested 19 Nonvested 9

TOTAL 40

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 2.50% of such salary for each additional year of service over 20 years up to 30 years to a maximum of 75.00% of such salary. Employees with at least eight years but less than 20 years of credited service may retire at or after age 60 and receive a reduced benefit. The monthly benefit of a police officer who retired with 20 or more years of service after January 1, 1977 shall be increased annually, following the first anniversary date of retirement and be paid upon reaching the age of at least 55 years, by 3.00% of the original pension and 3.00% compounded annually thereafter.

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- 40 -

12. DEFINED BENEFIT PENSION PLANS (Continued)

a. Plan Descriptions (Continued)

Police Pension Plan (Continued)

Tier 2 employees (those hired on or after January 1, 2011) attaining the age of 55 or

older with ten or more years of creditable service are entitled to receive an annual

retirement benefit equal to the average monthly salary obtained by dividing the total

salary of the police officer during the 96 consecutive months of service within the

last 120 months of service in which the total salary was the highest by the number of

months of service in that period. Police officers’ salary for pension purposes is

capped at $106,800, plus the lesser of ½ of the annual change in the Consumer Price

Index or 3.00% compounded. The annual benefit shall be increased by 2.50% of

such salary for each additional year of service over 20 years up to 30 years to a

maximum of 75.00% of such salary. Employees with at least ten years may retire at

or after age 50 and receive a reduced benefit (i.e., ½% for each month under 55).

The monthly benefit of a Tier 2 police officer shall be increased annually at age 60

on the January 1st after the police officer retires, or the first anniversary of the

pension starting date, whichever is later. Noncompounding increases occur annually,

each January thereafter. The increase is the lesser of 3.00% or ½ of the change in the

Consumer Price Index for the proceeding calendar year.

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 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 May 31, 2012, the

Village’s contribution was 24.53% of covered payroll.

b. Summary of Significant Accounting Policies and Plan Asset Matters

Basis of Accounting

The financial statements are prepared using the accrual basis of accounting.

Employee and employer 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 plan.

- 39 -



- 41 -


b. Summary of Significant Accounting Policies and Plan Asset Matters (Continued)

Method Used to Value Investments

Investments are reported at fair value. Investment income is recognized as earned.

Gains and losses on sales and exchanges of fixed-income securities are recognized on

the transaction date.

Administrative Costs

Administrative costs for the Police Pension Plan are financed primarily through

investment earnings.

c. Significant Investments

There are no significant investments (other than U.S. Government guaranteed

obligations) in any one organization that represent 5.00% or more of plan net assets

for the Police Pension Plan. Information for the IMRF is not available.

d. Annual Pension Costs

Employer contributions have been determined as follows:

Illinois

Municipal

Retirement

Police

Pension

Actuarial Valuation Date December 31,

2009

May 31,

2011

Actuarial Cost Method Entry-age

Normal

Entry-age

Normal

Asset Valuation Method 5 Year

Smoothed

Market

5 Year

Smoothed

Market

- 40 -



- 42 -


d. Annual Pension Costs (Continued)

Illinois

Municipal

Retirement

Police

Pension

Amortization Method Level

Percentage of

Payroll

Level

Percentage of

Payroll

Amortization Period 30 Years,

Open

29 Years,

Closed

Significant Actuarial Assumptions

a) Rate of Return on 7.50% 7.50%

Present and Future Assets Compounded Compounded

Annually Annually

b) Projected Salary Increase - 4.00% 5.50%

Attributable to Inflation Compounded Compounded

Annually Annually

c) Additional Projected .40% to 10.0% Not Available

Salary Increases -

Seniority/Merit

Employer annual pension cost (APC) actual contributions and the net pension

obligation (NPO) are as follows. The NPO is the cumulative difference between the

APC and the contributions actually made.

Illinois

Municipal

Retirement*

Police

Pension*

Annual Pension Cost 2010 $ 228,157 $ 464,042

(APC) 2011 237,943 546,055

2012 243,818 563,765

Actual Contribution 2010 228,157 440,000

2011 237,943 524,000

2012 243,818 530,000

- 41 -



- 43 -


d. Annual Pension Costs (Continued)

Illinois

Municipal

Retirement*

Police

Pension*

Percentage of APC Contributed 2010 100.00% 94.82%

2011 100.00% 95.96%

2012 100.00% 94.01%

Net Pension Obligation 2010 $ - $ 1,087,727

(NPO) 2011 - 1,109,782

2012 - 1,143,547

* The information presented is for the fiscal years ended May 31, 2010, 2011 and

2012.

The annual pension cost and NPO (Asset) for the Police Pension Fund has been

calculated as of May 31, 2012:

Annual Required Contribution $ 529,375

Interest on Net Pension Obligation 83,234

Adjustment to Annual Required Contribution (48,844)

Annual Pension Cost 563,765

Contributions Made 530,000

Increase in Net Pension Obligation (Asset) 33,765

Net Pension Obligation (Asset), Beginning of Year 1,109,782

NET PENSION OBLIGATION (ASSET), END OF YEAR $ 1,143,547

- 42 -



- 44 -


e. Funded Status

The funded status of the plans as of May 31, 2012 (December 31, 2011 for IMRF),

based on actuarial valuations performed as of the same date, is as follows. The

actuarial assumptions used to determine the funded status of the plans are the same

actuarial assumptions used to determine the employer APC of the plans as disclosed

in Note 12-d, except for the Police Pension Plan which is based on a 30 year closed

amortization period.

Illinois

Municipal

Retirement

Police

Pension

Actuarial Accrued Liability (AAL) $ 5,023,125 $ 15,649,031

Actuarial Value of Plan Assets 3,613,872 10,213,235

Unfunded Actuarial Accrued Liability (UAAL) 1,409,253 5,435,796

Funded Ratio (Actuarial Value of Plan

Assets/AAL)

71.94%

65.26%

Covered Payroll (Active Plan Members) $ 2,025,057 $ 2,160,390

UAAL as a Percentage of Covered Payroll 69.59% 251.61%

See the schedules of funding progress in the required supplementary information

immediately following the notes to financial statements for additional information

related to the funded status of the plans.

13. OTHER POSTEMPLOYMENT BENEFITS

a. Plan Description

In addition to providing the pension benefits described in Note 12, the Village

provides postemployment health care benefits (OPEB) for retired employees through

a single-employer defined benefit plan. The benefits, benefit levels, employee

contributions and employer contributions are governed by the Village and can be

amended by the Village through its personnel manual, except for the implicit subsidy

which is governed by the State Legislature and Illinois Compiled Statutes (ILCS).

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 and proprietary funds.

- 43 -



- 45 -

13. OTHER POSTEMPLOYMENT BENEFITS (Continued)

b. Benefits Provided

The Village provides continued health insurance coverage at the active employee

rates to all eligible retirees in accordance with ILCS, which creates an implicit

subsidy of retiree health insurance since the retiree does not pay an age adjusted

premium. To be eligible for benefits, an employee must qualify for retirement under

the Village’s retirement plan.

c. Membership

At May 31, 2011 (the latest actuarial valuation date), membership consisted of:

Retirees and Beneficiaries Currently Receiving

Benefits 5

Terminated Employees Entitled

to Benefits but not yet Receiving Them -

Active Employees 51

TOTAL 56

Participating Employers 1

d. Funding Policy

The Village is not required to and currently does not advance fund the cost of

benefits that will become due and payable in the future. Active employees do not

contribute to the plan until retirement.

e. Annual OPEB Costs and Net OPEB Obligation

The Village first had an actuarial valuation performed for the plan as of May 31,

2009 to determine the funded status of the plan as of that date as well as the

employer’s annual required contribution (ARC) for the fiscal year ended May 31,

2009. The Village’s annual OPEB cost, the percentage of annual OPEB cost

contributed to the plan, and the net OPEB obligation for May 31, 2010, 2011, and

2012 was as follows:

- 44 -



- 46 -

13. OTHER POSTEMPLOYMENT BENEFITS (Continued) e. Annual OPEB Costs and Net OPEB Obligation (Continued)

Fiscal Year

Ended

Annual OPEB Cost

Employer

Contributions

Percentage of Annual OPEB Cost

Contributed

Net OPEB Obligation

May 31, 2010 $ 30,374 $ 7,707 25.4% $ 44,000 May 31, 2011 30,751 7,707 25.1% 67,044 May 31, 2012 66,035 16,284 24.66% 116,795

The net OPEB obligation as of May 31, 2012, was calculated as follows:

Annual Required Contribution $ 64,918 Interest on Net OPEB Obligation 3,352 Adjustment to Annual Required Contribution (2,235)

Annual OPEB Cost 66,035 Contributions Made 16,284

Increase in Net OPEB Obligation 49,751 Net OPEB Obligation, Beginning of Year 67,044

NET OPEB OBLIGATION, END OF YEAR $ 116,795

Funded Status and Funding Progress. The funded status of the plan as of May 31,

2012 was as follows:

Actuarial Accrued Liability (AAL) $ 698,905 Actuarial Value of Plan Assets - Unfunded Actuarial Accrued Liability (UAAL) 698,905 Funded Ratio (Actuarial Value of Plan Assets/AAL) 0.00% Covered Payroll (Active Plan Members) $ 4,185,447 UAAL as a Percentage of Covered Payroll 16.70%

Actuarial valuations of an ongoing plan involve estimates of the value of reported

amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

- 45 -



- 47 -

13. OTHER POSTEMPLOYMENT BENEFITS (Continued)

e. Annual OPEB Costs and Net OPEB Obligation (Continued)

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 May 31, 2011, actuarial valuation, the entry age actuarial cost method was

used. The actuarial assumptions included a discount rate of 5.0% and an initial

healthcare cost trend rate of 8.0% with an ultimate healthcare inflation rate of 6.0%.

Both rates include a 3.0% 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 30 year basis.

14. COMPONENT UNIT - MESSENGER PUBLIC LIBRARY

a. Summary of Significant Accounting Policies

The accounting policies of the Library conform to generally accepted accounting

principles as applicable to governments. The Government Accounting Standards

Boards (GASB) is the accepted standard-setting body for establishing governmental

accounting and financial reporting principles. The following is a summary of the

more significant policies:

1) Fund Accounting

The Library uses funds to report on its financial position and the results of its

operations. 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. The Library reports only governmental funds.

- 46 -



- 48 -

14. COMPONENT UNIT - MESSENGER PUBLIC LIBRARY (Continued)

a. Summary of Significant Accounting Policies (Continued)

1) Fund Accounting (Continued)

Governmental funds are used to account for all or most of a Library’s general

activities, the including collection and disbursement of restricted or committed

monies (special revenue funds), the funds committed, restricted or assigned for

the acquisition or construction of capital assets (capital projects funds) and the

funds committed, restricted or assigned for the servicing of long-term debt

(debt service funds). The general fund is used to account for all activities of

the Library not accounted for in some other fund.

The government-wide financial statements are reported using the economic

resources measurement focus and the accrual basis of accounting. Revenues

are recorded when earned and expenses are recorded when a liability is

incurred. Property taxes are recognized as revenues in the year for which they

are levied (i.e., intended to finance). Grants and similar items are recognized

as revenue as soon as all eligibility requirements imposed by the provider have

been met.

2) Measurement Focus, Basis of Accounting and Financial Statement Presentation

Property taxes 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. All other revenue items are considered to be measurable

and available only when cash is received by the Library.

Those revenues susceptible to accrual are property taxes, grant revenue and

interest revenue. Fine revenues are not susceptible to accrual because generally

they are not measurable until received in cash.

The Library reports unearned revenue on its financial statements. Unearned

revenues arise when a potential revenue does not meet both the measurable and

available or earned criteria for recognition in the current period. Unearned

revenues also arise when resources are received by the Library before it has a

legal claim to them or prior to the provision of services, as when grant monies

are received prior to the incurrence of qualifying expenditures. In subsequent

periods, when both revenue recognition criteria are met, or when the Library

has a legal claim to the resources, the liability for unearned revenue is removed

from the financial statements and revenue is recognized.

- 47 -



- 49 -


a. Summary of Significant Accounting Policies (Continued)

3) Cash and Investments

Investments are stated at cost or amortized cost, which approximates fair value.

4) Capital Assets

Capital assets, which include property, plant, equipment and infrastructure

assets (e.g., roads, bridges, sidewalks and similar items), are reported in the

applicable governmental columns in the government-wide financial statements.

Capital assets are defined by the Library as assets with an initial, individual

cost in excess of $2,500 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 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. Capital assets are depreciated using the straight-line method

over the following estimated useful lives:

Assets Years

Building Improvements 5-7

Furniture and Equipment 5-10

5) Compensated Absences

In accordance with GASB Interpretation No. 6, Accounting for Certain

Liabilities, only vested or accumulated vacation leave including related social

security and Medicare that is committed to be liquidated at May 31, 2012, is

reported as an expenditure and a fund liability of the governmental fund that

will pay it. Vested or accumulated vacation of governmental activities at the

government-wide level is recorded as an expense and liability as the benefits

accrue to employees. Sick leave does not vest upon termination or retirement

and therefore no liability has been recorded for this.

- 48 -



- 50 -

14. COMPONENT UNIT - MESSENGER PUBLIC LIBRARY (Continued) b. Cash and Investments The Library’s investment policy authorizes the Library 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 or agreements to repurchase these obligations, repurchase agreements, short-term commercial paper rated within the three highest classifications by at least two standard rating services, and Illinois Funds.

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 1940. Investments in Illinois Funds are valued at Illinois Fund’s share price, the price at which the investment could be sold.

It is the policy of the Library 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 Library and conforming to all state and local statutes governing the investment of public funds, using the “prudent person” standard for managing the overall portfolio. The primary objective of the policy is safety of principal, liquidity, yield and maintaining the public trust.

1) Deposits with Financial Institutions

Custodial credit risk for deposits with financial institutions is the risk that in the event of bank failure, the Library’s deposits may not be returned to it. To guard against credit risk for deposits with financial institutions, the Library’s investment policy requires that deposits with financial institutions in excess of FDIC be collateralized with collateral held by an independent third party in the name of the Library.

2) Investments

In accordance with its investment policy, the Library limits its exposure to interest rate risk by diversifying its investment portfolio to the best of its ability based on the nature of the funds invested and the cash flow needs of those funds. A variety of financial instruments and maturities, properly balanced, will help to ensure liquidity and reduce risk or interest rate volatility and loss of principal. Diversifying investments and maturities will avoid incurring unreasonable risks in the investment portfolio regarding specific security types, issuers or individual financial institutions. The Library’s investment policy does not specifically limit the maximum maturity length of investments.

- 49 -



- 51 -


b. Cash and Investments (Continued)

2) Investments (Continued)

The Library 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 U.S. Government or securities issued by agencies

of the U.S. Government that are explicitly guaranteed by the U.S. Government.

However, the Library’s investment policy does not specifically limit the

Library to these types of investments.

Custodial credit risk for investments is the risk that, in the event of the failure

of the counterparty to the investment, the Library will not be able to recover the

value of its investments that are in the possession of an outside party. To limit

its exposure, the Library’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 Library’s agent separate from where the investment was

purchased.

c. Receivables

Property taxes for the 2011 levy year attach as an enforceable lien on January 1,

2011, on property values assessed as of the same date. Taxes are levied by

December 31 of the same year by passage of a Tax Levy Ordinance. Tax bills are

prepared by the County and issued on or about May 1, 2012, and are payable in two

installments, on or about June 1, 2012 and September 1, 2012. The County collects

such taxes and remits them periodically.

The 2011 levy was adopted in December 2011 and is recorded as a receivable at

May 31 and offset by unearned revenue since it is not due before the end of the

Library’s fiscal year and is intended to finance the subsequent fiscal year.

The 2012 tax levy, which attached as an enforceable lien on property as of January 1,

2012, has not been recorded as a receivable as of May 31, 2012 as the tax has not yet

been levied by the Library and will not be levied until December 2012, and therefore,

the levy is not measurable at May 31, 2012.

- 50 -



- 52 -


d. Capital Assets

Capital asset activity for the year ended May 31, 2012 was as follows:

Beginning

Balances

Increases

Decreases

Ending

Balances



Land $ 600,000 $ - $ - $ 600,000

Total Capital Assets not Being Depreciated 600,000 - - 600,000


Building Improvements 66,174 - - 66,174

Furniture and Equipment 44,623 36,930 - 81,553

Total Capital Assets Being Depreciated 110,797 36,930 - 147,727

Less Accumulated Depreciation for

Building Improvements 9,968 9,968 - 19,936

Furniture and Equipment 28,065 6,816 - 34,881

Total Accumulated Depreciation 38,033 16,784 - 54,817

Total Capital Assets Being Depreciated, Net 72,764 20,146 - 92,910


CAPITAL ASSETS, NET $ 672,764 $ 20,146 $ - $ 692,910

Depreciation expense was charged to functions of the primary government as

follows:


Culture and Recreation $ 16,784

e. Long-Term Liabilities

The following is a summary of changes in the Library’s long-term liabilities for the

year ended May 31, 2012:

Issue

Balances

June 1

Increases

Decreases

Balances

May 31

Current

Portion

Accrued Compensated

Absences Payable

$ 33,267

$ 23,778

$ 33,267

$ 23,778

$ 23,778

Net OPEB Obligation 3,945 3,609 - 7,554 -

TOTAL $ 37,212 $ 27,387 $ 33,267 $ 31,332 $ 23,778

- 51 -

REQUIRED SUPPLEMENTARY INFORMATION


GENERAL FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL


Variance

Original Final Over

Budget Budget Actual (Under)

REVENUES

Taxes 5,945,250$ 6,155,250$ 6,306,927$ 151,677$

Licenses and Permits 268,000 268,000 327,643 59,643

Intergovernmental 1,405,000 1,405,000 1,437,917 32,917

Charges for Services 387,950 387,950 433,955 46,005

Fines and Forfeits 291,000 291,000 291,247 247

Investment Income 90,000 90,000 38,961 (51,039)

Miscellaneous 5,000 5,000 3,685 (1,315)

Total Revenues 8,392,200 8,602,200 8,840,335 238,135

EXPENDITURES

Current

General Government 1,972,221 2,155,771 1,989,921 (165,850)

Public Safety 4,384,245 4,577,245 4,498,949 (78,296)

Public Works 1,404,384 1,506,384 1,221,105 (285,279)

Health and Welfare 76,000 76,000 65,094 (10,906)

Total Expenditures 7,836,850 8,315,400 7,775,069 (540,331)


OVER EXPENDITURES 555,350 286,800 1,065,266 778,466


Transfers (Out) (705,635) (805,635) (805,635) -

Insurance Claim Reimbursement 5,000 5,000 11,446 6,446

Total Other Financing Sources (Uses) (700,635) (800,635) (794,189) 6,446

NET CHANGE IN FUND BALANCE (145,285)$ (513,835)$ 271,077 784,912$

FUND BALANCE, JUNE 1 5,152,760

FUND BALANCE, MAY 31 5,423,837$

(See independent auditor's report.)- 52 -

(2) UAAL

Actuarial (4) as a

Actuarial (1) Accrued (3) Unfunded Percentage

Valuation Actuarial Liability Funded AAL (5) of Covered

Date Value of (AAL) Ratio (UAAL) Covered Payroll

December 31, Assets Entry-Age (1) / (2) (2) - (1) Payroll (4) / (5)

2006 2,506,293$ 3,196,696$ 78.40% 690,403$ 1,496,030$ 46.15%

2007 2,701,435 3,480,250 77.62% 778,815 1,723,517 45.19%

2008 2,787,395 4,071,905 68.45% 1,284,510 1,982,268 64.80%

2009 2,939,032 4,295,084 68.43% 1,356,052 2,110,878 64.24%

2010 3,297,172 4,717,710 69.89% 1,420,538 2,013,810 70.54%

2011 3,613,872 5,023,125 71.94% 1,409,253 2,025,057 69.59%

May 31, 2012


SCHEDULE OF FUNDING PROGRESS

ILLINOIS MUNICIPAL RETIREMENT FUND


(2) UAAL

Actuarial (4) as a

Actuarial (1) Accrued (3) Unfunded Percentage

Valuation Actuarial Liability Funded AAL (5) of Covered

Date Value of (AAL) Ratio (UAAL) Covered Payroll

May 31, Assets Entry-Age (1) / (2) (2) - (1) Payroll (4) / (5)

2007 6,844,199$ 9,627,733$ 71.09% 2,783,534$ 1,790,902$ 155.43%

2008 7,235,405 10,664,231 67.85% 3,428,826 1,918,494 178.72%

2009 7,007,773 11,828,034 59.25% 4,820,261 1,987,958 242.47%

2010 8,056,624 12,917,436 62.37% 4,860,812 2,040,182 238.25%

2011 9,375,450 14,266,774 65.72% 4,891,324 2,017,606 242.43%

2012 10,213,235 15,649,031 65.26% 5,435,796 2,160,390 251.61%

May 31, 2012



POLICE PENSION FUND


(2) (4) UAAL

Actuarial Unfunded as a

Actuarial (1) Accrued (3) AAL Percentage

Valuation Actuarial Liability Funded (UAAL) (5) of Covered

Date Value of (AAL) Ratio (OAAL) Covered Payroll

May 31, Assets Entry-Age (1) / (2) (2) - (1) Payroll (4) / (5)

2009 -$ 298,427$ 0.00% 298,427$ 3,970,226$ 7.52%

2010 - 298,427 0.00% 298,427 4,151,060 7.19%

2011 - 698,905 0.00% 698,905 4,031,416 17.34%

2012 - 698,905 0.00% 698,905 4,185,447 16.70%

The Village implemented GASB Statement No. 45 for the fiscal year ended May 31, 2009.

N/A - information is not available as no actuarial valuation was performed

Information for prior years is not available.



OTHER POSTEMPLOYMENT BENEFIT PLAN

May 31, 2012


Annual

Required

Fiscal Employer Contribution Percentage

Year Contributions (ARC) Contributed

2007 174,587$ 174,587$ 100.00%

2008 194,413 194,413 100.00%

2009 219,239 219,239 100.00%

2010 228,157 228,157 100.00%

2011 237,943 237,943 100.00%

2012 243,818 243,818 100.00%

May 31, 2012


SCHEDULE OF EMPLOYER CONTRIBUTIONS

ILLINOIS MUNICIPAL RETIREMENT FUND


Annual

Required



2007 296,000$ 295,217$ 100.27%

2008 348,000 347,382 100.18%

2009 389,000 388,247 100.19%

2010 440,000 439,842 100.04%

2011 524,000 523,264 100.14%

2012 530,000 529,375 100.12%

May 31, 2012



POLICE PENSION FUND


Annual

Required



2009 7,707$ 29,040$ 26.54%

2010 7,707 30,018 25.67%

2011 7,707 30,018 25.67%

2012 16,284 64,918 25.08%

The Village implemented GASB Statement No. 45 for the fiscal year ended May 31, 2009.

Information for prior years is not available.

May 31, 2012


OTHER POSTEMPLOYMENT BENEFIT PLAN



- 60 -


NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

May 31, 2012

BUDGETS AND BUDGETARY ACCOUNTING

Annual budgets were adopted for all governmental and proprietary funds. Budgets are adopted

on a basis consistent with generally accepted accounting principles. All annual appropriations

lapse at fiscal year end.

All departments of the Village submit requests for appropriations to the Village administrator so

that a budget may be prepared. The budget is prepared by fund, department, division and object

for the general fund and the department/division level for other funds, and includes information

on the past year, current year estimates, and requested appropriations for the next fiscal year.

The proposed budget is presented to the governing body for review. The governing body holds

public hearings and may add to, subtract from or change appropriations, but may not change the

form of the budget. The budget may be amended by the governing body.

The Board of Trustees approves all transfer amounts between departments for all funds.

Expenditures may not legally exceed budgeted appropriations at the department level in all

funds. During the year, several budget transfers were adopted and are reflected in the financial

statements.

- 59 -


STATEMENTS AND SCHEDULES

MAJOR GOVERNMENTAL FUNDS

GENERAL FUND

The General Fund is the general operating fund of the Village. It is used to account for all

financial resources except those accounted for in another fund.


GENERAL FUND

SCHEDULE OF REVENUES - BUDGET AND ACTUAL


Variance

Original Final Over


TAXES

Property Taxes 1,840,000$ 1,840,000$ 1,844,732$ 4,732$

Property Taxes - Road and Bridge 135,000 135,000 138,436 3,436

Replacement Taxes 40,000 40,000 35,448 (4,552)

Sales Tax 3,440,000 3,650,000 3,811,397 161,397

Use Tax 255,000 255,000 245,851 (9,149)

Telecommunications Tax 103,000 103,000 90,937 (12,063)

Amusement Tax 63,000 63,000 76,438 13,438

OTB Tax 68,000 68,000 62,485 (5,515)

Other Taxes 1,250 1,250 1,203 (47)

Total Taxes 5,945,250 6,155,250 6,306,927 151,677

LICENSES AND PERMITS

Business Licenses 34,000 34,000 34,241 241

Liquor Licenses 47,000 47,000 49,688 2,688

Antenna/Tower License 2,500 2,500 1,950 (550)

Business Registration 11,000 11,000 12,805 1,805

Towing Licenses 500 500 625 125

Building Permits 125,000 125,000 140,037 15,037

Storm Drain Fees 2,500 2,500 2,550 50

Plumbing Permits 11,000 11,000 5,417 (5,583)

Contractor Licenses 8,000 8,000 32,551 24,551

Zoning and Annexation Permits 2,500 2,500 4,200 1,700

Overweight Truck Permits 9,000 9,000 5,075 (3,925)

Western Development 15,000 15,000 38,504 23,504

Total Licenses and Permits 268,000 268,000 327,643 59,643

INTERGOVERNMENTAL

State Income Tax 1,375,000 1,375,000 1,420,009 45,009

Grants 30,000 30,000 17,908 (12,092)

Total Intergovernmental 1,405,000 1,405,000 1,437,917 32,917

CHARGES FOR SERVICES

Rents 22,000 22,000 22,000 -

Accident Reports 1,200 1,200 1,425 225

School Reimbursement 31,250 31,250 23,927 (7,323)

Services Fees 90,000 90,000 103,065 13,065

Fingerprinting 1,000 1,000 1,865 865

BRC Review Fees 2,000 2,000 281 (1,719)

Cable Franchise Fees 198,000 198,000 200,879 2,879

Administration Fees 7,000 7,000 11,090 4,090

Printed Materials 500 500 823 323

Developer Contributions - - 8,905 8,905

Other 35,000 35,000 59,695 24,695

Total Charges for Services 387,950 387,950 433,955 46,005

(This schedule is continued on the following page.)- 60 -


GENERAL FUND

SCHEDULE OF REVENUES - BUDGET AND ACTUAL (Continued)


Variance

Original Final Over


FINES AND FORFEITS

Circuit Court Fines 261,000$ 261,000$ 262,701$ 1,701$

Alarm System Fines 4,000 4,000 4,300 300

Drug Fines and Forfeitures 1,000 1,000 200 (800)

Ordinance Violations 25,000 25,000 24,046 (954)

Total Fines and Forfeits 291,000 291,000 291,247 247

INVESTMENT INCOME 90,000 90,000 38,961 (51,039)

MISCELLANEOUS 5,000 5,000 3,685 (1,315)

TOTAL REVENUES 8,392,200$ 8,602,200$ 8,840,335$ 238,135$



GENERAL FUND

SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL


Variance

Original Final Over


GENERAL GOVERNMENT

Village Officers and Trustees 73,243$ 73,243$ 71,809$ (1,434)$

Village Clerk 14,082 14,082 10,868 (3,214)

Administration/Finance 548,245 561,795 550,699 (11,096)

Plan Commission 9,100 9,100 6,365 (2,735)

Professional Services 165,120 165,120 118,120 (47,000)

Community Development 436,953 436,953 404,177 (32,776)

Other Departments 893,500 1,063,500 995,905 (67,595)

Reimbursements from Other Funds (168,022) (168,022) (168,022) -

Total General Government 1,972,221 2,155,771 1,989,921 (165,850)

PUBLIC SAFETY

Police Commission 5,825 5,825 2,314 (3,511)

Police Department 4,378,420 4,571,420 4,496,635 (74,785)

Total Public Safety 4,384,245 4,577,245 4,498,949 (78,296)

PUBLIC WORKS

Public Works 1,404,384 1,506,384 1,221,105 (285,279)

HEALTH AND WELFARE

Health and Safety 76,000 76,000 65,094 (10,906)

TOTAL EXPENDITURES 7,836,850$ 8,315,400$ 7,775,069$ (540,331)$



GENERAL FUND

SCHEDULE OF DETAILED EXPENDITURES - BUDGET AND ACTUAL


Variance

Original Final Over


GENERAL GOVERNMENT

Village Officers and Trustees

Personal Services

Salaries and Wages 52,075$ 54,150$ 54,150$ -$

Employer's Social Security 3,868 4,068 4,016 (52)

Total Personal Services 55,943 58,218 58,166 (52)

Contractual Services

Legal 1,000 - - -

Dues and Meetings 10,300 9,300 9,008 (292)

Conventions and Travel 1,500 1,500 1,484 (16)

Total Contractual Services 12,800 10,800 10,492 (308)

Commodities

Office Supplies 500 900 843 (57)

Miscellaneous 3,500 2,825 2,308 (517)

Total Commodities 4,000 3,725 3,151 (574)

Capital Outlay

Equipment 500 500 - (500)

Total Capital Outlay 500 500 - (500)

Total Village Officers and Trustees 73,243 73,243 71,809 (1,434)

Village Clerk

Personal Services

Salaries and Wages 6,782 6,782 6,782 -


Dues and Meetings 300 300 - (300)

Legal 7,000 6,300 3,477 (2,823)

Total Contractual Services 7,300 6,600 3,477 (3,123)

Commodities

Office Supplies - 700 609 (91)

Total Village Clerk 14,082 14,082 10,868 (3,214)

Administration/Finance

Personal Services

Salaries and Wages 353,255 364,555 363,610 (945)

Employer's Social Security 27,024 25,874 25,798 (76)

Illinois Municipal Retirement Fund 42,991 44,391 43,392 (999)

Employee Health Insurance 48,266 44,266 42,451 (1,815)

Life Insurance 384 384 281 (103)

Total Personal Services 471,920 479,470 475,532 (3,938)

(This schedule is continued on the following pages.)- 63 -

GENERAL FUND

SCHEDULE OF DETAILED EXPENDITURES - BUDGET AND ACTUAL (Continued)


Variance

Original Final Over


GENERAL GOVERNMENT (Continued)


Communications 2,400$ 10,400$ 9,821$ (579)$

Telephone 4,500 7,500 7,131 (369)

Dues and Meetings 2,350 2,350 1,067 (1,283)

Convention and Travel 2,600 2,100 1,517 (583)

Training 1,250 1,250 881 (369)

Website Maintenance 8,800 6,800 6,487 (313)

Banking Fees 7,400 4,400 3,852 (548)

Equipment Repairs and Maintenance 15,500 15,500 15,296 (204)


Commodities

Office Supplies 4,300 4,300 4,263 (37)

Postage 4,250 3,250 2,802 (448)

Publishing/Advertising 3,575 3,575 2,180 (1,395)

Printing 13,600 11,600 11,165 (435)

Miscellaneous 5,800 8,300 7,837 (463)

Total Commodities 31,525 31,025 28,247 (2,778)

Capital Outlay

Other Equipment - 1,000 868 (132)

Total Capital Outlay - 1,000 868 (132)

Total Administration/Finance 548,245 561,795 550,699 (11,096)

Plan Commission

Personal Services

Salaries and Wages 8,000 8,000 6,300 (1,700)



Consulting Fees 500 500 25 (475)

Dues and Meetings 500 500 27 (473)

Total Contractual Services 1,000 1,000 52 (948)

Commodities

Office Supplies 100 100 13 (87)

Total Plan Commission 9,100 9,100 6,365 (2,735)

Professional Services


Engineering 25,000 26,000 25,348 (652)

Legal 95,000 93,000 52,213 (40,787)

Accounting and Audit 40,120 41,120 40,559 (561)

Professional and Consulting Fees 5,000 5,000 - (5,000)


Total Professional Services 165,120 165,120 118,120 (47,000)



GENERAL FUND



Variance

Original Final Over



GENERAL GOVERNMENT (Continued)

Community Development

Personal Services

Salaries and Wages 275,908$ 275,908$ 268,391$ (7,517)$

Overtime Salaries 500 500 - (500)

Employer's Social Security 21,144 21,144 19,636 (1,508)





Contractual ServicesPlanning 2,000 2,000 285 (1,715) Inspection Services 17,000 9,000 6,125 (2,875) Communications 1,650 1,650 1,013 (637) Consulting Fees - - 3,071 3,071 Conventions and Travel 4,200 4,200 2,584 (1,616) Telephone 2,300 4,300 4,069 (231) Training 1,750 1,750 35 (1,715) Dues and Meetings 1,225 1,225 949 (276) Vehicle Repair and Maintenance 2,000 2,000 1,998 (2) Equipment Repair and Maintenance 10,200 10,200 8,403 (1,797)


CommoditiesOffice Supplies 5,500 5,500 4,607 (893) Gas and Oil 3,500 5,000 4,595 (405) Uniform Allowance 200 200 - (200) Postage 1,500 2,500 2,024 (476) Publishing 6,000 6,000 5,316 (684) Printing 500 2,000 1,800 (200) Miscellaneous 500 500 463 (37)


Capital OutlayOther Equipment 750 2,750 2,451 (299) Mobile Equipment 3,850 3,850 3,850 -

Total Capital Outlay 4,600 6,600 6,301 (299)

Total Community Development 436,953 436,953 404,177 (32,776)

Other DepartmentsContractual Services

Public Access Cable 78,000 78,000 74,940 (3,060) Beautification Committee 3,500 5,700 5,554 (146) Sales Tax Rebates 806,000 856,000 818,387 (37,613) Miscellaneous - 5,000 4,938 (62)


Commodities

Fireworks 6,000 6,000 6,000 -

Total Commodities 6,000 6,000 6,000 -


GENERAL FUND



Variance

Original Final Over



GENERAL GOVERNMENT (Continued)Other Departments (Continued)

Capital Outlay

Capital Improvements -$ 112,800$ 86,086$ (26,714)$

Total Capital Outlay - 112,800 86,086 (26,714)

Total Other Departments 893,500 1,063,500 995,905 (67,595)

Less Reimbursements from Other Funds (168,022) (168,022) (168,022) -

TOTAL GENERAL GOVERNMENT 1,972,221$ 2,155,771$ 1,989,921$ (165,850)$

PUBLIC SAFETY

Police Commission

Personal Services

Salaries and Wages 1,800$ 2,300$ 1,900$ (400)$

Employer's Social Security 75 75 - (75)

Total Personal Services 1,875 2,375 1,900 (475)


Legal 300 300 - (300)

Training 2,000 2,000 39 (1,961)

Conventions and Travel 750 250 - (250)

Dues and Meetings 400 400 375 (25)

Total Contractual Services 3,450 2,950 414 (2,536)

Commodities

Miscellaneous Expenditures 500 500 - (500)

Total Commodities 500 500 - (500)

Total Police Commission 5,825 5,825 2,314 (3,511)

Police Department

Personal Services

Salaries and Wages 2,487,942 2,614,942 2,610,154 (4,788)

Overtime 140,000 125,000 123,473 (1,527)

Court Time 33,000 33,000 28,876 (4,124)




Life Insurance 2,976 2,976 2,127 (849)

Employers Pension Contribution 530,000 530,000 530,000 -

Total Personal Services 3,798,823 3,910,823 3,872,862 (37,961)


Communications 196,200 196,200 187,465 (8,735)

DUI Prevention 16,000 17,000 16,803 (197)

Drug Seizure Program - 5,000 4,020 (980)

Too Good for Drugs - 500 297 (203)

Legal 60,000 56,250 39,425 (16,825)


GENERAL FUND



Variance

Original Final Over



PUBLIC SAFETY (Continued)

Police Department (Continued)

Contractual Services (Continued)

Telephone 9,000 11,000 10,615 (385)

Training 5,000 5,200 5,113 (87)

Tuition Reimbursement 1,000 1,000 1,000 -

Dues and Meetings 5,000 5,000 4,840 (160)

Postage 2,000 2,000 689 (1,311)

Community Services 8,500 8,500 8,244 (256)

Licensing 300 300 - (300)

Firearm Training 5,000 5,000 4,672 (328)

Vehicle Repair and Maintenance 26,600 26,800 26,687 (113)

Equipment Repair and Maintenance 37,000 52,200 52,131 (69)


Commodities

Office Supplies 9,250 9,450 9,399 (51)

Auto, Gas and Oil 80,000 81,000 80,032 (968)

Prisoner Care 2,300 2,300 594 (1,706)

Investigations 4,150 4,150 1,913 (2,237)

Uniform Allowance 26,300 26,300 25,071 (1,229)

Miscellaneous 5,000 6,000 5,630 (370)


Capital Outlay

Other Equipment 2,550 3,000 2,686 (314)

Mobile Equipment 78,447 136,447 136,447 -

Total Capital Outlay 80,997 139,447 139,133 (314)

Total Police Department 4,378,420 4,571,420 4,496,635 (74,785)

TOTAL PUBLIC SAFETY 4,384,245$ 4,577,245$ 4,498,949$ (78,296)$

PUBLIC WORKS

Personal Services

Salaries and Wages 532,938$ 537,438$ 533,190$ (4,248)$

Overtime 40,000 40,000 21,068 (18,932)


Illinois Municipal Retirement Fund 68,751 68,751 65,436 (3,315)





Communications 3,600 4,100 4,025 (75)

Legal 13,000 13,000 6,077 (6,923)

Telephone 5,000 8,500 8,033 (467)

Utility 10,000 10,500 10,300 (200)

Traffic Signals 20,000 23,000 22,461 (539)

Conventions and Travel 500 500 17 (483)

Training 1,000 1,000 91 (909)


GENERAL FUND



Variance

Original Final Over



PUBLIC WORKS (Continued)

Contractual Services (Continued)

Dues and Meetings 550$ 550$ 207$ (343)$

Vehicle Repair and Maintenance 40,000 40,000 21,893 (18,107)

Equipment Repair and Maintenance 15,000 15,000 5,015 (9,985)

Public Building Repair and Maintenance 42,900 57,900 57,711 (189)

Public Grounds Repair and Maintenance 7,500 48,500 13,144 (35,356)

Storm Drain Maintenance 8,000 14,000 13,091 (909)

Streets and Alleys Repair 25,000 25,000 13,066 (11,934)

Grass Cutting 30,750 39,750 39,412 (338)

Tree Service 37,000 89,000 53,233 (35,767)

Snow Removal 200,000 160,000 64,167 (95,833)

Sidewalk Repair 15,000 15,000 10,081 (4,919)


Commodities

Office Supplies 2,500 3,000 2,959 (41)

Custodial Supplies 3,200 8,200 7,928 (272)

Auto, Gas and Oil 37,000 37,000 25,970 (11,030)

Uniform Allowance 4,000 4,000 1,266 (2,734)

Salt 6,000 6,000 - (6,000)

Postage 400 600 520 (80)

Printing 300 300 - (300)

Miscellaneous 2,000 3,300 3,038 (262)


Capital Outlay

Other Equipment 18,000 18,000 15,573 (2,427)

Mobile Equipment 70,655 70,655 70,655 -

Total Capital Outlay 88,655 88,655 86,228 (2,427)

TOTAL PUBLIC WORKS 1,404,384$ 1,506,384$ 1,221,105$ (285,279)$

HEALTH AND WELFARE

Health and Safety


ESDA 17,000$ 17,000$ 13,630$ (3,370)$

Mosquito Control 52,000 52,000 48,064 (3,936)

Animal Control 7,000 7,000 3,400 (3,600)

TOTAL HEALTH AND WELFARE 76,000$ 76,000$ 65,094$ (10,906)$

TOTAL EXPENDITURES 7,836,850$ 8,315,400$ 7,775,069$ (540,331)$


MAJOR CAPITAL PROJECTS FUNDS

Capital Projects Funds are used to account for the funds committed, restricted or assigned for the

acquisition or construction of capital assets (other than those financed by proprietary funds).

Capital Projects - to account for various capital projects that the Village funds with various

restricted, committed and assigned revenues.


CAPITAL PROJECTS FUND




Variance

Final Over

Budget Actual (Under)

REVENUES

Taxes

Non-Home Rule Sales 885,000$ 935,797$ 50,797$

Electric Utility 375,000 381,803 6,803

Gas Utility 165,000 115,428 (49,572)

Simplified Telecommunications 295,000 272,811 (22,189)

Total Taxes 1,720,000 1,705,839 (14,161)

Grants 129,023 115,875 (13,148)

Developer Contributions 140,000 19,833 (120,167)

Contributions/Donations 35,500 43,353 7,853

Impact Fees 124,000 135,377 11,377

Investment Income 15,000 6,213 (8,787)

Total Revenues 2,163,523 2,026,490 (137,033)

EXPENDITURES

Capital Outlay

Oak St. and Route 31 9,200 - (9,200)

Village Facilities 1,693,000 1,679,599 (13,401)

Annual Road Program 1,308,600 1,235,166 (73,434)

Sidewalk/ROW Improvements 15,000 12,223 (2,777)

Subdivision Improvements 150,000 3,599 (146,401)

Equipment 73,851 57,852 (15,999)

Other Capital Improvements 75,000 73,890 (1,110)

Total Expenditures 3,324,651 3,062,329 (262,322)


OVER EXPENDITURES (1,161,128) (1,035,839) 125,289


Transfers In 50,000 50,000 -

Total Other Financing Sources (Uses) 50,000 50,000 -

NET CHANGE IN FUND BALANCE (1,111,128)$ (985,839) 125,289$


FUND BALANCE, MAY 31 975,978$


MAJOR DEBT SERVICE FUNDS

Debt Service Funds are used to account for the funds committed, restricted or assigned for the

servicing of long-term debt.

Library Debt Service - to account for the debt service activity related to the 2009 General

Obligation Refunding Bonds used to construct the Messenger Public Library building.


LIBRARY DEBT SERVICE FUND




Variance

Final Over


REVENUES

Property Taxes 485,500$ 488,512$ 3,012$

Investment Income 300 443 143

Total Revenues 485,800 488,955 3,155

EXPENDITURES

Current

General Government

Miscellaneous 50 - (50)

Debt Service

Principal Retirement 345,000 345,000 -

Interest 140,050 140,050 -

Fiscal Charges 500 495 (5)

Total Expenditures 485,600 485,545 (55)

NET CHANGE IN FUND BALANCE 200$ 3,410 3,210$

FUND BALANCE, JUNE 1 84,082




Motor Fuel Tax - to account for the Village’s share of gasoline taxes restricted by the

Illinois Department of Transportation for the operation of street maintenance programs and

capital projects as authorized by the Illinois Department of Transportation.

Sperry TIF - to account for the operations of the Village’s Tax Increment Financing

District #2 funded by restricted incremental taxes.

North Lincolnway TIF - to account for the operations of the Village’s North Lincolnway

Tax Increment Financing District funded by restricted incremental taxes.

Route 31 TIF - to account for the operations of the Village’s Tax Increment Financing

District #1 funded by restricted incremental taxes.

Community Development Loan - to account for the operations of the Illinois Department of

Commerce and Community Affairs revolving loan program restricted to assist small

businesses in the Village.

Special Service Areas - to account for the operations of several special property tax levies

for new housing subdivisions restricted to fund any necessary maintenance that is not being

done by the subdivisions’ homeowner’s association.

Insurance - to account for that portion of the property tax levy restricted for insurance costs

and those expenditures on insurance they fund.

Sanitary Sewer - to account for the collection of user charges per 1,000 gallons of water

usage committed to fund the maintenance and improvement of the sanitary sewer pipes.

The commitment was effective May 1, 2011.

Tourism - to account for the collection of all hotel taxes and revenues from local festivals

restricted by the State for tourism. Ninety percent of hotel taxes are paid to the Aurora

Area Convention and Tourism Council, and remaining funds are used for local festival

expenses and other tourism related projects.

North Aurora Activity Center - to account for the operations of a Village owned building

that has several tenants leasing or renting space for various activities. The fund also

accounts for capital improvements to the building funded by installment contracts and the

principal and interest payments on the debt.

Police Station Debt Service - to account for the debt service activity related to the 2008

Alternate Revenue Source Bonds used to construct the new police station.

North Community

Motor Fuel Sperry Lincolnway Route 31 Development

Tax TIF TIF TIF Loan

ASSETS

Cash and Cash Equivalents 1,066,235$ 1,307$ 7,504$ 1,367,789$ 292,785$

Receivables

Property Taxes - 1,233 12,670 387,926 -

Other Taxes 36,245 - - - -

Loans - - - - 148,308

Accrued Interest - - - - -

Accounts - - - - -

Prepaid Items - - - - -

TOTAL ASSETS 1,102,480$ 2,540$ 20,174$ 1,755,715$ 441,093$

LIABILITIES AND FUND BALANCES

LIABILITIES

Accounts Payable 9,682$ -$ -$ 710$ 1,950$

Retainage Payable - - - - -

Deferred Property Taxes - 1,233 12,670 392,355 -

Advances to Other Funds - - 10,000 - -

Due to Others - - - - -

Total Liabilities 9,682 1,233 22,670 393,065 1,950

FUND BALANCES

Nonspendable in Form - Prepaid Items - - - - -

Restricted for Debt Service - - - - -

Restricted for Highways and Streets 1,092,798 - - - -

Restricted for Economic Development - 1,307 - 1,362,650 439,143

Restricted for Subdivision Improvements - - - - -

Restricted for Tort Purposes - - - - -

Unrestricted

Assigned for Buffer Repair/Replacement - - - - -

Assigned for Sanitary Sewers - - - - -

Assigned for Tourism - - - - -

Assigned for Activity Center - - - - -

Unassigned (Deficit) - - (2,496) - -

Total Fund Balances 1,092,798 1,307 (2,496) 1,362,650 439,143

TOTAL LIABILITIES AND

FUND BALANCES 1,102,480$ 2,540$ 20,174$ 1,755,715$ 441,093$

Special Revenue Funds

May 31, 2012

COMBINING BALANCE SHEET



- 71 -

Capital

Projects

Special North Aurora

Service Sanitary Activity Police Station

Areas Insurance Sewer Tourism Center Debt Service Total

180,876$ 208,176$ 1,258,511$ 21,889$ 111,816$ 284,726$ 4,801,614$

11,247 141,219 - - - - 554,295

- - - 1,460 - - 37,705

- - - - - - 148,308

- - - - - - -

- - 35,999 - - - 35,999

- - - 2,400 - - 2,400

192,123$ 349,395$ 1,294,510$ 25,749$ 111,816$ 284,726$ 5,580,321$

998$ 52,266$ 113,771$ 3,657$ 1,848$ -$ 184,882$

- - 12,176 - - - 12,176

12,208 150,496 - - - - 568,962

- - - - - - 10,000

- - - - 950 - 950

13,206 202,762 125,947 3,657 2,798 - 776,970

- - - 2,400 - - 2,400

- - - - - 284,726 284,726

- - - - - - 1,092,798

- - - - - - 1,803,100

137,219 - - - - - 137,219

- 146,633 - - - - 146,633

41,698 - - - - - 41,698

- - 1,168,563 - - - 1,168,563

- - - 19,692 - - 19,692

- - - - 109,018 - 109,018

- - - - - - (2,496)

178,917 146,633 1,168,563 22,092 109,018 284,726 4,803,351

192,123$ 349,395$ 1,294,510$ 25,749$ 111,816$ 284,726$ 5,580,321$



North Community

Motor Fuel Sperry Lincolnway Route 31 Development

Tax TIF TIF TIF Loan

REVENUES

Taxes -$ 581$ -$ 542,773$ -$

Licenses and Permits - - - 84,713 -

Intergovernmental 508,609 - - - -

Charges for Services - - - - -

Investment Income 666 - - 3,235 2,493

Miscellaneous - - - - -

Total Revenues 509,275 581 - 630,721 2,493

EXPENDITURES

Current

General Government - - 2,496 99,322 2,211

Public Safety - - - - -

Public Works 330,788 - - - -

Sanitation - - - - -

Capital Outlay - - - 107,495 -

Debt Service

Principal - - - - -

Interest - - - - -

Fiscal Charges - - - - -

Total Expenditures 330,788 - 2,496 206,817 2,211


OVER EXPENDITURES 178,487 581 (2,496) 423,904 282


Transfers In - - - - -

Insurance Claim Reimbursement - - - - -

Total Other Financing Sources (Uses) - - - - -

NET CHANGE IN FUND BALANCES 178,487 581 (2,496) 423,904 282

FUND BALANCES, JUNE 1 914,311 726 - 938,746 438,861

FUND BALANCES, MAY 31 1,092,798$ 1,307$ (2,496)$ 1,362,650$ 439,143$





AND CHANGES IN FUND BALANCES

COMBINING STATEMENT OF REVENUES, EXPENDITURES

- 73 -

Capital

Projects

Special North Aurora

Service Sanitary Activity Police Station

Areas Insurance Sewer Tourism Center Debt Service Total

19,630$ 142,241$ -$ 19,266$ -$ -$ 724,491$

- - 14,200 - - - 98,913

- - - - - - 508,609

- - 173,501 - 82,023 - 255,524

- 473 2,158 - - 105 9,130

- - - 31,375 - - 31,375

19,630 142,714 189,859 50,641 82,023 105 1,628,042

12,904 19,268 - 60,018 64,241 - 260,460

- 112,105 - - - - 112,105

- 35,033 - - - - 365,821

- 8,758 54,571 - - - 63,329

- - 160,511 - - - 268,006

- - - - - 320,000 320,000

- - - - - 365,969 365,969

- - - - - 475 475

12,904 175,164 215,082 60,018 64,241 686,444 1,756,165

6,726 (32,450) (25,223) (9,377) 17,782 (686,339) (128,123)

- 50,000 - 20,000 - 685,635 755,635

- 10,500 - - - - 10,500

- 60,500 - 20,000 - 685,635 766,135

6,726 28,050 (25,223) 10,623 17,782 (704) 638,012

172,191 118,583 1,193,786 11,469 91,236 285,430 4,165,339

178,917$ 146,633$ 1,168,563$ 22,092$ 109,018$ 284,726$ 4,803,351$




MOTOR FUEL TAX FUND




Variance

Final Over


REVENUES

Intergovernmental

Motor Fuel Tax Allotments 425,000$ 508,609$ 83,609$

Investment Income 1,500 666 (834)

Total Revenues 426,500 509,275 82,775

EXPENDITURES

Current

Public Works

Salt 142,600 81,642 (60,958)

Street and Alley Repairs and Maintenance 140,000 110,436 (29,564)

Street Lighting and Poles 150,000 138,481 (11,519)

Miscellaneous 250 229 (21)

Total Expenditures 432,850 330,788 (102,062)

NET CHANGE IN FUND BALANCE (6,350)$ 178,487 184,837$





SPERRY TIF FUND




Variance

Final Over


REVENUES

Taxes

Property Taxes -$ 581$ 581$

Total Revenues - 581 581

EXPENDITURES

None - - -

Total Expenditures - - -

NET CHANGE IN FUND BALANCE -$ 581 581$

FUND BALANCE, JUNE 1 726




NORTH LINCOLNWAY TIF FUND




Variance

Final Over


REVENUES

None -$ -$ -$

Total Revenues - - -

EXPENDITURES

Current

General Government

Planning 6,000 2,496 (3,504)

Professional Services 25,000 - (25,000)


NET CHANGE IN FUND BALANCE (31,000)$ (2,496) 28,504$

FUND BALANCE, JUNE 1 -

FUND BALANCE, MAY 31 (2,496)$



ROUTE 31 TIF FUND




Variance

Final Over


REVENUES

Taxes

Property Taxes 535,000$ 542,773$ 7,773$

Intergovernmental 100,000 84,713 (15,287)

Investment Income 2,000 3,235 1,235

Total Revenues 637,000 630,721 (6,279)

EXPENDITURES

Current

General Government

Office 200 146 (54)

Engineering 45,000 10,178 (34,822)

Legal Services 2,500 405 (2,095)

Accounting and Audit Services 950 950 -

Professional Consulting Fees 45,000 143 (44,857)

Reimbursements 170,000 87,240 (82,760)

Other 300 260 (40)

Capital Outlay 550,000 107,495 (442,505)







COMMUNITY DEVELOPMENT LOAN FUND




Variance

Final Over


REVENUES

Investment Income 23,625$ 2,493$ (21,132)$

Total Revenues 23,625 2,493 (21,132)

EXPENDITURES

Current

General Government

Project Expenditures 206,000 2,211 (203,789)


NET CHANGE IN FUND BALANCE (182,375)$ 282 182,657$





SPECIAL SERVICE AREAS FUND




Variance

Final Over


REVENUES

Taxes

Property Taxes 19,656$ 19,630$ (26)$

Investment Income 70 - (70)

Total Revenues 19,726 19,630 (96)

EXPENDITURES

Current

General Government

Administration/Finance 2,022 2,022 -

Maintenance 40,450 10,882 (29,568)







INSURANCE FUND




Variance

Final Over


REVENUES

Taxes

Property Taxes 142,000$ 142,241$ 241$

Investment Income 500 473 (27)

Total Revenues 142,500 142,714 214

EXPENDITURES

Current

General Government 19,580 19,268 (312)

Public Safety 113,920 112,105 (1,815)

Public Works 35,600 35,033 (567)

Sanitation 8,900 8,758 (142)



OVER EXPENDITURES (35,500) (32,450) 3,050


Transfers In 50,000 50,000 -

Insurance Claim Reimbursement 10,000 10,500 500

Total Other Financing Sources (Uses) 60,000 60,500 500

NET CHANGE IN FUND BALANCE 24,500$ 28,050 3,550$





SANITARY SEWER FUND




Variance

Final Over


REVENUES

Licenses and Permits

Sanitary Sewer Permits 10,000$ 14,200$ 4,200$

Charges for Services

Sewer Sales 180,000 173,501 (6,499)

Investment Income 4,000 2,158 (1,842)

Total Revenues 194,000 189,859 (4,141)

EXPENDITURES

Current

Sanitation

Engineering 15,000 13,558 (1,442)

Legal 2,000 1,950 (50)

Administrative Fee 25,000 25,000 -

Equipment Repair and Maintenance 1,000 488 (512)

Repair and Maintenance 17,000 7,846 (9,154)

Liability Insurance 5,000 5,000 -

Miscellaneous 1,000 729 (271)

Capital Outlay

Mobile Equipment 15,000 15,000 -

Capital Improvements 227,000 145,511 (81,489)


NET CHANGE IN FUND BALANCE (114,000)$ (25,223) 88,777$





TOURISM FUND




Variance

Final Over


REVENUES

Taxes

Hotel Tax 22,000$ 19,266$ (2,734)$

Miscellaneous

North Aurora Days 20,000 31,375 11,375

Total Revenues 42,000 50,641 8,641

EXPENDITURES

Current

General Government

Tourism 17,400 17,339 (61)

North Aurora Days 33,400 33,329 (71)

Fireworks 9,000 9,000 -

Miscellaneous 1,500 350 (1,150)



OVER EXPENDITURES (19,300) (9,377) 9,923


Transfer In 20,000 20,000 -


NET CHANGE IN FUND BALANCE 700$ 10,623 9,923$





NORTH AURORA ACTIVITY CENTER FUND




Variance

Final Over


REVENUES


Rent 82,000$ 82,023$ 23$

Investment Income 50 - (50)

Total Revenues 82,050 82,023 (27)

EXPENDITURES

Current

General Government

Repairs and Maintenance 34,700 20,715 (13,985)


Utilities 8,500 8,348 (152)

Administrative 26,000 26,000 -

Miscellaneous 2,500 2,178 (322)


NET CHANGE IN FUND BALANCE 3,350$ 17,782 14,432$





POLICE STATION DEBT SERVICE FUND




Variance

Final Over


REVENUES

Investment Income 750$ 105$ (645)$

Total Revenues 750 105 (645)

EXPENDITURES

Current

General Government

Miscellaneous 100 - (100)

Debt Service

Principal Retirement 320,000 320,000 -

Interest 365,969 365,969 -

Fiscal Charges 500 475 (25)

Total Expenditures 686,569 686,444 (125)


OVER EXPENDITURES (685,819) (686,339) (520)


Transfer In 685,635 685,635 -


NET CHANGE IN FUND BALANCE (184)$ (704) (520)$




PROPRIETARY FUNDS

ENTERPRISE FUND

The Enterprise Fund is used to account for operations that are financed and operated in a manner

similar to private business enterprises.

Waterworks Operations - to account for all the operating revenue and expenses related to

the provision of water service to the residents of the Village.


WATERWORKS OPERATIONS FUND

SCHEDULE OF REVENUES, EXPENSES AND

CHANGES IN NET ASSETS - BUDGET AND ACTUAL


Variance

Final Over


OPERATING REVENUES

Water Sales 2,286,060$ 2,336,684$ 50,624$

Water Meters 13,000 14,204 1,204

Water Permits 40,000 61,055 21,055

Meter Reads 18,000 17,289 (711)

Impact Fees - 2,306 2,306

Building Permits 1,000 1,474 474

Total Operating Revenues 2,358,060 2,433,012 74,952

OPERATING EXPENSES

Operations 1,932,048 1,332,923 (599,125)

Depreciation - 761,850 761,850

Total Operating Expenses 1,932,048 2,094,773 162,725

OPERATING INCOME (LOSS) 426,012 338,239 (87,773)

NONOPERATING REVENUES (EXPENSES)

Investment Income 2,000 1,189 (811)

Tower Rent 112,000 114,298 2,298

Miscellaneous 15,000 12,353 (2,647)

Insurance Claim Reimbursement - 9,364 9,364

Loss on Disposal of Capital Assets - (2,508) (2,508)

Interest Expense (115,192) (119,454) (4,262)

Total Nonoperating Revenues (Expenses) 13,808 15,242 1,434

NET INCOME (LOSS) BEFORE CONTRIBUTIONS 439,820 353,481 (86,339)

CONTRIBUTIONS - 754,260 754,260

CHANGE IN NET ASSETS 439,820$ 1,107,741 667,921$

NET ASSETS, JUNE 1 21,147,099

NET ASSETS, MAY 31 22,254,840$



WATERWORKS OPERATIONS FUND

SCHEDULE OF OPERATIONS EXPENSES - BUDGET AND ACTUAL


Variance

Final Over


OPERATIONS EXPENSES

Personal Services

Salaries and Wages 251,282$ 241,814$ (9,468)$

Overtime Salaries 21,000 10,842 (10,158)

Employer's Social Security 20,829 18,189 (2,640)

Illinois Municipal Retirement Fund 33,235 29,751 (3,484)

Employee Health Insurance 54,910 47,849 (7,061)

Life Insurance 356 272 (84)

Unemployment Tax 650 650 -

Total Personal Services 382,262 349,367 (32,895)


Engineering 98,000 75,680 (22,320)

Legal 7,000 2,489 (4,511)

Conventions and Travel 1,450 901 (549)

Training 1,200 139 (1,061)

Dues and Meetings 1,000 986 (14)

Chlorine 71,000 59,880 (11,120)

Salt Treatment 10,000 9,659 (341)

Meters, Repairs and Replacements 49,765 33,620 (16,145)

Postage 20,100 15,651 (4,449)

Publishing 2,000 1,565 (435)

Printing 19,200 15,189 (4,011)

Vehicle Repair and Maintenance 3,500 2,300 (1,200)

Equipment Repair and Maintenance 9,200 8,781 (419)

Water Studies 34,000 27,621 (6,379)

Testing 8,000 7,791 (209)

Fire Hydrant Repair and Maintenance 7,500 6,317 (1,183)

Treatment Plant Repair and Maintenance 30,100 24,809 (5,291)

Water Well Maintenance 15,000 14,294 (706)

Watermain Repair and Maintenance 44,000 43,538 (462)

Water Tower Maintenance 12,300 4,913 (7,387)

Banking Services 14,000 9,830 (4,170)

Telephone 9,300 8,944 (356)

Communications 6,000 5,961 (39)

Utility 400,000 349,129 (50,871)

Office Rental 22,000 22,000 -

Administrative Fee 115,000 115,000 -

Miscellaneous 10,000 9,609 (391)


Total Contractual Services 1,070,615 926,596 (144,019)



WATER OPERATIONS FUND

SCHEDULE OF OPERATIONS EXPENSES - BUDGET AND ACTUAL (Continued)


Variance

Final Over


OPERATIONS EXPENSES (Continued)

Commodities

Uniform Allowance 800$ 508$ (292)$

Office Supplies 2,700 2,614 (86)

Gas and Oil 13,000 9,819 (3,181)

Equipment 9,000 8,810 (190)

MEF Replacement Fees 29,138 29,138 -

Total Commodities 54,638 50,889 (3,749)

Capital Improvements

Annual Watermain Replacement 1,288,000 899,538 (388,462)

Water System Improvements 30,000 - (30,000)

Total Capital Improvements 1,318,000 899,538 (418,462)

ADJUSTMENTS TO GAAP BASIS

Less: Capital Assets Capitalized 893,467 893,467 -

Total Adjustments to GAAP Basis 893,467 893,467 -

TOTAL OPERATIONS EXPENSES

EXCLUDING DEPRECIATION - GAAP BASIS 1,932,048$ 1,332,923$ (599,125)$


INTERNAL SERVICE FUNDS

Internal Service Funds are used to account for operations provided to other departments or

agencies primarily within the Village.

Mobile Equipment - to account for the accumulation of department service charges to

replace obsolete Village vehicles and the expenditures to replace the vehicles.

Employee Compensated Absences - to account for the portion of compensated absences

related to governmental funds owed to employees.

Employee

Mobile Compensated

Equipment Absences Total

CURRENT ASSETS

Cash and Cash Equivalents 435,656$ 315,350$ 751,006$

Investments 692,573 - 692,573

Inventory 17,680 - 17,680

Interest receivable 811 - 811

Total Current Assets 1,146,720 315,350 1,462,070

CAPITAL ASSETS

Nondepreciable 15,800 - 15,800

Depreciable, Net of Accumulated Depreciation 597,471 - 597,471

Total Capital Assets 613,271 - 613,271

Total Assets 1,759,991 315,350 2,075,341

CURRENT LIABILITIES

Accounts Payable 6,450 - 6,450

Compensated Absences Payable - 78,837 78,837

Total Current Liabilities 6,450 78,837 85,287

LONG-TERM LIABILITIES


Total Long-Term Liabilities - 236,513 236,513

Total Liabilities 6,450 315,350 321,800

NET ASSETS

Invested in Capital Assets 613,271 - 613,271

Unrestricted 1,140,270 - 1,140,270

TOTAL NET ASSETS 1,753,541$ -$ 1,753,541$

May 31, 2012

COMBINING STATEMENT OF NET ASSETS




Employee

Mobile Compensated


OPERATING REVENUES

Charges for Services 255,090$ 39,100$ 294,190$

Total Operating Revenues 255,090 39,100 294,190

OPERATING EXPENSES

Operations and capital 7,164 39,100 46,264

Depreciation 144,807 - 144,807

Total Operating Expenses 151,971 39,100 191,071

OPERATING INCOME (LOSS) 103,119 - 103,119

NONOPERATING REVENUES

Investment Income 7,746 - 7,746

Gain on Disposal of Capital Assets 8,027 - 8,027

Total Nonoperating Revenues 15,773 - 15,773

CHANGE IN NET ASSETS 118,892 - 118,892

NET ASSETS, JUNE 1 1,634,649 - 1,634,649

NET ASSETS, MAY 31 1,753,541$ -$ 1,753,541$



AND CHANGES IN NET ASSETS

COMBINING STATEMENT OF REVENUES, EXPENSES



Employee

Mobile Compensated


CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from Internal Service Transactions 255,090$ 39,100$ 294,190$

Payments to Suppliers (5,533) - (5,533)

Net Cash from Operating Activities 249,557 39,100 288,657

CASH FLOWS FROM NONCAPITAL


None - - -

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES

Proceeds from the Sale of Capital Assets 8,027 - 8,027

Purchase of Capital Assets (57,346) - (57,346)

Net Cash from Capital and Related Financing Activities (49,319) - (49,319)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of investments (690,298) - (690,298)

Interest Received 4,660 - 4,660

Net Cash from Investing Activities (685,638) - (685,638)

NET INCREASE (DECREASE) IN CASH

AND CASH EQUIVALENTS (485,400) 39,100 (446,300)

CASH AND CASH EQUIVALENTS, JUNE 1 921,056 276,250 1,197,306

CASH AND CASH EQUIVALENTS, MAY 31 435,656$ 315,350$ 751,006$

RECONCILIATION OF OPERATING INCOME

TO NET CASH FLOWS FROM

OPERATING ACTIVITIES

Operating Income 103,119$ -$ 103,119$

Adjustments to Reconcile Operating Income

to Net Cash from Operating Activities

Depreciation 144,807 - 144,807

(Increase) Decrease in

Inventory 1,631 - 1,631

Increase (Decrease) in


NET CASH FROM OPERATING ACTIVITIES 249,557$ 39,100$ 288,657$

RECEIPTS FROM NONCASH TRANSACTIONS

Change in fair value of investments 2,275$ -$ 2,275$

TOTAL NONCASH TRANSACTIONS 2,275$ -$ 2,275$


COMBINING STATEMENT OF CASH FLOWS




Variance

Final Over


OPERATING REVENUES

Charges for Services 255,090$ 255,090$ -$

Total Operating Revenues 255,090 255,090 -

OPERATING EXPENSES

Operations and Capital 132,500 57,305 (75,195)

Total Operating Expenses 132,500 57,305 (75,195)

OPERATING INCOME (LOSS) 122,590 197,785 75,195

NONOPERATING REVENUES


Intergovernmental - - -

Gain on Disposal of Capital Assets 5,000 8,027 3,027

Total Nonoperating Revenues 6,500 15,773 9,273

CHANGE IN NET ASSETS - NON-GAAP BASIS 129,090$ 213,558 84,468$

ADJUSTMENTS TO GAAP BASIS

Capital Assets Capitalized 50,141

Depreciation (144,807)

Total Adjustments to GAAP Basis (94,666)

CHANGE IN NET ASSETS 118,892

NET ASSETS, JUNE 1 1,634,649

NET ASSETS, MAY 31 1,753,541$



AND CHANGES IN NET ASSETS - BUDGET AND ACTUAL

SCHEDULE OF REVENUES, EXPENSES

MOBILE EQUIPMENT FUND


FIDUCIARY FUNDS

Police Pension Trust Fund - to account for the accumulation of resources to pay for current and

future police pension costs.

Agency Funds are used to account for assets held by the Village in an agent capacity for

individuals, private organizations and other governments.

Special Assessments - to accumulate resources for payment of special assessment bonds.

The bonds are not an obligation of the Village.

Poplar and Alder Special Service Area - to accumulate resources for payment of special

service area bonds. The bonds are not an obligation of the Village.

Developer’s and Building Escrow - to account for building bond deposits, developer’s

deposits and corresponding development costs.

Land Cash Escrows - to account for the accumulation and distribution of other taxing

districts land/cash impact fees.

POLICE PENSION TRUST FUND

SCHEDULE OF CHANGES IN NET ASSETS - BUDGET AND ACTUAL


Variance

Final Over


ADDITIONS

Contributions

Employer 530,000$ 530,000$ -$

Employee 207,000 218,628 11,628

Total Contributions 737,000 748,628 11,628

Investment Income

Net Appreciation (Depreciation) in Fair Value

of Investments 150,000 (106,447) (256,447)

Interest 300,600 305,195 4,595

Total Investment Income 450,600 198,748 (251,852)

Less Investment Expense (36,000) (34,148) 1,852

Net Investment Income 414,600 164,600 (250,000)

Total Additions 1,151,600 913,228 (238,372)

DEDUCTIONS

Benefits and Refunds 537,900 474,119 (63,781)

Administrative 12,800 11,713 (1,087)

Total Deductions 550,700 485,832 (64,868)

NET INCREASE 600,900$ 427,396 (173,504)$

NET ASSETS HELD IN TRUST

FOR PENSION BENEFITS

June 1 9,375,450

May 31 $ 9,802,846




AGENCY FUNDS

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES


Balances Balances

June 1 Additions Deductions May 31

ALL FUNDS

ASSETS

Cash and Cash Equivalents 1,785,048$ 745,819$ 920,617$ 1,610,250$

TOTAL ASSETS 1,785,048$ 745,819$ 920,617$ 1,610,250$

LIABILITIES

Due to Others 1,785,048$ 745,819$ 920,617$ 1,610,250$

TOTAL LIABILITIES 1,785,048$ 745,819$ 920,617$ 1,610,250$

SPECIAL ASSESSMENTS

ASSETS

Cash and Cash Equivalents 47,752$ -$ 10,392$ 37,360$

TOTAL ASSETS 47,752$ -$ 10,392$ 37,360$

LIABILITIES

Due to Others 47,752$ -$ 10,392$ 37,360$

TOTAL LIABILITIES 47,752$ -$ 10,392$ 37,360$

POPLAR AND ALDER SPECIAL SERVICE AREA

ASSETS

Cash and Cash Equivalents 103,580$ 10,805$ -$ 114,385$

TOTAL ASSETS 103,580$ 10,805$ -$ 114,385$

LIABILITIES

Due to Others 103,580$ 10,805$ -$ 114,385$

TOTAL LIABILITIES 103,580$ 10,805$ -$ 114,385$



AGENCY FUNDS

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES (Continued)


Balances Balances

June 1 Additions Deductions May 31

DEVELOPER'S AND BUILDING ESCROW

ASSETS

Cash and Cash Equivalents 429,704$ 547,999$ 635,024$ 342,679$

TOTAL ASSETS 429,704$ 547,999$ 635,024$ 342,679$

LIABILITIES

Due to Others 429,704$ 547,999$ 635,024$ 342,679$

TOTAL LIABILITIES 429,704$ 547,999$ 635,024$ 342,679$

LAND CASH ESCROWS

ASSETS

Cash and Cash Equivalents 1,204,012$ 187,015$ 275,201$ 1,115,826$

TOTAL ASSETS 1,204,012$ 187,015$ 275,201$ 1,115,826$

LIABILITIES

Due to Others 1,204,012$ 187,015$ 275,201$ 1,115,826$

TOTAL LIABILITIES 1,204,012$ 187,015$ 275,201$ 1,115,826$


OTHER SUPPLEMENTARY INFORMATION

LONG-TERM DEBT PAYABLE


LONG-TERM DEBT PAYABLE FROM GOVERNMENTAL ACTIVITIES

SCHEDULE OF GENERAL LONG-TERM DEBT

May 31, 2012

AMOUNT AVAILABLE AND TO BE PROVIDED

FOR THE RETIREMENT OF GENERAL LONG-TERM DEBT

Amount Available for Debt Service 372,218$

Amount to be Provided for Retirement

of General Long-Term Debt 13,165,980

TOTAL AMOUNT AVAILABLE AND TO BE PROVIDED

FOR THE RETIREMENT OF GENERAL LONG-TERM DEBT 13,538,198$

GENERAL LONG-TERM DEBT PAYABLE

General Obligation Bonds Payable 11,970,000$

Compensated Absences 315,350

Net Other Postemployment Benefit Obligation 109,301

Net Pension Obligation 1,143,547

TOTAL GENERAL LONG-TERM DEBT PAYABLE 13,538,198$


Date of Issue

Date of Maturity

Authorized Issue 1,770,000$

Actual Issue 1,770,000$

Denomination of Bonds 5,000$

Denomination of Bonds 1 - 354 - $5,000

Interest Rates Bonds

1-138 2.000%

139-174 2.500%

175-211 2.550%

212-249 3.000%

250-286 3.100%

287-320 3.300%

321-354 3.400%

Principal Maturity Date

Interest Dates

Payable at Amalgamated Bank of Chicago, Chicago, Illinois

Debt Retired by Waterworks Operations Fund

Tax

Levy Bond

Year Numbers Principal Interest Totals June 1 Amount December 1 Amount

2011 321-354 170,000$ 2,890$ 172,890$ 2012 2,890$ 2012 -$

170,000$ 2,890$ 172,890$ 2,890$ -$

June 1, 2012

June 1

June 1 and December 1

FUTURE PRINCIPAL AND INTEREST REQUIREMENTS

Tax Levy Interest Due on



GENERAL OBLIGATION ALTERNATE REVENUE SOURCE

BOND SERIES 2003

May 31, 2012

February 15, 2003


Date of Issue

Date of Maturity






1-57 3.700%

58-116 3.700%

117-177 3.700%

178-242 3.700%

243-314 3.700%

315-389 3.700%

390-462 3.700%

463-538 3.700%

539-617 3.700%

618-700 3.700%


Interest Dates



Tax

Levy Bond

Year Numbers Principal Interest Totals June 1 Amount December 1 Amount

2011 315-389 375,000$ 71,410$ 446,410$ 2012 35,705$ 2012 35,705$

2012 390-462 365,000 57,536 422,536 2013 28,768 2013 28,768

2013 463-538 380,000 44,030 424,030 2014 22,015 2014 22,015

2014 539-617 395,000 29,970 424,970 2015 14,985 2015 14,985

2015 618-700 415,000 15,354 430,354 2016 7,677 2016 7,677

1,930,000$ 218,300$ 2,148,300$ 109,150$ 109,150$




BOND SERIES 2006

June 1 and December 1



May 31, 2012

April 15, 2006

December 1, 2016

December 1


Date of Issue

Date of Maturity






1-51 3.250%

52-113 3.250%

114-177 3.375%

178-243 3.625%

244-312 3.750%

313-384 3.875%

385-459 4.000%

460-537 4.000%

538-618 4.000%

619-702 4.000%

703-790 4.125%

791-1080 4.250%

1081-1297 4.625%

1298-1536 4.750%

1537-1800 5.000%


Interest Dates


Debt Retired by Police Station Debt Service

Tax

Levy Bond

Year Numbers Principal Interest Totals July 1 Amount January 1 Amount

2011 178-243 330,000$ 355,168$ 685,168$ 2012 177,584$ 2012 177,584$

2012 244-312 345,000 343,206 688,206 2013 171,603 2013 171,603

2013 313-384 360,000 330,268 690,268 2014 165,134 2014 165,134

2014 385-459 375,000 316,318 691,318 2015 158,159 2015 158,159

2015 460-537 390,000 301,318 691,318 2016 150,659 2016 150,659

2016 538-618 405,000 285,718 690,718 2017 142,859 2017 142,859

2017 619-702 420,000 269,518 689,518 2018 134,759 2018 134,759

2018 703-790 440,000 252,718 692,718 2019 126,359 2019 126,359

2019 791-882 460,000 234,568 694,568 2020 117,284 2020 117,284

2020 883-979 485,000 215,018 700,018 2021 107,509 2021 107,509

2021 980-1080 505,000 194,406 699,406 2022 97,203 2022 97,203

2022 1081-1186 530,000 172,944 702,944 2023 86,472 2023 86,472

2023 1187-1297 555,000 148,432 703,432 2024 74,216 2024 74,216

2024 1298-1414 585,000 122,762 707,762 2025 61,381 2025 61,381

2025 1415-1536 610,000 94,976 704,976 2026 47,488 2026 47,488

2026 1537-1665 645,000 66,000 711,000 2027 33,000 2027 33,000

2027 1666-1800 675,000 33,750 708,750 2028 16,875 2028 16,875

8,115,000$ 3,737,088$ 11,852,088$ 1,868,544$ 1,868,544$




BOND SERIES 2008

May 31, 2012

December 15, 2008

January 1, 2029

January 1

January 1 and July 1




Date of Issue

Date of Maturity






1-65 2.000%

66-134 2.000%

135-207 2.500%

208-283 2.750%

284-363 3.250%

364-447 3.500%

448-535 3.750%

536-628 3.750%

629-725 3.750%

726-826 3.750%

827-905 3.750%


Interest Dates


Debt Retired by Library Debt Service

Tax

Levy Bond

Year Numbers Principal Interest Totals July 1 Amount January 1 Amount

2011 135-207 365,000$ 133,150$ 498,150$ 2012 66,575$ 2013 66,575$

2012 208-283 380,000 124,026 504,026 2013 62,013 2014 62,013

2013 284-363 400,000 113,576 513,576 2014 56,788 2015 56,788

2014 364-447 420,000 100,576 520,576 2015 50,288 2016 50,288

2015 448-535 440,000 85,876 525,876 2016 42,938 2017 42,938

2016 536-628 465,000 69,376 534,376 2017 34,688 2018 34,688

2017 629-725 485,000 51,938 536,938 2018 25,969 2019 25,969

2018 726-826 505,000 33,750 538,750 2019 16,875 2020 16,875

2019 827-905 395,000 14,814 409,814 2020 7,407 2021 7,407

3,855,000$ 727,082$ 4,582,082$ 363,541$ 363,541$

January 1, 2021

January 1

January 1 and July 1





GENERAL OBLIGATION REFUNDING LIBRARY

May 31, 2012

November 17, 2009

BOND SERIES 2009


Date of Issue December 14, 2010

Date of Maturity

Authorized Issue

Actual Issue

Interest Rates 2.018% to 3.071%

Principal Maturity Date December 15

Interest Dates December 15 and June 15


Tax

Levy

Year Principal Interest Totals June 15 Amount December 15 Amount

2011 93,512$ 21,012$ 114,524$ 2012 10,506$ 2012 10,506$

2012 94,915 20,114 115,029 2013 10,057 2013 10,057

2013 96,955 18,806 115,761 2014 9,403 2014 9,403

2014 99,476 17,194 116,670 2015 8,597 2015 8,597

2015 102,560 15,220 117,780 2016 7,610 2016 7,610

2016 106,252 12,858 119,110 2017 6,429 2017 6,429

2017 110,502 10,138 120,640 2018 5,069 2018 5,069

2018 115,309 7,062 122,371 2019 3,531 2019 3,531

2019 120,551 3,702 124,253 2020 1,851 2020 1,851

940,032$ 126,106$ 1,066,138$ 63,053$ 63,053$



1,033,785$

1,033,785$



KANE COUNTY LOAN PAYABLE

May 31, 2012

December 15, 2020


STATISTICAL SECTION

This part of the Village of North Aurora, 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

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.

102-110

Revenue Capacity

These schedules contain information to help the reader assess the Village’s

most significant local revenue source, the property tax.

111-116

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.

117-121

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.

122-123

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.

124-126

Sources: Unless otherwise noted, the information in these schedules is derived from the

comprehensive annual financial reports for the relevant year. The Village implemented GASB

Statement No. 34 in 2005; schedules presenting government-wide information include

information beginning in that year.

Fiscal Year Ended May 31 2005 2006 2007


Invested in Capital Assets,

Net of Related Debt 27,807,918$ 28,664,581$ 32,653,441$

Restricted 2,761,386 6,753,905 2,954,373

Unrestricted 3,306,310 3,508,854 6,242,053

TOTAL GOVERNMENTAL ACTIVITIES 33,875,614$ 38,927,340$ 41,849,867$

BUSINESS-TYPE ACTIVITIES



Restricted 1,012,074 1,509,714 774,389

Unrestricted 2,665,592 4,159,744 4,094,263

TOTAL BUSINESS-TYPE ACTIVITIES 13,415,149$ 15,043,566$ 16,504,673$

PRIMARY GOVERNMENT



Restricted 3,773,460 8,263,619 3,728,762

Unrestricted 5,971,902 7,668,598 10,336,316

TOTAL PRIMARY GOVERNMENT 47,290,763$ 53,970,906$ 58,354,540$

Data Source

Audited Financial Statements

Note: The Village implemented GASB S-34 as of May 31, 2005. Information for prior year's is not available.


NET ASSETS BY COMPONENT

Last Eight Fiscal Years

- 102 -

2008 2009 2010 2011 2012

36,451,871$ 47,004,982$ 52,220,638$ 73,654,427$ 81,798,254$

2,886,652 3,469,442 3,557,460 4,108,032 3,572,015

6,311,477 5,375,448 6,800,528 7,919,304 7,482,489

45,650,000$ 55,849,872$ 62,578,626$ 85,681,763$ 92,852,758$

16,277,652$ 17,646,735$ 18,198,621$ 20,103,711$ 20,760,990$

- - - - -

1,262,692 917,151 761,323 1,043,388 1,493,850

17,540,344$ 18,563,886$ 18,959,944$ 21,147,099$ 22,254,840$

52,729,523$ 64,651,717$ 70,419,259$ 93,758,138$ 102,559,244$

2,886,652 3,469,442 3,557,460 4,108,032 3,572,015

7,574,169 6,292,599 7,561,851 8,962,692 8,976,339

63,190,344$ 74,413,758$ 81,538,570$ 106,828,862$ 115,107,598$


- 103 -

Fiscal Year 2005 2006 2007

EXPENSES


General Government 1,750,585$ 1,534,212$ 2,025,634$

Public Safety 2,805,054 3,064,960 3,398,055

Public Works 3,227,499 3,112,930 2,679,384

Sanitation 362,500 608,099 575,269

Health and Welfare 85,329 71,535 69,907

Interest 344,337 320,402 325,448

Total Governmental Activities Expenses 8,575,304 8,712,138 9,073,697


Waterworks 1,676,759 1,520,616 1,815,852

Total Business-Type Activities Expenses 1,676,759 1,520,616 1,815,852

TOTAL PRIMARY GOVERNMENT EXPENSES 10,252,063$ 10,232,754$ 10,889,549$

PROGRAM REVENUES



General Government 1,583,789$ 1,330,995$ 1,224,831$

Public Works 425,542 1,396,519 1,024,597

Other 718,895 957,624 970,029

Operating Grants and Contributions 704,293 505,835 472,193

Capital Grants and Contributions 45,920 1,944,080 317,200

Total Governmental Activities

Program Revenues 3,478,439 6,135,053 4,008,850



Waterworks 2,203,734 2,926,496 2,978,263

Capital Grants and Contributions 172,202 72,800 -

Total Business-Type Activities

Program Revenues 2,375,936 2,999,296 2,978,263

TOTAL PRIMARY GOVERNMENT

PROGRAM REVENUES 5,854,375$ 9,134,349$ 6,987,113$

NET REVENUE (EXPENSE)

Governmental Activities (5,096,865)$ (2,577,085)$ (5,064,847)$

Business-Type Activities 699,177 1,478,680 1,162,411


NET REVENUE (EXPENSE) (4,397,688)$ (1,098,405)$ (3,902,436)$




- 104 -

2008 2009 2010 2011 2012

2,258,047$ 2,741,380$ 2,613,359$ 2,367,118$ 2,781,256$

3,725,577 4,548,047 4,259,824 3,589,938 4,864,872

3,240,032 3,198,892 3,289,053 3,644,191 3,736,393

519,526 578,730 421,496 359,733 510,422

290,372 88,768 66,978 72,277 65,094

266,082 426,940 510,332 537,322 512,987

10,299,636 11,582,757 11,161,042 10,570,579 12,471,024

2,025,595 2,245,452 2,140,741 2,155,414 2,207,371

2,025,595 2,245,452 2,140,741 2,155,414 2,207,371

12,325,231$ 13,828,209$ 13,301,783$ 12,725,993$ 14,678,395$

931,765$ 672,395$ 546,116$ 647,884$ 631,909$

36,679 31,268 44,884 40,208 50,790

740,633 707,396 601,625 617,152 614,929

536,322 494,958 494,575 598,055 526,517

1,529,638 10,036,690 6,853,809 21,555,794 7,053,967

3,775,037 11,942,707 8,541,009 23,459,093 8,878,112

2,583,628 2,329,638 2,264,997 2,442,003 2,547,310

337,915 920,752 230,238 1,882,337 754,260

2,921,543 3,250,390 2,495,235 4,324,340 3,301,570

6,696,580$ 15,193,097$ 11,036,244$ 27,783,433$ 12,179,682$

(6,524,599)$ 359,950$ (2,620,033)$ 12,888,514$ (3,592,912)$

895,948 1,004,938 354,494 2,168,926 1,094,199

(5,628,651)$ 1,364,888$ (2,265,539)$ 15,057,440$ (2,498,713)$

- 105 -

Fiscal Year 2005 2006 2007

GENERAL REVENUES AND OTHER



Taxes

Property and Replacement 1,867,878$ 2,047,676$ 2,225,352$

Sales 2,666,884 3,147,327 4,014,090

Telecommunications 206,459 220,084 238,991

Utility 217,215 265,398 243,691

Amusement 306,471 151,117 82,478

Other 24,773 199,723 215,788

Shared Income Taxes 913,172 1,064,667 1,187,151


Miscellaneous 58,345 18,155 2,440

Contributions 10,624,534 - -

Transfer In 34,250 34,250 -

Total Governmental Activities 17,077,389 7,628,811 8,918,069



Contributions 565,057 - -

Miscellaneous - - -

Transfer (Out) (34,250) (34,250) -

Total Business-Type Activities 590,524 149,737 314,749

TOTAL PRIMARY GOVERNMENT 17,667,913$ 7,778,548$ 9,232,818$

CHANGE IN NET ASSETS

Governmental Activities 11,980,524$ 5,051,726$ 3,853,222$

Business-Type Activities 1,289,701 1,628,417 1,477,160


CHANGE IN NET ASSETS 13,270,225$ 6,680,143$ 5,330,382$

Data Source




CHANGES IN NET ASSETS (Continued)


- 106 -

2008 2009 2010 2011 2012

2,479,136$ 2,798,676$ 3,085,273$ 3,192,341$ 3,212,355$

4,596,159 4,160,089 4,013,156 4,392,497 4,747,193

252,686 254,250 383,446 374,926 363,748

300,320 321,939 513,988 537,432 497,232

78,403 73,592 66,300 67,359 76,438

297,307 325,188 280,784 320,504 328,803

1,422,163 1,399,626 1,225,777 1,229,912 1,420,009

621,671 351,622 155,009 56,265 54,747

74,537 154,940 90,885 43,387 63,382

- - - - -

- - - - -

10,122,382 9,839,922 9,814,618 10,214,623 10,763,907

139,723 18,604 4,734 1,981 1,189

- - - - -

- - 36,830 16,248 12,353

- - - - -

139,723 18,604 41,564 18,229 13,542

10,262,105$ 9,858,526$ 9,856,182$ 10,232,852$ 10,777,449$

3,597,783$ 10,199,872$ 7,194,585$ 23,103,137$ 7,170,995$

1,035,671 1,023,542 396,058 2,187,155 1,107,741

4,633,454$ 11,223,414$ 7,590,643$ 25,290,292$ 8,278,736$


- 107 -


FUND BALANCES OF GOVERNMENTAL FUNDS

Last Ten Fiscal Years

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*

GENERAL FUND

Reserved 58,921$ 75,985$ 88,843$ 52,275$ 61,061$ 74,520$ 39,542$ 34,047$ 28,325$ -$

Unreserved 1,770,633 1,756,075 2,887,812 3,946,179 4,966,959 4,903,124 4,593,025 4,671,774 5,124,435 -

Nonspendable - - - - - - - - - 45,382

Restricted - - - - - - - - - 20,047

Unrestricted

Unassigned - - - - - - - - - 5,358,408

TOTAL GENERAL FUND 1,829,554$ 1,832,060$ 2,976,655$ 3,998,454$ 5,028,020$ 4,977,644$ 4,632,567$ 4,705,821$ 5,152,760$ 5,423,837$

ALL OTHER GOVERNMENTAL FUNDS

Reserved 186,619$ 39,418$ 2,748,811$ 6,741,380$ 2,935,545$ 2,865,078$ 11,673,398$ 5,044,911$ 4,249,421$ -$

Unreserved

Special Revenue 1,431,453 1,587,627 - - - - - - - -

Capital Projects 1,209,524 1,962,494 1,742,453 299,891 1,885,323 1,892,227 1,268,483 2,049,659 1,961,817 -

Nonspendable - - - - - - - - - 2,400

Restricted - - - - - - - - - 3,551,968

Unrestricted

Assigned - - - - - - - - - 2,314,949

Unassigned (deficit) - - - - - - - - - (2,496)

TOTAL ALL OTHER

GOVERNMENTAL FUNDS 2,827,596$ 3,589,539$ 4,491,264$ 7,041,271$ 4,820,868$ 4,757,305$ 12,941,881$ 7,094,570$ 6,211,238$ 5,866,821$

TOTAL ALL GOVERNMENTAL FUNDS 4,657,150$ 5,421,599$ 7,467,919$ 11,039,725$ 9,848,888$ 9,734,949$ 17,574,448$ 11,800,391$ 11,363,998$ 11,290,658$

* The Village implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, in fiscal year 2012.

Data Source


- 108 -


CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS


Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

REVENUES

Taxes 4,012,450$ 4,481,981$ 5,289,679$ 6,031,325$ 7,020,390$ 8,004,010$ 7,933,736$ 8,342,948$ 8,885,058$ 9,225,769$

Licenses and Permits 576,626 711,939 1,098,156 1,494,596 1,181,232 668,631 419,591 274,749 355,582 426,556

Intergovernmental 1,016,466 1,129,445 1,660,766 1,663,245 1,710,368 1,972,850 2,004,584 1,770,352 2,169,201 2,062,401

Charges for Services 818,046 975,143 1,126,330 1,935,244 1,677,960 804,638 779,315 683,158 668,021 689,479

Fines and Forfeits 214,988 202,261 212,662 229,598 334,303 319,105 326,941 277,722 301,113 291,247

Developer Contributions - - - 1,850,000 250,000 717,134 1,741,648 577,373 65,614 198,563

Investment Income 167,076 59,535 157,408 480,414 708,088 621,671 351,622 155,009 56,265 54,747

Miscellaneous 180,806 128,470 352,043 45,192 44,578 36,795 40,150 47,880 23,916 35,060

Total Revenues 6,986,458 7,688,774 9,897,044 13,729,614 12,926,919 13,144,834 13,597,587 12,129,191 12,524,770 12,983,822

EXPENDITURES

Current

General Government 1,468,523 1,729,108 1,577,844 1,371,934 1,950,044 2,214,660 2,366,401 2,391,451 2,163,355 2,250,381

Public Safety 2,421,132 2,541,746 2,796,852 3,107,013 3,396,136 3,726,617 3,864,954 3,984,649 4,154,945 4,611,054

Public Works 1,115,222 1,113,109 1,288,810 1,085,901 1,805,840 2,024,422 2,011,129 1,617,841 1,523,924 1,586,926

Sanitation 58,596 52,742 76,629 101,813 69,521 72,078 67,018 76,971 57,858 63,329

Health and Welfare 56,495 96,029 85,329 71,535 69,907 290,372 88,768 66,978 72,277 65,094

Capital Outlay 4,969,311 700,478 1,384,120 3,219,349 6,192,083 3,697,677 5,547,491 8,499,948 3,727,818 3,330,335

Debt Service

Principal 281,037 282,613 324,000 902,000 340,000 947,428 405,000 635,000 750,000 665,000

Interest and Fiscal Charges 438,375 515,071 351,420 332,513 322,484 285,519 317,327 722,609 548,852 506,989

Total Expenditures 10,808,691 7,030,896 7,885,004 10,192,058 14,146,015 13,258,773 14,668,088 17,995,447 12,999,029 13,079,108


OVER EXPENDITURES (3,822,233) 657,878 2,012,040 3,537,556 (1,219,096) (113,939) (1,070,501) (5,866,256) (474,259) (95,286)

- 109 -

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Transfers In 522,400$ 784,530$ 824,250$ 2,672,199$ 1,545,000$ 1,654,908$ 1,097,290$ 681,642$ 706,012$ 805,635$

Transfers (Out) (507,400) (750,280) (790,000) (2,637,949) (1,545,000) (1,654,908) (1,097,290) (681,642) (706,012) (805,635)

Bonds Issued - - - - - - 9,000,000 4,525,000 - -

Payment to Refunded Bonds Escrow - - - - - - - (4,500,954) - -

Discount on Bonds Issued - - - - - - (90,000) - - -

Premium on Bonds Issued - - - - - - - 68,153 - -

Proceeds from Certificates of Participation - - - - - - - - - -

Proceeds from Conveyance - - - - 575,428 - - - - -

Sale of Capital Assets 68 1,468 30 - - - - - - -

Insurance Claim Reimbursement - - - - - - - - 37,866 21,946

Total Other Financing Sources (Uses) 15,068 35,718 34,280 34,250 575,428 - 8,910,000 92,199 37,866 21,946

OTHER CHANGES TO FUND BALANCES

Prior Period Adjustment - 70,853 - - (547,169) - - - - -

NET CHANGE IN FUND BALANCES (3,807,165)$ 764,449$ 2,046,320$ 3,571,806$ (1,190,837)$ (113,939)$ 7,839,499$ (5,774,057)$ (436,393)$ (73,340)$

DEBT SERVICE AS A PERCENTAGE OF

NONCAPITAL EXPENDITURES 12.32% 12.60% 10.39% 14.73% 8.08% 12.17% 6.92% 11.53% 14.14% 11.20%

Data Source


- 110 -


ASSESSED VALUE AND ACTUAL VALUE OF TAXABLE PROPERTY

Last Ten Levy Years

Total Estimated Estimated

Total Taxable Direct Actual Actual

Levy Residential Commercial Industrial Railroad Farm Assessed Tax Taxable Taxable

Year Property Property Property Property Property Value Rate Value Value

2002 222,417,139$ 36,324,643$ 28,033,154$ 166,582$ 665,897$ 287,607,415$ 0.539700 862,822,245$ 33.333%

2003 253,826,385 37,213,681 26,540,043 139,798 618,881 318,338,788 0.521200 955,016,364 33.333%

2004 287,453,001 37,953,198 27,961,411 136,759 687,557 354,191,926 0.500720 1,062,575,778 33.333%

2005 333,252,680 42,837,358 29,920,087 126,362 453,980 406,590,467 0.470059 1,219,771,401 33.333%

2006 375,662,406 55,675,142 32,164,507 132,288 242,413 463,876,756 0.448888 1,391,630,268 33.333%

2007 433,340,748 66,370,277 34,532,131 147,147 278,939 534,669,242 0.423425 1,604,007,726 33.333%

2008 455,105,924 73,362,075 40,855,140 169,537 268,650 569,761,326 0.461899 1,709,283,978 33.333%

2009 455,869,473 77,510,259 40,660,653 205,003 337,496 574,582,884 0.380791 1,723,748,652 33.333%

2010 430,166,785 74,268,198 37,777,327 224,708 378,796 542,815,814 0.457352 1,628,447,442 33.333%

2011 396,460,429 64,212,904 34,967,983 268,280 385,110 496,294,706 0.510648 1,488,884,118 33.333%

Data Source

Office of the County Clerk

Note: Property in the Village is reassessed each year. Property is assessed at 33% of actual value. Tax rates are per $100 of assessed value and are the "Rate Setting EAV"

- 111 -

Tax Levy Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

VILLAGE DIRECT RATES

Village of North Aurora 0.396500 0.386100 0.374500 0.356290 0.346120 0.331880 0.373998 0.294611 0.367100 0.409270

General Obligation Library Debt Service 0.143200 0.135100 0.126220 0.113769 0.102768 0.091545 0.087901 0.086180 0.090252 0.101378

Total Direct Rate 0.539700 0.521200 0.500720 0.470059 0.448888 0.423425 0.461899 0.380791 0.457352 0.510648

OVERLAPPING RATES (REPRESENTATIVE)

Messenger Public Library 0.244900 0.264000 0.263410 0.258440 0.251060 0.240730 0.242000 0.242730 0.266280 0.296870

North Aurora Fire District 0.492500 0.547800 0.751570 0.715310 0.737631 0.694262 0.698169 0.696580 0.764120 0.834119

Kane County 0.429200 0.357800 0.346680 0.336730 0.345185 0.332164 0.333610 0.339794 0.372975 0.398980

Kane County Forest Preserve 0.139500 0.127000 0.143200 0.190474 0.174710 0.197429 0.193217 0.199732 0.220104 0.260923

Aurora Township (1) 0.275600 0.250900 0.238780 0.230243 0.221596 0.213940 0.214057 0.218958 0.242825 0.274235

College District 516 0.404300 0.413400 0.409920 0.393329 0.398359 0.395048 0.399526 0.404276 0.406952 0.470953

Fox Valley Park District 0.408600 0.399500 0.406760 0.384598 0.374563 0.403707 0.401363 0.412193 0.480263 0.528582

West Aurora Schools 129 4.062500 3.906600 3.815460 3.678550 3.563522 4.125158 4.122511 4.183454 4.273974 5.160256

Total Overlapping Rates 6.457100 6.267000 6.375780 6.187674 6.066626 6.602438 6.604453 6.697717 7.027493 8.224918

TOTAL ALL RATES (REPRESENTATIVE) 6.996800 6.788200 6.876500 6.657733 6.515514 7.025863 7.066352 7.078508 7.484845 8.735566

Data Source

Office of the Kane County Clerk

Notes

(1) Aurora Township includes Aurora Township and Aurora Township Road and Bridge

The Village is a non-home rule community and as such is subject to the tax cap which limits the increase in the Village's annual property tax levy to 5% or the rate of inflation in the CPI,

whichever is lessor. This limitation on the increase is based on last year's actual extension. The tax extension limitation formula allows the Village to "capture" the value of new construction.

Approved debt service levies are not subject to the tax cap; however, general obligation debt backed solely by property taxes cannot be issued unless approved by the voters via referendum.

The Village has also established a number of Special Service Areas within the Village. These areas are for the maintenance of lawns and detention ponds and are not a significant

portion of the overall tax bill.

A very small portion of the Village's population belongs in the Kaneland School District or the Batavia School District.


PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS

Last Ten Levy Years

- 112 -


PRINCIPAL PROPERTY TAXPAYERS

Current Year and Nine Years Ago

Percentage Percentage

of Total of Total

Village Village

Taxable Taxable Taxable Taxable

Assessed Assessed Assessed Assessed

Taxpayer Value Rank Valuation Value Rank Valuation

Dart Container Corportation 7,988,997$ 1 1.61% 2,895,263$ 3 1.01%

Woodman's Food Market 4,562,782 2 0.92%

Preferred Real Estate LLC 3,905,442 3 0.79%

Target Corporation 3,248,941 4 0.65%

American National Bank & Trust 3,216,075 5 0.65% 2,519,748 4 0.88%

Summitt Enterprises of Illinois, Ltd. 2,864,474 6 0.58% 3,342,413 2 1.16%

JCPenney Properties Inc. 2,383,334 7 0.48%

Little Miranda, LLC 1,963,033 8 0.40%

First Industrial Investment, LLC 1,628,462 9 0.33%

Butterfield Trails Apartments 1,618,098 10 0.33%

American National Bank Trust OTB 3,490,385 1 1.21%

First Industrial Development Services 2,337,899 5 0.81%

Metropolitan Bank and Trust #2030 2,194,597 6 0.76%

Malan Aurora Corp. 1,976,584 7 0.69%

JDI Realty LLC 1,872,802 8 0.65%

LaSalle National Bank and Trust #2040 1,559,638 9 0.54%

Oberweis Dairy, Inc. 1,390,691 10 0.48%

33,379,638$ 6.73% 23,580,020$ 8.20%

Notes

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.

Data Source


Levy Year Levy Year

2011 2002

- 113 -


PROPERTY TAX LEVIES AND COLLECTIONS (1)

Last Ten Levy Years

Levy Percentage Total Percentage

Year Tax Levied Amount of Levy Collections of Levy

2002 1,634,818$ 1,629,718$ 99.69% 1,629,718$ 99.69%

2003 1,737,086 1,726,403 99.39% 1,726,403 99.39%

2004 1,862,056 1,859,837 99.88% 1,859,837 99.88%

2005 2,009,711 2,001,075 99.57% 2,001,075 99.57%

2006 2,202,084 2,141,318 97.24% 2,141,318 97.24%

2007 2,400,312 2,387,434 99.46% 2,387,434 99.46%

2008 2,772,836 2,767,699 99.81% 2,767,699 99.81%

2009 2,324,453 2,322,977 99.94% 2,322,977 99.94%

2010 2,621,370 2,613,921 99.72% 2,613,921 99.72%

2011 2,672,466 164,801 6.17% 164,801 6.17%

Data Source


(1) Levies and collections include property taxes for the Village, Library Debt Service,

and the distributions for road and bridge that are allocated to the Village. Does not

include property taxes for the Village's special service areas or TIF distributions.

Collected Within the

Fiscal Year of the Levy

- 114 -


TOTAL SALES TAXES BY CATEGORY

Last Ten Calendar Years

Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

General Merchandise -$ 9,645$ 15,760$ 12,060$ 106,057$ 418,447$ 486,771$ 467,325$ 493,607$ 505,924$

Food 30,641 22,339 33,203 34,286 379,347 811,291 902,814 909,306 977,589 1,106,414

Drinking and Eating Places 99,554 114,468 180,984 172,664 163,968 231,941 260,481 241,546 262,390 289,233

Apparel - - - 174 69 20,951 47,052 55,847 60,937 73,069

Furniture & H.H. & Radio 84,785 82,373 108,430 116,222 121,941 80,428 146,079 255,162 263,781 254,383

Lumber, Building Hardware 119,957 138,669 212,835 508,392 616,757 504,750 121,685 63,057 60,859 71,572

Automobile and Filling Stations 1,303,212 1,265,972 1,444,042 1,504,957 1,663,281 1,739,143 1,660,857 1,323,237 1,474,027 1,776,042

Drugs and Miscellaneous Retail 31,616 38,621 63,726 123,868 193,157 248,197 263,922 267,408 288,566 286,046

Agriculture and All Others 121,918 93,573 148,910 187,575 209,025 213,366 302,435 239,617 152,316 149,743

Manufacturers 216,778 209,408 247,642 243,575 251,716 212,924 161,536 135,394 138,919 166,620

Unclassified 4,262 - 215 - - - - - - -

TOTAL 2,012,723$ 1,975,068$ 2,455,747$ 2,903,773$ 3,705,318$ 4,481,438$ 4,353,632$ 3,957,899$ 4,172,992$ 4,679,044$

VILLAGE DIRECT SALES TAX RATE 1.00% 1.00% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%

Effective January 1, 2004, the Village implemented a 0.50% non-home rule sales tax applicable to all sales except food, drugs and titled vehicles (summarized exemptions).

Approximately 47% of all retail sales are applicable to the 0.50% non-home rule sales tax.

The above numbers are the total sales tax dollars received by the Village before applicable sales tax rebates.

Data Source

Village Records

- 115 -

General Merchandise

General Merchandise State

Village and General Merchandise

Direct Other Total Rate

Rate Rates Within Village

2003 1.00% 5.50% 6.50%

2004 (2) 1.50% 5.50% 7.00%

2005 1.50% 5.50% 7.00%

2006 1.50% 5.50% 7.00%

2007 1.50% 5.50% 7.00%

2008 (3) 1.50% 6.00% 7.50%

2009 1.50% 6.00% 7.50%

1.50% 6.00% 7.50%

1.50% 6.00% 7.50%

1.50% 6.00% 7.50%

Data Source

Village and State Records

(1)

(2)

(3)


DIRECT AND OVERLAPPING SALES TAX RATES (1)

Last Ten Levy Years

Fiscal

2010

2012

2011

Effective April 1, 2008, the State increased the Regional Transportation Authority's sales tax rate in Kane

County from 0.25% to 0.75% for not only General Merchandise but qualifying food and drugs.

The rates listed in this table apply to sales of general merchandise. Sales of food not prepared for immediate

consumption, drugs and titled vehicles are subject to a different tax rate. This rate is 1.75% for sales of food and

7.00% for sales of titled vehicles.

Effective Jan 1, 2004 the Village implemented a 0.50% non-home rule sales tax by referendum. Applicable to

all sales except food not prepared for immediate consumption, drugs and titled vehicles.

Year

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RATIOS OF OUTSTANDING DEBT BY TYPE


Governmental Activities Percentage

Fiscal General Installment General Kane County Total of

Year Obligation Notes/COPs Obligation Loan Primary Personal Per

Ended Bonds Payable Bonds Payable Government Income* Capita*

2003 6,705,000$ 1,105,000$ 1,770,000$ -$ 9,580,000$ 2.41% 905$

2004 6,500,000 888,000 1,615,000 - 9,003,000 2.26% 654

2005 6,265,000 799,000 1,440,000 - 8,504,000 2.14% 618

2006 6,005,000 157,000 4,760,000 - 10,922,000 2.38% 794

2007 5,715,000 682,428 4,580,000 - 10,977,428 2.76% 798

2008 5,395,000 55,000 4,115,000 - 9,565,000 2.08% 602

2009 14,045,000 - 3,635,000 - 17,680,000 3.85% 1,112

2010 13,385,000 - 3,140,000 - 16,525,000 3.59% 1,040

2011 12,635,000 - 2,630,000 1,033,785 16,298,785 3.36% 972

2012 11,970,000 - 2,100,000 940,032 15,010,032 3.03% 896

Note: Details of the Village's outstanding debt can be found in the notes to financial statements.

Data Source

Village Records

* See the schedule of Demographic and Economic Statistics on page 122 for personal income and population data.


Activities

Business-Type

- 117 -


RATIOS OF GENERAL BONDED DEBT OUTSTANDING


Percentage of

Less: Amounts Estimated

General Restricted Actual Taxable

Fiscal Obligation for Principal Net Value of Per

Year Bonds Repayment Total Property* Capita

2003 6,780,000$ -$ 6,780,000$ 2.36% 641$

2004 6,705,000 39,238 6,665,762 2.09% 484

2005 6,500,000 33,024 6,466,976 1.83% 470

2006 6,265,000 43,576 6,221,424 1.53% 452

2007 5,715,000 57,058 5,657,942 1.22% 411

2008 5,395,000 64,343 5,330,657 1.00% 335

2009 14,045,000 351,559 13,693,441 2.40% 862

2010 13,385,000 367,103 13,017,897 2.27% 819

2011 12,635,000 369,512 12,265,488 2.26% 732

2012 11,970,000 284,726 11,685,274 2.35% 697

Note: Details of the Village's outstanding debt can be found in the notes to financial statements.

Data Source

Village Records

* See the schedule of Assessed Value and Actual Value of Taxable Property on page 111 for property

value data.

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DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT

May 31, 2012

Percentage Village of

Debt Applicable North Aurora

Gross to the Village of Share

Debt North Aurora (1) of Debt

Village of North Aurora 11,970,000$ 100.00% 11,970,000$

Kane County 63,140,000 3.67% 2,317,238

Kane County Forest Preserve 233,685,866 3.67% 8,576,271

Fox Valley Park District 66,740,000 9.00% 6,006,600

Batavia Park District 6,575,000 3.77% 247,878

Batavia Library 1998 Bond District 3,200,000 6.83% 218,560

Batavia Library 1999 Bond District 1,075,000 6.83% 73,423

Schools

School District No. 101 99,400,000 0.65% 646,100

School District No. 129 107,935,000 28.73% 31,009,726

School District No. 302 109,949,768 0.31% 340,844

Community College District No. 516 72,162,893 5.46% 3,940,094

Total Other Governments 763,863,527 53,376,734

TOTAL OVERLAPPING BONDED DEBT 775,833,527$ 65,346,734$

(1)

Data Source

Kane County

Determined by ratio of assessed valuation of property subject to taxation in the Village to valuation of

property subject to taxation in overlapping unit.

Governmental Unit

- 119 -


LEGAL DEBT MARGIN INFORMATION


Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Legal debt limit 24,806,140$ 27,456,720$ 30,549,054$ 35,068,428$ 40,009,370$ 46,115,222$ 49,141,914$ 49,557,774$ 46,817,864$ 42,805,418$

Total net debt

applicable to limit 7,210,000 6,713,000 6,474,000 5,657,000 5,982,428 5,130,000 4,825,000 4,525,000 4,200,000 3,855,000

LEGAL DEBT MARGIN 17,596,140$ 20,743,720$ 24,075,054$ 29,411,428$ 34,026,942$ 40,985,222$ 44,316,914$ 45,032,774$ 42,617,864$ 38,950,418$

Total net debt applicable

to the limit as a

percentage of debt limit 29% 24% 21% 16% 16% 15% 10% 9% 9% 9%

Legal Debt Margin Calculation for Fiscal 2010

Assessed Value 496,294,706$

Legal debt margin 8.625%

Debt limit 42,805,418

Debt applicable to limit

General obligation bonds 3,855,000$

Total Debt Applicable to Limit 3,855,000

LEGAL DEBT MARGIN 38,950,418$

Data Source

Village Records

- 120 -

General Obligation Alternate Revenue Source Waterworks Bonds General Obligation Alternate Revenue Source Police Station Capital Bonds

Water Sales Tax,

Charges Less: Net Beginning Use Tax, Total Less: Net

Fiscal and Operating Available Debt Service Fund and Available Non-Debt Available Debt Service

Year Other (1) Expenses (2) Revenue Principal Interest Coverage Balance Other Funds Expenditures Funds Principal Interest Coverage

2003 1,260,728$ 1,018,173$ 242,555$ 150,000$ 59,009$ 1.16

2004 1,321,091 1,077,855 243,236 155,000 34,869 1.28

2005 1,699,543 1,257,843 441,700 175,000 40,993 2.04

2006 2,117,494 1,095,671 1,021,823 180,000 37,443 4.70

2007 2,663,526 1,227,426 1,436,100 180,000 115,140 4.87

2008 2,444,586 1,366,309 1,078,277 465,000 159,293 1.73

2009 2,294,418 1,435,195 859,223 480,000 147,436 1.37 -$ 280,785$ 280,785$ -$ 280,785$ -$ -$ N/A

2010 2,269,443 1,286,390 983,053 495,000 130,636 1.57 280,785 661,884 942,669 - 942,669 255,000 401,413 1.44

2011 2,443,696 1,416,878 1,026,818 495,000 125,390 1.66 285,717 686,272 971,989 - 971,989 310,000 376,044 1.42

2012 2,546,187 1,332,923 1,213,264 530,000 119,454 1.87 285,430 685,740 971,170 - 971,170 320,000 365,969 1.42

(1) Water Charges and Other includes investment earnings but not tap on fees.

(2) Operating expenses do not include interest or depreciation.

Data Source

Village Records


PLEDGED-REVENUE COVERAGE


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(2)

Per

Capita (3)

(1) Personal Personal Unemployment

Population Income Income Rate

16,760 494,817,760$ 29,524$ 9.9%

16,760 485,704,800 28,980 10.3%

15,893 459,752,704 28,928 10.1%

15,893 459,752,704 28,928 6.3%

15,893 459,752,704 28,928 4.8%

13,764 398,164,992 28,928 4.3%

13,764 398,164,992 28,928 5.7%

13,764 398,164,992 28,928 6.0%

13,764 351,697,728 25,552 6.7%

10,585 270,467,920 25,552 6.5%

(1)

(2)

(3)


DEMOGRAPHIC AND ECONOMIC INFORMATION


Fiscal

Year

2007

2006

2008

2009

2012

2011

2010

Population of 16,760 based on 2010 Census. Population of 15,893 based on 2007 partial,

special Census. Population of 13,764 based on special Census conducted in 2004. Population

of 10,585 based on 2000 Census.

Unemployment rate based on average unemployment rate for Kane County for preceding

calendar year.

2004

2003

2005

Per Capital Personal Income Based on 2010 Census. Per Capita Income of $28,928 based on

2004 Census and EASI Analytics. Per Capita Income of $25,552 based on 2000 census.

$15,526 based on 1990 census. 2011 Year based on Kane County 2010 Census.

- 122 -

Percentage of Percentage of

Total Village Total Village

Employer Employees Rank Population Employees Rank Population

Aurora Packing Company, Inc. 260 1 1.55% 180 3 1.70%

Dart Container Corporation 234 2 1.40% 150 4 1.42%

West Aurora School District 230 3 1.37% 200 1

Oberweis Dairy, Inc. 225 4 1.34% 125 5 1.18%

Pentair Aurora Pump 215 5 1.28% 200 1 1.89%

Woodman's Food Market 195 6 1.16%

Air-Rite Heating & Cooling, Inc. 150 7 0.89% 100 6 0.94%

Euclid Beverage Ltd. 140 8 0.84%

Daco, Inc. 135 9 0.81% 99 7 0.94%

Target 135 10 0.81%

Reliant Data Processing, Inc. 50 8 0.47%

Ruddy Brothers, Inc. 50 9 0.47%

DR Speery 50 10 0.47%

TOTAL 1,919 11.45% 1,204 9.49%

Note: Illinois Manufacturers Directory, Illinois Services Directory, Kane County Economic Commission Listing.

20032012


PRINCIPAL EMPLOYERS

Current Year and Nine Years Ago

- 123 -

Function/Program 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

GENERAL GOVERNMENT

Admin/Finance 5.60 6.20 6.20 5.60 5.75 5.75 5.75 4.75 4.60 4.60

Community Development 3.00 3.00 3.00 3.00 4.20 4.35 4.35 3.80 3.80 4.11

PUBLIC SAFETY

Police

Sworn Officers 24.00 24.00 25.00 27.00 30.00 30.00 29.00 29.00 28.00 28.00

Civilians/Other 3.40 3.40 3.65 4.20 4.10 4.10 4.10 4.10 4.10 4.10

PUBLIC WORKS

Administration 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00

Street Maintenance 5.50 5.50 6.50 6.50 7.50 8.30 8.30 8.30 7.25 7.45

Water Operations/Billing 2.00 2.00 2.00 3.00 3.00 3.00 4.00 4.00 4.00 4.00

TOTAL 45.50 46.10 48.35 51.30 56.55 57.50 57.50 55.95 53.75 54.26

Data Source

Village Finance Office


FULL-TIME EQUIVALENT EMPLOYEES


- 124 -


COMMUNITY DEVELOPMENT

New Home Permits 159 223 241 307 208 73 25 19 18 22

New Commercial Permits 9 6 14 16 29 41 26 18 20 16

Misc Permits 541 577 541 660 948 605 555 524 603 542

POLICE

Physical Arrests 323 407 341 347 487 666 640 421 381 456

Ordinance Violations N/A N/A N/A 152 182 159 200 163 143 182

Traffic Violations 4,472 4,847 5,082 5,283 6,885 7,408 7,234 6,205 8,555 7,758

PUBLIC WORKS

Street Resurfacing (miles) 0.27 - - 0.54 2.73 0.43 0.35 - 0.15 0.58

Street Reconstruction (miles) - 0.23 0.69 0.16 1.61 - 1.50 0.80 0.40 0.54

WATER

New Connections 223 264 239 287 208 110 25 34

Water Main Breaks 20 15 12 12 10 10 13 10 10 23

Average Daily Consumption 1,593,052 1,572,000 1,671,096 1,668,560 1,950,000 1,802,320 1,596,992 1,831,441 1,783,000 1,817,873

Peak Daily Consumption 3,017,000 2,984,000 2,660,000 3,454,000 3,370,000 3,940,000 3,200,000 3,027,000 2,800,000 3,240,000

Data Source

Various Village departments

Some information for prior years was not readily available


OPERATING INDICATORS


- 125 -


PUBLIC SAFETY

Police

Stations 1 1 1 1 1 1 1 1 1 1

Area Patrols 2 2 3 3 3 3 3 3 3 3

Patrol Units 12 14 15 15 17 17 17 17 17 17

PUBLIC WORKS

Residential Streets (miles) 52 52 60 60 70 70 74 74 74 76

Streetlights 320 320 444 444 500 500 575 849 849 947

Traffic Signals 6 6 6 8 8 8 8 8 8 8

WATER

Water Mains (miles) 52 52 65 66 67 68 72 73 73 76

Fire Hydrants 800 850 875 900 920 920 950 960 960 980

Storage Capacity (gallons) 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000

Data Source

Various Village departments

Some information for prior years was not readily available


CAPITAL ASSET STATISTICS


- 126 -

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