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CITY COUNCIL 2017/11/06 AgendaTHE CITY OF LAKE FOREST CITY COUNCIL HAS BEEN INVITED TO A TOUR OF KELMSCOTT PARK LOCATED ON THE CORNER OF LAUREL AND WESTERN AVENUES TO INCLUDE A SINGLE FAMILY HOME AND APARTMENTS ON MONDAY, NOVEMBER 6, 2017 AT 5 PM. THE CITY OF LAKE FOREST CITY COUNCIL AGENDA Monday, November 6, 2017 at 6:30 pm City Hall Council Chambers Honorable Mayor, Robert Lansing Prudence R. Beidler, Alderman First Ward Stanford Tack, Alderman Third Ward James E. Morris, Alderman First Ward Jack Reisenberg, Alderman Third Ward Timothy Newman, Alderman Second Ward Michelle Moreno, Alderman Fourth Ward Melanie Rummel, Alderman Second Ward Raymond Buschmann, Alderman Fourth Ward CALL TO ORDER AND ROLL CALL 6:30pm PLEDGE OF ALLEGIANCE REPORTS OF CITY OFFICERS A. COMMENTS BY MAYOR A. Swear in Police Officer Steven Sheets 2. COMMENTS BY CITY MANAGER A. Community Spotlight -Kinderhaven - Dr. Penny Robbins, Director Preschool Academy C. Public Works 101 - Michael Thomas, Director of Public Works 3. COMMENTS BY COUNCIL MEMBERS AUDIT COMMITTEE REPORT 1. Audit Committee Report-Fiscal Year 2017 Annual Financial Report PRESENTED BY: Don O’Callaghan, Audit Committee Chairman STAFF CONTACT: Elizabeth Holleb, Finance Director (847-810-3612) 1 Monday, November 6, 2017 City Council Agenda PURPOSE AND ACTION REQUESTED: The Audit Committee and Staff request receipt of the audit report for the fiscal year ended April 30, 2017. BACKGROUND/DISCUSSION: The Comprehensive Annual Financial Report (CAFR) for the fiscal year ended April 30, 2017 is provided beginning on page 14. A bound copy of the CAFR is available upon request. The document has been reviewed by the Audit Committee with Baker Tilly Virchow Krause, the City’s independent audit firm, and has been accepted by the Audit Committee. The City has received an unmodified opinion on its Fiscal Year 2017 financial statements. The City has been awarded the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association for thirty-eight consecutive years. This year’s report will once again be submitted to GFOA for consideration of this award. The Audit Committee met four times in 2017 and highlights of those meetings as well as the audit report will be presented this evening by Audit Committee Chairman O’Callaghan. COUNCIL ACTION: Receipt of the audit report for the fiscal year ended April 30, 2017 FINANCE COMMITTEE REPORT 1. Distinguished Budget Presentation Award PRESENTED BY: James Morris, Finance Committee Chairman The City of Lake Forest has been awarded the Government Finance Officers Association Distinguished Budget Presentation Award for the fiscal year 2018 budget document. The award has been granted to the City for the 2nd consecutive year. The Distinguished Budget Presentation Award is the highest form of recognition in governmental budgeting, and its attainment is a significant accomplishment by a government and its management. In an October 12 news release, the GFOA states that “In order to receive the budget award, the entity had to satisfy nationally recognized guidelines for effective budget presentation. These guidelines are designed to assess how well an entity’s budget serves as a policy document, a financial plan, an operations guide and a communications device.” For budgets beginning in 2016, only 1,612 units of government received the award nationally, which is 1.8% of the 89,000 units of government in the United States.* The GFOA is a nonprofit professional association serving more than 19,000 elected and appointed government finance professionals in the United States and Canada. In addition to the Budget Award, a Certificate of Recognition for Budget Presentation is presented by the GFOA to the individual designated as instrumental in their government unit’s achievement of the award. I am pleased to present this award to Elizabeth Holleb, Director of Finance and IT, for her efforts in coordinating the preparation of the annual budget and for leading the efforts in making the required changes to the City’s budget document to meet the stringent requirements of the GFOA budget awards program. 2 Monday, November 6, 2017 City Council Agenda * 2012 Census of Governments, US Census Bureau 2. Tax Levy Estimate Determination of Non-Binding Estimate of the Amount of Revenue to be generated from Property Taxes for the 2017 Calendar Year in Accordance with the Truth in Taxation Statute and Establishment of a Public Hearing Date for the 2017 Tax Levy (if required) PRESENTED BY: Elizabeth Holleb, Finance Director (847-810-3612) PURPOSE AND ACTION REQUESTED: Staff requests City Council approval of a non-binding estimate of the amount of revenue to be generated from property taxes in calendar year 2017 and setting of a public hearing date if this estimate exceeds 105% of the prior year’s tax extension in accordance with State Statutes. PROJECT REVIEW/RECOMMENDATIONS: Reviewed Date Comments Finance Committee 10/16/17 Preliminary discussion of 2017 Tax Levy City Council Workshop 9/18/17 Direction to Independent Actuary to change payroll growth assumption from 5.5% to 2.0% for 4/30/17 police and fire actuarial valuations. City Council Workshop 6/19/17 Presentation by independent actuary regarding police and fire pension actuarial valuations. Direction to accept recommendation regarding mortality and salary increase assumptions. BACKGROUND/DISCUSSION: Under the Truth in Taxation Act, the City Council is required to determine the estimated amount of money to be raised by taxation twenty (20) days prior to the adoption of the annual tax levy. The amount determined is an estimate, and may be increased or decreased under the statute, provided that any increase does not exceed 105% of the prior year’s tax extension without the required notice and public hearing. This estimate is preliminary and initiates the public process for the 2017 tax levy by establishing an estimated amount from which staff can prepare a proposed levy ordinance. A discussion regarding the 2017 tax levy is scheduled for the November 13 Finance Committee budget workshop. The tax levy ordinance will be considered by the City Council on November 20 and again on December 4, 2017. The City Council conducted workshops in June and September to consider recommendations for the police and fire pension funds from the City’s independent actuary. In an effort to mitigate the contribution increases of 8-9% per year projected to continue indefinitely, the City Council elected to alter actuarial assumptions for both plans. The actuarial assumption adjustments necessitate an increase in funding for Fiscal Year 2019, but will allow for a more modest annual adjustment to these costs. The City Council will consider alternate means to fund the increased contributions at its Finance Committee budget workshop on November 13. For purposes of the estimate considered for approval on 3 Monday, November 6, 2017 City Council Agenda November 6, it has been assumed that the increased contributions will be funded entirely by the tax levy to make the most conservative estimate. The 2017 property tax levy estimate, as considered by the Finance Committee on October 16, is as follows: Levy 2016 Extended 2017 Levy Estimate % Increase (Decr.) Aggregate Levy $ 28,540,894 $ 30,066,290 5.34% Debt Service Levy 1,429,804 1,521,588 6.42% TOTAL LEVY $ 29,970,698 $ 31,587,878 5.40% The increase in the aggregate levy is comprised primarily of the following: • 2.10% overall increase in compliance with the tax cap applicable to 2017 levies under the Property Tax Extension Limitation Law (PTELL), • an increase due to new construction as estimated by the Lake County Assessor’s Office, and • an increase in funding requirements for police and fire pension. The total levy as estimated above would result in a projected $154 (4.72%) increase in the tax bill of an average home ($800,000 market value). A public hearing would be required under the Truth in Taxation Act. COUNCIL ACTION: Determination of an Estimate of the Amount of Revenue to be generated from Property Taxes for the 2017 Calendar Year and establishment of December 4, 2017 as a public hearing date (if required) in Accordance with the Truth in Taxation Statute 4. OPPORTUNITY FOR CITIZENS TO ADDRESS THE CITY COUNCIL ON NON-AGENDA ITEMS 5. ITEMS FOR OMNIBUS VOTE CONSIDERATION 1. Approval of the October 16, 2017 City Council Meeting Minutes A copy of the minutes can be found on page 224. COUNCIL ACTION: Approval of the Minutes 2. Check Register for Period September 23-October 27, 2017 Fund Invoice Payroll Total General 576,978 1,103,699 1,680,677 Water & Sewer 85,196 126,392 211,587 Parks & Recreation 188,701 327,592 516,293 Capital Improvements 1,240,070 0 1,240,070 Motor Fuel Tax 0 0 0 Cemetery 22,126 22,445 44,571 Senior Resources 16,669 19,979 36,648 Deerpath Golf Course 145,889 1,997 147,886 4 Monday, November 6, 2017 City Council Agenda Fleet 128,832 38,738 167,569 Debt Funds 750 0 750 Housing Trust 0 0 0 Park & Public Land 104,924 0 104,924 All other Funds 1,212,108 141,110 1,353,217 $3,722,241 $1,781,951 $5,504,192 3. Approval of Contract with Direct Response Resources for Vehicle, Pet and Parking Licenses/Permits STAFF CONTACT: Diane Hall, Assistant Finance Director (847-810-3614) PURPOSE AND ACTION REQUESTED: Staff requests City Council award a one year contract with the option to renew up to five years, based on performance, for the processing of the City’s vehicle licenses, pet licenses and parking permits to Direct Response Resources. BACKGROUND/DISCUSSION: In November 2016, the City Council approved a one year contract with our current provider, which is now scheduled to expire for the online processing of the City’s vehicle, pet and parking licenses/permits. The City has been notified of a significant increase in fees for this year. City staff completed a Request for Proposals (RFP) process in 2016 and has requested pricing from two additional vendors that currently provide services to other local municipal vehicle sticker programs. Staff has participated in demonstrations of the software proposed as well as contacted references for the additional vendors. The respondents met the specifications of the City’s 2016 RFP: Estimated First Year Cost: Credentials Inc. Based on estimated FY17 Counts - $116,000 Direct Response Resources Based on estimated FY17 Counts - $78,500 Third Millennium Based on estimated FY17 Counts – $88,900 Estimated Second Year Cost: Credentials Inc. Based on estimated FY17 Counts - $116,000 Direct Response Resources Based on estimated FY17 Counts - $69,200 Third Millennium Based on estimated FY17 Counts – $69,700 Direct Response Resources offers online purchases of vehicle, pet and parking licenses/permits, as well as fulfillment services. The City has worked with Direct Response Resources in prior years and has had a positive working relationship. Based on the demonstration provided to the Finance Department staff, Direct Response Resources online process appeared to be more user friendly and similar to the current program. During implementation, staff will work with the vendor to promote a smooth transition for residents to the new process. Credit cards fees would be assessed through the City’s current credit card processing vendor Automated Merchant Systems. BUDGET/FISCAL IMPACT: Below is an estimated summary of Contract budget: FY2018 Funding Source Amount Budgeted Amount Requested Budgeted? Y/N 5 Monday, November 6, 2017 City Council Agenda Finance Operating $104,540 $78,500* Y * Includes contract cost with service provider and estimated credit card fees. COUNCIL ACTION: If determined to be appropriate by the City Council, award a one year contract with the option to renew up to five years to Direct Response Resources for the processing of the City’s vehicle, pet and parking licenses/permits for $57,300 and the credit card fees to Automated Merchant Systems. 4. Approval of Resolutions Authorizing the Submission of Grant Applications between The City of Lake Forest and the Illinois Department of Transportation for Grant Funding through the Illinois Transportation Enhancement Program (“ITEP”) STAFF CONTACT: Robert Ells, Superintendent of Engineering (810-3555) PURPOSE AND ACTION REQUESTED: On December 4, 2015, the Fixing America’s Surface Transportation Act (“FAST Act”) was signed into law, the first in over ten (10) years to provide long-term funding certainty for surface transportation. The FAST Act is a five-year, $305 billion surface transportation reauthorization bill that authorizes federal highway, highway safety, transit and rail programs from federal fiscal years 2016 through 2020. The Act has set aside resources to fund projects through the Illinois Transportation Enhancement Program (“ITEP”). ITEP provides financial assistance for projects that support alternate modes of transportation, enhance transportation facilities, and improve the quality of life for members of the community. The 2017 ITEP cycle has been released, and a call for projects is being solicited for the program. Project sponsors may receive up to eighty (80) percent reimbursement for project costs. The remaining twenty (20) percent is the responsibility of the project sponsor. Approximately $40 million in funds will be available to award for selected projects during this cycle, with a $2 million maximum grant available per project. City staff respectfully requests that City Council approve resolutions between the City and Illinois Department of Transportation (“IDOT”) to support the applications for the projects listed below. Approval of these Resolutions affirm that the City is committed to funding the required local share and is requesting that IDOT allocate the maximum amount of ITEP grant funding possible to support each project. Acknowledgement and execution of a Local Assurance for each project, approved via Resolution, is required to satisfy the grant application requirements under the ITEP program. Staff is anticipating that grantees will be notified by early winter on the status of their application. If the City is awarded a grant, a subsequent Resolution and Agreement will need to be reviewed and considered by City Council to formally accept the grant award and to authorize the expenditure of any City funds to support the project. BACKGROUND/DISCUSSION: ITEP is a federally-funded competitive grant program that expands travel choices and enhances the transportation experience by improving the cultural, historic, aesthetic and environmental aspects of transportation infrastructure and promotes the opportunity for communities to beautify their streets and/or develop means of transportation facilities such as bike/pedestrian trails or paths. 6 Monday, November 6, 2017 City Council Agenda The federal ITEP funds are awarded competitively, and any local government or state agency with taxing authority is eligible to apply. Project sponsors may receive up to eighty (80) percent reimbursement for eligible project costs. The deadline for application submittals is December 1, 2017. The City has applied for, and been awarded, ITEP grants in the past. Notably, the City has received over $2.1 million in ITEP grants to support the Lake Forest Metra/Union Pacific North Train Station Renovation Project. Route 60 Shared-Use Path Project: This Project will provide safe bicycle and pedestrian access along the north side of Illinois Route 60 between Academy Drive and the existing sidewalk located at the Field Court entrance to the Conway Business Park. Once completed, the shared-use path will connect Conway Park to the path currently under construction at Middlefork Savanna which includes a 10’ wide bridge over the Metra tracks. This path, expected to open by the end of 2017, will provide a vital east – west connection for bicyclists and pedestrians as depicted in The City of Lake Forest Bicycle Master Plan. The City estimates that the cost for design and construction of the project will be $225,400. A prospective grant funding assessment for this project is included below. PROSPECTIVE GRANT FUNDING Project Estimated Project Cost Estimate ITEP Funding (80%) Total Local Share Estimate (20%) Amount Budgeted in FY18 IL Route 60 Bike Path Project $225,400 $180,320 $45,080 $0.00 The Capital Improvement Program identifies this project as a 1nf initiative (Priority 1 but not funded). To this end, funding to support design and construction has not been allocated at this point in time. Robert McClory Bike Trail Pedestrian Bridge Replacement Project: This project calls for the replacement of the two pedestrian bridges on the McClory Bike Path in downtown Lake Forest. The bridges, installed in 1994, span Illinois Road and Woodland Road and are 110 feet long and 220 feet long respectively. Beginning in 2013, the pedestrian bridges were inspected by a structural engineering firm. The firm noted deficiencies and identified interim repairs. These repairs were completed in 2014 to extend the life of the bridges, but the structural engineer recommended the bridges be replaced within 5 years. The inspections, done in conformance with the Nation Bridge Inspections Standards, identified extensive moisture and corrosion-related deterioration in many areas of the steel structures primarily caused by de-icing salts applied to the bridges during the winter months. De-icing salt applications have been discontinued on the bridges but the damage is irreversible and the corrosion pitting and formation of pack rust is on- going. The Robert McClory Bike Trail spans 26.5 miles from Highland Park to the Wisconsin state line and is an integral component of both the Grand Illinois Trail and US Bike Route 37 which begins in Chicago and ends in Northern Wisconsin where the trail ties into other national routes. 7 Monday, November 6, 2017 City Council Agenda The City is requesting ITEP funds for both design and construction and estimates the total cost for both to total about $800,000. A prospective grant funding assessment for this project is included below. PROSPECTIVE GRANT FUNDING Project Estimated Project Cost Estimate ITEP Funding (80%) Total Local Share Estimate (20%) Amount Budgeted in FY18 Robert McClory Bike Trail $800,000 $640,000 $160,000 0.00 The Capital Improvement Program has identified this project as a Priority 5 initiative (grant dependent). Approval of these Resolutions (beginning on page 228) affirms that the City is committed to the projects and pledges to fund the required local share and requests that IDOT allocate the maximum amount of ITEP grant funding possible for each project. If the City is awarded a grant, a subsequent Resolution and Agreement will need to be reviewed and considered by City Council to formally accept the grant award and to authorize the expenditure of any City funds to support the project. BUDGET/FISCAL IMPACT: ITEP grants provide 80% federal grant funding, The City of Lake Forest would be responsible for the 20% local agency matching funds. COUNCIL ACTION: Staff recommends City Council approve the following: 1. A Resolution authorizing submission of a grant application to the Illinois Transportation Enhancement Program for the Illinois Route 60 Shared-Use Path Project and authorizing the City Manager to execute related documents with the Illinois Department of Transportation regarding this application AND 2. A Resolution authorizing submission of a grant application to the Illinois Transportation Enhancement Program for the Robert McClory Bike Trail Pedestrian Bridge Replacement Project and authorizing the City Manager to execute related documents with the Illinois Department of Transportation regarding this application 5. Consideration of a Resolution Ratifying the Execution of a Stormwater and Landscaping Easement Agreement with the Catholic Bishop of Chicago for Work in the Ravine between Lake Forest Cemetery and Saint Mary’s Cemetery STAFF CONTACT: Chuck Myers, Superintendent of Parks, Forestry & Special Facilities (810-3565) PURPOSE AND ACTION REQUESTED: A Resolution is presented for Council’s consideration to initiate the necessary easement on the Saint Mary Cemetery property to complete the 8 Monday, November 6, 2017 City Council Agenda Cemetery Ravine Restoration Project (the Resolution and Exhibits are attached beginning on page 231). BACKGROUND/DISCUSSION: The City has been approved for funds under the Illinois Coastal Management Program Grant to restore and stabilize the ravine and improve the stormwater system within a ravine located within the Lake Forest Cemetery and the Saint Mary's Catholic Cemetery. A similar Stormwater and Landscaping Easement was granted in 2002 for a ravine restoration project on a separate portion of the ravine shared by the Lake Forest Cemetery and Saint Mary’s Cemetery. Terms of the grant program require that improvements be made on land owned by the public entity applying for funding. The Archdiocese of Chicago (an Illinois Corporation known as The Catholic Bishop of Chicago) owns a portion of the northern side of the ravine in which the improvement is planned. The Archdiocese is willing to grant the City an easement to allow the project to be constructed and planted on ravine property that it owns. Possession of an easement satisfies the terms of the grant program. BUDGET/FISCAL IMPACT: No approval for expenditure of City funds is requested. COUNCIL ACTION: Approve a motion in support of a Resolution ratifying the execution of a Stormwater and Landscaping Easement Agreement with the Catholic Bishop of Chicago for Work in the Ravine between Lake Forest Cemetery and Saint Mary Cemetery. 6. Award of Bid for Lake Forest Cemetery Ravine Restoration Project STAFF CONTACT: Chuck Myers, Superintendent of Parks, Forestry & Special Facilities (810-3565) PURPOSE AND ACTION REQUESTED: Award of a contract to John Keno & Co., Inc. to perform restoration and stabilization of a portion of the ravine located at the Lake Forest Cemetery. PROJECT REVIEW/RECOMMENDATIONS: Reviewed Date Comments Cemetery Commission 10/25/17 Reviewed and Approved City Council 04/01/16 Approval to Execute Grant Cemetery Ravine Taskforce 08/04/14 Approval of Concept BACKGROUND/DISCUSSION: The ravines of southern Lake Michigan play a critical role in protecting the water quality of the lake, preventing sediment runoff, protecting beaches and countless benefits to wildlife. The value of these ravines and the role they play in protecting Lake Michigan water quality has become increasingly well understood in just the past few decades. When restored and healthy, our ravines are beautiful assets and an integral part of the community’s character. In 2012, Conservation Design Forum (CDF) was hired by the City of Lake Forest and, specifically, the Lake Forest Cemetery, to prepare a Restoration Management Plan for the 9 Monday, November 6, 2017 City Council Agenda ravine system across the north end of the Lake Forest Cemetery. In 2014, CDF was hired to complete the Phase II engineering documents needed to implement the ravine restoration management plan. This project is intended to improve water quality for Lake Michigan’s beach and near shore areas as well as restore one of its ravines to improve the unique aquatic resource that the Lake Michigan ravines represent. The City of Lake Forest and Lake Forest Cemetery propose to restore 550 linear feet of ravine covering an area of approximately 0.5 acres. The work includes restoration and stabilization of the ravine bottom, restoration of the native flora of the ravine side slopes to address significant sheet, rill, and gully erosion, establishment of a native buffer filter strip to address runoff adjacent upland areas, and installation of a water quality sediment basin at the head end of the ravine to capture sediment and reduce runoff rates from a storm sewer discharging to the ravine. The project includes one year of stewardship maintenance and management of the established vegetation. The Cemetery ravine also plays a large role in the conveyance of stormwater. If not managed properly, storm water discharges can have a devastating impact on these fragile ravine systems. The proposed project will address some of the issues associated with the impact of stormwater on the ravine. In 2015, staff submitted a proposal to assist with funding the project through the Illinois Coastal Management Program (ICMP). Late in 2015, staff was informed that the City of Lake Forest had been awarded a grant for the project. On April 1, 2016 City Council gave staff approval to execute a grant agreement by and between the Illinois Department of Natural Resources and the City of Lake Forest, through the Illinois Coastal Management Program, to complete the ravine restoration project at the Lake Forest Cemetery. Since then, City staff has been working with CDF on permitting for the project, and at this time, all necessary permits have been secured. The proposed project involves the restoration of a section of the Cemetery ravine located within the natural ravine running through cemetery property from west to east. The western portion of the ravine extends onto private property west of the cemetery property line, the Saint Mary Cemetery owned by Catholic Bishop of Chicago. The ravine extends eastward from the head approximately 500 linear feet, to the land bridge. The ICMP Grant requires that the project be on public land or publicly controlled easement, City staff has worked with Saint Mary’s Cemetery on this easement and is requesting City Council approval under a separate agenda item in the packet. BUDGET/FISCAL IMPACT: The project was placed out to bid in September with a subsequent bid opening on October 5, 2017. A total of four bids for the project were received. The following is a summary of the bids received: Bidder Total John Keno & Co., Inc. $209,400 Elanar Construction Co. $224,142 10 Monday, November 6, 2017 City Council Agenda Copenhaver Construction Co., Inc. $229,000 Berger Excavating Contractors, Inc. $414,000 The low bidder for the project, John Keno & Co., has considerable experience with this type of project and has performed other projects in a satisfactory manner in Lake Forest. If awarded, work on this project is expected to begin in November and be completed in December. Below is an estimated summary of the project budget: FY ’18 Funding Source Amount Budgeted Amount Requested Budgeted? Y/N Cemetery Fund 183,787 $230,000 Y ICMP Grant ($80,000) The ICMP Grant of $80,000 will offset a portion of the project cost, requiring a net Cemetery Fund expense of $150,000. COUNCIL ACTION: Staff recommends award of a contract to John Keno & Co., Inc. for restoration and stabilization of the ravine and to improve the stormwater system within the ravine located at the Lake Forest Cemetery, in the amount of $230,000, which includes a 10% contingency. 7. Approval of a Contract for Corrective Work for the Everett Park Path Replacement Project STAFF CONTACT: Bob Ells, Superintendent of Engineering (847) 810-3555 PURPOSE AND ACTION REQUESTED: Staff requests approval of a contract for the corrective work for the Everett Park Path Replacement contract to Maneval Construction. BACKGROUND/DISCUSSION: The Everett Park Path Replacement contract was originally awarded to Allstar Asphalt. Allstar has failed to construct the project to standards acceptable to the City. Numerous attempts have been made to get Allstar to construct the project to City standards to no avail. Staff is recommending that the current contract with Allstar be terminated and the corrective work be awarded to the second lowest bidder for completion of the project. This corrective work involves the removal and replacement of the recently paved asphalt surface deemed unacceptable on both the path and basketball court. BUDGET/FISCAL IMPACT: Council previously approved the expenditure of $140,000 on April 17, 2017 for the construction of this project. The corrective work needed for this project will be within the previously approved expenditure of $140,000, and no additional funds are being requested. 11 Monday, November 6, 2017 City Council Agenda Allstar will be paid $49,699.80 for the work that is acceptable to the City. Maneval Construction proposed $88,586.35 to perform the corrective work to make the total project acceptable to the City. This will make the total project cost $138,256.15 which is $1,743.85 under the original budget. If any additional unforeseen work by Maneval is needed to correct the work to acceptable City requirements, any total project cost that would exceed the original budget amount of $140,000 will be subtracted from the monies owed Allstar and the balance remaining will be paid to Allstar upon the City accepting the final product. The previous bids for the Everett Park Path replacement are summarized below: BIDDER PARKS & RECREATION SHARE Allstar Asphalt Inc. $111,307.00 Maneval Construction $111,714.60 Chicagoland Paving Contractors $121,089.22 Evans & Son Blacktop $127,181.62 Schroeder Asphalt Services Inc. $129,474.35 Engineer’s Estimate $168,550.00 If approved by City Council, the project would commence on or about November 7, 2017 and be completed by the end of November. During construction, the Everett Park Path will be closed. Below is an estimated summary of project budget: FY2018 Funding Source Amount Budgeted Amount Requested Budgeted? Y/N Park and Public Land Fund $140,000 $140,000 Y COUNCIL ACTION: Staff recommends awarding the contract for the corrective work on the Everett Park Path to Maneval Construction in the amount of $88,586.35. COUNCIL ACTION: Approval of the seven (7) Omnibus items as presented 6. ORDINANCES 7. NEW BUSINESS 8. ADDITIONAL ITEMS FOR COUNCIL DISCUSSION 12 Monday, November 6, 2017 City Council Agenda EXECUTIVE SESSION 1. EXECUTIVE SESSION pursuant to 5ILCS 120/2 (c), (5), The City Council will be discussing the consideration of Land Acquisition and 5ILCS 120/2 (c), (6), The City Council will be discussing the disposition of property and the consideration for the sale or lease of property owned by the Public Body. Adjourn into Executive Session RECONVENE INTO REGULAR SESSION 10. ADJOURNMENT Office of the City Manager November 1, 2017 The City of Lake Forest is subject to the requirements of the Americans with Disabilities Act of 1990. Individuals with disabilities who plan to attend this meeting and who require certain accommodations in order to allow them to observe and/or participate in this meeting, or who have questions regarding the accessibility of the meeting or the facilities, are required to contact City Manager Robert R. Kiely, Jr., at (847) 234-2600 promptly to allow the City to make reasonable accommodations for those persons. 13 COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF LAKE FOREST, ILLINOIS As of and for the Year Ended April 30, 2017 City of Lake Forest Finance Department Elizabeth Holleb, Finance Director Diane Hall, Assistant Finance Director 14 CITY OF LAKE FOREST TABLE OF CONTENTS As of and for the Year Ended April 30, 2017 Page(s) INTRODUCTORY SECTION Transmittal Letter i - vi Certificate of Achievement for Excellence in Financial Reporting vii List of Principal Officials viii Organizational Chart ix FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT 1 - 3 REQUIRED SUPPLEMENTARY INFORMATION Management's Discussion and Analysis 4 - 16 BASIC FINANCIAL STATEMENTS Government-W ide Financial Statements Statement of Net Position 17 Statement of Activities 18 - 19 Fund Financial Statements Balance Sheet - Governmental Funds 20 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 21 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 22 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 23 Statement of Net Position - Proprietary Funds 24 - 25 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds 26 Statement of Cash Flows - Proprietary Funds 27 - 28 Statement of Fiduciary Net Position - Fiduciary Funds 29 Statement of Changes in Fiduciary Net Position - Fiduciary Funds 30 Index to Notes to Financial Statements 31 Notes to Financial Statements 32 - 89 15 CITY OF LAKE FOREST TABLE OF CONTENTS (cont.) As of and for the Year Ended April 30, 2017 REQUIRED SUPPLEMENTARY INFORMATION General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 90 Special Revenue Funds Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Parks and Recreation Fund 91 Historical Pension Information Illinois Municipal Retirement Fund - Schedule of Changes in the City's Net Pension Liability and Related Ratios 92 - 93 Illinois Municipal Retirement Fund - Schedule of Employer Contributions 94 - 95 Police Pension Fund - Schedule of Changes in the City's Net Pension Liability and Related Ratios 96 Police Pension Fund - Schedule of Employer Contributions 97 - 98 Police Pension Fund - Schedule of Investment Returns 99 Firefighters' Pension Fund - Schedule of Changes in the City's Net Pension Liability and Related Ratios 100 Firefighters' Pension Fund - Schedule of Employer Contributions 101 - 102 Firefighters' Pension Fund - Schedule of Investment Returns 103 Other Postemployment Benefits Plan - Schedule of Employer Contributions and Schedule of Funding Progress 104 Notes to Required Supplementary Information 105 SUPPLEMENTARY INFORMATION Governmental Funds Combining Balance Sheet - Nonmajor Governmental Funds 106 - 107 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 108 - 109 Schedules of Revenues, Expenditures and Changes in Fund Balances (Deficit) - Budget and Actual Asset Forfeiture Fund - Nonmajor Special Revenue Fund 110 Foreign Fire Insurance Tax Fund - Nonmajor Special Revenue Fund 111 Emergency Telephone Fund - Nonmajor Special Revenue Fund 112 Parks and Public Land Fund - Nonmajor Special Revenue Fund 113 Motor Fuel Tax Fund - Nonmajor Special Revenue Fund 114 General Cemetery Fund - Nonmajor Special Revenue Fund 115 16 CITY OF LAKE FOREST TABLE OF CONTENTS (cont.) As of and for the Year Ended April 30, 2017 SUPPLEMENTARY INFORMATION (cont.) Senior Resources Commission Fund - Nonmajor Special Revenue Fund 116 Housing Trust Fund - Nonmajor Special Revenue Fund 117 Route 60 Bridge Improvements Fund - Nonmajor Capital Projects Fund 118 Route 60 Intersection Improvements Fund - Nonmajor Capital Projects Fund 119 Laurel/W estern Redevelopment TIF Fund - Nonmajor Capital Projects Fund 120 Capital Improvements Fund - Major Capital Projects Fund 121 Debt Service Fund - Major Debt Service Fund 122 Schedules of Revenues, Expenses, and Nonoperating Revenues (Expenses) - Budget and Actual (Budgetary Basis) Waterworks and Sewerage Fund - Major Enterprise Fund 123 Deerpath Golf Course Fund - Nonmajor Enterprise Fund 124 Combining Statement of Net Position - Internal Service Funds 125 Combining Statement of Revenues, Expenses and Changes in Net Position - Internal Service Funds 126 Combining Statement of Cash Flows - Internal Service Funds 127 Schedules of Revenues, Expenses, and Nonoperating Revenues (Expenses) - Budget and Actual (Budgetary Basis) Fleet Fund - Internal Service Fund 128 Self Insurance Fund - Internal Service Fund 129 Liability Insurance Fund - Internal Service Fund 130 Combining Statement of Fiduciary Net Position - Pension Trust Funds 131 Combining Statement of Changes in Fiduciary Net Position - Pension Trust Funds 132 Statement of Changes in Fiduciary Net Position - Budget and Actual Police Pension Fund - Pension Trust Fund 133 Firefighters' Pension Fund - Pension Trust Fund 134 Statement of Changes in Assets and Liabilities - Agency Fund - Special Assessment Fund 135 Statement of Net Position and General Fund Balance Sheet - Discretely Presented Component Unit - Lake Forest Library 136 Statement of Activities and General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Discretely Presented Component Unit - Lake Forest Library 137 Summary of Debt Service Requirements to Maturity 138 17 CITY OF LAKE FOREST TABLE OF CONTENTS (cont.) As of and for the Year Ended April 30, 2017 SUPPLEMENTARY INFORMATION (cont.) Debt Service Requirements to Maturity - General Obligation Bonds 139 - 143 Special Service Area 25 Special Tax Bonds - 2003 Series 144 Special Service Area 26 Special Tax Bonds - 2003 Series 145 Special Service Area 29 Special Tax Bonds - 2004 Series 146 General Obligation Bonds - 2009 Series 147 General Obligation Bonds - 2010 Series B 148 General Obligation Bonds - 2010 Series C 149 General Obligation Bonds - 2011 Series A 150 General Obligation Bonds - 2011 Series B 151 General Obligation Bonds - 2013 Series 152 General Obligation Bonds - 2015 Series 153 Combining Balance Sheet - Debt Service Fund 154 - 155 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance - Debt Service Fund 156 - 157 STATISTICAL SECTION Net Position by Component - Last Ten Fiscal Years 158 - 159 Changes in Net Position - Last Ten Fiscal Years 160 - 163 Fund Balances of Governmental Funds - Last Ten Fiscal Years 164 - 165 Changes in Fund Balances for Governmental Funds - Last Ten Fiscal Years 166 - 167 Assessed Value and Actual Value of Taxable Property - Last Ten Levy Years 168 Property Tax Rates - Direct and Overlapping Governments - Last Ten Levy Years 169 Principal Property Taxpayers - Current Year and Nine Years Ago 170 Property Tax Levies and Collections - Last Ten Levy Years 171 Tax Extensions for City Funds - Last Ten Levy Years 172 Sales Tax Base and Number of Principal Payers - Taxable Sales by Category - .5% Sales Tax - Last Ten Calendar Years 173 Sales Tax Base and Number of Principal Payers - Taxable Sales by Category - 1% Sales Tax - Last Ten Calendar Years 174 Direct and Overlapping Sales Tax Rates - Last Ten Fiscal Years 175 Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 176 Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years 177 Direct and Overlapping Governmental Activities Debt 178 18 CITY OF LAKE FOREST TABLE OF CONTENTS (cont.) As of and for the Year Ended April 30, 2017 STATISTICAL SECTION (cont.) Legal Debt Margin Information - Last Ten Fiscal Years 179 Pledged Revenue Coverage - Last Ten Fiscal Years 180 Demographic and Economic Information - Last Ten Fiscal Years 181 Principal Employers - Current Year and Nine Years Ago 182 Full-Time Equivalent Employees - Last Ten Fiscal Years 183 Operating Indicators - Last Ten Fiscal Years 184 - 185 Capital Asset Statistics - Last Ten Fiscal Years 186 19 i October 19, 2017 The Honorable Mayor Lansing Members of the City Council Members of the Audit Committee Residents of the City of Lake Forest, Illinois The Comprehensive Annual Financial Report of the City of Lake Forest (City) for the year ended April 30, 2017, is hereby submitted as mandated by both local ordinances and state statutes. These ordinances and statutes require that the City issue annually a report on its financial position and activity presented in conformance with accounting principles generally accepted in the United States of Am erica (GAAP) and audited in accordance with generally accepted auditing standards by an independent firm of certified public accountants. This report consists of management’s representations concerning the finances of the City of Lake Forest. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft or misuse and to compile sufficient reliable information for the preparation of the City of Lake Forest’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City of Lake Forest utilizes an independent Audit Committee for reviewing the audit process and to report and make recommendations to the City Council. The Audit Committee members are Lake Forest residents having expertise in the area of financial administration and auditing. The City’s financial statements have been audited by Baker Tilly Virchow Krause, LLP a firm of licensed certified public accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the City of Lake Forest for the fiscal year ended April 30, 2017, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon their audit, that there was a reasonable basis for an unmodified opinion that the City’s financial statements for the fiscal year ended April 30, 2017, are fairly presented in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A is located immediately following the report of the independent auditors. 20 ii Profile of The City of Lake Forest The City of Lake Forest was incorporated as a city under a charter granted by the Illinois State Legislature in 1861 and am ended in 1869. Lake Forest is a residential community of 19,375 people and has a land area of 17.18 square miles. It is situated on Lake Michigan, thirty miles north of downtown Chicago in Lake County. In its American Community Survey, 2011-2015 estimates, the U.S. Census Bureau reported the City had a median household income and median home value significantly higher than comparable figures for Lake County and the State of Illinois: The City adopted the Council-Manager form of government in 1956. Policy making and legislative authority are vested in the City Council, which consists of a Mayor and an eight-member Council. The City Council is responsible, am ong other things, for passing ordinances, adopting the budget, appointing committees and hiring the Cit y Manager and City Attorney. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the City, and for hiring the heads of the City's departments. The Council members are elected to two-ye ar staggered terms with three Council members elected every two years. Aldermen serve a maximum of three terms. The Mayor is elected to a two-year term and serves a maximum of two terms. The City provides a full range of services, including police protection, fire protection, paramedic service, refuse disposal, commuter parking, com post center, recreation center, senior center, community parks, golf course, street maintenance, forestry, cemetery and a water production facility. The financial reporting entity of The City of Lake Forest includes all City funds as well as its component unit, the Lake Forest Library. Com ponent units are legally separate entities for which the prim ary government is financially accountable. Each ye ar the Cit y of Lake Forest prepares an annual budget document. This plan contains the following sections: the budget message and fiscal policy; summary tables of revenues, expenditures and fund balance for the fiscal year; operating budgets for each department; pay plan and personnel data; and debt and statistical information. The budget message highlights the significant expenditure events that will occur and the objectives to accomplish these events. It justifies the planned capital expenditures and also lists the goals that are to be achieved during the budget year. While the annual municipal budget represents the City's financial plan for expenditures over the course of the fiscal year, the annual Appropriation Ordinance is the formal legal mechanism by which the City Council authorizes the actual expenditure of funds budgeted in the annual budget. It appropriates specific sums of money by object and purpose of expenditure. 155,792 841,400 78,026 245,300 57,574 173,800 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 Median Household Income Median Home Value Lake Forest Lake County Illinois 21 iii In addition, the Appropriation Ordinance provides for a 10% contingency in expenditures in an amount above those actually budgeted. Each separate fund includes an item labeled contingency, with an appropriated amount equivalent to 10% of the total funds budgeted. Even though there is a 10% contingency line item, the City Council and City staff follow the adopted budget as its spending guideline and not the Appropriation Ordinance. This practice has been followed for more than thirty years and has worked very efficiently as a mechanism to address unanticipated items that may arise throughout the fiscal year. Budget-to-actual comparisons are provided for each individual governmental fund for which an appropriated annual budget has been adopted. For the General Fund and Parks and Recreati on Fund, considered major funds, this comparison is presented beginning on page 90 as required supplementary information. For the Capital Improvements Fund (major fund), Debt Service Fund (major fund) and non -major governmental funds with appropriated annual budgets, this comparison is presented in the Other Supplementary Information section of this report, which starts on page 110. Factors Affecting Financial Condition Local Economy. The City of Lake Forest is not immune to challenges brought on by nat ional and state economic conditions, but has been proactive in identifying mitigation strategies. Unemployment levels in Lake Forest are well below the levels for Lake County and the State of Illinois. For calendar year 2016, the City’s annual average unemployment rate was estimated to be 4.6%, compared to 5.2% for Lake County and 5.9% for the State of Illinois. The consumer confidence index is closely monitored by economists because consumer spending accounts for 70% of the United States’ economic activity. In September 2017, the index was 119.8, down slightly from 120.4 in August, and comparing favorably to the August 2016 index of 101.1. The index remains above 90, the minimum level associated with a healthy economy. An index above 100 signals growth. As revenues declined in recent years due to national economic conditions, the City has proactively reduced operating expenses to ensure a balanced budget and compliance with the City’s fiscal policies. Since personnel costs represent nearly 70% of the General Fund operating budget, it has been necessary to achieve cost savings through reduced personnel. In fiscal years (FY) 2004-2018, the City has reduced budgeted full time em ployees by 47 positions, returning the City’s total employee count below FY1992 levels. FY2016 budgeted full-time positions were reduced by 10 positions alone primarily by outsourcing dispatch operations. In February 2011, the City Council approved an organizational restructuring and Early Retirement Incentive (ERI) program which is offered and regulated by the Illinois Municipal Retirement Fund (IMRF). Twenty-six (26) em ployees participated in the ERI program, which is projected to generate net savings of $4.5 million over the initial ten year period. In December 2012, th e City Council approved the use of excess fund balance reserves to pay off the ERI liability in its entirety, rather than amortizing over ten years as initially anticipated. This early payoff allowed the City to avoid $1.8 million in interest costs over the amortization period. In September 2014, the City transitioned to a consolidated dispatch operation with the Villages of Glenview and Lake Bluff, as well as the City of Highland Park. The consolidation of dispatch operations is saving the City more than $350,000 per year while improving the infrastructure providing this vital service to residents. 22 iv Approximately half of the City’s General Fund revenues come from property taxes, which continue to be a stable revenue source. The other major funding sources of sales tax, income tax, utility taxes and building permit revenues met FY2017 budget estimates in aggregate. However, these revenues have yet to reach levels prior to the 2008 recession. Effective May 1, 2014, the City implemented a new sanitation fee that generates $600,000 per year. This revenue is currently deposited to the Capital Improvements Fund. The financial condition of the State of Illinois continues to be a significant concern although the City has limited its reliance on the State for direct funding. The City is vigilant in monitoring legislation that may be introduced that could have a negative impact on the City’s budget and vigorously opposes such legislation. The recently adopted State Budget for its fiscal year ended June 30, 2018, will impact the City’s fiscal year 2018 due to a reduction in income tax distributions and a newly imposed administration fee of 2% on home rule sales tax collections. No immediate expenditure reductions are necessary due to a budgeted operating surplus in the General Fund for FY2018, but the City Council and staff are discussing various fiscal scenarios for future years should the State continue to tap local revenues to balance its budget. In order to assist the business community and enhance sales tax revenues, economic development initiatives are conducted through the Office of the City Manager. The City has enlisted the services of an Economic Development Coordinator who acts as a liaison between the City, Lake Forest/Lake Bluff Chamber of Commerce and the business districts in Lake Forest. The City is committed to attracting desired businesses and to promote the viability of the business districts. More information can be found on the main page of the City’s website under Economic Development. In September 2017, Lake Forest was proud to host the BMW Championship, which brought the 70 top professional golfers from around the world to the City as part of the PGA Tour playoffs for the FedEx Cup. As it did in 2013 and 2015, the City actively embraced the event as a unique opportunity to market the community on an international stage. More than 115,000 spectators attended the 2015 event. In an effort to proactively address budgetary issues that may arise throughout the year, City staff monitors revenues and expenses on a monthly basis. Monthly financial “flash” reports are provided to the City Council Finance Committee. In addition, the City follows the fiscal policy approved annually by the City Council. The Fiscal Policy is designed to establish guidelines for the fiscal stability of the City and to provide guidelines for the City’s chief executive officer, the City Manager. Effective fiscal policy: Contributes significantly to the City’s ability to insulate itself from fiscal crisis, Enhances short-term and long-term financial credit ability by helping to achieve the highest credit and bond ratings possible, Promotes long-term financial stability by establishing clear and consistent guidelines, Directs attention to the total financial picture of the City rather than single issue areas, Promotes the view of linking long-term financial planning with day-to-day operations, and Provides the Council and the citizens a framework for measuring the fiscal impact of government services against established fiscal parameters and guidelines. In Fiscal Year 2016, the City Council adopted revisions to the Fiscal Policy effective for FY2017 and continuing in FY2018. The revised policy clarified the applicability of the Property Tax Extension Limitation Law to the City, established a policy for setting aside reserves to meet the City’s Other Post-Employment Benefits (OPEB) liability, revised the financing parameters for establishment of Special Service Areas, and committed to minimizing reliance on State and/or Federal revenues to fund core services. Long–Term Financial Planning. The City is funding infrastructure expenditures primarily with a real estate transfer tax that was approved by voter referendum. This real estate transfer tax is imposed on residential and commercial real estate transactions. The transfer tax of $4.00 per $1,000 of value is levied on the buyer of the real estate. 23 v FY2017 real estate transfer tax revenue totaled $1.4 million. Significant fluctuations occur in this revenue source due to changes in economic conditions, and more specifically the housing market. The City will remain conservative in projecting this revenue source and in spending monies on capital projects. A Public Works Committee which consists of three City Council mem bers was created to oversee capital improvement projects and programs. Annually in October, the Public Works Committee and city staff finalize the draft of the Five Year Capital Improvement Program. This draft is discussed at a City Council budget meeting, typically held in November. Five-year fund balance forecasts are prepared for major funds of the City each year as part of the budget development process to assist the City in identifying budget challenges on the horizon and ensure that a proactive approach is taken to addressing these challenges. Pension Benefits. Escalating costs for em ployee pension benefits will continue to pose financial challenges to the City. Sworn police and fire personnel receive retirement and disability benefits from the Police Pension Fund and Firefighters’ Pension Fund, respectively. Both of these plans are defined benefit, single-em ployer plans administered by boards of trustees. The defined benefits and employee contribution levels are governed by Illinois Compiled Statutes and may only be amended by the Illinois General Assembly. Police participants are required to contribute 9.91% of their base salaries and fire participants are required to contribute 9.455% of their base salaries. The City is required to contribute the remaining am ounts necessary to finance each plan as determined by an independent actuary. As of April 30, 2017, the most recent actuarial valuation date, the funded ratio for the Police Pension Plan is 52.9% and for the Firefighters’ Pension Plan is 69.4%. All other employees of the City who work over 1,000 hours per ye ar are covered by the Illinois Municipal Retirement Fund (IMRF), a statewide pension plan. Benefit provisions and funding requirements are established by State statutes and may only be changed by the Illinois General Assembly. Employees participating are required to contribute 4.5% of their annual wages and the City is required to contribute the remaining amounts necessary to fund the coverage of its employees in the plan. As of December 31, 2016, the funded ratio for IMRF is 88%, including the actuarial accrued liability for retirees which is 100% funded. In early 2010, a bill was signed by the Governor with an effective date of January 1, 2011, approving a "two-tier" system, where current employees keep their existing pension plans, but new hires will join a less expensive new system. IMRF was included in the bill but not the Police and Firefighters’ pension plans. By the end of 2010, the Illinois General Assembly approved police and firefighter pension reform legislation effective January 1, 2011. The law does not affect the pensions of currently employed police officers and firefighters -only those hired after January 1, 2011. Although little of the cost savings from both bills will be seen immediately, it does provide the City long-term financial relief. Implementation of GASB Statement No. 67, Financial Reporting for Pension Plans,for Fiscal Year 2015 and No. 68, Accounting and Financial Reporting for Pensions, for Fiscal Year 2016 has resulted in significant changes to the reporting of pension obligations in the City’s financial statements. Over the past few ye ars, the City has made adjustments to the mortality table and interest rate assumptions for its police and fire pension fund actuarial valuations. These changes have reduced the funded ratio but are intended to put the City in an even stronger position going forward. These changes are in addition to historically overfunding the annual pension cost compared to minimum requirements per State Statutes. Additional information on the City’s pension obligations, as well as other postemployment benefits, may be found in Note IV of the financial statements, as well as in the Required Supplementary Information. Major Initiatives The City is committed to maintaining the quality of life and the preservation of the character and heritage of Lake Forest. The City must continue to adhere to its prudent financial managem ent practices and remain focused on sustaining long-term financial stability. For FY2017, the most significant initiatives were as follows: 24 vi In January 2015, the City Council approved ordinances adopting a Tax Increment Financing (TIF) District on a 10-acre site at the north end of the Commercial Business District. This is the former site of the City’s municipal services center and has long been a focus of redevelopment for the City. In FY2016, the Cit y completed required demolition of existing structures and remediation of the site. In April 2016, the City Council approved a First Amendment to the Purchase/Sale Agreement, redevelopment agreement, final plat of subdivision and Final Development Planned Development Ordinance. The plan includes 165 total units –12 single family homes, 42 condominium units and 111 apartments. In FY2017, the City and developer closed on the sale of the property and construction has begun. A portion of the proceeds were used to call and retire the remaining principal due on the 2008 bond issue, saving $1.4 million in future interest costs. Construction of a new $190 million replacement hospital on the campus of the existing Northwestern Lake Forest Hospital is underway. City and Hospital representatives have worked closely on the planning and construction. The new hospital is scheduled to open in the first quarter of 2018. In February 2016, the City Council authorized final design of water plant improvements that will increase the plant capacity to 14 MGD (million gallons per day) and utilize GE membrane filters. In FY2017, design was completed and bidding of the project commenced. The City Council awarded the bid for construction on April 17, 2017, and construction has begun. A significant portion of the project will be funded from bonds issued in May 2017. Capital expenditures in Fiscal Year 2017 included: street improvements ($1.3 million), CBD Train Station restoration ($1.1 million –partially grant funded), Em erald Ash Borer tree removal and replacement ($188,000), and W ater/Sanitary Sewer capital improvements ($1.9 million). Awards and Acknowledgements The Governm ent Finance Officers Association (GFOA) awarded a Certificate of Achievem ent for Excellence in Financial Reporting to The City of Lake Forest for its comprehensive annual financial report for the fiscal year ended April 30, 2016. This was the 38th consecutive year that The City of Lake Forest has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized com prehensive annual financial report. This report must satisfy 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. We would like to express our appreciation to all members of the Finance Department who assisted and contributed to the preparation of this report. We would also like to thank the Mayor, members of the City Council and the Audit Committee for their interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted, Robert R. Kiely, Jr.Elizabeth A. Holleb City Manager Finance Director 25 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Lake Forest Illinois For its Comprehensive Annual Financial Report for the Fiscal Year Ended April 30, 2016 Executive Director/CEO 26 viii List of Principal Officials Year Ended April 30, 2017 LEGISLATIVE City Council Donald P. Schoenheider, Mayor Prue R. Beidler Catherine A. Waldeck George A. Pandaleon Timothy Newman Stanford Tack Jack Reisenberg Raymond P. Buschmann Michelle Moreno AUDIT COMMITTEE Don O’Callaghan, Chairman Amy Krebs Andrew Logan William McFadden Dean Stieber Donald P. Schoenheider, Mayor (ex-officio) George Pandaleon, Finance Committee Chairman (ex-officio) EXECUTIVE Robert R. Kiely Jr., City Manager DEPARTMENT OF FINANCE Elizabeth Holleb, Director of Finance Diane Hall, Assistant Finance Director 27 Voters and Residents of The City of Lake Forest Mayor and City Council Office of the City Manager CROYA Community Development Finance / IT Fire Human Resources Parks / Recreation Police Public Works Senior Center APPOINTED BOARDS, COMMISSION, COMMITTEES Audit Committee Board of Fire and Police Commissioners Board of Trustees –Firefighter Pension Fund Board of Trustees –Police Pension Fund Building Review Board Cemetery Commission Construction Codes Commission CROYA Board Elawa Farm Commission Historic Preservation Commission Housing Trust Fund Board Legal Committee Library Board Parks and Recreation Board Plan Commission Senior Resources Commission Zoning Board of Appeals 28 INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and City Council City of Lake Forest, Illinois Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Lake Forest, Illinois, as of and for the year ended April 30 , 2017, and the related notes to the financial statements, which collectively comprise the City of Lake Forest's basic financial statements as listed in the table of contents . Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America ; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The financial statements of the Lake Forest Library were not audited in accordance with Government Auditing Standards. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements . The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control over financial reporting relevant to the City of Lake Forest's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the City of Lake Forest's internal control. Accordingly, we express no such opinion . An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements . We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions . ~an1ndependentmemberof BAKER TILLY INTERNATIONAL Page 1 29 To the Honorable Mayor and City Council City of Lake Forest, Illinois Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Lake Forest, Illinois, as of April 30, 2017 and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the required supplementary information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. W e have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Lake Forest's basic financial statements. The supplementary information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects, in relation to the basic financial statements as a whole. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Lake Forest's basic financial statements. The introductory section and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Page 230 31 CITY OF LAKE FOREST,ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) APRIL 30, 2017 Page 4 The City of Lake Forest’s (the City) management’s discussion and analysis is designed to (1)assist the reader in focusing on significant financial issues, (2)provide an overview of the City’s financial activity, (3)identify changes in the City’s financial position (its ability to address the next and subsequent year’s challenges), (4)identify any material deviations from the financial plan (the approved budget), and (5)identify individual fund issues or concerns. 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 Transmittal Letter (beginning on page i) and the City’s financial statements (beginning on page 17). Financial Highlights The City’s net position decreased by $5.2 million during the fiscal year ending April 30, 2017 (FY17). The governmental net position decreased by $4.5 million and the business-type activities net position decreased by $.7 million. The governmental activities revenue increased by $3.0 million (5.8%) due to capital grants, increased property tax revenue and increased investment income. The expenses increased by $9.8 million (19.9%) due primarily to adjustments related to pensions and a temporary loss on the sale of assets. Transfers decreased by $.5 million related to a capital contribution from the Capital Improvements Fund to the Water and Sewer Fund in the prior year. The business-type activities revenue increased by $.2 million (2.2%) and expenses increased by $1.5 million (16.5%) due to pension adjustments and an increase in non-capitalized improvements. The transfers decreased by $.5 million as noted above. The total cost of all City programs increased from $58.3 million in FY16 to $69.6 million in FY17 –an increase of $11.3 million or 19.4% -attributable to pension adjustments, non-capitalized improvements and a temporary loss on the sale of capital assets. USING THE FINANCIAL SECTION OF THE COMPREHENSIVE ANNUAL REPORT The financial statement’s focus is on both the City as a whole (government-wide) and on the major individual funds. Both perspectives (government-wide and major fund) allow the user to address relevant questions, broaden a basis for comparison (year to year or government to government) and enhance the City’s accountability. Government-Wide Financial Statements The government-wide financial statements (see pages 17-19) are designed to be corporate-like in that all governmental and business-type activities are consolidated into columns which add to a total for the Primary Government. The focus of the Statement of Net Position (the Unrestricted Net Position) is designed to be similar to bottom line results for the City and its governmental and business-type activities. This statement combines and consolidates governmental fund’s current financial resources (short-term spendable resources) with capital assets and long term obligations using the accrual basis of accounting and economic resources measurement focus. The Statement of Activities (see page 18) is focused on both the gross and net cost of various activities (including governmental and business-type), which are supported by the government’s general taxes and other resources. This is intended to summarize and simplify the user’s analysis of the cost of various governmental services and/or subsidy to various business-type activities. 32 CITY OF LAKE FOREST,ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) APRIL 30, 2017 Page 5 The Governmental Activities reflect the City’s basic services, including highways and streets, sanitation, culture and recreation, public safety and general government. Property taxes, sales tax, income taxes and local utility taxes finance the majority of these services. The Business-type Activities reflect private sector type operations (W aterworks and Sewerage, Golf) where the fee for service is intended to cover all or most of the costs of operation, including depreciation. Fund Financial Statements Traditional users of governmental financial statements will find the Fund Financial Statements presentation more familiar. The focus is on Major Funds, rather than fund types. The Governmental Major Funds (see pages 20 and 22) presentation is presented on a sources and uses of liquid resources basis. This is the manner in which the financial plan (the budget) is typically developed. The flow and availability of liquid resources is a clear and appropriate focus of any analysis of a government. Funds are established for various purposes and the Fund Financial Statement allows the demonstration of sources and uses and/or budgeting compliance associated therewith. The Fund Financial Statements also allow the government to address its Fiduciary Funds (Police Pension, Firefighters’ Pension, Cemetery Trust, and Special Assessment Funds). While these Funds represent trust responsibilities of the government, these assets are restricted in purpose and do not represent discretionary assets of the government. Therefore, these assets are not presented as part of the Government-Wide Financial Statements. While the Business-type Activities column on the Business-type Fund Financial Statements (see pages 24 - 26) is essentially the same as the Business-type column on the Government-Wide Financial Statement, the Governmental Major Funds Total column requires a reconciliation because of the different measurement focus (current financial resources versus total economic resources) which is reflected on the page following each statement (see pages 21 and 23). The flow of current financial resources will reflect debt proceeds and inter-fund transfers as other financing sources as well as capital expenditures and debt principal payments as expenditures. The reconciliation will eliminate these transactions and incorporate the capital assets and long- term obligations (bonds and others) into the Governmental Activities column (in the Government-wide statements). Infrastructure Assets Historically, a government’s largest group of assets (infrastructure –roads, bridges, storm sewers, etc.) were not reported nor depreciated in governmental financial statements. Generally accepted accounting principles now require that these assets be valued and reported within the Governmental Activities column of the government-wide Statements. Additionally, the government must elect to either (1)depreciate these assets over their estimated useful life or (2)develop a system of asset management designed to maintain the service delivery potential to near perpetuity. If the government develops the asset management system (the modified approach) which periodically (at least every third year) by category measures and demonstrates its maintenance of locally established levels of service standards, the government may record its cost of maintenance in lieu of depreciation. The City has chosen to depreciate assets over their useful life. If a road project is considered maintenance –a recurring cost that does not extend the road’s original useful life or expand its capacity –the cost of the project will be expensed. An “overlay” of a road will be considered maintenance whereas a “rebuild” of a road will be capitalized. 33 CITY OF LAKE FOREST,ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) APRIL 30, 2017 Page 6 GOVERNMENT-WIDE STATEMENT Statement of Net Position The City’s combined net position decreased by $5.2 million for FY17 –from $227.4 million to $222.2 million. The analysis following will look at net position and net expenses of governmental and business-type activities separately. The total net position for the governmental activities decreased by $4.5 million –from $181.5 million to $177.0 million. The business-type activities net position decreased by $.7 million –from $45.9 million to $45.2 million. Table 1 reflects the condensed Statement of Net Position compared to FY16. Table 2 will focus on the changes in net position of the governmental and business-type activities. 2017 2016 2017 2016 2017 2016 Current and O ther Assets $91.3 $85.2 $9.6 $9.8 $100.9 $95.0 Capital Assets 200.6 214.7 50.9 52.7 251.5 267.4 T otal Asse ts 291.9 299.9 60.5 62.5 352.4 362.4 Deferred Outflows 8.9 10.6 1.1 1.5 10.0 12.1 Long- Term Liabilities 88.3 94.2 15.4 17.3 103.7 111.5 Other Liabilities 7.5 7.3 0.9 0.8 8.4 8.1 T otal Liabilitie s 95.8 101.5 16.3 18.1 112.1 119.6 Deferred Inflows 28.0 27.5 0.1 0.0 28.1 27.5 Net Position: Net Inves tment in Capital Assets 170.6 181.5 37.5 37.6 208.1 219.1 Restricted 15.5 18.5 0.0 0.0 15.5 18.5 Unres tric ted (9.1)(18.5)7.7 8.3 (1.4)(10.2) T otal Ne t Position $177.0 $181.5 $45.2 $45.9 $222.2 $227.4 Table 1 State me nt of Ne t Position As of April 30, 2016 and 2017 (in millions) Governmental Ac tiv itie s Busine ss-Type Ac tiv itie s Total Primar y Government For more detailed information see the Statement of Net Position (page 17). Normal Impacts There are six basic (normal) transactions that will affect the comparability of the Statement of Net Position summary presentation. Net Results of Activities will impact (increase/decrease) current assets and unrestricted net position. Borrowing for Capital will increase current assets and long-term debt. Spending Borrowed Proceeds on New Capital will reduce current assets and increase capital assets. There is a second im pact, an increase in capital assets and an increase in related net debt which will not change the net investment in capital assets. Spending of Non-borrowed Current Assets on New Capital will (a)reduce current assets and increase capital assets and (b)will reduce unrestricted net position and increase net investment in capital assets. 34 CITY OF LAKE FOREST,ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) APRIL 30, 2017 Page 7 Principal Payment on Debt will (a)reduce current assets and reduce long-term debt; and (b)reduce unrestricted net position and increase net investment in capital assets. Reduction of Capital Assets through Depreciation will reduce capital assets and net investment in capital assets. Current Year Impacts The City’s $5.2 million decrease in combined net position (which is the City’s bottom line) was the result of the governmental activities net position decreasing by $4.5 million and the business-type activities net position decreasing by $.7 million. The governmental activities total assets decreased by $8.0 million (2.7%) and the governmental activities total liabilities decreased by $5.7 million (5.6%). With the implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, long-term liabilities now include the net pension liability previously only disclosed in the notes to the financial statements. The decrease in total assets is primarily due to deletion of and depreciation on capital assets. The decrease in total liabilities is due to the retirement of general obligation bonds. See additional information in the Debt Outstanding section of the MD&A. A decrease in deferred outflows of $1.7 million related to pensions, while an increase in deferred inflows of $.5 million related to an increase in property taxes levied for future periods. Net investment in capital assets decreased by $10.9 million (6%) due to the sale of land owned by the City and depreciation. Restricted net position decreased $3.0 million largely due to bond proceeds expended for capital improvements. Unrestricted net position increased by $9.4 million primarily due to the net effect of GASB 68 reporting of pension obligations. The net position of business-type activities decreased by $.7 million, from $45.9 million to $45.2 million. The primary change in assets of the business-type activities was a decrease in capital assets due to depreciation expense exceeding capital additions. Long-term liabilities decreased by $1.9 million due to scheduled maturities of debt obligations. Net investment in capital assets decreased by a modest $.1 million, and unrestricted net position decreased by $.6 million. The majority of the unrestricted net position can be used by the City to finance water and sanitary sewer operations. The City has a policy of maintaining 33% of revenue plus one ye ar’s debt service plus $500,000 as a reserve in its water fund. The annual operating cost for this program is approxim ately $8.1 million per year and interest expense on bonds is $.4 million. Changes in Net Position The City’s combined change in net position was a decrease of $5.2 million in FY17. The City’s total revenues increased by $3.2 million, primarily driven by property taxes and interest income. The City’s cost of all programs increased by $11.3 million, largely attributable to pension adjustments, non-capitalized improvements and a temporary loss on the sale of capital assets. The chart on the following page compares the revenue and expenses for the current and previous fiscal year. 35 CITY OF LAKE FOREST,ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) APRIL 30, 2017 Page 8 2017 2016 2017 2016 2017 2016 REVENUE Program Revenue Charges for Servic es $14.9 $14.7 $9.5 $9.2 $24.4 $23.9 Grants and Contributions Oper ating 1.1 1.4 1.1 1.4 Capital 1.2 0.3 1.2 0.3 General R evenue Property Taxes 25.9 25.0 25.9 25.0 Other Taxes 4.7 4.3 4.7 4.3 Intergover nm ental - Taxes 6.1 6.1 6.1 6.1 Interes t Revenue 1.0 0.1 1.0 0.1 Other 0.0 0.0 0.1 0.0 0.1 Total Revenue 54.9 51.9 9.5 9.3 64.4 61.2 EXPENSES Governm ental Activities General Governm ent 16.9 11.7 16.9 11.7 Highways and Streets 10.9 9.2 10.9 9.2 Sanitation 2.6 2.2 2.6 2.2 Culture and Rec reation 10.0 8.5 10.0 8.5 Public Safety 17.0 16.3 17.0 16.3 Interes t 1.6 1.3 1.6 1.3 Bus ines s-Type Activities W ater and Sew er 8.5 7.2 8.5 7.2 Golf 2.1 1.9 2.1 1.9 Total Expe nse s 59.0 49.2 10.6 9.1 69.6 58.3 Exce ss be fore T ransfe rs (4.1)2.7 (1.1)0.2 (5.2)2.9 Transfers In (out)(0.4)(0.9)0.4 0.9 0.0 0.0 Change in Net Pos ition (4.5)1.8 (0.7)1.1 (5.2)2.9 Net Position - Be ginning 181.5 179.7 45.9 44.8 227.4 224.5 Net Position - Ending $177.0 $181.5 $45.2 $45.9 $222.2 $227.4 Ac tivitie s Busine ss-T yp e Ac tiv itie s Total Primary Government Table 2 Change s in Net Position For the Fiscal Ye ar Ende d April 30, 2017 and 2016 (in millions) Governmental 36 CITY OF LAKE FOREST,ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) APRIL 30, 2017 Page 9 Property Tax 47% Sales Tax 5% Income Tax 4% Utility Tax 7% Real Estate Transfer Tax 3% Charges for Services 27%Grants 2% Other 3% Inv Income 2% FY2017 Governmental Activities Revenue Property Tax 48% Sales Tax 6% Income Tax 4% Utility Tax 7% Real Estate Transfer Tax 3% Charges for Services 28% Grants 3% Other 1% Inv Income 0% FY2016 Governmental Activities Revenue 37 CITY OF LAKE FOREST,ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAU DITED) APRIL 30, 2017 Page 10 General Government 29% Highways and Streets 18% Sanitation 4% Culture and Recreation 17% Public Safety 29%Interest on LT Debt 3% FY2017 Governmental Activities Expenses General Government 24% Highways and Streets 19% Sanitation 4% Culture and Recreation 17% Public Safety 33%Interest on LT Debt 3% FY2016 Governmental Activities Expenses 38 CITY OF LAKE FOREST,ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAU DITED) APRIL 30, 2017 Page 11 Normal Impacts There are eight basic impacts on revenues and expenses as reflected below. Revenues Economic Condition can reflect a declining, stable or growing economic environment and has a substantial im pact on state income, sales and utility tax revenue as well as public spending habits for building permits, elective user fees and volumes of consumption. Increase/Decrease in City approved rates –while certain tax rates are set by statute, the City Council has authority to impose and periodically increase/decrease rates (water, sewer, building fees, etc.). Changing Patterns in Intergovernmental and Grant Revenue (both recurring and non-recurring)–certain recurring revenues (state shared revenues, etc.) may experience significant changes periodically while non-recurring (or one-time) grants are less predictable and often distorting in their impact on year to year com parisons. Market Impacts on Investment income –investment income on the City’s investment portfolio may fluctuate based on market conditions. Expenses Introduction of New Programs – within the functional expense categories (Public Safety, Highways and Streets, General Government, etc.), individual programs may be added or deleted to meet changing community needs. Increase/Decrease in Authorized Personnel –changes in service demand may cause the City Council to increase/decrease authorized staffing. Staffing costs (salary and related benefits) represent nearly 70% of the City’s general fund operating costs. Salary Increases (annual adjustments and merit)–the ability to attract and retain human and intellectual resources requires the City to strive to approach a competitive salary range position in the marketplace. Inflation –while overall inflation appears to be reasonably modest, the City is a major consumer of certain commodities such as supplies, fuels and parts. Some functions may experience unusual commodity specific increases. Current Year Impacts Governmental Activities Revenue For the fiscal ye ar ended April 30, 2017, revenues from governmental activities totaled $54.9 million, increasing $3.0 million compared to FY16. The primary changes occurred in Capital Grants ($.9 million), Property Tax ($.9 million) and Interest Revenue ($.9 million). Property tax revenue increased by 3.6% over FY16 and Cemetery Fund investment income increased significantly over the prior year. Property tax revenue continues to be the City’s single largest revenue source, contributing $25.9 million (47%) of governmental activities revenue. Property tax revenues combined with sales tax, the local utility tax, shared state income tax and real estate transfer tax revenues total $36.7 million and represent 67% of the total governmental activities revenue. 39 CITY OF LAKE FOREST,ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAU DITED) APRIL 30, 2017 Page 12 The real estate transfer tax became effective July 5, 2006 with a 58% voter approval via referendum. The tax is im posed upon buyers of any residential or commercial real estate at a rate of $4.00 per $1,000 of value. The revenue is used strictly to improve the City’s infrastructure. The City’s 2016 equalized assessed valuation increased 5.9% compared to the prior year and totaled $2,443,072,671. Although the City became a home rule municipalit y in November 2004, the City has historically self-imposed the Illinois Property Tax Extension Limitation Laws (PTELL), otherwise known as the tax cap, to the extent possible. The increase of approximately 3.6% over FY16 in property taxes was generated as a result of the City Council adopting a 2.93% increase in the levy and new growth. While the tax cap applicable to this levy was .80%, the City Council elected to exceed this cap due to uncertainty regarding the State budget and potential loss of State-shared revenue. Investment income increased by $0.9 million, from $.1 million to $1.0 million. Most of this increase occurred in the Cemetery Fund. The City’s strategy for investing did not change but the City benefited from improved market conditions. Expenses For the fiscal year ended April 30, 2017, expenses for governmental activities totaled $59.0 million, an increase of $9.8 million (19.9%). The increase is due in large part to pension adjustments and a temporary loss on the sale of the property associated with the prior Municipal Services facility. Increases in personnel costs, which represent nearly 70% of the General Fund operating costs, continue to outpace revenue growth. With high demand for skilled em ployees in both the public and private sectors in this region, it is im portant that the City provide competitive com pensation levels for our em ployees. The FY17 expenses included funding for the City’s performance based em plo yee compensation package plus a 2.5% general salar y adjustment. Business-type Activities Revenue Total revenue for the business-type activities increased by $.2 million (2.2%) primarily due to an increase in charges for services in the Water and Sewer Fund. Expenses The City’s business-type activity expenses increased by $1.5 million (16.5%) due primarily to pension adjustments and non-capitalized improvements. 40 CITY OF LAKE FOREST,ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAU DITED) APRIL 30, 2017 Page 13 FINANCIAL ANALYSIS OF THE CITY’S FUNDS Governmental Funds At April 30, 2017, the governmental funds (as presented on the balance sheet on page 20) reported a com bined fund balance of $49.5 million which is a $3.5 million (7.6%) increase from the beginning of the year ($46 million). This increase was largely driven by proceeds of capital asset sales of $5.6 million. Of the total fund balance of $49.5 million, $1.3 million is not available for continuing City services and capital projects. The unassigned fund balance for the total of all governmental funds is $28.8 million, which is a $6.3 million (28%) increase over the prior year. Major Governmental Funds The General Fund is the Cit y’s primary operating fund and the largest source of day-to-day service delivery. The total Fund Balance of the General Fund increased by $5.8 million or 24% from FY16 (from $23.8 million to $29.6 million). The General Fund revenues increased by $.9 million (2.5%) due primarily to an increase in property tax revenue. The General Fund expenditures decreased by $1.5 million (4.9%) due to a decrease in capital outlay of $1.8 million. The excess of revenues over expenditures (before transfers) for FY17 of $7.4 million exceeded FY16 ($5.0 million). The other financing sources (uses) were com parable, from $(1.7) million to $(1.6) million. Property taxes increased $.6 million, while other taxes increased $.2 million. Although the City became a home rule unit in November 2004, the City has historically self-imposed the Illinois Property Tax Extension Lim itation Law (PTELL), otherwise known as the tax cap. As noted previously, the 2015 levy extension (FY17 revenue) allowed for a 2.93% increase as well as new equalized assessed valuation growth. General Fund expenditures increased overall due to personnel cost increases. General government increased 3.1%, highways and streets increased 5.5% (primarily snow and ice control), sanitation was unchanged and public safety costs decreased .1%. In addition, General Fund capital outlay costs decreased by $1.8 million compared to FY16. Original Final General Fund Budget Budget Ac tual Revenues : Taxes $21.0 $21.0 $21.1 Intergovernm ental - Taxes 6.3 6.3 6.1 Other 8.7 8.7 9.6 Total 36.0 36.0 36.8 Expenditures and Trans fers: Expenditures 34.9 35.1 29.4 Trans fers (Net)1.2 1.2 1.6 Total 36.1 36.3 31.0 Change in Fund Balance ($0.1)($0.3) $5.8 Tab le 3 General Fund Budgetary Highlights (in millions ) Actual General Fund revenues were higher than budgeted revenues by $.8 million during FY17. The primary variance resulted from building permit revenues exceeding projections. Actual General Fund expenditures were lower than the final budget by $5.3 million. It is the City’s policy to add 10%, which is 41 CITY OF LAKE FOREST,ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAU DITED) APRIL 30, 2017 Page 14 $3.3 million, of contingency funding to the budget appropriation. The contingency am ount is only for specific uses as determined by the Cit y Council and was not expended in FY17. Additional information can be found on the schedule of revenues, expenditures and changes in fund balance –budget and actual on page 90. The Parks and Recreation Fund accounts for the parks and recreation programs. Services include forestry and parks maintenance operations, a fitness center, dance academ y, and a variety of other indoor and outdoor programs. The Fund Balance of the Parks and Recreation Fund decreased by $.2 million, from $3.0 million to $2.8 million. The Parks and Recreation Fund revenues and expenditures were consistent with the prior year. Total other financing sources (uses) decreased by $.2 million, contributing to a net change in fund balance of $(246,306). The Capital Improvements Fund is reported as a Major Fund for FY17 and is used to account for revenues used to fund City building and infrastructure projects. Fund balance of this fund decreased by $1.4 million due to expenditure of bond proceeds from the prior year. Compared to FY16, revenue increased by $.5 million due to increases in grant revenue. Total expenditures decreased by $1.5 million in the capital outlay category. Proceeds of capital asset sales of $5.6 million were transferred to the Debt Service Fund. The Debt Service Fund is reported as a Major Fund for FY17 and is used to account for revenues used to retire non-Enterprise Fund obligations. Fund balance for FY17 decreased by $.2 million, from $1.6 million to $1.4 million. Transfers in of $6.8 million were used to retire all remaining principal on the 2008 General Obligation Bonds, saving the City $1.4 million in future interest costs. CAPITAL ASSETS 2017 2016 2017 2016 2017 2016 Land and Imp rovements $38.2 $46.4 $0.5 $0.5 $38.7 $46.9 In frastructure - Land 66.7 66.7 66.7 66.7 Construction in Progress 0.0 0.0 0.0 0.0 0.0 0.0 In frastructure 54.3 57.0 54.3 57.0 Buildings 19.0 20.2 12.4 13.4 31.4 33.6 Imp rovements 18.2 19.8 23.3 23.6 41.5 43.4 Machinery and Equipment 4.2 4.6 1.6 1.6 5.8 6.2 Sanitary Sewers 0.0 0.0 13.1 13.6 13.1 13.6 Total $200.6 $214.7 $50.9 $52.7 $251.5 $267.4 Table 4 Capital Assets at Year End - 2017 and 2016 Net of Depreciation (in millions) Governmental Ac tivities Business-T ype Ac tivities Total Primary Government At the end of FY17, the City had a combined total of $251.5 million invested in a broad range of capital assets. This am ount represents a net decrease (including additions and deductions) of $15.9 million. The net decrease is attributable to a $14.1 million decrease in governmental activities and a $1.8 million decrease in the business-type activities. The $14.1 million decrease in the governmental activities was due to an $8.9 million net deletion due to the sale of the former Municipal Services site, $5.9 million of depreciation offset by $.7 million of capital 42 CITY OF LAKE FOREST,ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAU DITED) APRIL 30, 2017 Page 15 asset additions. The $1.8 million decrease in business-type activities was due to $2.8 million of depreciation offset by $1.0 million in asset additions. The following reconciliation summarizes the changes in Capital Assets which are presented in detail on pages 57-59 of the Notes. Governm ental Busines s-Type Ac tivities Ac tivities Total Be ginning Balance $214.7 $52.7 $267.4 Ad ditions Deprec iable 0.7 1.0 1.7 Non-Deprec iable 0.0 Cons truc tion in Progres s 0.0 Retirement s Deprec iable (2.5)(0.1)(2.6) Non-Deprec iable (8.3)(8.3) Cons truc tion in Progres s 0.0 Deprec iation (5.9)(2.8)(8.7) Retirement s 1.9 0.1 2.0 Ending B alance $200.6 $50.9 $251.5 Table 5 Change in Capital Assets (in m illions ) Debt Outstanding The City had $48.3 million of general obligation bonds outstanding at April 30, 2017. Of this amount $24.8 million were payable from property taxes and the remainder were self-supporting. The City abates the property tax levies for these debt issues annually. The City’s per capita debt ratio for all direct and overlapping debt with other governmental units was $5,862 and $5,420 if self-supporting debt is excluded. The City operated as a home rule community for FY17. The City was granted home rule status via a referendum held on November 2, 2004. Under home rule authority, the City will not have a legal debt limit. For more detailed information on long-term debt activity, see pages 62-64. The City issued no additional debt in FY17. As of April 30, 2017, the City’s net pension liability is $52.4 million, an increase of $1.9 million over the $50.5 million balance as of April 30,2016. Additional information regarding the net pension liability can be found in Note IV. 43 CITY OF LAKE FOREST,ILLINOIS MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAU DITED) APRIL 30, 2017 Page 16 Economic Factors Unemployment levels in Lake Forest are well below the levels for Lake County and the State of Illinois. For calendar year 2016, the Cit y’s annual average unemployment rate was estimated to be 4.6%, com pared to 5.2% for Lake County and 5.9% for the State of Illinois. The City maintains a Aaa bond rating from Moody’s Investors Service. CONTAC TING THE CITY’S FINAN CIAL MANAGEMENT This financial report is designed to provide our citizens, customers, investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. Questions concerning this report or requests for additional financial information should be directed to Elizabeth Holleb, Finance Director, City of Lake Forest, 800 N. Field Drive, Lake Forest, IL 60045. 44 BASIC FINANCIAL STAT EMENTS 45 CITY OF LAKE FOREST STATEMENT OF NET POSITION As of April 30, 2017 Primary Government Component Unit Governmental Activities Business-type Activities Totals Lake Forest Library ASSETS Cash and cash equivalents $52,667,449 $7,484,331 $60,151,780 $2,893,943 Investments 4,968,042 -4,968,042 - Receivables (net) Property taxes 25,911,934 -25,911,934 3,906,063 Other taxes 359,077 -359,077 5,838 Accounts 1,874,306 1,367,236 3,241,542 - Loans 608,961 -608,961 - Other 2,789,368 3,984 2,793,352 - Due from other governments 1,661,356 -1,661,356 - Internal balances (668,310)668,310 -- Inventories 434,119 70,257 504,376 - Prepaid items 625,950 35,654 661,604 26,446 Due from fiduciary funds 51,808 -51,808 - Capital Assets Capital assets not being depreciated 104,915,713 486,000 105,401,713 219,000 Capital assets being depreciated, net of accumulated depreciation 95,694,118 50,381,287 146,075,405 3,099,135 Total Assets 291,893,891 60,497,059 352,390,950 10,150,425 DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding 43,189 374,307 417,496 - Deferred outflows of resources related to pensions 8,874,943 723,629 9,598,572 672,819 Total Deferred Outflows of Resources 8,918,132 1,097,936 10,016,068 672,819 LIABILITIES Accounts payable 2,236,726 429,594 2,666,320 58,590 Accrued liabilities 1,845,350 86,686 1,932,036 68,891 Accrued interest payable 371,795 135,002 506,797 - Deposits 1,053,363 -1,053,363 - Unearned revenue 1,984,282 312,501 2,296,783 - Due to fiduciary funds 14,575 -14,575 - Noncurrent Liabilities Due within one year 1,902,156 1,957,000 3,859,156 33,051 Due in more than one year 86,426,657 13,391,432 99,818,089 1,608,754 Total Liabilities 95,834,904 16,312,215 112,147,119 1,769,286 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources related to pensions 2,088,030 81,977 2,170,007 76,584 Property taxes levied for future periods 25,911,934 -25,911,934 3,906,063 Total Deferred Inflows of Resources 27,999,964 81,977 28,081,941 3,982,647 NET POSITION Net investment in capital assets 170,568,584 37,504,482 208,073,066 3,259,399 Restricted for Culture and recreation 3,302,996 -3,302,996 - Highways and streets 1,304,150 -1,304,150 - Public safety 579,449 -579,449 - Cemetery purposes 6,269,175 -6,269,175 - Affordable housing 1,375,879 -1,375,879 - Capital projects 1,578,300 -1,578,300 - Debt service 1,067,027 -1,067,027 - Unrestricted (9,068,405)7,696,321 (1,372,084)1,811,912 TOTAL NET POSITION $176,977,155 $45,200,803 $222,177,958 $5,071,311 See accompanying notes to financial statements. Page 1746 CITY OF LAKE FOREST STATEMENT OF ACTIVITIES For the Year Ended April 30, 2017 Program Revenues Functions/Programs Expenses Charges for Services Operating Grants and Contributions Capital Grants and Contributions Primary Government Governmental Activities General government $16,882,976 $8,860,169 $264,101 $1,174,000 Highway and streets 10,923,639 782,953 500,607 - Sanitation 2,611,231 734,111 -- Culture and recreation 10,023,195 2,810,762 306,804 - Public safety 17,048,209 1,689,547 17,067 - Interest on long-term debt 1,559,100 --- Total Governmental Activities 59,048,350 14,877,542 1,088,579 1,174,000 Business-type Activities Waterworks and Sewerage 8,510,811 7,873,741 -- Deerpath Golf Course 2,095,510 1,606,661 -- Total Business-type Activities 10,606,321 9,480,402 -- Total Primary Government $69,654,671 $24,357,944 $1,088,579 $1,174,000 Component Unit Lake Forest Library $3,976,005 $52,120 $35,010 $- General Revenues Taxes Property Home rule sales Utility Real estate transfer Other Intergovernmental Sales Income Telecommunication Replacement Other Investment income Total General Revenues Transfers Total General Revenues and Transfers Change in net position NET POSITION - Beginning of Year NET POSITION - END OF YEAR See accompanying notes to financial statements. Page 1847 Net (Expenses) Revenues and Changes in Net Position Primary Government Component Unit Governmental Activities Business-type Activities Totals Lake Forest Library $(6,584,706)$-$(6,584,706)$- (9,640,079)-(9,640,079)- (1,877,120)-(1,877,120)- (6,905,629)-(6,905,629)- (15,341,595)-(15,341,595)- (1,559,100)-(1,559,100)- (41,908,229)-(41,908,229)- -(637,070)(637,070)- -(488,849)(488,849)- -(1,125,919)(1,125,919)- (41,908,229)(1,125,919)(43,034,148)- ---(3,888,875) 25,928,864 -25,928,864 3,910,955 639,542 -639,542 - 2,305,619 -2,305,619 - 1,398,160 -1,398,160 - 265,736 -265,736 - 2,190,065 -2,190,065 - 2,306,546 -2,306,546 - 1,290,556 -1,290,556 - 144,942 -144,942 36,677 225,690 2,450 228,140 - 1,042,049 58,366 1,100,415 27,573 37,737,769 60,816 37,798,585 3,975,205 (360,000)360,000 -- 37,377,769 420,816 37,798,585 3,975,205 (4,530,460)(705,103)(5,235,563)86,330 181,507,615 45,905,906 227,413,521 4,984,981 $176,977,155 $45,200,803 $222,177,958 $5,071,311 See accompanying notes to financial statements. Page 1948 CITY OF LAKE FOREST BALANCE SHEET GOVERNMENTAL FUNDS As of April 30, 2017 General Parks and Recreation Capital Improvements Debt Service Nonmajor Governmental Funds Totals ASSETS Cash and cash equivalents $29,929,975 $3,338,125 $5,599,509 $1,438,822 $5,509,658 $45,816,089 Investments ----4,968,042 4,968,042 Receivables (net) Property taxes 17,989,460 5,461,334 819,288 1,641,852 -25,911,934 Other taxes 359,077 ----359,077 Accounts 665,504 208,755 1,000,047 --1,874,306 Loans 608,961 ----608,961 Other 65,890 ---979,696 1,045,586 Due from other governments 1,611,944 6,991 --42,421 1,661,356 Advances to other funds -125,000 --380,000 505,000 Due from fiduciary funds ----51,808 51,808 Inventories 89,853 ----89,853 Prepaid items 79,346 ---31,121 110,467 TOTAL ASSETS $51,400,010 $9,140,205 $7,418,844 $3,080,674 $11,962,746 $83,002,479 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities Accounts payable $588,612 $210,052 $837,439 $-$76,734 $1,712,837 Accrued liabilities 786,391 160,831 --18,800 966,022 Deposits 1,004,053 3,310 28,000 -18,000 1,053,363 Unearned revenue 1,439,471 528,228 8,624 -6,745 1,983,068 Advances from other funds --380,000 --380,000 Due to fiduciary funds 14,575 ----14,575 Total Liabilities 3,833,102 902,421 1,254,063 -120,279 6,109,865 Deferred Inflows of Resources Property taxes levied for a future period 17,989,460 5,461,334 819,288 1,641,852 -25,911,934 Unavailable revenues --769,979 -676,844 1,446,823 Total Deferred Inflows of Resources 17,989,460 5,461,334 1,589,267 1,641,852 676,844 27,358,757 Fund Balances Nonspendable 778,160 125,000 --411,121 1,314,281 Restricted -2,651,450 4,575,514 1,438,822 10,754,502 19,420,288 Unassigned 28,799,288 ----28,799,288 Total Fund Balances 29,577,448 2,776,450 4,575,514 1,438,822 11,165,623 49,533,857 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AN D FUND BALANCES $51,400,010 $9,140,205 $7,418,844 $3,080,674 $11,962,746 $83,002,479 See accompanying notes to financial statements. Page 2049 CITY OF LAKE FOREST RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION As of April 30, 2017 Total Fund Balances - Governmental Funds $49,533,857 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental funds are not financial resources and, therefore, are not reported in the funds. See Note III. C.200,609,831 Less amount reported in internal service funds below.(13,718) Some receivables that are not currently available are reported as unavailable revenues in the fund financial statements but are recognized as revenue when earned in the government-wide statements.1,446,823 Deferred outflows of resources related to pensions do not relate to current financial resources and are not reported in the governmental funds.8,874,943 Less amount reported in internal service funds below.(238,636) Deferred inflows of resources related to pensions do not relate to current financial resources and are not reported in the governmental funds.(2,088,030) Less amount reported in internal service funds below.27,202 Some liabilities, including long-term debt, are not due and payable in the current period and therefore, are not reported in the funds. Bonds and notes payable (35,140,565) Compensated absences (1,816,263) Accrued interest (371,795) Unamortized debt discount 25,788 Unamortized debt premium (144,125) Net pension liabilities (50,959,279) Other post-employment obligation (294,369) Less amount reported in internal service funds below.528,099 A deferred charge on refunding represents a consumption of net position that applies to a future period and, therefore, is not reported in the funds.43,189 The net position of the internal service funds are included in the governmental activities in the Statement of Net Position.6,954,203 NET POSITION OF GOVERNMENTAL ACTIVITIES $176,977,155 See accompanying notes to financial statements. Page 2150 CITY OF LAKE FOREST STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For the Year Ended April 30, 2017 General Parks and Recreation Capital Improvements Debt Service Nonmajor Governmental Funds Totals REVENUES Taxes: Property $18,024,168 $5,472,173 $9,764 $2,422,759 $-$25,928,864 Other 3,114,897 -1,446,160 -48,000 4,609,057 Intergovernmental 6,114,346 42,792 --499,630 6,656,768 Licenses and permits 5,157,398 ----5,157,398 Fines, forfeitures and penalties 312,643 ---8,525 321,168 Charges for services 3,051,184 2,520,926 712,741 -1,720,466 8,005,317 Grants and contributions 8,218 167,911 898,520 153,915 191,172 1,419,736 Investment income 203,554 36,617 47,110 17,266 684,968 989,515 Miscellaneous 791,954 41,516 4,678 -3,583 841,731 Total Revenues 36,778,362 8,281,935 3,118,973 2,593,940 3,156,344 53,929,554 EXPENDITURES Current General government 9,895,864 -417,597 6,250 1,261,575 11,581,286 Highways and streets 2,276,480 ---841,981 3,118,461 Sanitation 2,311,435 ----2,311,435 Culture and recreation -7,995,380 --536,909 8,532,289 Public safety 14,767,076 ---359,798 15,126,874 Capital Outlay -539,359 4,489,106 -411,004 5,439,469 Debt Service Principal retirement 173,360 --7,733,336 -7,906,696 Interest and fiscal charges ---1,639,191 -1,639,191 Total Expenditures 29,424,215 8,534,739 4,906,703 9,378,777 3,411,267 55,655,701 Excess (deficiency) of revenues over expenditures 7,354,147 (252,804)(1,787,730)(6,784,837)(254,923)(1,726,147) OTHER FINANCING SOURCES (USES) Transfers in 13,991 364,498 376,568 6,781,993 239,611 7,776,661 Proceeds from capital asset sales --5,631,108 -5,000 5,636,108 Transfers out (1,572,883)(358,000)(5,615,219)(235,346)(355,213)(8,136,661) Total Other Financing Sources (Uses)(1,558,892)6,498 392,457 6,546,647 (110,602)5,276,108 Net Change in Fund Balances 5,795,255 (246,306)(1,395,273)(238,190)(365,525)3,549,961 FUND BALANCES - Beginning of Year 23,782,193 3,022,756 5,970,787 1,677,012 11,531,148 45,983,896 FUND BALANCES - END OF YEAR $29,577,448 $2,776,450 $4,575,514 $1,438,822 $11,165,623 $49,533,857 See accompanying notes to financial statements. Page 2251 CITY OF LAKE FOREST RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended April 30, 2017 Net change in fund balances - total governmental funds $3,549,961 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of net position the cost of these assets is capitalized and they are depreciated over their estimated useful lives and reported as depreciation expense in the statement of activities. Capital outlay is reported as an expenditure in the fund financial statements but is capitalized in the government-wide financial statements 669,106 Proceeds from the sale of capital assets are included as an other financing source in the fund financial statements but are not recorded as revenue in the government-wide financial statements.(5,631,108) Depreciation is reported in the government-wide financial statements (5,943,643) Loss on sale or retirement of capital assets (3,243,149) Less amount reported in internal service funds below 4,805 Receivables not currently available are reported as revenue when collected or currently available in the fund financial statements but are recognized as revenue when earned in the government-wide financial statements. Unavailable revenue 893,430 Debt issued provides current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Principal repaid 7,906,696 Governmental funds report debt premiums and discounts as other financing sources (uses) or expenditures. However, in the statement of net position, these are reported as additions to or deductions from long-term debt. These are allocated over the period the debt is outstanding in the statement of activities and are reported as interest expense. Debt discount (19,694) Debt premium 21,382 Some expenses in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. Compensated absences (85,519) Accrued interest on debt 103,915 Amortization of deferred charge on refunding (25,512) Net pension liability (1,884,198) Deferred outflows of resources related to pensions (1,702,050) Deferred inflows of resources related to pensions (67,322) Other post-employment benefits (9,831) Less amount reported in internal service funds below 102,704 Internal service funds are used by management to charge self insurance costs and fleet charges to individual funds. The change in net position of the internal service fund reported with governmental activities 829,567 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $(4,530,460) See accompanying notes to financial statements. Page 2352 CITY OF LAKE FOREST STATEMENT OF NET POSITION PROPRIETARY FUNDS As of April 30, 2017 Business-type Activities - Enterprise Funds Waterworks and Sewerage Nonmajor Enterprise Fund - Deerpath Golf Course Totals Governmental Activities - Internal Service Funds ASSETS Current Assets Cash and cash equivalents $7,004,002 $480,329 $7,484,331 $6,851,360 Receivables Accounts 1,358,756 8,480 1,367,236 - Other 3,984 -3,984 1,743,782 Inventories -70,257 70,257 344,266 Prepaid items -35,654 35,654 515,483 Total Current Assets 8,366,742 594,720 8,961,462 9,454,891 Noncurrent Assets Capital Assets Capital assets not being depreciated 345,896 140,104 486,000 - Capital assets being depreciated 103,309,398 4,112,270 107,421,668 48,047 Less: Accumulated depreciation (54,160,471)(2,879,910)(57,040,381)(34,329) Total Noncurrent Assets 49,494,823 1,372,464 50,867,287 13,718 Total Assets 57,861,565 1,967,184 59,828,749 9,468,609 DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding 356,547 17,760 374,307 - Deferred outflows of resources related to pensions 711,939 11,690 723,629 238,636 Total Deferred Outflows of Resources 1,068,486 29,450 1,097,936 238,636 See accompanying notes to financial statements. Page 2453 CITY OF LAKE FOREST STATEMENT OF NET POSITION PROPRIETARY FUNDS As of April 30, 2017 Business-type Activities - Enterprise Funds Waterworks and Sewerage Nonmajor Enterprise Fund - Deerpath Golf Course Totals Governmental Activities - Internal Service Funds LIABILITIES Current Liabilities Accounts payable 229,082 200,512 429,594 523,889 Accrued liabilities 65,278 21,408 86,686 879,328 Accrued interest payable 128,592 6,410 135,002 - Unearned revenue 17,796 294,705 312,501 1,214 General obligation bonds 1,872,000 80,000 1,952,000 - Compensated absences 4,981 19 5,000 - Total Current Liabilities 2,317,729 603,054 2,920,783 1,404,431 Noncurrent Liabilities Long-Term Debt General obligation debt payable 11,217,968 567,143 11,785,111 - Compensated absences 191,775 668 192,443 58,935 Net pension liability 1,391,059 22,819 1,413,878 469,164 Other Liabilities Advances from other funds -125,000 125,000 - Total Noncurrent Liabilities 12,800,802 715,630 13,516,432 528,099 Total Liabilities 15,118,531 1,318,684 16,437,215 1,932,530 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources related to pensions 80,653 1,324 81,977 27,202 Total Deferred Inflows of Resources 80,653 1,324 81,977 27,202 NET POSITION Net investment in capital assets 36,761,402 743,080 37,504,482 13,718 Unrestricted 6,969,465 (66,454)6,903,011 7,733,795 TOTAL NET POSITION $43,730,867 $676,626 $44,407,493 $7,747,513 Adjustments to reflect the consolidation of internal service funds activities related to enterprise funds.793,310 Net Position of Business-type Activities reported in the government-wide statement of net position.$45,200,803 See accompanying notes to financial statements. Page 2554 CITY OF LAKE FOREST STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended April 30, 2017 Business-type Activities - Enterprise Funds Waterworks and Sewerage Nonmajor Enterprise Fund - Deerpath Golf Course Totals Governmental Activities - Internal Service Funds OPERATING REVENUES Charges for services $7,763,663 $1,605,823 $9,369,486 $9,216,007 Connection fees 102,550 -102,550 - Miscellaneous 7,528 838 8,366 - Total Operating Revenues 7,873,741 1,606,661 9,480,402 9,216,007 OPERATING EXPENSES General and administrative 2,550,163 641,484 3,191,647 8,362,395 Operations and maintenance 2,852,898 1,289,195 4,142,093 - Depreciation and amortization 2,692,469 172,353 2,864,822 4,805 Total Operating Expenses 8,095,530 2,103,032 10,198,562 8,367,200 Operating Income (Loss)(221,789)(496,371)(718,160)848,807 NONOPERATING REVENUES (EXPENSES) Investment income 56,774 1,592 58,366 52,534 Loss on disposal of capital assets (17,365)-(17,365)- Interest expense (443,202)(16,016)(459,218)- Paying agent fees (500)-(500)- Total Nonoperating Revenues (Expenses)(404,293)(14,424)(418,717)52,534 Income (Loss) Before Transfers (626,082)(510,795)(1,136,877)901,341 TRANSFERS Transfers in 2,000 358,000 360,000 - Total Transfers 2,000 358,000 360,000 - Change in Net Position (624,082)(152,795)(776,877)901,341 NET POSITION - Beginning of Year 44,354,949 829,421 45,184,370 6,846,172 NET POSITION- END OF YEAR $43,730,867 $676,626 44,407,493 $7,747,513 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds 71,774 Change in Net Position of Business-type Activities reported in the government-wide statement of activities.$(705,103) See accompanying notes to financial statements. Page 2655 CITY OF LAKE FOREST STATEMENT OF CASH FLOW S PROPRIETARY FUNDS For the Year Ended April 30, 2017 Business-type Activities - Enterprise Funds Waterworks and Sewerage Nonmajor Enterprise Fund - Deerpath Golf Course Totals Governmental Activities - Internal Service Funds CASH FLOWS FROM OPERATING AC TIVITIES Received from customers $7,867,771 $1,616,165 $9,483,936 $8,566,847 Paid to suppliers for goods and services (2,757,588)(1,231,622)(3,989,210)(7,247,123) Paid to employees (2,231,384)(631,951)(2,863,335)(702,943) Net Cash Flows From Operating Activities 2,878,799 (247,408)2,631,391 616,781 CASH FLOWS FROM INVESTING AC TIVITIES Investments sold and matured 56,774 1,592 58,366 52,534 Net Cash Flows From Investing Activities 56,774 1,592 58,366 52,534 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from (to) other funds (164,819)473,359 308,540 - Net Cash Flows From Noncapital Financing Activities (164,819)473,359 308,540 - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid (1,822,000)(80,000)(1,902,000)- Interest paid (376,830)(12,598)(389,428)- Acquisition and construction of capital assets (820,564)(112,356)(932,920)- Other - paying agent fees (500)-(500)- Net Cash Flows From Capital and Related Financing Activities (3,019,894)(204,954)(3,224,848)- Net Change in Cash and Cash Equivalents (249,140)22,589 (226,551)669,315 CASH AND CASH EQUIVALENTS - Beginning of Year 7,253,142 457,740 7,710,882 6,182,045 CASH AND CASH EQUIVALENTS - END OF YEAR $7,004,002 $480,329 $7,484,331 $6,851,360 See accompanying notes to financial statements. Page 2756 CITY OF LAKE FOREST STATEMENT OF CASH FLOW S PROPRIETARY FUNDS For the Year Ended April 30, 2017 Business-type Activities - Enterprise Funds Waterworks and Sewerage Nonmajor Enterprise Fund - Deerpath Golf Course Totals Governmental Activities - Internal Service Funds RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss)$(221,789)$(496,371)$(718,160)$848,807 Adjustments to Reconcile Operating Income (Loss) to Net Cash Flows From Operating Activities Depreciation 2,692,469 172,353 2,864,822 4,805 Changes in assets and liabilities Accounts receivable (3,999)(3,198)(7,197)(647,839) Inventories -4,694 4,694 (33,560) Prepaid items -16,842 16,842 73,246 Deferred outflows related to pensions 282,357 (7,292)275,065 104,731 Accounts payable 95,310 36,037 131,347 125,651 Accrued liabilities ---146,805 Accrued salaries 5,169 (964)4,205 (2,517) Net pension liability (36,999)16,541 (20,458)(21,782) Deferred inflows related to pensions 67,555 1,266 68,821 22,699 Unearned revenue (1,971)12,702 10,731 (1,321) Compensated absences 697 (18)679 (2,944) NET CASH FLOWS FROM OPERATING ACTIVITIES $2,878,799 $(247,408)$2,631,391 $616,781 NONCASH CAPITAL AND RELATED FINANCING AC TIVITIES None See accompanying notes to financial statements. Page 2857 CITY OF LAKE FOREST STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS As of April 30, 2017 Private Purpose Trust Pension Trusts Agency Fund ASSETS Cash $-$843,637 $60,174 Money markets 22,100 67,844 - Investments U.S. treasury obligations -10,318,986 - U.S. government agencies -3,510,897 - Municipal/corporate bonds -8,177,386 - Equity securities 247,548 -- Mutual funds 271,522 37,756,756 - Real estate investment fund -3,152,759 - Interest receivable -147,795 - Prepaid items 320 11,867 - Due from primary government -14,575 - Total Assets 541,490 64,002,502 60,174 LIABILITIES Accounts payable 481 33,990 - Due to primary government 51,808 -- Due to special assessment districts --60,174 Total Liabilities 52,289 33,990 60,174 NET POSITION Restricted for pension benefits -63,968,512 - Restricted for other purposes 489,201 -- TOTAL NET POSITION $489,201 $63,968,512 $- See accompanying notes to financial statements. Page 2958 CITY OF LAKE FOREST STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS For the Year Ended April 30, 2017 Private Purpose Trust Pension Trusts AD DITIONS Contributions Employer $-$3,107,087 Employee -662,078 Miscellaneous -936 Total Contributions -3,770,101 Investment income Interest 9,559 1,238,354 Net appreciation in fair value of investments 35,874 4,591,417 Total Investment Income 45,433 5,829,771 Less Investment expense -194,453 Net Investment Income 45,433 5,635,318 Total Additions 45,433 9,405,419 DEDUCTIONS Pension benefits and refunds -4,728,944 Other administrative expenses 31,330 9,200 Total Deductions 31,330 4,738,144 Change in Net Position 14,103 4,667,275 NET POSITION - Beginning of Year 475,098 59,301,237 NET POSITION - END OF YEAR $489,201 $63,968,512 See accompanying notes to financial statements. Page 3059 CITY OF LAKE FOREST INDEX TO NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE Page I Summary of Significant Accounting Policies 32 A.Reporting Entity 32 B.Government-W ide and Fund Financial Statements 33 C.Measurement Focus, Basis of Accounting, and Financial Statement Presentation 37 D.Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position or Equity 39 1.Deposits and Investments 39 2.Receivables 43 3.Inventories and Prepaid Items 44 4.Capital Assets 44 5.Deferred Outflows of Resources 45 6.Compensated Absences 46 7.Long-Term Obligations 46 8.Deferred Inflows of Resources 46 9. Equity Classifications 47 II Stewardship, Compliance, and Accountability 49 A.Budgetary Information 49 B.Excess Expenditures Over Appropriations 50 III Detailed Notes on All Funds 50 A.Deposits and Investments 50 B.Receivables 56 C.Capital Assets 57 D.Interfund Advances and Transfers 60 E.Long-Term Obligations 62 F.Lease Disclosures 65 G.Fund Balances 66 IV Other Information 67 A.Employees' Retirement System 67 B.Risk Management 82 C.Joint Ventures 84 D.Commitments and Contingencies 85 E.Other Postemployment Benefits 86 F.Subsequent Events 88 G.Laurel and W estern Tax Increment Financing (TIF) District 88 H.Effect of New Accounting Standards on Current-Period Financial Statements 89 See accompanying notes to financial statements. Page 3160 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Lake Forest, Illinois (the City) was incorporated in 1861 under a charter granted by the Illinois State Legislature that was amended in 1869. The City is a home-rule municipality, under the 1970 Illinois Constitution, located in Lake County, Illinois. The City provides the following services as authorized by its charter: public safety (police and fire protection), water and sewer, recreation, refuse collection, a senior center, public library, a cemetery, and a golf course. The accounting policies of the City of Lake Forest, Illinois conform to accounting principles generally accepted in the United States of America as applicable to governmental units. The accepted standard- setting body for establishing governmental accounting and financial reporting principles is the Governmental Accounting Standards Board (GASB). A.REPORTING ENTITY This report includes all of the funds of the City. The reporting entity for the City consists of the primary government and its component units. Component units are legally separate organizations for which the primary government is financially accountable or other organizations for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the reporting entity's financial statements to be misleading. The primary government is financially accountable if (1) it appoints a voting majority of the organization's governing body and it is able to impose its will on that organization, (2) it appoints a voting majority of the organization's governing body and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government, (3) the organization is fiscally dependent on and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. Certain legally separate, tax exempt organizations should also be reported as a component unit if all of the following criteria are met: (1) the economic resources received or held by the separate organization are entirely or almost entirely for the direct benefit of the primary government, its component units, or its constituents; (2) the primary government or its component units, is entitled to, or has the ability to access, a majority of the economic resources received or held by the separate organization; and (3) the economic resources received or held by an individual organization that the primary government, or its component units, is entitled to, or has the ability to otherwise access, are significant to the primary government. Component units are reported using one of two methods, discrete presentation or blending. Generally, component units should be discretely presented in a separate column in the financial statements. A component unit should be reported as part of the primary government using the blending method if it meets any one of the following criteria: (1) the primary government and the component unit have substantively the same governing body and a financial benefit or burden relationship exists, (2) the primary government and the component unit have substantively the same governing body and management of the primary government has operational responsibility for the component unit, (3) the component unit serves or benefits, exclusively or almost exclusively, the primary government rather than its citizens, or (4) the total debt of the component unit will be paid entirely or almost entirely from resources of the primary government. Page 3261 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) A.REPORTING ENTITY (cont.) The Police Pension Employees Retirement System (PPERS) is established for the City's police employees. PPERS functions for the benefit of these employees and is governed by a five-member pension board. Two members appointed by the City’s Mayor with the approval of the City Council, one pension beneficiary elected by the beneficiaries, and two police employees elected by the active police constitute the pension board. The City and the PPERS participants are obligated to fund all PPERS costs based upon actuarial valuations. The State of Illinois is authorized to establish benefit levels and the City is authorized to approve the actuarial assumptions used in the determination of contribution levels. Although it possesses many characteristics of a legally separate government, PPERS is reported as if it were part of the primary government because its sole purpose is to finance and administer the pensions of the City’s police employees and because of the fiduciary nature of such activities. PPERS is reported as a pension trust fund and the data for the pension is included in the government's fiduciary fund financial statements. No separate annual financial report is issued for the PPERS. The Firefighters’ Pension Employees Retirement System (FPERS) is established for the City's firefighters. FPERS functions for the benefit of these employees and is governed by a five-member pension board. Two members appointed by the City’s Mayor with the approval of the City Council, one pension beneficiary elected by the beneficiaries; and two fire employees elected by the active firefighters' constitute the pension board. The City and the FPERS participants are obligated to fund all FPERS costs based upon actuarial valuations. The State of Illinois is authorized to establish benefit levels and the City is authorized to approve the actuarial assumptions used in the determination of contribution levels. Although it possesses many of the characteristics of a legally separate government, FPERS is reported as if it were part of the primary government because its sole purpose is to finance and administer the pensions of the City’s firefighters because of the fiduciary nature of such activities. FPERS is reported as a pension trust fund and the data for the pension is included in the government's fiduciary fund financial statements. No separate annual financial report is issued for the FPERS. Discretely Presented Component Unit Lake Forest Library The government-wide financial statements include the Lake Forest Library (Library) as a component unit. The Library is a legally separate organization governed by a seven-member Board of Trustees. The board of the Library is appointed by the Mayor of the City. The Library is financially accountable to the City as the City's approval is needed for the Library to issue bonded debt. Complete financial statements of the Library are available at the City's Administrative Office, 800 North Field Drive, Lake Forest, Illinois 60045. The Library follows the same accounting policies as the City. B.GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS In February 2015, the GASB issued statement No. 72 - Fair Value Measurement and Application. This statement addresses accounting and financial reporting issues related to fair value measurements. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard was implemented May 1, 2016. Page 3362 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B.GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.) Government-Wide Financial Statements The statement of net position and statement of activities display information about the reporting government as a whole. They include all funds of the reporting entity except for fiduciary funds.The statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The City does not allocate indirect expenses to functions in the statement of activities. 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 contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported as general revenues. Internally dedicated resources are reported as general revenues rather than as program revenues. Fund Financial Statements Financial statements of the City are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts, which constitute its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position/fund balance, revenues, and expenditures/expenses. Page 3463 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B.GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.) Fund Financial Statements (cont.) Funds are organized as major funds or nonmajor funds within the governmental and proprietary statements. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the City or meets the following criteria: a. Total assets/deferred outflows of resources, liabilities/deferred inflows of resources, revenues, or expenditures/expenses of that individual governmental or enterprise fund are at least 10% of the corresponding total for all funds of that category or type, and b. The same element of the individual governmental or enterprise fund that met the 10% test is at least 5% of the corresponding total for all governmental and enterprise funds combined. c. In addition, any other governmental or enterprise fund that the City believes is particularly important to financial statement users may be reported as a major fund. 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 City reports the following major governmental funds: General Fund - accounts for the City's primary operating activities. It is used to account for and report all financial resources except those accounted for and reported in another fund. Parks and Recreation Fund - used to account for the maintenance of parks and recreation programs. Services include a fitness center, dance academy, and a variety of other indoor and outdoor programs. Principal revenue sources for this fund include a dedicated tax levy, grants, contributions, and program fees. Capital Improvements Fund - used to account for revenues to be used to fund City building and infrastructure projects. Debt Service Fund - used to account for and report financial resources that are restricted, committed, or assigned to expenditure for the payment of general long-term debt principal, interest, and related costs. The City reports the following major enterprise fund: Waterworks and Sewerage Fund - accounts for operations of the waterworks and sewerage system for the residents of the City. Page 3564 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B.GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.) Fund Financial Statements (cont.) The City reports the following nonmajor governmental and enterprise funds: Special Revenue Funds - used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes (other than debt service or capital projects). Asset Forfeiture Foreign Fire Insurance Tax Emergency Telephone Parks and Public Land Motor Fuel Tax General Cemetery Senior Resources Commission Housing Trust Capital Projects Funds - used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Route 60 Bridge Improvements Route 60 Intersection Improvements Laurel/W estern Redevelopment TIF Improvements Enterprise Fund - used to account for and report any activity for which a fee is charged to external uses for goods or services, and must be used for activities which meet certain debt or cost recovery criteria. Deerpath Golf Course In addition, the City reports the following fund types: Internal Service Funds - used to account for and report the financing of goods or services provided by one department or agency to other departments or agencies of the City, or to other governmental units, on a cost-reimbursement basis. Fleet Self Insurance Liability Insurance Page 3665 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B.GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.) Fund Financial Statements (cont.) Private-Purpose Trust Fund - used to account for monies provided by private donations on which the investment earnings are expected to be used for the maintenance of each individual's cemetery plot. Pension (and Other Employee Benefit) Trust Funds - used to account for and report resources that are required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, other postemployment benefit plans, or other employee benefit plans. Firefighters' Pension Police Pension Agency Fund - used to account for and report assets held by the City in a trustee capacity or as an agent for individuals, private organizations, and/or other governmental units. C.MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION Government-Wide Financial Statements The government-wide statement of net position and statement of activities are reported using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Property taxes are recognized as revenues in the year for which they are levied. Taxes receivable for the following year are recorded as receivables and deferred inflows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider are met. Special assessments are recorded as revenue when earned. Unbilled receivables are recorded as revenues when services are provided. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Page 3766 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) C.MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION (cont.) Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recorded when they are both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the City considers revenues, except for property taxes and income taxes, to be available if they are collected within 90 days of the end of the current fiscal period. Revenues for property taxes are considered to be available if they are collected within 60 days of the end of the current fiscal year. Revenues for income taxes are considered to be available if they are collected within 120 days of the end of the current fiscal year. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on long-term debt, claims, judgments, compensated absences, and pension expenditures, which are recorded as a fund liability when expected to be paid with expendable available financial resources. Property taxes are recorded in the year levied as receivables and deferred inflows. They are recognized as revenues in the succeeding year when services financed by the levy are being provided. Intergovernmental aids and grants are recognized as revenues in the period the City is entitled the resources and the amounts are available. Amounts owed to the City which are not available are recorded as receivables and unavailable revenues. Amounts received before eligibility requirements (excluding time requirements) are met are recorded as liabilities. Amounts received in advance of meeting time requirements are recorded as deferred inflows. Revenues susceptible to accrual include property taxes, miscellaneous taxes, public charges for services, special assessments and interest. Other general revenues such as fines and forfeitures, inspection fees, recreation fees, and miscellaneous revenues are recognized when received in cash or when measurable and available under the criteria described above. Proprietary and fiduciary fund financial statements (other than agency funds) are reported using the economic resources measurement focus and the accrual basis of accounting, as described previously in this note. Agency funds follow the accrual basis of accounting, and do not have a measurement focus. The proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Waterworks and Sewerage Fund and the Deerpath Golf Course Fund are charges to customers for sales and services. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Page 3867 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) C.MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION (cont.) All Financial Statements 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, deferred outflows of resources, liabilities, and deferred inflows of resources 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. D.ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY 1.Deposits and Investments For purposes of the statement of cash flows, the City considers all highly liquid investments with an initial maturity of three months or less when acquired to be cash equivalents. The City and Library are authorized to invest in the following types of securities under Illinois law and the City's investment policy: Bonds, notes, certificates of indebtedness, treasury bills, or other securities which are guaranteed by the full faith and credit of the United States of America; Bonds, notes, debentures, or other similar obligations of U.S. Government or its agencies; Interest bearing bonds of any county, township, city, incorporated town, municipal corporation, or school district, and the bonds shall be registered in the name of the municipality or held under a custodial agreement at a bank, provided the bonds shall be rated at the time of purchase within the 4 highest general classifications established by a rating service of nationally recognized expertise in rating bonds of both states and their political subdivisions; Interest bearing savings accounts, interest bearing certificates of deposit, interest bearing deposits, or any other investments constituting direct obligations of any bank as defined by the Illinois Banking Act (205 ILCS 5/1 et. seq.), provided, however, that such investments may be made in only banks which are insured by the Federal Deposit Insurance Corporation; Commercial Paper - issuer must be a United States corporation with more than $500 million in assets, rating must be within the highest tier (e.g. A-1, P-1, F-1, D-1, or higher) by two standard rating services, must mature within 180 days of purchase, such purchases cannot exceed 10% of the corporation's outstanding obligations, and such purchases cannot exceed one-third of funds; Page 3968 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D.ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (cont.) 1.Deposits and Investments (cont.) Money Market Mutual Funds - registered under the Investment Company Act of 1940 (15 U.S.C.A. § 80a-1 et. seq.), provided the portfolio is limited to bonds, notes, certificates, treasury bills, or other securities which are guaranteed by the full faith and credit of the federal government as to principal and interest; Short term discount obligations of the Federal National Mortgage Association (established by or under the National Housing Act (1201 U.S.C. 1701 et. seq.)), or in shares or other forms of securities legally issuable by savings banks or savings and loans associations incorporated under the laws of Illinois or any other state or under the laws of the United States, provided, however, that the shares or investment certificates of such savings banks or savings and loans associations are insured by the Federal Deposit Insurance Corporation; Dividend-bearing share accounts, share certificate accounts, or class of share accounts of a credit union chartered under the law of the State of Illinois or the laws of the United States; provided, however, the principal office of the credit unions must be located within the State of Illinois; and, provided further, that such investments may be made only in those credit union accounts of which are insured by applicable law; The Public Treasurer's Investment Pool created under Section 17 of the State Treasurer Act (15 ILCS 505/17) or in a fund managed, operated, and administered by a bank subsidiary of a bank, or subsidiary of a bank holding company, or use the services of such an entity to hold and invest or advise regarding the investment of any public funds; and Repurchase agreements of government securities having the meaning set out in the Government Securities Act of 1986 (15 U.S.C.A § 780-5) subject to the provisions of that Act and the regulations issued there under, provided, however, that such government securities, unless registered or inscribed in the name of the City, shall be purchased through banks or trust companies authorized to do business in the State of Illinois; and such other repurchase agreements as are authorized in subsection (h) of Section 2 of the Public Funds Investment Act (30 ILCS 235/2). Repurchase agreements may be executed only with approved financial institutions or broker/dealers meeting the City's established standards, which shall include mutual execution of a Master Repurchase Agreement adopted by the City. The Lake Forest Cemetery Investment Fund is also permitted to invest in the following instruments: Common and preferred stock authorized for investments of trust funds under the laws of the State of Illinois limited to 60% of the fund's investments. Page 4069 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D.ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (cont.) 1.Deposits and Investments (cont.) In addition, Pension Funds are also permitted to invest in the following instruments: Common and preferred stock authorized for investments of trust funds under the laws of the State of Illinois limited to 35% of the fund's investments; General accounts of Illinois-licensed life insurance companies; Separate accounts of Illinois-licensed insurance companies invested in stocks, bonds, and real estate limited to 10% of the fund's investments; Bonds issued by any county, city, township, village, incorporated town, municipal corporation, or school district in Illinois; and Tax anticipation warrants issued by any city, township, village, incorporated town, or fire protection district in Illinois. Investments are stated at fair value, which is the amount at which an investment could be exchanged in a current transaction between willing parties. Fair values are based on quoted market prices. No investments are reported at amortized cost. Adjustments necessary to record investments at fair value are recorded in the operating statement as increases or decreases in investment income. Investment income on commingled investments of municipal accounting funds is allocated based on average balances. The difference between the bank statement balance and carrying value is due to outstanding checks and/or deposits in transit. 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 for which the investments could be sold. Page 4170 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D.ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (cont.) 1.Deposits and Investments (cont.) The Police Pension Fund’s investment policy, in accordance with Illinois Statutes, establishes the following target allocation across asset classes: Asset Class Target Long-Term Expected Real Rate of Return Fixed Income 35%2.00% Domestic Equities 36%5.60% International Equities 18%5.90% Real Estate 10%5.40% Cash 1%(0.40)% Illinois Compiled Statues (ILCS) limit the Police Pension Fund's investments in equities, mutual funds and variable annuities to 65%. Securities in any one company should not exceed 5% of the total fund. The long-term expected rate of return on the Police Pension Fund's investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (net of pension plan investm ent expense and inflation) were developed for each major asset class. These ranges were combined to produce long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the Police Pension Fund's target asset allocation are listed in the table above. Page 4271 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D.ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (cont.) 1.Deposits and Investments (cont.) The Firefighters’ Pension Fund’s investment policy, in accordance with Illinois Statutes, establishes the following target allocation across asset classes: Asset Class Target Long-Term Expected Real Rate of Return Ultra-Short Fixed Income 0.60%1.5% US Fixed Income 34.90%3.1% High Yield 3.90%7.0% US Large Cap Growth Equity 17.10%8.4% US Large Cap Value Equity 12.90%8.1% US Mid Cap Growth Equity 3.10%9.4% US Mid Cap Value Equity 12.80%8.7% US Small Cap Value Equity 1.45%9.5% Europe Equity 7.00%7.0% Japan Equity 4.55%7.5% Equity Return Assets 1.7%5.7% Illinois Compiled Statues (ILCS) limit the Firefighters' Pension Fund's investments in equities, mutual funds and variable annuities to 65%. Securities in any one company should not exceed 5% of the total fund. The long-term expected rate of return on the Firefighters' Pension Fund's investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (net of pension plan investment expense and inflation) were developed for each major asset class. These ranges were combined to produce long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates or arithmetic real rates of return for each major asset class included in the Firefighters' Pension Fund's target asset allocation are listed in the table above. See Note III. A. for further information. 2.Receivables Tax bills for levy year 2016 are prepared by Lake County and issued in May 2017 and are payable in two installm ents, on or about June 1, 2017 and September 1, 2017 or within 30 days of the tax bills being issued. Page 4372 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D.ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (cont.) 2.Receivables (cont.) The county collects such taxes and remits them periodically. The 2016 property tax levy is recognized as a receivable and deferral in fiscal 2017, net the 1.5% allowance for uncollectible. As the taxes become available to finance current expenditures, they are recognized as revenues. At April 30, 2017, the property taxes receivable and related deferred inflows consisted of the estimated amount collectible from the 2016 levy. Property taxes for levy year 2017 attaches as an enforceable lien on January 1, 2017, on property values assessed as of the same date. Taxes are levied by December following the lien date (by passage of a Tax Levy Ordinance). The 2017 tax levy, which attached as an enforceable lien on the property as of January 1, 2017, has not been recorded as a receivable as of April 30, 2017, as the tax has not yet been levied by the City and will not be levied until December 2017, and therefore, the levy is not measurable at April 30, 2017. During the course of operations, transactions occur between individual funds that may result in amounts owed between funds. Short-term interfund loans are reported as "due to and from other funds." Long-term interfund loans (noncurrent portion) are reported as "advances from and to other funds." Interfund receivables and payables between funds within governmental activities are eliminated in the statement of net position. Any residual balances outstanding between the governmental activities and business-type activities are reported in the governmental-wide financial statements as internal balances. 3.Inventories and Prepaid Items Inventories are recorded at cost and are recorded as expenditures/expenses when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. 4.Capital Assets Government-Wide Statements Capital assets, which include property, plant and equipment, are reported in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $10,000 and an estimated useful life in excess of one year. All capital assets are valued at historical cost, or estimated historical cost if actual amounts are unavailable. Donated capital assets are recorded at their estimated fair value at the date of donation. Page 4473 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D.ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (cont.) 4.Capital Assets (cont.) Government-Wide Statements (cont.) Additions to and replacements of capital assets of business-type activities are recorded at original cost, which includes material, labor, overhead, and an allowance for the cost of funds used during construction when significant. For tax-exempt debt, the amount of interest capitalized equals the interest expense incurred during construction netted against any interest revenue from temporary investment of borrowed fund proceeds. No interest was capitalized during the current year. The cost of renewals and betterments relating to retirement units is added to plant accounts. The cost of property replaced, retired or otherwise disposed of, is deducted from plant accounts and, generally, together with removal costs less salvage, is charged to accumulated depreciation. Depreciation and amortization of all exhaustible capital assets is recorded as an allocated expense in the statement of activities, with accumulated depreciation and amortization reflected in the statement of net position. Depreciation and amortization is provided over the assets' estimated useful lives using the straight-line method. The range of estimated useful lives by type of asset is as follows: Public domain infrastructure 20 - 60 Years Buildings 30 - 50 Years Improvements other than buildings 40 - 80 Years Vehicles, machinery, equipment, and software 3 - 20 Years Water mains 40 Years Sanitary sewers 50 Years Fund Financial Statements In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same way as in the government-wide statements. 5. Deferred Outflows of Resources A deferred outflow of resources represents a consumption of net position/fund balance that applies to a future period and will not be recognized as an outflow of resources (expense/expenditure) until that future time. A deferred charge on refunding arises from the advance refunding of debt. The difference between the cost of the securities placed in trust for future payments of the refunded debt and the net carrying value of that debt is deferred and amortized as a component of interest expense over the shorter of the term of the refunding issue or the original term of the refunded debt. The unamortized amount is reported as a deferred outflow of resources in the government-wide and proprietary fund financial statements. Page 4574 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D.ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (cont.) 6.Compensated Absences Under terms of employment, employees are granted sick leave and vacations in varying amounts. Only benefits considered to be vested are disclosed in these statements. All vested vacation and sick leave pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements, and are payable with expendable resources. 7.Long-Term Obligations All long-term obligations to be repaid from governmental and business-type resources are reported as liabilities in the government-wide statements. The long-term obligations consist primarily of notes and bonds payable, net pension liability, and accrued compensated absences. Long-term obligations for governmental funds are not reported as liabilities in the fund financial statements. The face value of debts (plus any premiums) are reported as other financing sources and payments of principal and interest are reported as expenditures. The accounting in proprietary funds is the same as it is in the government-wide statements. For the government-wide statements and proprietary fund statements, bond premiums and discounts are amortized over the life of the issue using the effective interest method. The balance at year end is shown as an increase or decrease in the liability section of the statement of net position. 8.Deferred Inflows of Resources A deferred inflow of resources represents an acquisition of net position/fund balance that applies to a future period and therefore will not be recognized as an inflow of resources (revenue) until that future time. Page 4675 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D.ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (cont.) 9. Equity Classifications Government-Wide Statements Equity is classified as net position and displayed in three components: a. Net investment in capital assets - Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances (excluding unspent debt proceeds) of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. b. Restricted net position - Consists of net position with constraints placed on their use either by 1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or, 2) law through constitutional provisions or enabling legislation. c. Unrestricted net position - All other net positions that do not meet the definitions of "restricted" or "net investment in capital assets." When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. Fund Statements Governmental fund balances are displayed as follows: a. Nonspendable - Includes fund balance amounts that cannot be spent either because they are not in spendable form or because legal or contractual requirements require them to be maintained intact. b. Restricted - Consists of fund balances with constraints placed on their use either by 1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or 2) law through constitutional provisions or enabling legislation. c. Committed - Includes fund balance amounts that are constrained for specific purposes that are internally imposed by the government through formal action of the highest level of decision making authority. Fund balance amounts are committed through a formal action (resolution) of the City Council. This formal action must occur prior to the end of the reporting period, but the amount of the commitment, which will be subject to the constraints, may be determined in the subsequent period. Any changes to the constraints imposed require the same formal action of the City Council that originally created the commitment. Page 4776 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) D.ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION OR EQUITY (cont.) 9. Equity Classifications (cont.) Fund Statements (cont.) d. Assigned - Includes spendable fund balance amounts that are intended to be used for specific purposes that do not meet the criteria to be classified as restricted or committed. Intent is expressed by: a) The City Council itself; or b) a body or official to which the City Council has delegated the authority to assign amounts to be used for specific purposes. Annually, the City Council approves the fiscal policy which delegates this authority to the City's Finance Director. Within the other governmental fund types (special revenue, debt service, capital projects) resources are assigned in accordance with the established fund purpose and approved budget/appropriation. Assignments may take place after the end of the reporting period. e. Unassigned - Includes residual positive fund balance within the general fund which has not been classified within the other above mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those purposes. Proprietary fund equity is classified the same as in the government-wide statements. In the General Fund, it is the City's policy to consider restricted resources to have been spent first when an expenditure is incurred for which both restricted and unrestricted (i.e. committed, assigned, or unassigned) fund balances are available, followed by committed, and then assigned fund balances. Unassigned amounts are only used after the other resources have been used. In other governmental funds (special revenue, capital projects, and debt service fund types), it is the City's policy to consider restricted resources to have been spent last. W hen an expenditure is incurred for purposes for which both restricted and unrestricted fund balances are available, the City first uses any assigned amounts, followed by committed and then restricted amounts. See Note III. G. for further information. Page 4877 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE II - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A.BUDGETARY INFORMATION The budget amounts represent the operating budget for the City and the appropriations represent the City's legal expenditure limit. The City Council follows these procedures in establishing the budgetary and appropriations data reflected in the financial statements: (1)The City Manager submits to the City Council a proposed operating budget for the fiscal year. The operating budget includes proposed expenditures and estimated revenues. (2)Public budget and appropriations meetings are conducted by the City to obtain taxpayer comments. (3)The budget and the appropriation ordinance, which is 10% higher than the budget, are both legally enacted through action of the City Council. Once enacted, the budget cannot be amended without approval from the City Council. Funds may have expenditures in excess of budgeted amounts, but legally may not have expenditures in excess of appropriations. (4)The legal level of budgetary control is the fund level. Management may make transfers of appropriations within a fund. Any expenditures that exceed the total appropriations at the fund level must be approved by the City Council. (5)Formal budgetary integration and legally adopted budgets are employed as a management control device during the year for the General and Special Revenue Funds, through an internal reporting system. Such budgetary integration permits the City's department managers to monitor actual revenues and expenditures relative to budgets on an ongoing basis throughout the year. Formal encumbrance accounting is not used, and appropriations not used by the end of the fiscal year lapse. (6)Governmental fund budgets are adopted for all funds and are on a basis consistent with generally accepted accounting principles (GAAP). All proprietary funds have budgets and are generally in accordance with GAAP except that principal retirement is budgeted and deprecation expense is not budgeted. Additionally, the Pension Trust Funds adopted budgets which are generally in accordance with GAAP. Page 4978 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS A.DEPOSITS AND INVESTMENTS The City's and Library's deposits and investments at year end were comprised of the following: Carrying Value Statement Balances Associated Risks Deposits $56,193,163 $57,037,044 Custodial Credit Risk - Deposits Money markets 288,959 288,959 Custodial Credit Risk - Deposits U.S. government agencies - explicitly guaranteed 3,232,303 3,232,303 Custodial Credit Risk - Investments, Interest Rate Risk U.S. government agencies - implicitly guaranteed 278,594 278,594 Credit Risk, Custodial Credit Risk - Investments, Concentration of Credit Risk, Interest Rate Risk Mutual funds - other than bonds 37,526,456 37,526,456 N/A U.S. treasury obligations 10,318,986 10,318,986 Custodial Credit Risk - Investments, Interest Rate Risk Real estate investment fund 3,152,759 3,152,759 Custodial Credit Risk - Investments Corporate bonds 7,817,537 7,817,537 Credit Risk, Custodial Credit Risk - Investments, Concentration of Credit Risk, Interest Rate Risk, Foreign Currency Risk Municipal bonds 359,849 359,849 Credit Risk, Custodial Credit Risk - Investments, Concentration of Credit Risk, Interest Rate Risk Illinois funds 7,703,936 7,703,936 Credit Risk Equity securities 3,630,075 3,630,075 Custodial Credit Risk - Investments, Foreign Currency Risk Mutual funds - bond funds 1,930,132 1,930,132 Credit Risk, Interest Rate Risk, Foreign Currency Risk Petty cash 10,625 -N/A Total Deposits and Investments $132,443,374 $133,276,630 Page 5079 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) A.DEPOSITS AND INVESTMENTS (cont.) Reconciliation to financial statements Per statement of net position Cash and cash equivalents - primary government $60,151,780 Investments - primary government 4,968,042 Cash and cash equivalents - Lake Forest Library 2,893,943 Per statement of net position - fiduciary funds Private Purpose Trust - money markets 22,100 Private Purpose Trust - equity securities 247,548 Private Purpose Trust - mutual funds 271,522 Agency Fund - cash 60,174 Pension Trusts - cash 843,637 Pension Trusts - money markets 67,844 Pension Trusts - U.S. treasury obligations 10,318,986 Pension Trusts - U.S. government agencies 3,510,897 Pension Trusts - Municipal/corporate bonds 8,177,386 Pension Trusts - mutual funds 37,756,756 Pension Trusts - real estate investment fund 3,152,759 Total Deposits and Investments $132,443,374 Deposits in each local and area bank are insured by the FDIC in the amount of $250,000 for time and savings accounts (including NOW accounts) and $250,000 for demand deposit accounts (interest-bearing and noninterest-bearing). In addition, if deposits are held in an institution outside of the state in which the government is located, insured amounts are further limited to a total of $250,000 for the combined amount of all deposit accounts. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. As of April 30, 2017, the City's investments were measured using the market value approach and the valuation inputs as follows: April 30, 2017 Investment Type Level 1 Level 2 Level 3 Total Equity securities $3,382,527 $-$-$3,382,527 Mutual funds - bond funds 513,895 --513,895 Mutual funds - other than bond funds 914,415 --914,415 Total $4,810,837 $-$-$4,810,837 Page 5180 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) A.DEPOSITS AND INVESTMENTS (cont.) Private Purpose Trust April 30, 2017 Investment Type Level 1 Level 2 Level 3 Total Equity securities $247,548 $-$-$247,548 Mutual funds - bond funds 114,267 --114,267 Mutual funds - other than bond funds 157,255 --157,255 Total $519,070 $-$-$519,070 Police Pension Fund April 30, 2017 Investment Type Level 1 Level 2 Level 3 Total U.S. treasury obligations $8,020,625 $-$-$8,020,625 U.S. government agencies -528,085 -528,085 Mutual funds - other than bond funds 15,975,101 --15,975,101 Corporate bonds -1,540,599 -1,540,599 Real estate investment fund --3,152,759 3,152,759 Total $23,995,726 $2,068,684 $3,152,759 $29,217,169 Firefighter's Pension Fund April 30, 2017 Investment Type Level 1 Level 2 Level 3 Total U.S. treasury obligations $2,298,361 $-$-$2,298,361 U.S. government agencies -2,982,812 -2,982,812 Municipal bonds -359,849 -359,849 Corporate bonds -6,276,938 -6,276,938 Mutual funds - bond funds 1,301,970 --1,301,970 Mutual funds - other than bond funds 20,479,685 --20,479,685 Total $24,080,016 $9,619,599 $-$33,699,615 Page 5281 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) A.DEPOSITS AND INVESTMENTS (cont.) Custodial Credit Risk Deposits Custodial credit risk for deposits is the risk that in the event of a financial institution failure, the City's deposits may not be returned to the City. The City's investment policy requires that deposits that exceed the amount insured by FDIC, NCUA, and/or SPIC insurance be collateralize at the rate of 110% of such deposits, by U.S. Government Securities, obligations of Federal instrumentalities, obligations of the state of Illinois, or general obligation bonds of the City. The Cemetery Investment Fund and the Pension Funds do not have a deposit policy for custodial credit risk. The City does not have any deposits exposed to custodial credit risk. Investments Custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in possession of an outside party. The investment policies for the City, Cemetery, and Pension Funds require investment securities be held by an authorized custodial bank pursuant to a written custodial agreement. The City does not have any investments exposed to custodial credit risk. Credit Risk Credit risk is the risk that an issuer or other counterparty will not fulfill its obligation. The City's investment policy limits the City's exposure to credit risk by limiting investments to the safest types as described above. The Cemetery and Pension Funds' general investment policy is to follow the prudent person rule subject to specific restrictions of the Illinois Cemetery Care Act, the Illinois Pension Code, and the respective Cemetery and Pension Fund's asset allocation policy. Under the prudent person rule, investments shall be made with care, skill, prudence, and diligence under the prevailing circumstances that a prudent person acting in similar capacity and familiar with such matters would use in the investment of a fund or like character and with like aims. The Cemetery and Police Pension Funds' investment policy further limits the investment in any one company or issuer to 5% of the funds' total assets. The Cemetery fund also limits the investment in any one equity industry group to no more than 15% of the Fund's assets. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Page 5382 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) A.DEPOSITS AND INVESTMENTS (cont.) Credit Risk (cont.) As of April 30, 2017, the City's investments were rated as follows: Investment Type Standard & Poors Moody's Investors Services Illinois funds AAA Not rated U.S. government agencies - implicitly guaranteed AA+Aaa Municipal bonds Not rated to AA Aa2 to Aaa Corporate bonds BBB- to AAA Not rated to Aaa Mutual funds - bond funds Not Rated to AAA N/A Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the value of an investment. Although the City and Cemetery Fund's investment policy does not specifically limit the length of maturity of investments, it requires that the City and Cemetery Fund to minimize the interest rate risk by structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity and by investing operating funds primarily in short-term securities, money market mutual funds, or similar investment pools. The Police Pension Fund's investment policy does not limit the length of maturity of investments since it is passively managing its fixed income exposure to the Barclays Capital Intermediate Government Index. Although the Firefighters' Pension Fund's investment policy does not specifically limit the length of maturity of investments, it manages interest rate risk by investing fixed income assets in proportion to the present value of the Fund's projected liabilities. As of April 30, 2017, the City's investments were as follows: Police Pension Fund Maturity Investment Type Fair Value Less than one year 1 - 5 years 6-10 years U.S. treasury obligations $8,020,625 $-$4,419,138 $3,601,487 U.S. government agencies 528,085 174,587 353,498 - Corporate bonds 1,540,599 294,465 1,079,505 166,629 Totals $10,089,309 $469,052 $5,852,141 $3,768,116 Page 5483 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) A.DEPOSITS AND INVESTMENTS (cont.) Interest Rate Risk (cont.) Firefighters' Pension Fund Maturity Investment Type Fair Value Less than one year 1 - 5 years 6 - 10 years More than 10 years U.S. treasury obligation $2,298,361 $476,478 $797,067 $1,024,816 $- U.S. government agencies 2,982,812 508,420 507,979 560,288 1,406,125 Municipal bonds 359,849 106,684 157,226 95,939 - Corporate bonds 6,276,938 498,517 3,535,252 2,188,141 55,028 Totals $11,917,960 $1,590,099 $4,997,524 $3,869,184 $1,461,153 The City and the Private Purpose Trust have $513,895 and $114,267, respectively, invested in mutual funds - bond funds that have a maturity of less than one year. Foreign Currency Risk Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment or deposit. To diversify risk, the Firefighters' Pension Fund uses an equity asset allocation that incorporates a variety of management styles. The allocations are reviewed quarterly and rebalanced if necessary. To diversify risk, the Police Pension funds are well diversified across international regions. At April 30, 2017, the City was exposed to foreign currency risk as follows: Investment Currency Maturity Date Fair Value William Blair Funds International - General Cemetery Various N/A $583,681 William Blain Funds International - Cemetery Trust Various N/A 102,132 Hartford Schroders International Multi-Cap - General Cemetery Various N/A 330,733 Hartford Schroders International Multi-Cap - Cemetery Trust Various N/A 55,122 Foreign Mutual Funds - Police Pension Various N/A 5,433,156 Foreign Bond Issues - Police Pension Various Various 133,777 Foreign Mutual Funds - Fire Pension Various N/A 3,321,731 Total $9,960,332 Page 5584 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) A.DEPOSITS AND INVESTMENTS (cont.) Money-Weighted Rate of Return Police Pension Fund For the year ended April 30, 2017, the annual money-weighted rate of return on the police pension plan investments, net of pension plan investment expense, was 9.67%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Firefighters' Pension Fund For the year ended April 30, 2017, the annual money-weighted rate of return on the firefighters' pension plan investments, net of pension plan investment expense, was 9.66%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. See Note I.D.1. for further information on deposit and investment policies. B.RECEIVABLES All of the receivables on the balance sheet are expected to be collected within one year, with the exception of the City's loans receivables. The City receives annual principal payments on the loans through fiscal year 2019. Page 5685 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) C.CAPITAL ASSETS Capital asset activity for the year ended April 30, 2017, was as follows: Beginning Balance Additions Deletions Ending Balance Governmental Activities Capital assets not being depreciated Land and land improvements $46,403,412 $6,950 $8,254,979 $38,155,383 Infrastructure - land 66,740,770 --66,740,770 Construction in progress -19,560 -19,560 Total Capital Assets Not Being Depreciated 113,144,182 26,510 8,254,979 104,915,713 Capital assets being depreciated Infrastructure 181,918,439 12,413 -181,930,852 Buildings 32,349,442 -2,347,383 30,002,059 Improvements other than buildings 33,608,219 19,980 77,872 33,550,327 Machinery and equipment 17,124,917 610,203 72,568 17,662,552 Total Capital Assets Being Depreciated 265,001,017 642,596 2,497,823 263,145,790 Total Capital Assets 378,145,199 669,106 10,752,802 368,061,503 Less: Accumulated depreciation for Infrastructure (124,940,699)(2,623,286)-(127,563,985) Buildings (12,064,831)(693,955)1,728,105 (11,030,681) Improvements other than buildings (13,881,794)(1,520,860)77,872 (15,324,782) Machinery and equipment (12,499,250)(1,105,542)72,568 (13,532,224) Total Accumulated Depreciation (163,386,574)(5,943,643)1,878,545 (167,451,672) Net Capital Assets Being Depreciated 101,614,443 (5,301,047)619,278 95,694,118 Total Governmental Activities Capital Assets, Net of Accumulated Depreciation $214,758,625 $(5,274,537)$8,874,257 $200,609,831 Depreciation expense was charged to functions as follows: Governmental Activities General government $1,890,817 Highways and streets 2,745,155 Sanitation 181,165 Culture and recreation 974,421 Public safety 152,085 Total Governmental Activities Depreciation Expense $5,943,643 Page 5786 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) C.CAPITAL ASSETS (cont.) Beginning Balance Additions Deletions Ending Balance Business-type Activities Capital assets not being depreciated Land $459,369 $-$17,956 $441,413 Construction in progress -44,587 -44,587 Total Capital Assets Not Being Depreciated 459,369 44,587 17,956 486,000 Capital assets being depreciated Buildings 27,021,790 --27,021,790 Improvements other than buildings 44,392,415 780,099 32,450 45,140,064 Machinery and equipment 4,781,306 165,188 23,921 4,922,573 Sanitary sewers and related property 30,337,241 --30,337,241 Total Capital Assets Being Depreciated 106,532,752 945,287 56,371 107,421,668 Total Capital Assets 106,992,121 989,874 74,327 107,907,668 Less: Accumulated depreciation for Buildings (13,596,827)(1,003,571)-(14,600,398) Improvements other than buildings (20,780,777)(1,030,238)30,591 (21,780,424) Machinery and equipment (3,163,476)(253,391)23,921 (3,392,946) Sanitary sewers and related property (16,688,991)(577,622)-(17,266,613) Total Accumulated Depreciation (54,230,071)(2,864,822)54,512 (57,040,381) Net Capital Assets Being Depreciated 52,302,681 (1,919,535)1,859 50,381,287 Business-type Capital Assets, Net of Accumulated Depreciation $52,762,050 $(1,874,948)$19,815 $50,867,287 Page 5887 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) C.CAPITAL ASSETS (cont.) Beginning Balance Additions Deletions Ending Balance Component Unit - Lake Forest Library Capital assets not being depreciated Land $70,000 $-$-$70,000 Art 149,000 --149,000 Total Capital Assets Not Being Depreciated 219,000 --219,000 Capital assets being depreciated Buildings 1,180,907 --1,180,907 Improvements other than buildings 2,331,505 36,117 96,529 2,271,093 Machinery and equipment 3,903,577 410,279 293,482 4,020,374 Total Capital Assets Being Depreciated 7,415,989 446,396 390,011 7,472,374 Total Capital Assets 7,634,989 446,396 390,011 7,691,374 Less: Accumulated depreciation for Buildings (677,504)(23,338)-(700,842) Improvements other than buildings (1,237,391)(137,650)96,529 (1,278,512) Machinery and equipment (2,304,915)(382,452)293,482 (2,393,885) Total Accumulated Depreciation (4,219,810)(543,440)390,011 (4,373,239) Net Capital Assets Being Depreciated 3,196,179 (97,044)-3,099,135 Total Component Unit Capital Assets, Net of Accumulated Depreciation $3,415,179 $(97,044)$-$3,318,135 Page 5988 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) D.INTERFUND ADVANCES AND TRANSFERS Advances The following is a schedule of interfund advances: Receivable Fund Payable Fund Amount Amount Not Due W ithin One Year Parks and Recreation Deerpath Golf Course $125,000 $125,000 Laurel/W estern Redevelopment TIF Capital Improvements 380,000 380,000 Total - Fund Financial Statements $505,000 Less: Fund eliminations (380,000) Less: Interfund receivables created with internal service fund eliminations (793,310) Total - Internal Balances - Government-W ide Statement of Net Position $(668,310) The principal purpose of the advance between the Parks and Recreation Fund and the Deerpath Golf Course Fund is to assist with the funding of the golf course's future redevelopment project. The principal purpose of the advance between the Laurel/W estern Redevelopment TIF Fund and the Capital Improvements Fund is to repay the Laurel/W estern Redevelopment TIF Fund for a parcel of land it owned that was sold during the fiscal year and the receipts were recorded within the Capital Improvements Fund. Page 6089 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) D.INTERFUND ADVANCES AND TRANSFERS (cont.) Transfers The following is a schedule of interfund transfers: Fund Transferred To Fund Transferred From Amount Principal Purpose Parks and Recreation General $364,498 Transfer for operations Water and Sewerage General 2,000 Transfer for operations Nonmajor government General 239,611 Transfer for operations Deerpath Golf Course Parks and Recreation 358,000 Transfer for operations Debt Service General 966,774 Transfer for debt service Debt Service Capital Improvements 5,850,565 Transfer for debt service Debt Service Nonmajor government 200,000 Transfer for debt service Nonmajor government Capital Improvements 141,222 Transfer to close fund General Nonmajor government 13,991 Transfer to close fund Total - Fund Financial Statements 8,136,661 Less: Government-wide eliminations (7,776,661) Total Transfers - Government-W ide Statement of Activities $360,000 Generally, transfers are used to (1) move revenues from the fund that collects them to the fund that the budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund, and (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. Page 6190 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) E.LONG-TERM OBLIGATIONS Long-term obligations activity for the year ended April 30, 2017, was as follows: Beginning Balance Increases Decreases Ending Balance Amounts Due Within One Year Governmental Activities Bonds and Notes Payable General obligation bonds $42,390,541 $-$7,733,336 $34,657,205 $1,298,796 Notes payable 656,720 -173,360 483,360 483,360 Premiums 165,507 -21,382 144,125 - Discount (45,482)-(19,694)(25,788)- Sub-totals 43,167,286 -7,908,384 35,258,902 1,782,156 Other Liabilities Compensated absences 1,730,744 2,372,879 2,287,360 1,816,263 120,000 Other postemployment benefits 284,538 198,144 188,313 294,369 - Net pension liability 49,075,081 6,267,481 4,383,283 50,959,279 - Total Other Liabilities 51,090,363 8,838,504 6,858,956 53,069,911 120,000 Total Governmental Activities Long-Term Liabilities $94,257,649 $8,838,504 $14,767,340 $88,328,813 $1,902,156 Business-type Activities Bonds Payable General obligation bonds $15,521,000 $-$1,902,000 $13,619,000 $1,952,000 Premium 158,654 -40,543 118,111 - Sub-totals 15,679,654 -1,942,543 13,737,111 1,952,000 Other Liabilities Compensated absences 196,764 192,599 191,920 197,443 5,000 Net pension liability 1,434,336 175,208 195,666 1,413,878 - Total Other Liabilities 1,631,100 367,807 387,586 1,611,321 5,000 Total Business-type Activities Long-Term Liabilities $17,310,754 $367,807 $2,330,129 $15,348,432 $1,957,000 Component Unit - Lake Forest Library Compensated absences $150,187 $173,955 $132,649 $191,493 $5,000 Capital leases -84,225 25,489 58,736 28,051 Other postemployment benefits 48,771 30,196 8,258 70,709 - Net pension liability 1,526,764 -205,897 1,320,867 - Total Other Liabilities 1,725,722 288,376 372,293 1,641,805 33,051 Total Component Unit Long-Term Liabilities $1,725,722 $288,376 $372,293 $1,641,805 $33,051 General Obligation Bonds All general obligation bonds payable are backed by the full faith and credit of the City. Bonds in the governmental funds will be retired by future property tax levies accumulated by the Debt Service Fund. Business-type activities bonds are payable by revenues from user fees of those funds or, if the revenues are not sufficient, by future tax levies. Page 6291 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) E.LONG-TERM OBLIGATIONS (cont.) General Obligation Bonds (cont.) Governmental Activities General Obligation Bonds Date of Issue Final Maturity Interest Rates Original Indebtedness Balance April 30, 2017 Special Service Area 25 5/1/2003 12/15/2022 1.95-2.95%$1,050,000 $410,000 Special Service Area 26 10/7/2003 12/15/2022 2.50-3.40%276,500 110,939 Special Service Area 29 12/20/2004 12/15/2023 2.55-3.65%2,000,000 920,266 2009 Series 5/14/2009 12/15/2028 2.00-4.10%3,680,000 2,680,000 2010 Series B 5/12/2010 12/15/2032 5.75%3,000,000 3,000,000 2010 Series C 5/12/2010 12/15/2029 3.00-5.50%5,425,000 4,930,000 2011 Series B 9/6/2011 12/15/2023 1.00-3.00%4,470,000 3,351,000 2013 Series 9/16/2013 12/15/2032 2.00-4.00%9,715,000 9,535,000 2015 Series 8/3/2015 12/15/2036 2.50-3.75%9,780,000 9,720,000 Total Governmental Activities - General Obligation Bonds $34,657,205 Business-type Activities General Obligation Bonds Date of Issue Final Maturity Interest Rates Original Indebtedness Balance April 30, 2017 2011 Series A 9/6/2011 12/15/2020 1.50-3.00%$1,195,000 $525,000 2011 Series B 9/6/2011 12/15/2023 1.00-3.00%20,355,000 13,094,000 Total Business-type Activities - General Obligation Bonds $13,619,000 Debt service requirements to maturity are as follows: Governmental Activities Business-type Activities General Obligation Bonds General Obligation Bonds Years Principal Interest Principal Interest 2018 $1,298,796 $1,277,590 $1,952,000 $357,358 2019 1,429,624 1,242,488 1,987,000 308,870 2020 1,730,850 1,202,720 2,067,000 259,520 2021 2,037,502 1,154,978 2,132,000 207,196 2022 2,119,613 1,093,130 2,037,000 154,245 2023-2027 9,065,820 4,434,625 3,444,000 143,730 2028-2032 11,720,000 2,627,837 -- 2033-2037 5,255,000 372,825 -- Totals $34,657,205 $13,406,193 $13,619,000 $1,430,919 Page 6392 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) E.LONG-TERM OBLIGATIONS (cont.) Notes Payable The City entered into a long term promissory note as a part of purchasing a parking lot during the fiscal year ended April 30, 2016. The note will be repaid from the General Fund. Notes Payable at April 30, 2017 consist of the following: Governmental Activities Notes Payable Date of Issue Final Maturity Interest Rates Original Indebtedness Balance April 30, 2017 2016 Promissory Note 5/21/2015 7/1/2017 0%$830,080 $483,360 Total Governmental Activities Notes Payable $483,360 Debt service requirements to maturity are as follows: Governmental Activities Notes Payable Years Principal Interest 2018 $483,360 $- Totals $483,360 $- Other Debt Information Estimated payments of compensated absences, other post employment benefits, and net pension liability are not included in the debt service requirement schedules. Compensated absences and the IMRF net pension liability will be liquidated by the applicable governmental funds (primarily the General, Parks and Recreation, Senior Commission, and Cemetery Funds) that account for the salaries and wages for the related employees. Other post employment benefits and the Police and Firefighters' net pension liability will be liquidated by the General Fund. Page 6493 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) F. LEASE DISCLOSURES Lessee - Capital Leases In 2017 the Library acquired capital assets through a lease/purchase agreement. The gross amount of these assets under capital leases is $84,225, which are included in capital assets in the discretely presented component unit activities. The future minimum lease obligations and the net present value on these minimum lease payments as of April 30, 2017, are as follows: Component Unit Years Principal Interest Totals 2018 $28,051 $459 $28,510 2019 28,333 177 28,510 2020 2,352 2 2,354 Totals $58,736 $638 $59,374 Page 6594 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE III - DETAILED NOTES ON ALL FUNDS (cont.) G.FUND BALANCES Governmental Funds Governmental fund balances reported on the fund financial statements at April 30, 2017, include the following: General Fund Parks and Recreation Fund Capital Improvements Fund Debt Service Fund Nonmajor Governmental Funds Totals Fund Balances Nonspendable: Prepaid items $79,346 $-$-$-$31,121 $110,467 Inventories 89,853 ----89,853 Long-term loans receivable 608,961 ----608,961 Long-term advances -125,000 --380,000 505,000 Restricted for: Culture and recreation -2,651,450 --526,545 3,177,995 Highway and streets ----1,302,806 1,302,806 Public safety - fire ----179,418 179,418 Public safety - police ----350,463 350,463 Cemetery perpetual care ----6,262,121 6,262,121 Affordable housing ----725,879 725,879 Capital projects --4,575,514 -1,407,270 5,982,784 Debt service ---1,438,822 -1,438,822 Unassigned:28,799,288 ----28,799,288 Total Fund Balances $29,577,448 $2,776,450 $4,575,514 $1,438,822 $11,165,623 $49,533,857 Page 6695 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION A.EMPLOYEES' RETIREMENT SYSTEM The City contributes to three defined benefit pension plans, the Illinois Municipal Retirement Fund (IMRF), an agent-multiple-employer public employee retirement system; the Police Pension Plan which is a single- employer pension plan; and the Firefighters' Pension Plan which is a single-employer pension plan. The benefits, benefits levels, employee contributions and employer contributions for the plans are governed by Illinois Compiled Statutes and can only be amended by the Illinois General Assembly. The Police Pension Plan and the Firefighters' Pension Plan do not issue separate reports on the pension plans. 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, 2211 York Road, Suite 500, Oak Brook, Illinois 60523. Illinois Municipal Retirement Fund Plan description.All employees (other than those covered by the Police and Firefighters' Pension plans) hired in positions that meet or exceed the prescribed annual hourly standard must be enrolled in IMRF as participating members. IMRF has a two tier plan. Members who first participated in IMRF or an Illinois Reciprocal System prior to January 1, 2011 participate in Tier 1. All other members participate in Tier 2. For Tier 1 participants, pension benefits vest after 8 years of service. Participating members who retire at age 55 (at reduced benefits) or after age 60 (at full benefits) with 8 years of 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 (average of the highest 48 consecutive months' earnings during the last 10 years) for credited service up to 15 years and 3% for each year thereafter. Em ployees hired on or after January 1, 2011, are eligible for Tier 2 benefits. For Tier 2 participants, pension benefits vest after 10 years of service. Participating members who retire at age 62 (at reduced benefits) or after age 67 (at full benefits) with 10 years of 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 the first 15 years of service credit, plus 2% for each year of service after 15 years to a maximum of 75% of their final rate of earnings. Final rate of earnings is the highest total earnings during any 96 consecutive months within the last 10 years of service, divided by 96. Under Tier 2, the pension is increased every year after retirement, upon reaching age 67, by the lesser of 3% of the original pension amount or 1/2 of the increase in the Consumer Price Index of the original pension amount. Under the employer number within IMRF, both the City and Library contribute to the plan. As a result, IMRF is considered to be an agent multiple-employer plan through which cost-sharing occurs between the City and Library. Plan membership. At December 31, 2016, the measurement date, membership in the plan was as follows: Retirees and beneficiaries 262 Inactive, non-retired members 177 Active members 198 Total 637 Page 6796 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Contributions. As set by statute, City and Library employees participating in IMRF are required to contribute 4.50% of their annual covered salary. The statute requires the City and Library to contribute the amount necessary, in addition to member contributions, to finance the retirement coverage of its own employees. The City and Library’s actuarially determined contribution rate for calendar year 2016 was 12.77% of annual covered payroll for IMRF. The City and Library also contribute for disability benefits, death benefits and supplemental retirement benefits, all of which are pooled at the IMRF level. Contribution rates for disability and death benefits are set by the IMRF Board of Trustees, while the supplemental retirement benefits rate is set by statute. Net Pension Liability/(Asset). The net pension liability/(asset) was measured as of December 31, 2016, and the total pension liability used to calculate the net pension liability/(asset) was determined by an actuarial valuation as of that date. Summary of Significant Accounting Policies. For purposes of measuring the net pension liability/(asset), deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of IMRF and additions to/deductions from IMRF fiduciary net position have been determined on the same basis as they are reported by IMRF. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Actuarial Assumptions. The total pension liability for IMRF was determined by actuarial valuations performed as of December 31, 2016 using the following actuarial methods and assumptions: Actuarial cost method Entry Age Normal Asset valuation method Market Value Actuarial assumptions Investment Rate of Return 7.50% Inflation 3.50% Salary increases 3.75% to 14.50%, including inflation Price inflation 2.75% Mo rtality. For non-disabled retirees, an IMRF specific mortality table was used with fully generational projection scale MP-2014 (base year 2012). The IMRF specific rates were developed from the RP-2014 Blue Collar Health Annuitant Mortality Table with adjustments to match current IMRF experience. For disabled retirees, an IMRF specific mortality table was used with fully generational projection scale MP- 2014 (base year 2014). The IMRF specific rates were developed from the RP-2014 Disabled Retirees Mortality Table applying the same adjustment that were applied for non-disabled lives. For active members, an IMRF specific mortality table was used with fully generational projection scale MP-2014 (base year 2012). The IMRF specific rates were developed from the RP-2014 Employee Mortality Table with adjustments to match current IMRF experience. Page 6897 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Long-Term Expected Real Rate of Return. The long-term expected rate of return on pension plan investments was determined using an asset allocation study in which best-estimate ranges of expected future real rates of return (net of pension plan investment expense and inflation) were developed for each major asset class. These ranges were combined to produce long-term expected rate of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic and geometric real rates of return for each major asset class are summarized in the following table: Projected Returns/Risks Asset Class Target Allocation One Year Arithmetic Ten Year Geometric Equities 38.00%8.30%6.85% International equities 17.00%8.45%6.75% Fixed income 27.00%3.05%3.00% Real estate 8.00%6.90%5.75% Alternatives 9.00% Private equity 12.45%7.35% Hedge funds 5.32%5.25% Commodities 4.25%2.65% Cash equivalents 1.00%2.25%2.25% Discount rate.The discount rate used to measure the total pension liability for IMRF was 7.50%. The discount rate calculated using the December 31, 2015 measurement date was 7.48%. The projection of cash flows used to determine the discount rate assumed that member contributions will be made at the current contribution rate and that City contributions will be made at rates equal to the difference between actuarially determined contribution rate and the member rate. Based on those assumptions, the fiduciary net position was projected not to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on investments of 7.50% was blended with the index rate of 3.78% for tax exempt 20-year general obligation municipal bonds with an average AA credit rating at December 31, 2016 to arrive at a discount rate of 7.50%used to determine the total pension liability. The year ending December 31, 2115 is the last year in the 2017 to 2116 projection period for which projected benefit payments are fully funded. Page 6998 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Discount rate sensitivity. The following is a sensitivity analysis of the net pension liability/(asset) to changes in the discount rate. The table below presents net pension liability/(asset) of the City calculated using the discount rate of 7.50% as well as what the net pension liability/(asset) would be if it were to be calculated using a discount rate that is 1 percentage point lower (6.50%) or 1 percentage point higher (8.50%) than the current rate: 1% Decrease Current Discount Rate 1% Increase City: Total pension liability $100,732,968 $89,528,501 $80,309,964 Plan fiduciary net pension 78,725,947 78,725,947 78,725,947 Net pension liability/(asset)$22,007,021 $10,802,554 $1,584,017 Library: Total pension liability $13,341,683 $11,857,696 $10,636,737 Plan fiduciary net pension 10,536,829 10,536,829 10,536,829 Net pension liability/(asset)$2,804,854 $1,320,867 $99,908 Total: Total pension liability $114,074,651 $101,386,197 $90,946,701 Plan fiduciary net pension 89,262,776 89,262,776 89,262,776 Net pension liability/(asset)$24,811,875 $12,123,421 $1,683,925 Changes in net pension liability/(asset). The changes in net pension liability/(asset)for the calendar year ended December 31, 2016 were as follows: Increase (Decrease) Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability/(Asset) (a) - (b) City: Balances at December 31, 2015 $87,093,580 $75,725,294 $11,368,286 Service cost 1,315,386 -1,315,386 Interest on total pension liability 6,584,652 -6,584,652 Differences between expected and actual experience of the total pension liability (689,342)-(689,342) Change of assumptions (209,390)-(209,390) Benefit payments, including refunds of employee contributions (4,566,385)(4,566,385)- Contributions - employer -1,494,964 (1,494,964) Contributions - employee -558,977 (558,977) Net investment income -5,250,256 (5,250,256) Other (net transfer)-262,841 (262,841) Balances at December 31, 2016 $89,528,501 $78,725,947 $10,802,554 Page 7099 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Increase (Decrease) Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability/(Asset) (a) - (b) Library: Balances at December 31, 2015 $11,696,692 $10,169,928 $1,526,764 Service cost 160,837 -160,837 Interest on total pension liability 668,406 -668,406 Differences between expected and actual experience of the total pension liability (84,288)-(84,288) Change of assumptions (25,603)-(25,603) Benefit payments, including refunds of employee contributions (558,348)(558,348)- Contributions - employer -182,795 (182,795) Contributions - employee -68,348 (68,348) Net investment income -641,968 (641,968) Other (net transfer)-32,138 (32,138) Balances at December 31, 2016 $11,857,696 $10,536,829 $1,320,867 Total: Balances at December 31, 2015 $98,790,272 $85,895,222 $12,895,050 Service cost 1,476,223 -1,476,223 Interest on total pension liability 7,253,058 -7,253,058 Differences between expected and actual experience of the total pension liability (773,630)-(773,630) Change of assumptions (234,993)-(234,993) Benefit payments, including refunds of employee contributions (5,124,733)(5,124,733)- Contributions - employer -1,677,759 (1,677,759) Contributions - employee -627,325 (627,325) Net investment income -5,892,224 (5,892,224) Other (net transfer)-294,979 (294,979) Balances at December 31, 2016 $101,386,197 $89,262,776 $12,123,421 Plan fiduciary net position as a percentage of the total pension liability %88.04 Page 71100 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Pension expense and deferred outflows of resources and deferred inflows of resources related to pensions.For the year ended April 30, 2017, the City recognized pension expense of $4,274,514. The City reported deferred outflows and inflows of resources related to pension from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources City: Difference between expected and actual experience $306,455 $482,649 Assumption changes 143,115 143,682 Net difference between projected and actual earnings on pension plan investments 4,568,420 - Contributions subsequent to the measurement date 498,123 - Total $5,516,113 $626,331 Library: Difference between expected and actual experience $37,471 $59,015 Assumption changes 17,499 17,569 Net difference between projected and actual earnings on pension plan investments 558,597 - Contributions subsequent to the measurement date 59,252 - Total $672,819 $76,584 Total: Difference between expected and actual experience $343,926 $541,664 Assumption changes 160,614 161,251 Net difference between projected and actual earnings on pension plan investments 5,127,017 - Contributions subsequent to the measurement date 557,375 - Total $6,188,932 $702,915 Page 72101 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) The amount reported as deferred outflows resulting from contributions subsequent to the measurement date in the above table will be recognized as a reduction in the net pension liability/(asset) for the year ending April 30, 2017. The remaining amounts reported as deferred outflows and inflows of resources related to pensions ($4,928,642) will be recognized in pension expense as follows: Year Ending December 31,City Library Total 2017 $1,669,770 $204,169 $1,873,939 2018 1,359,138 166,186 1,525,324 2019 1,281,624 156,708 1,438,332 2020 81,127 9,920 91,047 Total $4,391,659 $536,983 $4,928,642 Police Pension Plan description. Police sworn personnel are covered by the Police Pension Plan, which is a defined benefit single-employer pension plan. Although this is a single employer pension plan, the defined benefits and employee and employer contribution levels are governed by Illinois State Statutes (Chapter 40 ILCS 5/3) and may be amended only by the Illinois legislature. The City accounts for the plan as a pension trust fund. As provided for in the Illinois Compiled Statutes, the Plan provides retirement benefits as well as death and disability benefits to employees grouped into two tiers. Tier 1 is for employees hired prior to January 1, 2011 and Tier 2 is for employees hired after that date. The following is a summary of the Police Pension Fund as provided for in Illinois Compiled Statutes. Tier 1 - Covered employees attaining the age of 50 or more with 20 or more years of creditable service are entitled to receive an annual retirement benefit of one half of the salary attached to the rank on the last day of service, or for one year prior to the last day, whichever is greater. The pension shall be increased by 2.5% of such salary for each additional year of service over 20 years up to 30 years to a maximum of 75% of such salary. Employees with at least 8 years but less than 20 years of credited service may retire at or after age 60 and receive a reduced retirement benefit. The monthly pension 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 paid upon reaching at least the age 55, by 3% of the original pension and 3% compounded annually thereafter. Tier 2 - Covered employees attaining the age of 55 or more with 10 or more years of creditable service are entitled to receive a monthly pension of 2.5% of the final average salary for each year of creditable service. The salary is initially capped at $106,800 but increases annually thereafter and is limited to 75% of final average salary. Employees with 10 or more years of creditable service may retire at or after age 50 and receive a reduced retirement benefit. The monthly pension of a police officer be increased annually on the January 1 occurring either on or after the attainment of age 60 or the first anniversary of the pension start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase in the CPI, whichever is less. Page 73102 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Police Pension (cont.) Plan membership. At April 30, 2017, the Police Pension membership consisted of: Retirees and beneficiaries 40 Inactive, non-retired members 8 Active members 40 Total 88 Contributions. Covered employees are required to contribute 9.91% of their base salary to the Police Pension Plan. If an employee leaves covered employment with less than 20 years of service, accumulated employee contributions may be refunded without accumulated interest. The City is required to contribute the remaining amounts necessary to finance the plans as actuarially determined by an enrolled actuary. Effective January 1, 2011 the City’s contributions must accumulate to the point where the past service cost for the Police Pension Plan is 90% funded by the year 2040. The City's actuarially determined contribution rate for the fiscal year ending April 30, 2017 was 50.54% of annual covered payroll. Net Pension Liability/(Asset). The net pension liability/(asset) was measured as of April 30, 2017, and the total pension liability used to calculate the net pension liability/(asset) was determined by an annual actuarial valuation as of that date. Summary of Significant Accounting Policies. The financial statements of the Police Pension Plan are prepared using the accrual basis of accounting. Plan member contributions are recognized in the period in which contributions are due. The City’s contributions are recognized when due and a formal commitment to provide the contributions are made. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Plan investments are reported at fair value. Short-term investments are reported at cost, which approximated fair value. Investments that do not have an established market are reported at estimated fair values. Page 74103 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Police Pension (cont.) Actuarial Assumptions. The total pension liability was determined by an actuarial valuation performed as of April 30, 2017 using the following actuarial methods and assumptions: Actuarial cost method Entry Age Normal Asset valuation method Market Value Actuarial assumptions Interest rate 7.00% Inflation 2.50% Projected salary increases Service Based Cost-of-living adjustments Tier 1: 3.00% Tier 2: 3.00% Mortality rates were based on the RP-2000 CHBCA Mortality Table. The actuarial assumptions were based on the results of an actuarial experience study conducted by the Illinois Department of Insurance dated September 26, 2012. Discount rate. The discount rate used to measure the total pension liability for the Police Pension Plan was 7.00%, the same as the prior valuation. The projection of cash flows used to determine the discount rate assumed that member contributions will be made at the current contribution rate and that City contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on Plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Discount rate sensitivity.The following is a sensitivity analysis of the net pension liability to changes in the discount rate. The table below presents the pension liability of the City calculated using the discount rate of 7.00% as well as what the net pension liability would be if it were to be calculated using a discount rate that is 1 percentage point lower (6.00%) or 1 percentage point higher (8.00%) than the current rate: 1% Decrease Current Discount Rate 1% Increase Total pension liability $64,028,203 $56,248,128 $49,862,159 Plan fiduciary net position 29,758,448 29,758,448 29,758,448 Net pension liability $34,269,755 $26,489,680 $20,103,711 Page 75104 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Police Pension (cont.) Changes in net pension liability/(asset).The City's changes in net pension liability/(asset) for the calendar year ended April 30, 2017 was as follows: Increase (Decrease) Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability/Asset (a) - (b) Balances at April 30, 2016 $52,622,210 $27,404,163 $25,218,047 Service cost 931,083 -931,083 Interest on total pension liability 3,660,514 -3,660,514 Differences between expected and actual experience of the total pension liability 306,030 -306,030 Change of assumptions 1,248,764 -1,248,764 Benefit payments, including refunds of employee contributions (2,520,473)(2,520,473)- Contributions - employer -1,895,500 (1,895,500) Contributions - employee -371,695 (371,695) Net investment income -2,635,379 (2,635,379) Administration -(27,816)27,816 Balances at April 30, 2017 $56,248,128 $29,758,448 $26,489,680 Pension expense and deferred outflows of resources and deferred inflows of resources related to pensions.For the year ended April 30, 2017, the City recognized pension expense of $2,633,034. The City reported deferred outflows and inflows of resources related to pension from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Difference between expected and actual experience $244,824 $1,419,360 Assumption changes 999,011 - Net difference between projected and actual earnings on pension plan investments 867,565 - Total $2,111,400 $1,419,360 Page 76105 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Police Pension (cont.) The amounts reported as deferred outflows and inflows of resources related to pensions ($692,040) will be recognized in pension expense as follows: Year Ending April 30,Amount 2018 $293,769 2019 293,769 2020 293,769 2021 (189,267) Total $692,040 Firefighters' Pension Plan description. Fire sworn personnel are covered by the Firefighters' Pension Plan, which is a defined benefit single-employer pension plan. Although this is a single employer pension plan, the defined benefits and employee and employer contribution levels are governed by Illinois State Statutes (Chapter 40 ILCS 5/3) and may be amended only by the Illinois legislature. The City accounts for the plan as a pension trust fund. As provided for in the Illinois Compiled Statutes, the Firefighters' Pension Plan provides retirement benefits as well as death and disability benefits to employees grouped into two tiers. Tier 1 is for employees hired prior to January 1, 2011 and Tier 2 is for employees hired after that date. The following is a summary of the Firefighters' Pension Plan as provided for in Illinois Compiled Statutes. Tier 1 - Covered employees attaining the age of 50 or more with 20 or more years of creditable service are entitled to receive a monthly retirement benefit of one half of the monthly salary attached to the rank held in the fire service at the date of retirement. The monthly pension shall be increased by one twelfth of 2.5% of such monthly salary for each additional month over 20 years of service through 30 years of service to a maximum of 75% of such monthly salary. Employees with at least 10 years but less than 20 years of credited service may retire at or after age 60 and receive a reduced retirement benefit. The monthly pension of a firefighter who retired with 20 or more years of service after January 1, 1977 shall be increased annually, following the first anniversary date of retirement and paid upon reaching at least the age 55, by 3% of the original pension and 3% compounded annually thereafter. Tier 2 - Covered employees attaining the age of 55 or more with 10 or more years of creditable service are entitled to receive a monthly pension of 2.5% of the final average salary for each year of creditable service. The salary is initially capped at $106,800 but increases annually thereafter and is limited to 75% of final average salary. Employees with 10 or more years of creditable service may retire at or after age 50 and receive a reduced retirement benefit. The monthly pension of a firefighter shall be increased annually on the January 1 occurring either on or after the attainment of age 60 or the first anniversary of the pension start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase in the CPI, whichever is less. Page 77106 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Firefighters' Pension (cont.) Plan membership. At April 30, 2017, the Firefighters' Pension Plan membership consisted of: Retirees and beneficiaries 38 Inactive, non-retired members 4 Active members 32 Total 74 Contributions. Participants contribute a fixed percentage of their base salary to the plans. At April 30, 2017, the contribution percentage was 9.455%. If a participant leaves covered employment with less than 20 years of service, accumulated participant contributions may be refunded without accumulated interest. The City is required to contribute the remaining amounts necessary to finance the plans as actuarially determined by an enrolled actuary. Effective January 1, 2011 the City’s contributions must accumulate to the point where the past service cost for the Firefighters' Pension Plan is 90% funded by the year 2040. The City's actuarially determined contribution rate for the fiscal year ending April 30, 2017 was 39.45% of annual covered payroll. Net pension liability/(asset). The net pension liability/(asset) was measured as of April 30, 2017, and the total pension liability used to calculate the net pension liability/(asset) was determined by an annual actuarial valuation as of that date. Summary of significant accounting policies. The financial statements of the Firefighters' Pension Plan are prepared using the accrual basis of accounting. Plan member contributions are recognized in the period in which contributions are due. The City’s contributions are recognized when due and a formal commitment to provide the contributions are made. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Plan investments are reported at fair value. Short-term investments are reported at cost, which approximated fair value. Investments that do not have an established market are reported at estimated fair values. Page 78107 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Firefighters' Pension (cont.) Actuarial assumptions. The total pension liability was determined by an actuarial valuation performed as of April 30, 2017 using the following actuarial methods and assumptions: Actuarial cost method Entry Age Asset valuation method 5-year average Market Value Actuarial assumptions Interest rate 7.00% Inflation 2.50% Projected salary increases 5.50% Cost-of-living adjustments Tier 1: 3.00% Tier 2: 3.00% Mortality rates were based on the RP-2000 CHBCA Mortality Table. The actuarial assumptions were based on the results of an actuarial experience study conducted by the Illinois Department of Insurance dated September 26, 2012. Discount rate. The discount rate used to measure the total pension liability for the Firefighters' Pension Plan was 7.00%, the same as the prior valuation. The projection of cash flows used to determine the discount rate assumed that member contributions will be made at the current contribution rate and that City contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on Plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Discount rate sensitivity.The following is a sensitivity analysis of the net pension liability to changes in the discount rate. The table below presents the pension liability of the City calculated using the discount rate of 7.00% as well as what the net pension liability would be if it were to be calculated using a discount rate that is 1 percentage point lower (6.00%) or 1 percentage point higher (8.00%) than the current rate: 1% Decrease Current Discount Rate 1% Increase Total pension liability $56,080,913 $49,290,987 $43,728,419 Plan fiduciary net position 34,210,064 34,210,064 34,210,064 Net pension liability $21,870,849 $15,080,923 $9,518,355 Page 79108 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Firefighters' Pension (cont.) Changes in net pension liability/(asset).The City's changes in net pension liability/(asset) for the calendar year ended April 30, 2017 was as follows: Increase (Decrease) Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability/Asset (a) - (b) Balances at April 30, 2016 $45,820,158 $31,897,074 $13,923,084 Service cost 860,148 -860,148 Interest on total pension liability 3,190,325 -3,190,325 Differences between expected and actual experience of the total pension liability 227,730 -227,730 Change of assumptions 1,401,097 -1,401,097 Benefit payments, including refunds of employee contributions (2,208,471)(2,208,471)- Contributions - employer -1,211,587 (1,211,587) Contributions - employee -290,383 (290,383) Net investment income -3,053,497 (3,053,497) Administration -(34,006)34,006 Balances at April 30, 2017 $49,290,987 $34,210,064 $15,080,923 Pension expense and deferred outflows of resources and deferred inflows of resources related to pensions.For the year ended April 30, 2017, the City recognized pension expense of $2,088,620. The City reported deferred outflows and inflows of resources related to pension from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Difference between expected and actual experience $189,775 $124,316 Assumption changes 1,167,581 - Net difference between projected and actual earnings on pension plan investments 613,703 - Total $1,971,059 $124,316 Page 80109 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Firefighters' Pension (cont.) The amounts reported as deferred outflows and inflows of resources related to pensions ($1,846,743) will be recognized in pension expense as follows: Year Ending April 30,Amount 2018 $501,401 2019 501,401 2020 501,401 2021 71,068 2022 271,472 Total $1,846,743 PENSION SEGMENT INFORMATION Fiduciary Net Position Pension Trust Police Pension Firefighters' Pension Total Assets Cash $445,007 $398,630 $843,637 Money markets 67,844 -67,844 Investments U.S. treasury obligations 8,020,625 2,298,361 10,318,986 U.S. government agencies 528,085 2,982,812 3,510,897 Municipal/corporate bonds 1,540,599 6,636,787 8,177,386 Mutual funds 15,975,101 21,781,655 37,756,756 Real estate investment fund 3,152,759 -3,152,759 Prepaids 1,860 10,007 11,867 Interest receivable 51,265 96,530 147,795 Due from primary government 6,710 7,865 14,575 Total Assets 29,789,855 34,212,647 64,002,502 Liabilities Accounts payable 31,407 2,583 33,990 Total Liabilities 31,407 2,583 33,990 Net Position Restricted for pensions $29,758,448 $34,210,064 $63,968,512 Page 81110 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) A.EMPLOYEES' RETIREMENT SYSTEM (cont.) Changes in Plan Net Position Pension Trust Police Pension Firefighters' Pension Total Additions Contributions Employer $1,895,500 $1,211,587 $3,107,087 Employee 371,695 290,383 662,078 Miscellaneous 717 219 936 Total Contributions 2,267,912 1,502,189 3,770,101 Investment Income Interest 495,186 743,168 1,238,354 Net appreciation in fair value of investments 2,221,093 2,370,324 4,591,417 Total Investment income 2,716,279 3,113,492 5,829,771 Less investment expense 104,833 89,620 194,453 Net investment income 2,611,446 3,023,872 5,635,318 Total Additions 4,879,358 4,526,061 9,405,419 Deductions Pension benefits and refunds 2,520,473 2,208,471 4,728,944 Other administrative expenses 4,600 4,600 9,200 Total Deductions 2,525,073 2,213,071 4,738,144 Change in net position 2,354,285 2,312,990 4,667,275 Net position, beginning of year 27,404,163 31,897,074 59,301,237 Net position, end of year $29,758,448 $34,210,064 $63,968,512 B.RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City accounts for its risk of loss in the Liability Insurance Fund through payments to the Intergovernmental Risk Management Agency. Page 82111 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) B.RISK MANAGEMENT (cont.) Public Entity Risk Pool IRMA The City participates in the Intergovernmental Risk Management Agency (IRMA). IRMA is an organization of municipalities and special districts in Northeastern Illinois that have formed an association under the Illinois Intergovernmental Co-operations Statute to pool their risk management needs. The agency administers a mix of self-insurance and commercial insurance coverages; property/casualty and workers’ compensation claim administration/litigation management services; unemployment claim administration; extensive risk management/loss control consulting and training programs; and a risk information system and financial reporting service for its members. The City’s payments to IRMA are displayed on the financial statements as expenditures/expenses in appropriate funds. The City assumes the first $25,000 of each occurrence, and IRMA has a mix of self- insurance and commercial insurance at various amounts above that level. Each member appoints one delegate, along with an alternate delegate, to represent the member on the Board of Directors. The City does not exercise any control over the activities of IRMA beyond its representation on the Board of Directors. Initial contributions are determined each year based on the individual member’s eligible revenue as defined in the bylaws of IRMA and experience modification factors based on past member loss experience. Members have a contractual obligation to fund any deficit of IRMA attributable to any membership year during which they were a member. Supplemental contributions may be required to fund these deficits. Beginning of Claims and End of Fiscal Year Changes in Claim Fiscal Year Liability Estimates Payments Liability 2015-2016 $144,825 $224,277 $213,438 $155,664 2016-2017 155,664 301,093 318,724 138,033 City of Lake Forest Medical and Dental Plan The City established the City of Lake Forest Medical and Dental Plan, a self-insurance plan providing health insurance for all employees of the City, effective January 1, 2000. Administration of the Plan is provided by Professional Benefit Administrators, Inc. (an outside agency). Liabilities are reported when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. An excess coverage insurance policy covers total claims in excess of $100,000 per participant in a plan year. Liabilities include all amounts for claims, including incremental costs that have been incurred but not reported (IBNR) and are reported in the Self Insurance Fund (internal service fund). The City has not had significant reductions in insurance coverage in any of the last three years. Page 83112 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) B.RISK MANAGEMENT (cont.) Public Entity Risk Pool (cont.) Changes in the balances of claims liabilities for the years ended April 30, 2017 and 2016 are as follows: Beginning of End of Fiscal Year Changes in Claim Fiscal Year Liability Estimates Payments Liability 2015-2016 $815,894 $5,186,100 $5,421,177 $580,817 2016-2017 580,817 4,749,766 4,589,080 741,503 The City has also purchased insurance from private insurance companies. For insured programs, there have been no significant reductions in insurance coverage. For all programs, settlement amounts have not exceeded insurance coverage for the current or three prior years. C.JOINT VENTURES Solid Waste Agency of Lake County The City of Lake Forest, the Great Lakes Naval Training Center, Lake County, and 41 other municipalities jointly operate the Solid W aste Agency of Lake County, (the Agency). The purpose of the Agency is to implement a regional approach to solid waste management which addresses the economic, political, and environmental issues in Lake County. The Agency is governed by a Board of Directors consisting of one official elected by each member. Each director has one vote. The governing body has authority to adopt its own budget and control the financial affairs of the the Agency. The Executive Committee of the Agency consists of nine members of the Board of Directors elected by the Board. Each member is entitled to one vote on the committee. The Executive Committee may take any action not specifically reserved on the Board of Directors by the Act, the Agency agreement, or the by-laws. The City does not have an equity interest in the Agency although there does exist a residual interest in the Agency's assets upon dissolution of the joint venture. The City has an ongoing financial responsibility for its share of Agency liabilities. Each participant is liable for their share of any of the Agency's contracts entered into while bound by the intergovernmental agreement until those contracts are paid off. To obtain the Agency's financial statements, contract the Solid W aste Agency of Lake County, Illinois, at 1311 N. Estes Street, Gurnee, Illinois 60031. Page 84113 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) C.JOINT VENTURES (cont.) Northern Suburban Special Recreation Association The City is a member of the Northern Suburban Special Recreation Association (NSSRA), which was organized by ten organizations in order to provide special recreation programs to the physically and mentally handicapped within their districts and to share the expenses of such programs on a cooperative basis. Each member's 1999 contribution was determined based upon the ratio of the members' assessed valuations. The NSSRA is governed by a Board of Directors which consists of one representative from each participating organization. Each Director has an equal vote. The representatives of NSSRA are appointed by the Board of Directors. The Board of Directors is the governing body of the NSSRA and is responsible for establishing all major policies and changes therein and for approving all budgets, capital outlay, programming, and master plans. The City does not have an equity interest in NSSRA although there does exist a residual interest in NSSRA's assets upon dissolution of the joint venture. The City has an ongoing financial responsibility for its share of the NSSRA's liabilities. Each participant is liable for their share of any of the NSSRA contracts entered into while bound by the intergovernmental agreement until those contracts are paid off. To obtain NSSRA's financial statements, contact Northern Suburban Special Recreation Association at 3105 MacArthur Blvd., Northbrook, Illinois 60062. D.COMMITMENTS AND CONTINGENCIES The City has outstanding construction contracts with contractors totaling $370,785 at April 30, 2017. W ork that has been completed on these projects but not yet paid for (including contract retainages) is reflected as accounts payable and expenditures. Page 85114 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) E.OTHER POSTEMPLOYMENT BENEFITS Plan Description In addition to providing the pension benefits described in Note IV. A., the City and Library (hereinafter City) provide post-employment health care benefits (OPEB) for retired employees. Hereinafter, the medical and dental plan benefits offered are referred to as the "Plan." The Plan offers several medical and dental insurance benefits options to eligible retirees and their dependents. The benefits, benefit levels, employee contributions and employer contributions are governed by the City Council and can only be amended by the City Council. The Plan is not accounted for as a trust fund and an irrevocable trust has not been established. The City does not issue a Plan financial report. Funding Policy The contribution requirements of plan members and the City are established and may be amended by the City Council and are detailed in the various plan benefit booklets provided to employees. The required contribution is based on projected pay-as-you-go financing requirements. For fiscal year 2017 the City contributed $196,571, representing current premiums. The City’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC) The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City’s annual OPEB cost for the year, the amount actually contributed to plan, and changes in the City’s net OPEB obligation to the Retiree Health Plan: City Library Annual required contribution $196,247 $29,871 Interest on net OPEB obligation 11,382 1,951 Adjustment to annual required contribution (9,485)(1,626) Annual OPEB cost 198,144 30,196 Contributions made (188,313)(8,258) Increase in net OPEB obligation 9,831 21,938 Net OPEB Obligation - Beginning of Year 284,538 48,771 Net OPEB Obligation - End of Year $294,369 $70,709 Page 86115 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) E.OTHER POSTEMPLOYMENT BENEFITS (cont.) The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation were as follows: Fiscal Year Ended Annual OPEB Cost Percentage of Annual OPEB Cost Contributed Net OPEB Obligation City: April 30, 2015 $224,739 87.30%$229,476 April 30, 2016 233,865 76.46%284,538 April 30, 2017 198,144 95.04%294,369 Library: April 30, 2015 $22,996 17.80%$31,144 April 30, 2016 24,039 26.55%48,771 April 30, 2017 30,196 27.35%70,709 The funded status of the plan as of April 30, 2017, the most recent actuarial valuation date, was as follows: City Library Actuarial accrued liability (AAL)$3,736,584 $286,873 Actuarial value of plan assets -- Unfunded Actuarial Accrued Liability (UAAL)$3,736,584 $286,873 Funded ratio (actuarial value of plan assets/AAL)-%-% Covered payroll (active plan members)$21,743,897 $1,778,891 UAAL as a percentage of covered payroll 17.18%16.13% The projection of future benefit payments for an ongoing plan involves estimates for 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 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. Page 87116 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) E.OTHER POSTEMPLOYMENT BENEFITS (cont.) 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 benefit costs between the employer and plan members to that point. The 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 April 30, 2017, actuarial valuation, the entry age actuarial cost method was used. The actuarial assumptions included a 4.0 percent investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the plan at the valuation date, and an annual healthcare cost trend rate of 8.5 percent initially, reduced by decrements to an ultimate rate of 5.5 percent ultim ately. Both rates included a 3.0 percent inflation assumption. The actuarial value of assets were determined using market value. The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at April 30, 2017 was 30 years. F.SUBSEQUENT EVENTS On June 05, 2017 the City issued general obligation bonds in the amount of $9,295,000 with an interest rate range of 2.00 - 3.50%. This amount will be used for the purpose of financing certain capital improvements to the City's water treatment plant. G.LAUREL AND WESTERN TAX INCREMENT FINANCING (TIF) DISTRICT The City approved the Laurel and W estern TIF in January 2015. The TIF district is comprised of 10.6 acres. The City acquired the single parcel not previously owned by the City and prepared the site for a mix of housing options. Demolition of the seven structures was completed in preparation for the developm ent of the site. The City entered into a Property Purchase Agreement with Focus Acquisition Company LLC for the sale and redevelopment of all the developable land within the district. Following environm ental remediation and site preparation required by the City, as well as the completion of contingency and inspection periods under the agreement, the sale of the property was closed in September 2016. The purchase price of the City property was $12 million, consisting of $5.625 million paid to the City at closing and a TIF Note of $6.375 million executed between the City and the developer. The TIF Note was subsequently assigned by the developer to the City to allow repayment of the note from future TIF increment. As of April 30, 2017, the City has not received any TIF increment and anticipates the TIF increment to begin with the 2017 levy year, collected in 2018 (City’s FY2019). Because the TIF Note does not meet the definition of an asset pursuant to GASB Concept Statement 4 as of the financial statement date, the Note receivable has not been reported on the City’s financial statements. Revenue will be recognized as payments on the TIF Note are made. A redevelopment agreement between the City and developer was also executed in September 2016. As of April 30, 2017, the City has received the development fees of $2,368,712 and construction has begun. The development plan calls for a mix of housing consisting of 12 single family homes, 42 condominium units and 111 apartments. Page 88117 CITY OF LAKE FOREST NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended April 30, 2017 NOTE IV - OTHER INFORMATION (cont.) H.EFFECT OF NEW ACCOUNTING STANDARDS ON CURRENT-PERIOD FINANCIAL STATEMENTS The Governmental Accounting Standards Board (GASB) has approved the following: Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not Within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68 Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions Statement No. 80, Blending Requirements for Certain Component Units - an Amendment of GASB Statement No. 14 Statement No. 81, Irrevocable Split-Interest Agreements Statement No. 82, Pension Issues - an Amendment of GASB Statements No. 67, No. 68, and No. 73 Statement No. 83, Certain Asset Retirement Obligations Statement No. 84, Fiduciary Activities Statement No. 85, Omnibus 2017 Statement No. 86, Certain Debt Extinguishment Issues Statement No. 87, Leases When they become effective, application of these standards may restate portions of these financial statements. Page 89118 R E Q U I R E D S U P P L E M E N T A R Y I N F O R M A T I O N 119 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Taxes Property $17,994,691 $17,994,691 $18,024,168 $29,477 Other taxes 3,031,742 3,031,742 3,114,897 83,155 Intergovernmental 6,310,083 6,310,083 6,114,346 (195,737) Licenses and permits 4,815,287 4,815,287 5,157,398 342,111 Fines, forfeitures and penalties 225,250 225,250 312,643 87,393 Charges for services 2,887,230 2,887,230 3,051,184 163,954 Grants and contributions --8,218 8,218 Investment income 83,000 83,000 203,554 120,554 Miscellaneous 685,162 685,162 791,954 106,792 Total Revenues 36,032,445 36,032,445 36,778,362 745,917 EXPENDITURES Current General government 11,182,115 11,209,861 9,895,864 1,313,997 Highways and streets 2,481,977 2,567,614 2,276,480 291,134 Sanitation 2,351,704 2,351,704 2,311,435 40,269 Public safety 15,420,787 15,482,443 14,767,076 715,367 Capital Outlay 173,360 --- Debt Service Contingency 3,302,198 3,302,198 -3,302,198 Principal retirement -173,360 173,360 - Total Expenditures 34,912,141 35,087,180 29,424,215 5,662,965 Excess (deficiency) of revenues over (under) expenditures 1,120,304 945,265 7,354,147 6,408,882 OTHER FINANCING SOURCES (USES) Transfers in --13,991 13,991 Transfers out (1,236,999)(1,236,999)(1,572,883)(335,884) Total Other Financing Sources (Uses)(1,236,999)(1,236,999)(1,558,892)(321,893) Net Change in Fund Balance $(116,695)$(291,734)5,795,255 $6,086,989 FUND BALANCE - Beginning of Year 23,782,193 FUND BALANCE - END OF YEAR $29,577,448 See independent auditors' report and accompanying notes to required supplementary information. Page 90120 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - PARKS AND RECREATION FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Property taxes $5,484,840 $5,484,840 $5,472,173 $(12,667) Intergovernmental 40,000 40,000 42,792 2,792 Charges for services 3,105,348 3,105,348 2,520,926 (584,422) Grants and contributions 204,625 204,625 167,911 (36,714) Investment income 27,437 27,437 36,617 9,180 Miscellaneous 29,000 29,000 41,516 12,516 Total Revenues 8,891,250 8,891,250 8,281,935 (609,315) EXPENDITURES Current Culture and recreation 8,495,203 8,529,231 7,995,380 533,851 Capital Outlay 584,847 684,710 539,359 145,351 Contingency 953,895 953,895 -953,895 Total Expenditures 10,033,945 10,167,836 8,534,739 1,633,097 Excess (deficiency) of revenues over (under) expenditures (1,142,695)(1,276,586)(252,804)1,023,782 OTHER FINANCING SOURCES (USES) Transfers in 359,998 359,998 364,498 4,500 Transfers out (175,000)(175,000)(358,000)(183,000) Total Other Financing Sources (Uses)184,998 184,998 6,498 (178,500) Net Change in Fund Balance $(957,697)$(1,091,588)(246,306)$845,282 FUND BALANCE - Beginning of Year 3,022,756 FUND BALANCE - END OF YEAR $2,776,450 See independent auditors' report and accompanying notes to required supplementary information. Page 91121 See independent auditors' report and accompanying notes to required supplementary information Page 92 CITY OF LAKE FOREST ILLINOIS MUNICIPAL RETIREMENT FUND SCHEDULE OF CHANGES IN THE CITY'S NET PENSION LIABILITY AND RELATED RATIOS For the past two fiscal years City Library Total Total pension liability Service cost 1,549,831$ 208,143$ 1,757,974$ Interest on total pension liability 7,086,670 951,742 8,038,412 Differences between expected and actual expereince of the total pension liability 796,382 106,954 903,336 Changes of assumptions 103,436 13,891 117,327 Transfer of liability (13,798,877) (1,853,193) (15,652,070) Benefit payments, including refunds of member contributions (4,968,065) (667,212) (5,635,277) Net change in total pension liability (9,230,623) (1,239,675) (10,470,298) Total pension liability - beginning 96,324,203 12,936,367 109,260,570 Total pension liability - ending (a)87,093,580$ 11,696,692$ 98,790,272$ Plan fiduciary net position Employer contributions 1,757,095$ 235,978$ 1,993,073$ Employee contributions 664,444 89,235 753,679 Net investment income 442,808 59,469 502,277 Benefit payments, including refunds of member contribtuions (4,968,065) (667,212) (5,635,277) Other (net transfer)(12,005,830) (1,612,386) (13,618,216) Net change in plan fiduciary net position (14,109,548) (1,894,916) (16,004,464) Plan fiduciary net position - beginning 89,834,842 12,064,844 101,899,686 Plan fiduciary net position - ending (b)75,725,294$ 10,169,928$ 85,895,222$ Employer's net pension liability - ending (a) - (b)11,368,286$ 1,526,764$ 12,895,050$ Plan fiduciary net position as a percentage of the total pension liability 86.95% Covered-employee payroll 13,391,112$ Employer's net pension liability as a percentage of covered-employee payroll 96.30% Notes to Schedule: 2016 The City implemented GASB Statement No. 68 in fiscal year 2016. Information prior to fiscal year 2016 is not available. 122 See independent auditors' report and accompanying notes to required supplementary information Page 93 City Library Total 1,315,386$ 160,837$ 1,476,223$ 6,584,652 668,406 7,253,058 (689,342) (84,288) (773,630) (209,390) (25,603) (234,993) - - - (4,566,385) (558,348) (5,124,733) 2,434,921 161,004 2,595,925 87,093,580 11,696,692 98,790,272 89,528,501$ 11,857,696$ 101,386,197$ 1,494,964$ 182,795$ 1,677,759$ 558,977 68,348 627,325 5,250,256 641,968 5,892,224 (4,566,385) (558,348) (5,124,733) 262,841 32,138 294,979 3,000,653 366,901 3,367,554 75,725,294 10,169,928 85,895,222 78,725,947$ 10,536,829$ 89,262,776$ 10,802,554$ 1,320,867$ 12,123,421$ 88.04% 13,135,941$ 92.29% 2017 123 See independent auditors' report and accompanying notes to required supplementary information Page 94 CITY OF LAKE FOREST ILLINOIS MUNICIPAL RETIREMENT FUND SCHEDULE OF EMPLOYER CONTRIBUTIONS For the past two fiscal years City Library Total Actuarially determined contribution 1,741,632$ 233,902$ 1,975,534$ Contributions in relation to the actuarially determined contribution (1,757,095) (235,978) (1,993,073) Contribution deficiency (excess)(15,463)$ (2,076)$ (17,539)$ Covered-employee payroll 13,391,112$ Contributions as a percentage of covered- employee payroll 14.88% Notes to Schedule: Valuation date: Methods and assumptions used to determine contribution rates: Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation 3.00% Salary increases Investment rate of return 7.50% Retirement Age Mortality RP-2000 CHBCA Other information: There were no benefit changes during the year. 2016 4.40% to 16.00% including inflation Experience-based table of rates that are specific to the type of eligibility condition Actuarially determined contribution rates are calculated as of December 31 of the year prior to the fiscal year in which contributions are reported. Information is obtained from IMRF. More recent information is not available. The City implemented GASB Statement No. 68 in fiscal year 2016. Information prior to fiscal year 2016 is not available. Entry age normal Level percentage of payroll, closed 28 years 5-Year Smoothed Market 124 See independent auditors' report and accompanying notes to required supplementary information Page 95 City Library Total 1,454,901$ 177,896$ 1,632,797$ (1,494,964) (182,795) (1,677,759) (40,063)$ (4,899)$ (44,962)$ 13,135,941$ 12.77% 2017 125 See independent auditors' report and notes to required supplementary information. Page 96 2015 2016 2017 Total pension liability Service cost 845,979$ 883,178$ 931,083$ Interest on total pension liability 3,219,893 3,657,765 3,660,514 Differences between expected and actual experience of the total pension liability 2,713 (2,129,040) 306,030 Changes of assumptions 3,568,719 - 1,248,764 Benefit payments, including refunds of member contributions (2,193,705) (2,320,588) (2,520,473) Other (16,057) - - Net change in total pension liability 5,427,542 91,315 3,625,918 Total pension liability - beginning 47,103,353 52,530,895 52,622,210 Total pension liability - ending (a)52,530,895$ 52,622,210$ 56,248,128$ Plan fiduciary net position Employer contributions 1,706,203$ 1,806,270$ 1,895,500$ Employee contributions 360,156 373,216 371,695 Net investment income 1,669,508 (475,655) 2,635,379 Benefit payments, including refunds of member contributions (2,193,705) (2,320,588) (2,520,473) Administrative expenses (4,150) (4,835) (27,816) Net change in plan fiduciary net position 1,538,012 (621,592) 2,354,285 Plan fiduciary net position - beginning 26,487,743 28,025,755 27,404,163 Plan fiduciary net position - ending (b)28,025,755$ 27,404,163$ 29,758,448$ City's net pension liability - ending (a) - (b)24,505,140$ 25,218,047$ 26,489,680$ Plan fiduciary net position as a percentage of the total pension liability 53.35%52.08%52.91% Covered-employee payroll 3,590,934$ 3,759,611$ 3,750,706$ City's net pension liability as a percentage of covered- employee payroll 682.42%670.76%706.26% Notes to Schedule: The Pension implemented GASB Statement No. 67 in fiscal year 2015. Information prior to fiscal year 2015 is not available. For measurement date April 30, 2017, amounts reported as changes of assumptions resulted from the following changes: -The healthy mortality table was updated from the RP-2000 Combined Healthy table with a blue collar adjustment to the RP- 2000 Combined Healthy table with a blue collar adjustment, projected to the valuation date with Scale BB. -The salary increase assumption was changed to better reflect our expectation of plan experience. -The disabled mortality table was updated from the RP-2000 Disabled table to the RP-2000 Disabled table, projected to the valuation date with Scale BB. CITY OF LAKE FOREST POLICE PENSION FUND SCHEDULE OF CHANGES IN THE CITY'S NET PENSION LIABILITY AND RELATED RATIOS Last Three Fiscal Years Changes of assumptions. For Fiscal Year 2015, the mortality, disability, turnover and retirement assumptions were revised to reflect the most recent study conducted by the Illinois Department of Insurance. 126 See independent auditors' report and notes to required supplementary information.Page 97 CITY OF LAKE FOREST POLICE PENSION FUND SCHEDULE OF EMPLOYER CONTRIBUTIONS Last Ten Fiscal Years 2008 2009 2010 2011 Actuarially determined contribution 917,388$ 1,025,521$ 1,128,050$ 1,405,652$ Contributions in relation to the actuarially determined contribution 928,718 1,038,121 1,128,592 1,412,730 Contribution deficiency (excess)(11,330)$ (12,600)$ (542)$ (7,078)$ Covered-employee payroll 3,162,441$ 3,162,441$ 3,283,760$ 3,322,493$ Contributions as a percentage of covered- employee payroll 29.37%32.83%34.37%42.52% Notes to Schedule: Methods and assumptions used to determine contribution rates: Actuarial cost method Amortization method Remaining amortization period Asset valuation method Salary increases Investment rate of return Retirement age Mortality The Pension implemented GASB Statement No. 67 in fiscal year 2015. Information prior to fiscal year 2015 is derived from actuarial valuations developed in conformity with GASB Statement No. 25 and 27. Mortality rates were based on the RP-2000 Mortality Table Entry-age normal Level percentage of payroll, closed 26 years (as of 05/01/2015 valuation) 5-year average market value 5.50% 50-62 7.00%, net of pension plan investment expense Valuation date: Actuarially determined contributions are calculated as of May 1, two years prior to the year in which contributions are reported. 127 See independent auditors' report and notes to required supplementary information.Page 98 2012 2013 2014 2015 2016 2017 1,372,431$ 1,375,906$ 1,384,307$ 1,508,450$ 1,810,315$ 1,737,445$ 1,515,074 1,502,075 1,563,964 1,706,203 1,806,270 1,895,500 (142,643)$ (126,169)$ (179,657)$ (197,753)$ 4,045$ (158,055)$ 3,359,679$ 3,170,518$ 3,518,797$ 3,590,934$ 3,759,611$ 3,750,706$ 45.10%47.38%44.45%47.51%48.04%50.54% 128 See independent auditors' report and notes to required supplementary information.Page 99 2015 2016 2017 Annual money-weighted rate of return, net of investment expense 6.79%-1.44%9.67% Notes to Schedule: The Pension implemented GASB Statement No. 67 in fiscal year 2015. Information prior to fiscal year 2015 is not available. CITY OF LAKE FOREST POLICE PENSION FUND SCHEDULE OF INVESTMENT RETURNS Last Three Fiscal Years 129 See independent auditors' report and notes to required supplementary information.Page 100 2015 2016 2017 Total pension liability Service cost 912,154$ 926,420$ 860,148$ Interest on total pension liability 2,754,242 3,072,945 3,190,325 Differences between expected and actual experience actual experience of the total pension liability (213,530) (186,474) 227,730 Changes of assumptions 2,024,054 - 1,401,097 Benefit payments, including refunds of member contributions (1,769,849) (1,931,047) (2,208,471) Net change in total pension liability 3,707,071 1,881,844 3,470,829 Total pension liability - beginning 40,231,243 43,938,314 45,820,158 Total pension liability - ending (a)43,938,314$ 45,820,158$ 49,290,987$ Plan fiduciary net position Employer contributions 1,168,287$ 1,216,585$ 1,211,587$ Employee contributions 296,676 297,946 290,383 Net investment income 1,871,817 60,335 3,053,497 Miscellaneous revenue - 100 - Benefit payments, including refunds of member contributions (1,769,849) (1,931,047) (2,208,471) Administrative expenses (4,150) (4,835) (34,006) Net change in plan fiduciary net position 1,562,781 (360,916) 2,312,990 Plan fiduciary net position - beginning 30,695,209 32,257,990 31,897,074 Plan fiduciary net position - ending (b)32,257,990$ 31,897,074$ 34,210,064$ City's net pension liability - ending (a) - (b)11,680,324$ 13,923,084$ 15,080,923$ Plan fiduciary net position as a percentage of the total pension liability 73.42%69.61%69.40% Covered-employee payroll 3,111,216$ 2,924,893$ 3,071,211$ City's net pension liability as a percentage of covered- employee payroll 375.43%476.02%491.04% Notes to Schedule: The Pension implemented GASB Statement No. 67 in fiscal year 2015. Information prior to fiscal year 2015 is not available. -The healthy mortality table was updated from the RP-2000 Combined Healthy table with a blue collar adjustment to the RP- 2000 Combined Healthy table with a blue collar adjustment, projected to the valuation date with Scale BB. -The disabled mortality table was updated from the RP-2000 Disabled table to the RP-2000 Disabled table, projected to the valuation date with Scale BB. -The salary increase assumption was changed to better reflect our expectation of plan experience. Changes of assumptions. For Fiscal Year 2015, the mortality, disability, turnover and retirement assumptions were revised to reflect the most recent study conducted by the Illinois Department of Insurance. CITY OF LAKE FOREST FIREFIGHTERS' PENSION FUND SCHEDULE OF CHANGES IN THE CITY'S NET PENSION LIABILITY AND RELATED RATIOS Last Three Fiscal Years For measurement date April 30, 2017, amounts reported as changes of assumptions resulted from the following changes: 130 See independent auditors' report and notes to required supplementary information.Page 101 CITY OF LAKE FOREST FIREFIGHTERS' PENSION FUND SCHEDULE OF EMPLOYER CONTRIBUTIONS Last Ten Fiscal Years 2008 2009 2010 2011 Actuarially determined contribution 608,241$ 662,323$ 761,978$ 954,946$ Contributions in relation to the actuarially determined contribution 610,671 701,472 810,129 960,850 Contribution deficiency (excess)(2,430)$ (39,149)$ (48,151)$ (5,904)$ Covered-employee payroll 2,855,889$ 2,855,889$ 2,926,591$ 2,644,320$ Contributions as a percentage of covered- employee payroll 21.38%24.56%27.68%36.34% Notes to Schedule: Methods and assumptions used to determine contribution rates: Actuarial cost method Amortization method Remaining amortization period Asset valuation method Salary increases Investment rate of return Retirement age Mortality Entry-age normal The Pension implemented GASB Statement No. 67 in fiscal year 2015. Information prior to fiscal year 2015 is derived from actuarial valuations developed in conformity with GASB Statement No. 25 and 27. 50-62 Mortality rates were based on the RP-2000 Mortality Table Level percentage of payroll, closed 19 years (as of 05/01/2015 valuation) 5-year average market value 5.50% 7.00%, net of pension plan investment expense Valuation date: Actuarially determined contributions are calculated as of May 1, two years prior to the year in which contributions are reported. 131 See independent auditors' report and notes to required supplementary information.Page 102 2012 2013 2014 2015 2016 2017 862,452$ 894,551$ 894,384$ 950,325$ 1,217,702$ 1,137,826$ 983,298 1,026,345 1,090,695 1,168,287 1,216,585 1,211,587 (120,846)$ (131,794)$ (196,311)$ (217,962)$ 1,117$ (73,761)$ 2,941,767$ 3,049,732$ 3,004,889$ 3,111,216$ 2,924,893$ 3,071,211$ 33.43%33.65%36.30%37.55%41.59%39.45% 132 See independent auditors' report and notes to required supplementary information. Page 103 CITY OF LAKE FOREST FIREFIGHTERS' PENSION FUND SCHEDULE OF INVESTMENT RETURNS Last Three Fiscal Years 2015 2016 2017 Annual money-weighted rate of return, net of investment expense 6.48%0.26%9.66% Notes to Schedule: The Pension implemented GASB Statement No. 67 in fiscal year 2015. Information prior to fiscal year 2015 is not available. 133 CITY OF LAKE FOREST OTHER POSTEMPLOYMENT BENEFITS PLAN SCHEDULE OF EMPLOYER CONTRIBUTIONS AND SCHEDULE OF FUNDING PROGRESS For the Year Ended April 30, 2017 Schedule of Annual Required Contributions - City Year Ended Annual Required Contribution Percentage Contributed 04/30/17 $196,247 96.0 % 04/30/16 232,335 77.0 % 04/30/15 223,399 87.9 % 04/30/14 145,288 101.2 % 04/30/13 94,954 66.9 % 04/30/12 94,954 71 % Schedule of Annual Required Contributions - Library Year Ended Annual Required Contribution Percentage Contributed 04/30/17 $29,871 27.6 % 04/30/16 23,831 26.8 % 04/30/15 22,915 17.8 % 04/30/14 3,786 0.0 % 04/30/13 2,727 0.0 % 04/30/12 2,727 0.0 % Schedule of Funding Progress - City Actuarial Valuation Date Actuarial Value of Assets (a) Actuarial Accrued Liability (AAL) - Entry Age (b) Unfunded AAL (UAAL) (b-a) Funded Ratio (a/b) Covered Payroll (c) UAAL as a Percentage of Covered Payroll ((b-a)/c) 04/30/17 $-$3,736,584 $3,736,584 0%$21,743,897 17.18% 04/30/15 -3,786,380 3,786,380 0%18,087,734 20.93% 04/30/13 -2,363,491 2,363,491 0%16,930,261 13.96% Schedule of Funding Progress - Library Actuarial Valuation Date Actuarial Value of Assets (a) Actuarial Accrued Liability (AAL) - Entry Age (b) Unfunded AAL (UAAL) (b-a) Funded Ratio (a/b) Covered Payroll (c) UAAL as a Percentage of Covered Payroll ((b-a)/c) 04/30/17 $-$286,873 $286,873 0%$1,778,891 16.13% 04/30/15 -272,766 272,766 0%1,288,196 21.17% 04/30/13 -34,113 34,113 0%1,306,979 2.61% See independent auditors' report and accompanying notes to required supplementary information. Page 104134 CITY OF LAKE FOREST NOTES TO REQUIRED SUPPLEMENTARY INFORMATION For the Year Ended April 30, 2017 BUDGETARY INFORMATION Budgets for the General and major special revenue fund are adopted on a basis of accounting consistent with accounting principles generally accepted in the United States of America (GAAP). See independent auditors' report. Page 105135 S U P P L E M E N T A R Y I N F O R M A T I O N 136 Nonmajor Special Revenue Funds Asset Forfeiture Fund –This fund accounts for revenues received from drug arrests (convicted property). Used solely for drug prevention programs administered by the Lake Forest Police Department. Foreign Fire Insurance Tax Fund –This fund accounts for revenues received from the 2% tax on fire insurance companies. Administered by members of the Fire Department to benefit the Fire Department. Emergency Telephone Fund –This fund accounts for the operations and maintenance of the emergency 911 telephone sys tem. Financing is provided by a specific monthly surcharge on customer telephone bills. Parks and Public Land Fund –This fund accounts for the revenues received from grants, contributions and the collection of open space fees. Such revenues are to be used to purchase or improve land. Motor Fuel Tax Fund –This fund accounts for the revenues received from the State of Illinois for the local share of the motor fuel tax collections. General Cemetery Fund –This fund accounts for the operations of the cemetery commission. Financing is provided by the proceeds from cemetery lot sales, user charges, and donations. Senior Resources Commission Fund –This fund accounts for gifts, activity fees, and investments used to finance senior citizens’ programs and activities. Housing Trust Fund –This fund accounts for half of the revenues received from the demolition tax. Revenues will be used for affordable housing projects in Lake Forest. Nonmajor Capital Projects Funds Route 60 Bridge Improvements Fund –This fund accounts for the pledged funds from various corporations and local governments to be used for the widening of the Route 60 Bridge over I-94. Route 60 Intersection Improvements Fund –This fund accounts for the monies received from corporations and state and federal grants used for the improvements to be made to the intersection at Route 60 and Field Drive. Laurel/Western Redevelopment TIF Fund –This fund accounts for tax increment revenues to be used for the improvements in the TIF district. Major Capital Projects Fund Capital Improvements Fund –This fund accounts for revenues to be used to fund city building and infrastructure projects. Major Debt Service Fund Debt Service Fund –This fund accounts for the principal and interest currently due on general obligation bonds. 137 CITY OF LAKE FOREST COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS As of April 30, 2017 Special Revenue Funds Asset Forfeiture Foreign Fire Insurance Tax Emergency Telephone Parks and Public Land Motor Fuel Tax ASSETS Cash and cash equivalents $133,729 $22,212 $(49,681)$365,206 $1,262,065 Investments -157,206 --- Receivables (net) Other 1,050 -323,779 -1,344 Due from other governments ----42,421 Advances to other funds ----- Due from fiduciary funds ----- Prepaid items --28,568 -- TOTAL ASSETS $134,779 $179,418 $302,666 $365,206 $1,305,830 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities Accounts payable $-$-$37,414 $-$1,680 Accrued liabilities ----- Deposits ----- Unearned revenues ----- Total Liabilities --37,414 -1,680 Deferred Inflows of Resources Unavailable revenues --21,000 -1,344 Total Deferred Inflows of Resources --21,000 -1,344 Fund Balances Nonspendable for prepaid items --28,568 -- Nonspendable for interfund advances ----- Restricted for culture and recreation ---365,206 - Restricted for highways and streets ----1,302,806 Restricted for public safety 134,779 179,418 215,684 -- Restricted for cemetery perpetual care ----- Restricted for affordable housing ----- Restricted for capital projects ----- Total Fund Balances 134,779 179,418 244,252 365,206 1,302,806 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AN D FUND BALANCES $134,779 $179,418 $302,666 $365,206 $1,305,830 Page 106138 Special Revenue Funds Capital Projects Fund General Cemetery Senior Resources Commission Housing Trust Route 60 Bridge Improvements Route 60 Intersection Improvements Laurel/W estern Redevelopment TIF Improvements Total Nonmajor Governmental Funds $1,435,120 $188,450 $743,879 $-$-$1,408,678 $5,509,658 4,810,836 -----4,968,042 4,500 (977)650,000 ---979,696 ------42,421 -----380,000 380,000 51,808 -----51,808 2,553 -----31,121 $6,304,817 $187,473 $1,393,879 $-$-$1,788,678 $11,962,746 $26,648 $9,584 $-$-$-$1,408 $76,734 8,995 9,805 ----18,800 --18,000 ---18,000 -6,745 ----6,745 35,643 26,134 18,000 --1,408 120,279 4,500 -650,000 ---676,844 4,500 -650,000 ---676,844 2,553 -----31,121 -----380,000 380,000 -161,339 ----526,545 ------1,302,806 ------529,881 6,262,121 -----6,262,121 --725,879 ---725,879 -----1,407,270 1,407,270 6,264,674 161,339 725,879 --1,787,270 11,165,623 $6,304,817 $187,473 $1,393,879 $-$-$1,788,678 $11,962,746 Page 107139 CITY OF LAKE FOREST COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended April 30, 2017 Special Revenue Funds Asset Forfeiture Foreign Fire Insurance Tax Emergency Telephone Parks and Public Land Motor Fuel Tax REVENUES Taxes: Other $-$-$-$-$- Intergovernmental 8,542 ---491,088 Fines, forfeitures and penalties 8,525 ---- Charges for services 21,500 103,596 280,388 78,338 - Grants and contributions ----9,519 Investment income 1,003 670 1,203 2,819 1,551 Miscellaneous ----- Total Revenues 39,570 104,266 281,591 81,157 502,158 EXPENDITURES Current General government ----- Highways and streets ----- Culture and recreation ----- Public safety -111,296 248,502 -- Capital Outlay 29,011 -11,997 165,000 1,680 Total Expenditures 29,011 111,296 260,499 165,000 1,680 Excess (deficiency) of revenues over expenditures 10,559 (7,030)21,092 (83,843)500,478 OTHER FINANCING SOURCES (USES) Transfers in ----- Proceeds from capital asset sales 5,000 ---- Transfers out ----- Total Other Financing Sources (Uses)5,000 ---- Net Change in Fund Balances 15,559 (7,030)21,092 (83,843)500,478 FUND BALANCES - Beginning of Year 119,220 186,448 223,160 449,049 802,328 FUND BALANCES - END OF YEAR $134,779 $179,418 $244,252 $365,206 $1,302,806 Page 108140 Special Revenue Funds Capital Projects Fund General Cemetery Senior Resources Commission Housing Trust Route 60 Bridge Improvements Route 60 Intersection Improvements Laurel/Western Redevelopment TIF Improvements Total Nonmajor Governmental Funds $-$-$48,000 $-$-$-$48,000 ------499,630 ------8,525 1,087,590 149,054 ----1,720,466 12,760 168,893 ----191,172 651,111 1,204 5,668 4,148 1,844 13,747 684,968 736 2,847 ----3,583 1,752,197 321,998 53,668 4,148 1,844 13,747 3,156,344 626,309 -30,000 62,283 402,568 140,415 1,261,575 ---841,981 --841,981 -536,909 ----536,909 ------359,798 -----203,316 411,004 626,309 536,909 30,000 904,264 402,568 343,731 3,411,267 1,125,888 (214,911)23,668 (900,116)(400,724)(329,984)(254,923) -239,611 ----239,611 ------5,000 ---(141,222)(13,991)(200,000)(355,213) -239,611 -(141,222)(13,991)(200,000)(110,602) 1,125,888 24,700 23,668 (1,041,338)(414,715)(529,984)(365,525) 5,138,786 136,639 702,211 1,041,338 414,715 2,317,254 11,531,148 $6,264,674 $161,339 $725,879 $-$-$1,787,270 $11,165,623 Page 109141 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - ASSET FORFEITURE FUND - NONMAJOR SPECIAL REVENUE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Intergovernmental $10,500 $10,500 $8,542 $(1,958) Charges for services 12,000 12,000 21,500 9,500 Fines, forfeitures and penalties --8,525 8,525 Investment income 515 515 1,003 488 Total Revenues 23,015 23,015 39,570 16,555 EXPENDITURES Capital Outlay 118,000 118,000 29,011 88,989 Contingency 11,800 11,800 -11,800 Total Expenditures 129,800 129,800 29,011 100,789 Excess (deficiency) of revenues over (under) expenditures (106,785)(106,785)10,559 117,344 OTHER FINANCING SOURCES (USES) Proceeds from capital asset sales --5,000 5,000 Total Other Financing Sources (Uses)--5,000 5,000 Net Change in Fund Balance $(106,785)$(106,785)15,559 $122,344 FUND BALANCE - Beginning of Year 119,220 FUND BALANCE - END OF YEAR $134,779 Page 110142 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - FOREIGN FIRE INSURANCE TAX FUND - NONMAJOR SPECIAL REVENUE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Charges for services $100,000 $100,000 $103,596 $3,596 Investment income 300 300 670 370 Total Revenues 100,300 100,300 104,266 3,966 EXPENDITURES Current Public safety 200,000 200,000 111,296 88,704 Contingency 20,000 20,000 -20,000 Total Expenditures 220,000 220,000 111,296 108,704 Net Change in Fund Balance $(119,700)$(119,700)(7,030)$112,670 FUND BALANCE - Beginning of Year 186,448 FUND BALANCE - END OF YEAR $179,418 Page 111143 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - EMERGENCY TELEPHONE FUND - NONMAJOR SPECIAL REVENUE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Charges for services $244,800 $244,800 $280,388 $35,588 Investment income 200 200 1,203 1,003 Total Revenues 245,000 245,000 281,591 36,591 EXPENDITURES Current Public safety 306,200 306,200 248,502 57,698 Capital Outlay 11,997 11,997 11,997 - Contingency 31,820 31,820 -31,820 Total Expenditures 350,017 350,017 260,499 89,518 Net Change in Fund Balance $(105,017)$(105,017)21,092 $126,109 FUND BALANCE - Beginning of Year 223,160 FUND BALANCE - END OF YEAR $244,252 Page 112144 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - PARKS AND PUBLIC LAND FUND - NONMAJOR SPECIAL REVENUE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Charges for services $125,344 $125,344 $78,338 $(47,006) Investment income 2,236 2,236 2,819 583 Total Revenues 127,580 127,580 81,157 (46,423) EXPENDITURES Capital Outlay 165,000 165,000 165,000 - Contingency 16,500 16,500 -16,500 Total Expenditures 181,500 181,500 165,000 16,500 Net Change in Fund Balance $(53,920)$(53,920)(83,843)$(29,923) FUND BALANCE - Beginning of Year 449,049 FUND BALANCE - END OF YEAR $365,206 Page 113145 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - MOTOR FUEL TAX FUND - NONMAJOR SPECIAL REVENUE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Grants and contributions $160,000 $160,000 $9,519 $(150,481) Intergovernmental 477,875 477,875 491,088 13,213 Investment income 3,508 3,508 1,551 (1,957) Total Revenues 641,383 641,383 502,158 (139,225) EXPENDITURES Capital Outlay 200,000 200,000 1,680 198,320 Contingency 20,000 20,000 -20,000 Total Expenditures 220,000 220,000 1,680 218,320 Net Change in Fund Balance $421,383 $421,383 500,478 $79,095 FUND BALANCE - Beginning of Year 802,328 FUND BALANCE - END OF YEAR $1,302,806 Page 114146 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL CEMETERY FUND - NONMAJOR SPECIAL REVENUE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Grants and contributions $12,000 $12,000 $12,760 $760 Charges for services 602,640 602,640 1,087,590 484,950 Investment income 50,000 50,000 651,111 601,111 Miscellaneous --736 736 Total Revenues 664,640 664,640 1,752,197 1,087,557 EXPENDITURES Current General government 852,402 852,402 626,309 226,093 Contingency 85,240 85,240 -85,240 Total Expenditures 937,642 937,642 626,309 311,333 Net Change in Fund Balance $(273,002)$(273,002)1,125,888 $1,398,890 FUND BALANCE - Beginning of Year 5,138,786 FUND BALANCE - END OF YEAR $6,264,674 Page 115147 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - SENIOR RESOURCES COMMISSION FUND - NONMAJOR SPECIAL REVENUE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Grants and contributions $178,500 $178,500 $168,893 $(9,607) Charges for services 197,409 197,409 149,054 (48,355) Investment income 350 350 1,204 854 Miscellaneous --2,847 2,847 Total Revenues 376,259 376,259 321,998 (54,261) EXPENDITURES Current Culture and recreation 607,972 607,972 536,909 71,063 Contingency 60,797 60,797 -60,797 Total Expenditures 668,769 668,769 536,909 131,860 Excess (deficiency) of revenues over (under) expenditures (292,510)(292,510)(214,911)77,599 OTHER FINANCING SOURCES Transfers in 248,111 248,111 239,611 (8,500) Total Other Financing Sources 248,111 248,111 239,611 (8,500) Net Change in Fund Balance $(44,399)$(44,399)24,700 $69,099 FUND BALANCE - Beginning of Year 136,639 FUND BALANCE - END OF YEAR $161,339 Page 116148 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - HOUSING TRUST FUND - NONMAJOR SPECIAL REVENUE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Other taxes $48,000 $48,000 $48,000 $- Investment income 2,600 2,600 5,668 3,068 Total Revenues 50,600 50,600 53,668 3,068 EXPENDITURES Current General government 250,000 365,000 30,000 335,000 Contingency 36,500 36,500 -36,500 Total Expenditures 286,500 401,500 30,000 371,500 Net Change in Fund Balance $(235,900)$(350,900)23,668 $374,568 FUND BALANCE - Beginning of Year 702,211 FUND BALANCE - END OF YEAR $725,879 Page 117149 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - ROUTE 60 BRIDGE IMPROVEMENTS FUND - NONMAJOR CAPITAL PROJECTS FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Investment income $-$-$4,148 $4,148 Total Revenues --4,148 4,148 EXPENDITURES Current General government --62,283 (62,283) Highways and streets 1,040,305 1,040,305 841,981 198,324 Contingency 104,031 104,031 -104,031 Total Expenditures 1,144,336 1,144,336 904,264 240,072 Excess (deficiency) of revenues over (under) expenditures (1,144,336)(1,144,336)(900,116)244,220 OTHER FINANCING SOURCES (USES) Transfers out --(141,222)(141,222) Total Other Financing Sources (Uses)--(141,222)(141,222) Net Change in Fund Balance $(1,144,336)$(1,144,336)(1,041,338)$102,998 FUND BALANCE - Beginning of Year 1,041,338 FUND BALANCE - END OF YEAR $- Page 118150 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - ROUTE 60 INTERSECTION IMPROVEMENTS FUND - NONMAJOR CAPITAL PROJECTS FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Investment income $-$-$1,844 $1,844 Total Revenues --1,844 1,844 EXPENDITURES Current General government --402,568 (402,568) Highways and streets 414,431 414,431 -414,431 Contingency 41,443 41,443 -41,443 Total Expenditures 455,874 455,874 402,568 53,306 Excess (deficiency) of revenues over (under) expenditures (455,874)(455,874)(400,724)55,150 OTHER FINANCING SOURCES (USES) Transfers out --(13,991)(13,991) Total Other Financing Sources (Uses)--(13,991)(13,991) Net Change in Fund Balance $(455,874)$(455,874)(414,715)$41,159 FUND BALANCE - Beginning of Year 414,715 FUND BALANCE - END OF YEAR $- Page 119151 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - LAUREL/W ESTERN REDEVELOPMENT TIF FUND - NONMAJOR CAPITAL PROJECTS FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Investment income $2,000 $2,000 $13,747 $11,747 Total Revenues 2,000 2,000 13,747 11,747 EXPENDITURES Current General government 106,500 141,960 140,415 1,545 Capital Outlay 1,300,000 1,548,469 203,316 1,345,153 Contingency 189,043 189,043 -189,043 Total Expenditures 1,595,543 1,879,472 343,731 1,535,741 Excess (deficiency) of revenues over (under) expenditures (1,593,543)(1,877,472)(329,984)1,547,488 OTHER FINANCING SOURCES (USES) Transfers out (200,000)(200,000)(200,000)- Total Other Financing Sources (Uses)(200,000)(200,000)(200,000)- Net Change in Fund Balance $(1,793,543)$(2,077,472)(529,984)$1,547,488 FUND BALANCE - Beginning of Year 2,317,254 FUND BALANCE - END OF YEAR $1,787,270 Page 120152 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - CAPITAL IMPROVEMENTS FUND - MAJOR CAPITAL PROJECTS FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Taxes Property $9,764 $9,764 $9,764 $- Other taxes 1,402,854 1,402,854 1,446,160 43,306 Grants and contributions 1,156,585 1,156,585 898,520 (258,065) Charges for services 643,008 643,008 712,741 69,733 Investment income 26,489 26,489 47,110 20,621 Miscellaneous 5,000 5,000 4,678 (322) Total Revenues 3,243,700 3,243,700 3,118,973 (124,727) EXPENDITURES Current General government 77,000 96,477 417,597 (321,120) Capital Outlay 4,601,153 5,577,648 4,489,106 1,088,542 Contingency 567,412 567,412 -567,412 Total Expenditures 5,245,565 6,241,537 4,906,703 1,334,834 Excess (deficiency) of revenues over (under) expenditures (2,001,865)(2,997,837)(1,787,730)1,210,107 OTHER FINANCING SOURCES (USES) Transfers in 275,770 275,770 376,568 100,798 Proceeds from capital asset sales 20,000 20,000 5,631,108 5,611,108 Transfers out -(5,600,000)(5,615,219)(15,219) Total Other Financing Sources (Uses)295,770 (5,304,230)392,457 5,696,687 Net Change in Fund Balance $(1,706,095)$(8,302,067)(1,395,273)$6,906,794 FUND BALANCE - Beginning of Year 5,970,787 FUND BALANCE - END OF YEAR $4,575,514 Page 121153 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - DEBT SERVICE FUND - MAJOR DEBT SERVICE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget REVENUES Taxes Property $2,420,679 $2,420,679 $2,422,759 $2,080 Grants and contributions 127,768 127,768 153,915 26,147 Investment income 6,775 6,775 17,266 10,491 Total Revenues 2,555,222 2,555,222 2,593,940 38,718 EXPENDITURES Current General government 6,250 6,250 6,250 - Debt service Principal retirement 1,628,336 7,733,336 7,733,336 - Interest and fiscal charges 1,639,191 1,639,191 1,639,191 - Total Expenditures 3,273,777 9,378,777 9,378,777 - Excess (deficiency) of revenues over (under) expenditures (718,555)(6,823,555)(6,784,837)38,718 OTHER FINANCING SOURCES (USES) Transfers in 988,974 988,974 6,781,993 5,793,019 Transfers out (635,854)(635,854)(235,346)400,508 Total Other Financing Sources (Uses)353,120 353,120 6,546,647 6,193,527 Net Change in Fund Balance $(365,435)$(6,470,435)(238,190)$6,232,245 FUND BALANCE - Beginning of Year 1,677,012 FUND BALANCE - END OF YEAR $1,438,822 Page 122154 Major Enterprise Fund Waterworks and Sewerage Fund –This fund accounts for the provision of water and sewer service to the residents of the City. Nonmajor Enterprise Fund Deerpath Golf Course Fund –This fund accounts for operations of the City golf course. Financing is provided by user charges from utilizing the golf course. 155 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENSES, AND NONOPERATING REVENUES (EXPENSES) - BUDGET AND ACTUAL (BUDGETARY BASIS) WATERW ORKS AND SEW ERAGE FUND - MAJOR ENTERPRISE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget OPERATING REVENUES Charges for services $7,930,827 $7,930,827 $7,763,663 $(167,164) Connection fees 103,500 103,500 102,550 (950) Miscellaneous 8,427 8,427 7,528 (899) Total Operating Revenues 8,042,754 8,042,754 7,873,741 (169,013) OPERATING EXPENSES General and administrative 2,410,100 2,410,100 2,550,163 (140,063) Operations and maintenance 3,692,607 4,200,269 3,675,911 524,358 Contingency 1,024,139 1,024,139 -1,024,139 Total Operating Expenses 7,126,846 7,634,508 6,226,074 1,408,434 NON-OPERATING REVENUES (EXPENSES) Investment income 31,605 31,605 56,774 25,169 Loss on disposal of capital assets --(17,365)(17,365) Principal retirement (1,822,000)(1,822,000)(1,822,000)- Interest expense (376,830)(376,830)(443,202)(66,372) Paying agent fees (2,999)(2,999)(500)2,499 Total Non-Operating Revenues (Expenses)(2,170,224)(2,170,224)(2,226,293)(56,069) Page 123156 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENSES, AND NONOPERATING REVENUE (EXPENSES) - BUDGET AND ACTUAL (BUDGETARY BASIS) DEERPATH GOLF COURSE FUND - NONMAJOR ENTERPRISE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget OPERATING REVENUES Charges for services $1,840,921 $1,840,921 $1,605,823 $(235,098) Miscellaneous --838 838 Total Operating Revenues 1,840,921 1,840,921 1,606,661 (234,260) OPERATING EXPENSES General and administrative 693,754 693,754 641,484 52,270 Operations and maintenance 1,297,709 1,297,709 1,456,056 (158,347) Contingency 209,053 209,053 -209,053 Total Operating Expenses 2,200,516 2,200,516 2,097,540 102,976 NON-OPERATING REVENUES (EXPENSES) Investment income 2,300 2,300 1,592 (708) Principal retirement (80,000)(80,000)(80,000)- Interest expense 18,570 (18,570)(16,016)2,554 Total Non-Operating Revenues (Expenses)(59,130)(96,270)(94,424)1,846 Page 124157 Internal Service Funds Fleet Fund –This fund accounts for the costs of operating a maintenance and repairs facility for automotive and other equipment used by other City departments. Such costs are billed to the other departments at actual cost plus an allocation of administrative costs based on actual costs. The automotive and other equipment is acquired by the various user departments. Self Insurance Fund –This fund accounts for the costs of the self-insured medical and dental plan. Administration of the plan is provided by Professional Benefit Administration, Inc. Liability Insurance Fund–This fund accounts for the costs of liability insurance. 158 CITY OF LAKE FOREST COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS As of April 30, 2017 Fleet Self Insurance Liability Insurance Totals ASSETS Current Assets Cash and cash equivalents $1,015,081 $4,742,507 $1,093,772 $6,851,360 Receivables Other 3,922 93,700 1,646,160 1,743,782 Inventories 344,266 --344,266 Prepaid items --515,483 515,483 Total Current Assets 1,363,269 4,836,207 3,255,415 9,454,891 Noncurrent Assets Capital assets (net of accumulated depreciation) Property and equipment 13,718 --13,718 Total Noncurrent Assets 13,718 --13,718 Total Assets 1,376,987 4,836,207 3,255,415 9,468,609 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources related to pensions 238,636 --238,636 Total Deferred Outflows of Resources 238,636 --238,636 LIABILITIES Current Liabilities Accounts payable 34,384 468,760 20,745 523,889 Accrued liabilities 20,537 741,503 117,288 879,328 Unearned revenue 1,214 --1,214 Total Current Liabilities 56,135 1,210,263 138,033 1,404,431 Noncurrent Liabilities Compensated absences 58,935 --58,935 Net pension liability 469,164 --469,164 Total Noncurrent Liabilities 528,099 --528,099 Total Liabilities 584,234 1,210,263 138,033 1,932,530 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources related to pensions 27,202 --27,202 Total Deferred Inflows of Resources 27,202 --27,202 NET POSITION Net investment in capital assets 13,718 --13,718 Unrestricted 990,469 3,625,944 3,117,382 7,733,795 TOTAL NET POSITION $1,004,187 $3,625,944 $3,117,382 $7,747,513 Page 125159 CITY OF LAKE FOREST COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS For the Year Ended April 30, 2017 Fleet Self Insurance Liability Insurance Totals OPERATING REVENUES Charges for services $1,976,836 $5,336,318 $1,902,853 $9,216,007 Total Operating Revenues 1,976,836 5,336,318 1,902,853 9,216,007 OPERATING EXPENSES General and administrative 1,753,868 5,458,166 1,150,361 8,362,395 Depreciation and amortization 4,805 --4,805 Total Operating Expenses 1,758,673 5,458,166 1,150,361 8,367,200 Operating Income (Loss)218,163 (121,848)752,492 848,807 NONOPERATING REVENUES Investment income 7,358 36,005 9,171 52,534 Total Nonoperating Revenues 7,358 36,005 9,171 52,534 Change in net position 225,521 (85,843)761,663 901,341 NET POSITION - Beginning of Year 778,666 3,711,787 2,355,719 6,846,172 NET POSITION - END OF YEAR $1,004,187 $3,625,944 $3,117,382 $7,747,513 Page 126160 CITY OF LAKE FOREST COMBINING STATEMENT OF CASH FLOW S INTERNAL SERVICE FUNDS For the Year Ended April 30, 2017 Fleet Self Insurance Liability Insurance Totals CASH FLOWS FROM OPERATING AC TIVITIES Receipts from interfund services provided $1,977,813 $5,261,678 $1,327,356 $8,566,847 Paid to suppliers for goods and services (977,554)(5,174,824)(1,094,745)(7,247,123) Paid to employees for services (702,943)--(702,943) Net Cash Flows From Operating Activities 297,316 86,854 232,611 616,781 CASH FLOWS FROM INVESTING AC TIVITIES Interest received 7,358 36,005 9,171 52,534 Net Cash Flows From Investing Activities 7,358 36,005 9,171 52,534 Net Change in Cash and Cash Equivalents 304,674 122,859 241,782 669,315 CASH AND CASH EQUIVALENTS - Beginning of Year 710,407 4,619,648 851,990 6,182,045 CASH AND CASH EQUIVALENTS - END OF YEAR $1,015,081 $4,742,507 $1,093,772 $6,851,360 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FLOWS FROM OPERATING ACTIVITIES Operating income (loss)$218,163 $(121,848)$752,492 $848,807 Adjustments to Reconcile Operating Income (Loss) to Net Cash Flows From Operating Activities Depreciation 4,805 --4,805 Changes in assets and liabilities Accounts receivable 2,298 (74,640)(575,497)(647,839) Inventories (33,560)--(33,560) Prepaid items --73,246 73,246 Deferred outflows related to pensions 104,731 --104,731 Accounts payable 6,744 122,656 (3,749)125,651 Accrued liabilities -160,686 (13,881)146,805 Accrued salaries (2,517)--(2,517) Net pension liability (21,782)--(21,782) Deferred inflows related to pensions 22,699 --22,699 Deferred revenue (1,321)--(1,321) Compensated absences (2,944)--(2,944) NET CASH FLOWS FROM OPERATING ACTIVITIES $297,316 $86,854 $232,611 $616,781 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES None Page 127161 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENSES, AND NONOPERATING REVENUES - BUDGET AND ACTUAL (BUDGETARY BASIS) FLEET FUND - INTERNAL SERVICE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget OPERATING REVENUES Charges for services $1,979,690 $1,979,690 $1,976,836 $(2,854) Total Operating Revenues 1,979,690 1,979,690 1,976,836 (2,854) OPERATING EXPENSES General and administrative 1,975,053 1,975,053 1,753,868 221,185 Depreciation and amortization --4,805 (4,805) Contingency 197,505 197,505 -197,505 Total Operating Expenses 2,172,558 2,172,558 1,758,673 413,885 NON-OPERATING REVENUES Investment income 1,000 1,000 7,358 6,358 Page 128162 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENSES, AND NONOPERATING REVENUE - BUDGET AND ACTUAL (BUDGETARY BASIS) SELF INSURANCE FUND - INTERNAL SERVICE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget OPERATING REVENUES Charges for services $5,640,871 $5,640,871 $5,336,318 $(304,553) Total Operating Revenues 5,640,871 5,640,871 5,336,318 (304,553) OPERATING EXPENSES General and administrative 6,160,000 6,160,000 5,458,166 701,834 Contingency 616,000 616,000 -616,000 Total Operating Expenses 6,776,000 6,776,000 5,458,166 1,317,834 NON-OPERATING REVENUES Investment income 17,900 17,900 36,005 18,105 Page 129163 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENSES, AND NONOPERATING REVENUE - BUDGET AND ACTUAL (BUDGETARY BASIS) LIABILITY INSURANCE FUND - INTERNAL SERVICE FUND For the Year Ended April 30, 2017 Budgeted Amounts Original Final Actual Variance with Final Budget OPERATING REVENUES Charges for services $1,327,348 $1,327,348 $1,902,853 $575,505 Total Operating Revenues 1,327,348 1,327,348 1,902,853 575,505 OPERATING EXPENSES General and administrative 1,255,507 1,255,507 1,150,361 105,146 Contingency 125,551 125,551 -125,551 Total Operating Expenses 1,381,058 1,381,058 1,150,361 230,697 NON-OPERATING REVENUES Investment income 2,000 2,000 9,171 7,171 Page 130164 Pension Trust Funds Police Pension Fund –This fund accounts for the accumulation of resources to be used for disability or retirement annuity payments to uniformed police department personnel at appropriate amounts and times in the future. Resources are contributed by employees at rates fixed by law and by the City at amounts determined by an independent actuary from a specific property tax levy. Firefighters’ Pension Fund –This fund accounts for the accumulation or resources to be used for disability or retirement annuity payments to uniformed fire department personnel at appropriate amounts and times in the future. Resources are contributed by employees at rates fixed by law and by the City at amounts determined by an independent actuary from a specific property tax levy. Private Purpose Trust Fund Cemetery Trust Fund –This fund accounts for monies provided by private donations. The investment earnings are expended for the operations of the cemetery. Ag ency Fund Special Assessment Fund –This fund accounts for the collection of special assessments of property owners and payments of related special assessment liabilities. The City does not have any outstanding special assessment. The cash balance is unclaimed rebated special assessments. 165 CITY OF LAKE FOREST COMBINING STATEMENT OF FIDUCIARY NET POSITION PENSION TRUST FUNDS As of April 30, 2017 Police Pension Firefighters' Pension Totals ASSETS Cash $445,007 $398,630 $843,637 Money markets 67,844 -67,844 Investments U.S. treasury obligations 8,020,625 2,298,361 10,318,986 U.S. government agencies 528,085 2,982,812 3,510,897 Municipal/corporate bonds 1,540,599 6,636,787 8,177,386 Mutual funds 15,975,101 21,781,655 37,756,756 Real estate investment fund 3,152,759 -3,152,759 Interest receivable 51,265 96,530 147,795 Prepaid items 1,860 10,007 11,867 Due from primary government 6,710 7,865 14,575 Total Assets 29,789,855 34,212,647 64,002,502 LIABILITIES Accounts payable 31,407 2,583 33,990 Total Liabilities 31,407 2,583 33,990 NET POSITION Held in trust for pension benefits $29,758,448 $34,210,064 $63,968,512 Page 131166 CITY OF LAKE FOREST COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION PENSION TRUST FUNDS For the Year Ended April 30, 2017 Police Pension Firefighters' Pension Total AD DITIONS Contributions Employer $1,895,500 $1,211,587 $3,107,087 Employee 371,695 290,383 662,078 Miscellaneous 717 219 936 Total Contributions 2,267,912 1,502,189 3,770,101 Interest Interest 495,186 743,168 1,238,354 Net appreciation in fair value of investments 2,221,093 2,370,324 4,591,417 Total Investment Income 2,716,279 3,113,492 5,829,771 Less Investment expense 104,833 89,620 194,453 Net Investment Income 2,611,446 3,023,872 5,635,318 Total Additions 4,879,358 4,526,061 9,405,419 DEDUCTIONS Pension benefits and refunds 2,520,473 2,208,471 4,728,944 Other administrative expenses 4,600 4,600 9,200 Total Deductions 2,525,073 2,213,071 4,738,144 Change in Net Position 2,354,285 2,312,990 4,667,275 NET POSITION - Beginning of Year 27,404,163 31,897,074 59,301,237 NET POSITION - END OF YEAR $29,758,448 $34,210,064 $63,968,512 Page 132167 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN FIDUCIARY NET POSITION - BUDGET AND ACTUAL - POLICE PENSION FUND - PENSION TRUST FUND For the Year Ended April 30, 2017 2017 Original Budget Final Budget Actual Variance with Final Budget Additions Contributions Employer $1,900,000 $1,900,000 $1,895,500 $(4,500) Employee 370,000 370,000 371,695 1,695 Miscellaneous --717 717 Total contributions 2,270,000 2,270,000 2,267,912 (2,088) Investment Income Interest 500,000 500,000 495,186 (4,814) Net appreciation in fair value of investments --2,221,093 2,221,093 Total investment income 500,000 500,000 2,716,279 2,216,279 Less Investment expense 115,000 115,000 104,833 10,167 Net investment income 385,000 385,000 2,611,446 2,226,446 Total additions 2,655,000 2,655,000 4,879,358 2,224,358 Deductions Pension benefits and refunds 2,350,000 2,350,000 2,520,473 (170,473) Other administrative expenses 5,000 5,000 4,600 400 Contingency 247,000 247,000 -247,000 Total deductions 2,602,000 2,602,000 2,525,073 76,927 Change in net position $53,000 $53,000 2,354,285 $2,301,285 Net position, beginning of year 27,404,163 Net position, end of year $29,758,448 Page 133168 CITY OF LAKE FOREST SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN FIDUCIARY NET POSITION - BUDGET AND ACTUAL - FIREFIGHTERS' PENSION FUND - PENSION TRUST FUND For the Year Ended April 30, 2017 2017 Original Budget Final Budget Actual Variance with Final Budget Additions Contributions Employer $1,213,722 $1,213,722 $1,211,587 $(2,135) Employee 290,000 290,000 290,383 383 Miscellaneous --219 219 Total contributions 1,503,722 1,503,722 1,502,189 (1,533) Investment Income Interest 500,000 500,000 743,168 243,168 Net appreciation in fair value of investments --2,370,324 2,370,324 Total investment income 500,000 500,000 3,113,492 2,613,492 Less Investment expense 90,000 90,000 89,620 380 Net investment income 410,000 410,000 3,023,872 2,613,872 Total additions 1,913,722 1,913,722 4,526,061 2,612,339 Deductions Pension benefits and refunds 2,090,000 2,090,000 2,208,471 (118,471) Other administrative expenses 5,000 5,000 4,600 400 Contingency 218,500 218,500 -218,500 Total deductions 2,313,500 2,313,500 2,213,071 100,429 Change in net position $(399,778)$(399,778)2,312,990 $2,712,768 Net position, beginning of year 31,897,074 Net position, end of year $34,210,064 Page 134169 Page 135 CITY OF LAKE FOREST Statement of Changes in Assets and Liabilities Agency Fund - Special Assessment Fund As of April 30, 2017 Balance,Balance, May 1, 2016 Additions Deletion April 30, 2017 Assets Cash and cash equivalents 60,174$ -$ -$ 60,174$ Liabilities Due to special assessment districts 60,174$ -$ -$ 60,174$ 170 Discretely Presented Component Unit Lake Forest Library –General Fund –This fund accounts for the operation and maintenance of the Lake Forest Library. Financing is provided by a specific annual property tax levy, charges for services, fines and forfeits, interest earned on investments and other miscellaneous revenues. 171 Page 136 CITY OF LAKE FOREST Discretely Presented Component Unit - Lake Forest Library Statement of Net Position and General Fund Balance Sheet General Statement of Fund Adjustments Net Position Assets and Deferred Outflows of Resources Cash and cash equivalents 2,893,943$ -$ 2,893,943$ uncollectibles) 3,906,063 - 3,906,063 5,838 - 5,838 Prepaid items 26,446 - 26,446 Capital assets not depreciated - 219,000 219,000 Capital assets depreciated, net of accumulated depreciation - 3,099,135 3,099,135 6,832,290 3,318,135 10,150,425 Deferred outflows of Resources Deferred outflows related to pensions - 672,819 672,819 Total Assets and Deferred Outflows of Resources 6,832,290$ 3,990,954$ 10,823,244$ Liabilities, Deferred Inflows of Resources, and Fund Balance/Net Position Liabilities 58,590$ -$ 58,590$ 68,891 - 68,891 Long-term obligations Due within one year - 33,051 33,051 Due in more than one year - 1,608,754 1,608,754 Total liabilities 127,481 1,641,805 1,769,286 Deferred Inflows of Resources Property taxes levied for future periods 3,906,063 - 3,906,063 Deferred inflows related to pensions - 76,584 76,584 Total deferred inflows of resources 3,906,063 76,584 3,982,647 Fund Balance/Net Position Nonspendable - prepaids 26,446 (26,446) - Unassigned 2,772,300 (2,772,300) - Net position Net investment in capital assets - 3,259,399 3,259,399 Unrestricted - 1,811,912 1,811,912 Total fund balance/net position 2,798,746 2,272,565 5,071,311 Total Liabilities, Deferred Inflows of Resources, and Fund Balance/Net Position 6,832,290$ 3,990,954$ 10,823,244$ Accounts payable Accrued liabilities As of April 30, 2017 Property taxes Receivables (net of allowance for Other taxes Total assets Capital assets 172 Page 137 CITY OF LAKE FOREST Discretely Presented Component Unit - Lake Forest Library Statement of Activities and General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance For the Year Ended April 30, 2017 Statement General of Fund Adjustments Activities Revenues 3,910,955$ -$ 3,910,955$ 36,677 - 36,677 35,010 - 35,010 15,374 - 15,374 Fines 36,746 - 36,746 27,573 - 27,573 4,062,335 - 4,062,335 Expenditures/expenses Current 3,422,129 553,876 3,976,005 Capital Outlay 137,159 (137,159) - Debt Service 25,489 (25,489) - Total expenditures/expenses 3,584,777 391,228 3,976,005 Net change in fund balance/net position 477,558 (391,228) 86,330 Other financing sources/(uses) Capital lease proceeds 84,225 (84,225) - Total other financing sources (uses)84,225 (84,225) - Excess (deficiency) of revenues and other financing sources over expenditures and other financing (uses)561,783 (475,453) 86,330 2,236,963 2,748,018 4,984,981 Fund balance/net position, end of year 2,798,746$ 2,272,565$ 5,071,311$ Fund balance/net position, beginning of year Property taxes Charges for services Total revenues Intergovernmental Grants and contributions Investment Income 173 Page 138 CITY OF LAKE FOREST Summary of Debt Service Requirements to Maturity As of April 30, 2017 General Fiscal Obligation Year Bonds 2018 4,885,744$ 2019 4,967,982 2020 5,260,090 2021 5,531,676 2022 5,403,988 2023 5,406,999 2024 4,492,058 2025 2,401,350 2026 2,406,274 2027 2,381,494 2028 2,384,782 2029 2,981,443 2030 2,973,638 2031 3,040,138 2032 2,967,838 2033 2,912,975 2034 1,620,125 2035 366,575 2036 365,025 2037 363,125 Total 63,113,317$ 174 Page 139 CITY OF LAKE FOREST Debt Service Requirements to Maturity - General Obligation Bonds As of April 30, 2017 Year Principal Interest Principal Interest Principal Interest 2018 60,000$ 10,935$ 16,461$ 3,590$ 114,335$ 30,228$ 2019 65,000 9,525 17,202 3,096 119,422 26,855 2020 65,000 7,932 17,993 2,563 124,857 23,213 2021 70,000 6,275 18,839 1,987 130,663 19,280 2022 75,000 4,350 19,743 1,365 136,870 15,034 2023 75,000 2,213 20,701 704 143,508 10,448 2024 - - - - 150,611 5,497 2025 - - - - - - 2026 - - - - - - 2027 - - - - - - 2028 - - - - - - 2029 - - - - - - 2030 - - - - - - 2031 - - - - - - 2032 - - - - - - 2033 - - - - - - 2034 - - - - - - 2035 - - - - - - 2036 - - - - - - 2037 - - - - - - 410,000$ 41,230$ 110,939$ 13,305$ 920,266$ 130,555$ Special Service Area 25 Fiscal Tax BondsTax Bonds Tax Bonds Special Service Area 26 Special Service Area 29 175 Page 140 CITY OF LAKE FOREST Debt Service Requirements to Maturity - General Obligation Bonds As of April 30, 2017 Year Principal Interest Principal Interest Principal Interest 2018 180,000$ 98,245$ -$ 172,500$ 210,000$ 243,974$ 2019 185,000 93,745 - 172,500 225,000 236,099 2020 190,000 88,195 - 172,500 215,000 227,099 2021 200,000 82,495 - 172,500 405,000 217,424 2022 205,000 76,495 - 172,500 415,000 198,693 2023 215,000 68,808 - 172,500 425,000 178,980 2024 225,000 60,745 - 172,500 435,000 158,793 2025 235,000 51,745 - 172,500 445,000 137,043 2026 245,000 42,345 - 172,500 460,000 114,792 2027 255,000 32,545 - 172,500 475,000 91,562 2028 265,000 22,345 - 172,500 490,000 67,100 2029 280,000 11,480 - 172,500 490,000 40,150 2030 - - 540,000 172,500 240,000 13,200 2031 - - 780,000 141,450 - - 2032 - - 820,000 96,600 - - 2033 - - 860,000 49,450 - - 2034 - - - - - - 2035 - - - - - - 2036 - - - - - - 2037 - - - - - - 2,680,000$ 729,188$ 3,000,000$ 2,530,000$ 4,930,000$ 1,924,909$ Obilgation Bonds Obligation Bonds Fiscal Series 2009 Series 2010 Series B 2010 Series C Obilgation Bonds 176 Page 141 CITY OF LAKE FOREST Debt Service Requirements to Maturity - General Obligation Bonds As of April 30, 2017 Fiscal Year Principal Interest Principal Interest 2018 125,000$ 12,788$ 2,270,000$ 433,500$ 2019 130,000 9,975 2,300,000 376,750 2020 130,000 7,050 2,400,000 319,250 2021 140,000 3,150 2,470,000 259,250 2022 - - 2,530,000 197,500 2023 - - 2,605,000 134,250 2024 - - 1,870,000 56,100 2025 - - - - 2026 - - - - 2027 - - - - 2028 - - - - 2029 - - - - 2030 - - - - 2031 - - - - 2032 - - - - 2033 - - - - 2034 - - - - 2035 - - - - 2036 - - - - 2037 - - - - 525,000$ 32,963$ 16,445,000$ 1,776,600$ 2011 Series A 2011 Series B Obligation Bonds Obligation Bonds 177 Page 142 CITY OF LAKE FOREST DebtService Requirements to Maturity - General Obligation Bonds As of April 30, 2017 Fiscal Year Principal Interest Principal Interest 2018 100,000$ 335,763$ 175,000$ 293,425$ 2019 200,000 333,763 175,000 289,050 2020 350,000 329,763 305,000 284,675 2021 430,000 322,763 305,000 277,050 2022 435,000 312,013 340,000 269,425 2023 440,000 298,962 355,000 260,925 2024 450,000 285,762 370,000 252,050 2025 460,000 272,262 385,000 242,800 2026 475,000 258,462 405,000 233,175 2027 480,000 241,837 410,000 223,050 2028 495,000 225,037 435,000 212,800 2029 930,000 206,475 650,000 200,838 2030 960,000 171,600 695,000 181,338 2031 1,085,000 133,200 740,000 160,488 2032 1,120,000 89,800 705,000 136,438 2033 1,125,000 45,000 720,000 113,525 2034 - - 1,530,000 90,125 2035 - - 330,000 36,575 2036 - - 340,000 25,025 2037 - - 350,000 13,125 9,535,000$ 3,862,462$ 9,720,000$ 3,795,900$ Series 2013 Series 2015 Obligation Bonds Obligation Bonds 178 Page 143 CITY OF LAKE FOREST Debt Service Requirements to Maturity - General Obligation Bonds As of April 30, 2017 Fiscal Year Principal Interest Total 2018 3,250,796$ 1,634,948$ 4,885,744$ 2019 3,416,624 1,551,358 4,967,982 2020 3,797,850 1,462,240 5,260,090 2021 4,169,502 1,362,174 5,531,676 2022 4,156,613 1,247,375 5,403,988 2023 4,279,209 1,127,790 5,406,999 2024 3,500,611 991,447 4,492,058 2025 1,525,000 876,350 2,401,350 2026 1,585,000 821,274 2,406,274 2027 1,620,000 761,494 2,381,494 2028 1,685,000 699,782 2,384,782 2029 2,350,000 631,443 2,981,443 2030 2,435,000 538,638 2,973,638 2031 2,605,000 435,138 3,040,138 2032 2,645,000 322,838 2,967,838 2033 2,705,000 207,975 2,912,975 2034 1,530,000 90,125 1,620,125 2035 330,000 36,575 366,575 2036 340,000 25,025 365,025 2037 350,000 13,125 363,125 48,276,205$ 14,837,112$ 63,113,317$ Total Requirements 179 Page 144 CITY OF LAKE FOREST Special Service Area 25 Special Tax Bonds – 2003 Series April 30, 2017 Date of issue:May 1, 2003 Date of maturity:December 15, 2022 Authorized issue:$1,050,000 Denomination of bonds:$5,000 Interest rate:1.95-2.95% Interest dates:June 15 and December 15 Payable at:Lake Forest Bank and Trust Lake Forest, Illinois Redeemable annually on December 15 Amount 2017 $60,000 2018 65,000 2019 65,000 2020 70,000 2021 75,000 Thereafter 75,000 $410,000 Bond Principal and Interest Requirements Tax levy Tax levy year Principal Interest Total June 15 Amount December 15 Amount 2016 $60,000 10,935 70,935 2017 $5,467 2017 5,468 2017 65,000 9,525 74,525 2018 4,763 2018 4,762 2018 65,000 7,932 72,932 2019 3,966 2019 3,966 2019 70,000 6,275 76,275 2020 3,138 2020 3,137 2020 75,000 4,350 79,350 2021 2,175 2021 2,175 Thereafter 75,000 2,213 77,213 Thereafter 1,107 Thereafter 1,106 $410,000 $41,230 $451,230 Coupons due on 180 Page 145 Special Service Area 26 Special Tax Bonds – 2003 Series April 30, 2017 Date of issue:October 7, 2003 Date of maturity:December 15, 2022 Authorized issue:$276,500 Denomination of bonds:One bond per maturity Interest rates:2.5-3.4% Interest dates:June 15 and December 15 Payable at:Lake Forest Bank and Trust Lake Forest, Illinois Redeemable annually on December 15 Amount 2017 $16,461 2018 17,202 2019 17,993 2020 18,839 2021 19,743 Thereafter 20,701 $110,939 Bond Principal and Interest Requirements Tax levy Tax levy year Principal Interest Total June 15 Amount December 15 Amount 2016 $16,461 $3,590 $20,051 2017 $1,795 2017 $1,795 2017 17,202 3,096 20,298 2018 1,548 2018 1,548 2018 17,993 2,563 20,556 2019 1,282 2019 1,281 2019 18,839 1,987 20,826 2020 994 2020 993 2020 19,743 1,365 21,108 2021 683 2021 682 Thereafter 20,701 704 21,405 Thereafter 352 Thereafter 352 $110,939 $13,305 $124,244 Coupons due on CITY OF LAKE FOREST 181 Page 146 CITY OF LAKE FOREST Special Service Area 29 Special Tax Bonds – 2004 Series April 30, 2017 Date of issue: Date of maturity:December 15, 2023 Authorized issue:$2,000,000 Denomination of bonds:One bond per maturity Interest rates:2.55-3.65% Interest dates:June 15 and December 15 Payable at:Lake Forest Bank and Trust Lake Forest, Illinois Redeemable annually on December 15 Amount 2017 $114,335 2018 119,422 2019 124,857 2020 130,663 2021 136,870 Thereafter 294,119 $920,266 Bond Principal and Interest Requirements Tax levy Tax levy year Principal Interest Total June 15 Amount December 15 Amount 2016 114,335 $30,228 $144,563 2017 $15,114 2017 $15,114 2017 119,422 26,855 146,277 2018 13,427 2018 13,428 2018 124,857 23,213 148,070 2019 11,606 2019 11,607 2019 130,663 19,280 149,943 2020 9,640 2020 9,640 2020 136,870 15,034 151,904 2021 7,517 2021 7,517 Thereafter 294,119 15,945 310,064 Thereafter 7,973 Thereafter 7,972 $920,266 $130,555 $1,050,821 Coupons due on December 20, 2004 182 Page 147 CITY OF LAKE FOREST General Obligation Bonds – 2009 April 30, 2017 Date of issue: Date of maturity:December 15, 2028 Authorized issue:$3,680,000 Denomination of bonds:$5,000 Interest rates:2.00 - 4.10% Interest dates:June 15 and December 15 Payable at:Wells Fargo Bank Chicago, Illinois Redeemable annually on December 15 Amount 2017 $180,000 2018 185,000 2019 190,000 2020 200,000 2021 205,000 Thereafter 1,720,000 $2,680,000 Bond Principal and Interest Requirements Tax levy Tax levy year Principal Interest Total June 15 Amount December 15 Amount 2016 $180,000 $98,245 $278,245 2017 $49,123 2017 $49,122 2017 185,000 93,745 278,745 2018 46,873 2018 46,872 2018 190,000 88,195 278,195 2019 44,097 2019 44,098 2019 200,000 82,495 282,495 2020 41,248 2020 41,247 2020 205,000 76,495 281,495 2021 38,248 2021 38,247 Thereafter 1,720,000 290,013 2,010,013 Thereafter 145,007 Thereafter 145,006 $2,680,000 $729,188 $3,409,188 Coupons due on May 14, 2009 183 Page 148 CITY OF LAKE FOREST General Obligation Bonds – 2010B April 30, 2017 Date of issue: Date of maturity:December 15, 2032 Authorized issue:$3,000,000 Denomination of bonds:$5,000 Interest rate:5.75% Interest dates:June 15 and December 15 Payable at:Wells Fargo Bank Chicago, Illinois Redeemable annually on December 15 Amount 2029 $540,000 2030 780,000 2031 820,000 2032 860,000 $3,000,000 Bond Principal and Interest Requirements Tax levy Tax levy year Principal Interest Total June 15 Amount December 15 Amount 2016 $—$172,500 $172,500 2017 $86,250 2017 $86,250 2017 —172,500 172,500 2018 86,250 2018 86,250 2018 —172,500 172,500 2019 86,250 2019 86,250 2019 —172,500 172,500 2020 86,250 2020 86,250 2020 —172,500 172,500 2021 86,250 2021 86,250 Thereafter 3,000,000 1,667,500 4,667,500 Thereafter 833,750 Thereafter 833,750 $3,000,000 $2,530,000 $5,530,000 Coupons due on May 12, 2010 184 Page 149 CITY OF LAKE FOREST General Obligation Bonds – 2010C April 30, 2017 Date of issue: Date of maturity:December 15, 2029 Authorized issue:$5,425,000 Denomination of bonds:$5,000 Interest rates:3.00 - 5.50% Interest dates:June 15 and December 15 Payable at:Wells Fargo Bank Chicago, Illinois Redeemable annually on December 15 Amount 2017 $210,000 2018 225,000 2019 215,000 2020 405,000 2021 415,000 Thereafter 3,460,000 $4,930,000 Bond Principal and Interest Requirements Tax levy Tax levy year Principal Interest Total June 15 Amount December 15 Amount 2016 $210,000 $243,974 $453,974 2017 $121,987 2017 $121,987 2017 225,000 236,099 461,099 2018 118,049 2018 118,050 2018 215,000 227,099 442,099 2019 113,549 2019 113,550 2019 405,000 217,424 622,424 2020 108,712 2020 108,712 2020 415,000 198,693 613,693 2021 99,347 2021 99,346 Thereafter 3,460,000 801,620 4,261,620 Thereafter 400,810 Thereafter 400,810 $4,930,000 $1,924,909 $6,854,909 Coupons due on May 12, 2010 185 Page 150 CITY OF LAKE FOREST General Obligation Bonds – 2011A April 30, 2017 Date of issue: Date of maturity:December 15, 2020 Authorized issue:$2,415,000 Denomination of bonds:$5,000 Interest rates:1.50 - 3.00% Interest dates:June 15 and December 15 Payable at:Wells Fargo Bank Chicago, Illinois Redeemable annually on December 15 Amount 2017 $125,000 2018 130,000 2019 130,000 2020 140,000 2021 — Thereafter — $525,000 Bond Principal and Interest Requirements Tax levy Tax levy year Principal Interest Total June 15 Amount December 15 Amount 2016 $125,000 $12,788 $137,788 2017 $6,394 2017 $6,394 2017 130,000 9,975 139,975 2018 4,988 2018 4,987 2018 130,000 7,050 137,050 2019 3,525 2019 3,525 2019 140,000 3,150 143,150 2020 1,575 2020 1,575 2020 —— — 2021 — 2021 — Thereafter —— — Thereafter — Thereafter — $525,000 $32,963 $557,963 September 6, 2011 Coupons due on 186 Page 151 CITY OF LAKE FOREST General Obligation Bonds – 2011B April 30, 2017 Date of issue: Date of maturity:December 15, 2023 Authorized issue:$24,825,000 Denomination of bonds:$5,000 Interest rates:1.00 - 3.00% Interest dates:June 15 and December 15 Payable at:Wells Fargo Bank Chicago, Illinois Redeemable annually on December 15 Amount 2017 $2,270,000 2018 2,300,000 2019 2,400,000 2020 2,470,000 2021 2,530,000 Thereafter 4,475,000 $16,445,000 Bond Principal and Interest Requirements Tax levy Tax levy year Principal Interest Total June 15 Amount December 15 Amount 2016 $2,270,000 $433,500 $2,703,500 2017 $216,750 2017 $216,750 2017 2,300,000 376,750 2,676,750 2018 188,375 2018 188,375 2018 2,400,000 319,250 2,719,250 2019 159,625 2019 159,625 2019 2,470,000 259,250 2,729,250 2020 129,625 2020 129,625 2020 2,530,000 197,500 2,727,500 2021 98,750 2021 98,750 Thereafter 4,475,000 190,350 4,665,350 Thereafter 95,175 Thereafter 95,175 $16,445,000 $1,776,600 $18,221,600 September 6, 2011 Coupons due on 187 Page 152 CITY OF LAKE FOREST General Obligation Bonds – 2013 April 30, 2017 Date of issue: Date of maturity:December 15, 2032 Authorized issue:$9,715,000 Denomination of bonds:$5,000 Interest rates:2.00 - 4.00% Interest dates:June 15 and December 15 Payable at:Wells Fargo Bank Chicago, Illinois Redeemable annually on December 15 Amount 2017 $100,000 2018 200,000 2019 350,000 2020 430,000 2021 435,000 Thereafter 8,020,000 $9,535,000 Bond Principal and Interest Requirements Tax levy Tax levy year Principal Interest Total June 15 Amount December 15 Amount 2016 $100,000 $335,763 $435,763 2017 $167,882 2017 $167,881 2017 200,000 333,763 533,763 2018 166,881 2018 166,882 2018 350,000 329,763 679,763 2019 164,882 2019 164,881 2019 430,000 322,763 752,763 2020 161,382 2020 161,381 2020 435,000 312,013 747,013 2021 156,007 2021 156,006 Thereafter 8,020,000 2,228,397 10,248,397 Thereafter 1,114,199 Thereafter 1,114,198 $9,535,000 $3,862,462 $13,397,462 September 16, 2013 Coupons due on 188 Page 153 CITY OF LAKE FOREST General Obligation Bonds – 2015 April 30, 2017 Date of issue: Date of maturity:December 15, 2036 Authorized issue:$9,780,000 Denomination of bonds:$5,000 Interest rates:2.50 - 3.75% Interest dates:June 15 and December 15 Payable at:Wells Fargo Bank Chicago, Illinois Redeemable annually on December 15 Amount 2017 $175,000 2018 175,000 2019 305,000 2020 305,000 2021 340,000 Thereafter 8,420,000 $9,720,000 Bond Principal and Interest Requirements Tax levy Tax levy year Principal Interest Total June 15 Amount December 15 Amount 2016 $175,000 $293,425 $468,425 2017 $146,713 2017 $146,712 2017 175,000 289,050 464,050 2018 144,525 2018 144,525 2018 305,000 284,675 589,675 2019 142,338 2019 142,337 2019 305,000 277,050 582,050 2020 138,525 2020 138,525 2020 340,000 269,425 609,425 2021 134,473 2021 134,712 Thereafter 8,420,000 2,382,275 10,802,275 Thereafter 1,191,138 Thereafter 1,191,137 $9,720,000 $3,795,900 $13,515,900 August 3, 2015 Coupons due on 189 Page 154 CITY OF LAKE FOREST Debt Service Fund Combining Balance Sheet As of April 30, 2017 2003 Series D/Special Service Special Service Special Service 2004 Series B/ 2011A Area 25 Area 26 Area 29 2011B General General General General General Obligation Obligation Obligation Obligation Obligation Assets Bonds Bonds Bonds Bonds Bonds Cash and cash equivalents -$ 13,418$ 3,353$ 3,251$ 1,354,834$ uncollectibles): - 70,364 20,243 142,888 - -$ 83,782$ 23,596$ 146,139$ 1,354,834$ Deferred inflows of resources Property taxes levied to finance FY18 -$ 70,364$ 20,243$ 142,888$ -$ Fund Balance Fund balance- restricted for debt service - 13,418 3,353 3,251 1,354,834 Total deferred inflows of resources and fund balances -$ 83,782$ 23,596$ 146,139$ 1,354,834$ Receivables (net of allowance for Property taxes Total assets 190 Page 155 2008 2009 2010 2013 2015 General General General General General Obligation Obligation Obligation Obligation Obligation Bonds Bonds Bonds Bonds Bonds Total -$ 21,925$ 29,215$ 12,430$ 396$ 1,438,822$ - 276,812 472,332 433,518 225,695 1,641,852 -$ 298,737$ 501,547$ 445,948$ 226,091$ 3,080,674$ -$ 276,812$ 472,332$ 433,518$ 225,695$ 1,641,852$ - 21,925 29,215 12,430 396 1,438,822 -$ 298,737$ 501,547$ 445,948$ 226,091$ 3,080,674$ 191 Page 156 CITY OF LAKE FOREST Debt Service Fund Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended April 30, 2017 2003 Series D/Special Service Special Service Special Service 2004 Series B/ 2011A Area 25 Area 26 Area 29 2011B General General General General General Obligation Obligation Obligation Obligation Obligation Bonds Bonds Bonds Bonds Bonds Revenues Taxes: Property taxes -$ 72,787$ 20,315$ 143,425$ -$ Grants and contributions- IRS rebate - - - - - Investment income 4,452 259 68 317 7,798 Total Revenues 4,452 73,046 20,383 143,742 7,798 Expenditures General government - - - - 500 Debt Service: Principal - 60,000 15,767 109,569 433,000 Interest - 12,285 4,059 33,351 97,590 Total expenditures - 72,285 19,826 142,920 531,090 Excess (deficiency) of revenues over expenditures 4,452 761 557 822 (523,292) Other financing sources: Transfers in 270,861 - - - 806,593 Transfers out (667,892) - - - - Total other financing sources (uses)(397,031) - - - 806,593 Net change in fund balance (392,579)761 557 822 283,301 Fund balance- beginning of the year 392,579 12,657 2,796 2,429 1,071,533 Fund balance- end of the year -$ 13,418$ 3,353$ 3,251$ 1,354,834$ 192 Page 157 2008 2009 2010 2013 2015 General General General General General Obligation Obligation Obligation Obligation Obligation Bonds Bonds Bonds Bonds Bonds Total 825,413$ 279,542$ 493,183$ 337,561$ 250,533$ 2,422,759$ - - 153,915 - - 153,915 2,340 706 928 398 - 17,266 827,753 280,248 648,026 337,959 250,533 2,593,940 2,500 500 1,000 750 1,000 6,250 6,685,000 175,000 195,000 - 60,000 7,733,336 241,575 102,620 422,811 335,763 389,137 1,639,191 6,929,075 278,120 618,811 336,513 450,137 9,378,777 (6,101,322) 2,128 29,215 1,446 (199,604) (6,784,837) 5,937,085 - - - 200,000 7,214,539 - - - - - (667,892) 5,937,085 - - - 200,000 6,546,647 (164,237)2,128 29,215 1,446 396 (238,190) 164,237 19,797 - 10,984 - 1,677,012 -$ 21,925$ 29,215$ 12,430$ 396$ 1,438,822$ 193 Statistical Section Contents Page Financial Trends 158 - 167 Revenue Capacity 168 - 175 Debt Capacity 176 - 180 Demographic and Economic Information 181 - 183 Operating Information 184 - 186 This portion of the City of Lake Forest's Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall economic condition and financial health. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes. These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt. These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and other governments. These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. 194 Page 158 Fiscal Years 2017 2016 2015 2014 Governmental Activities Net Investment in Capital Assets 170,568,584$ 181,481,470$ 181,056,601$ 184,270,349$ Restricted 15,476,976 18,506,073 15,737,797 16,860,362 Unrestricted (9,068,405) (18,479,928) 26,747,317 23,689,130 Total Governmental Activities Net Position 176,977,155$ 181,507,615$ 223,541,715$ 224,819,841$ Business-type Activities Net Investment in Capital Assets 37,504,482$ 37,582,505$ 36,617,378$ 36,163,443$ Unrestricted 7,696,321 8,323,401 8,941,920 9,739,336 Total Business-type Activities Net Position 45,200,803$ 45,905,906$ 45,559,298$ 45,902,779$ Primary Government Net Investment in Capital Assets 208,073,066$ 219,063,975$ 217,673,979$ 220,433,792$ Restricted 15,476,976 18,506,073 15,737,797 16,860,362 Unrestricted (1,372,084) (10,156,527) 35,689,237 33,428,466 Total Primary Government Net Position 222,177,958$ 227,413,521$ 269,101,013$ 270,722,620$ *Beginning in 2016, the City implemented GASB 68 which resulted in the inclusion of a net pension liability. Data Source Audited Financial Statements CITY OF LAKE FOREST Net Position by Component Last Ten Fiscal Years 195 Page 159 2013 2012 2011 2010 2009 2008 187,500,531$ 190,779,593$ 192,568,460$ 193,225,047$ 193,768,992$ 172,325,675$ 16,064,099 16,499,487 3,645,693 3,001,515 3,319,974 3,978,855 21,126,818 19,550,532 29,683,545 25,090,240 25,867,536 28,748,888 224,691,448$ 226,829,612$ 225,897,698$ 221,316,802$ 222,956,502$ 205,053,418$ 36,077,752$ 36,753,670$ 37,709,887$ 38,075,853$ 37,184,702$ 44,932,466$ 9,880,856 8,918,142 8,513,924 8,617,858 9,577,076 12,087,202 45,958,608$ 45,671,812$ 46,223,811$ 46,693,711$ 46,761,778$ 57,019,668$ 223,578,283$ 227,533,263$ 230,278,347$ 231,300,900$ 230,953,694$ 217,258,141$ 16,064,099 16,499,487 3,645,693 3,001,515 3,319,974 3,978,855 31,007,674 28,468,674 38,197,469 33,708,098 35,444,612 40,836,090 270,650,056$ 272,501,424$ 272,121,509$ 268,010,513$ 269,718,280$ 262,073,086$ 196 Page 160 Fiscal Years 2017 2016 2015 2014 Expenses Governmental Activities General Government 16,882,976$ 11,675,363$ 12,604,331$ 12,311,198$ Highway and Streets 10,923,639 9,230,548 8,839,231 7,762,403 Sanitation 2,611,231 2,208,326 2,474,355 2,586,125 Culture and Recreation 10,023,195 8,463,259 10,172,391 10,397,593 Public Safety 17,048,209 16,360,830 15,303,399 14,430,151 Interest 1,559,100 1,293,742 1,357,552 1,333,267 Total Governmental Activities Expenses 59,048,350$ 49,232,068$ 50,751,259$ 48,820,737$ Business-type Activities Waterworks and sewerage 8,510,811 7,239,042 8,353,825 7,476,752 Golf 2,095,510 1,868,252 1,642,121 1,554,678 Paid Parking - - - - Total Business-type Activities Expenditures 10,606,321 9,107,294 9,995,946 9,031,430 Total Primary Government Expenses 69,654,671$ 58,339,362$ 60,747,205$ 57,852,167$ Program Revenue Governmental Activities Charges for Services General Government 8,860,169$ 8,191,440$ 5,442,475$ 4,756,948$ Highways and Streets 782,953 990,840 710,795 741,334 Sanitation 734,111 697,435 682,062 77,147 Culture and Recreation 2,810,762 3,257,796 3,156,699 3,314,856 Public Safety 1,689,547 1,552,567 1,795,521 1,950,998 Operating Grants and Contributions 1,088,579 1,368,451 1,345,670 1,105,191 Capital Grants and Contributions 1,174,000 280,675 468,255 757,239 Total Governmental Activities Program Revenues 17,140,121 16,339,204 13,601,477 12,703,713 Business-type activities Charges for Services Waterworks and sewerage 7,873,741 7,477,558 8,034,469 7,521,323 Golf 1,606,661 1,759,271 1,414,217 1,397,836 Paid Parking - - - - Operating Grants and Contributions - - - - Capital Grants and Contributions - - - - Total Business-type Activities Program Revenues 9,480,402 9,236,829 9,448,686 8,919,159 Total Primary Government Revenues 26,620,523$ 25,576,033$ 23,050,163$ 21,622,872$ Net (Expense) Revenue Governmental Activities (41,908,229)$ (32,892,864)$ (37,149,782)$ (36,117,024)$ Business-type Activities (1,125,919) 129,535 (547,260) (112,271) Total Primary Government Net Expense (43,034,148)$ (32,763,329)$ (37,697,042)$ (36,229,295)$ CITY OF LAKE FOREST Change in Net Position Last Ten Fiscal Years 197 Page 161 2013 2012 2011 2010 2009 2008 16,176,326$ 12,080,189$ 13,321,852$ 13,974,412$ 14,928,550$ 11,035,000$ 7,536,444 8,304,860 8,687,404 9,469,570 7,911,604 8,821,953 2,512,559 2,568,820 2,349,916 2,183,373 2,169,302 2,310,966 10,352,252 9,469,832 9,402,752 9,589,857 9,430,847 8,812,293 13,748,855 13,583,116 13,398,718 13,116,738 12,623,300 12,348,729 1,362,715 1,420,087 1,424,317 1,097,805 978,029 808,253 51,689,151$ 47,426,904$ 48,584,959$ 49,431,755$ 48,041,632$ 44,137,194$ 8,287,297 7,985,394 8,008,372 7,882,904 7,659,138 8,228,975 1,459,394 1,371,380 1,393,869 1,345,437 1,490,115 1,562,520 - - - - - 757,200 9,746,691 9,356,774 9,402,241 9,228,341 9,149,253 10,548,695 61,435,842$ 56,783,678$ 57,987,200$ 58,660,096$ 57,190,885$ 54,685,889$ 4,838,151$ 4,771,863$ 4,455,844$ 4,822,344$ 4,980,144$ 5,249,766$ 753,487 846,366 693,029 809,661 1,239,586 929,199 58,564 81,577 171,030 104,158 192,848 295,658 3,342,913 3,392,303 3,650,467 4,121,592 4,197,023 3,831,855 1,861,619 1,678,032 1,930,715 1,540,927 1,589,647 1,567,944 1,777,734 1,433,791 846,781 1,413,819 684,872 790,979 25,000 360,407 5,982,721 925,524 9,033,429 5,301,494 12,657,468 12,564,339 17,730,587 13,738,025 21,917,549 17,966,895 8,598,079 7,477,637 7,344,740 7,048,854 6,589,780 6,893,939 1,320,455 1,238,016 1,264,624 1,333,879 1,413,732 1,430,875 - - - - - 1,016,991 - - - - - - - - 162,051 97,724 829,447 1,367,797 9,918,534 8,715,653 8,771,415 8,480,457 8,832,959 10,709,602 22,576,002$ 21,279,992$ 26,502,002$ 22,218,482$ 30,750,508$ 28,676,497$ (39,031,683)$ (34,862,565)$ (30,854,372)$ (35,693,730)$ (26,124,083)$ (26,170,299)$ 171,843 (641,121) (630,826) (747,884) (316,294) 160,907 (38,859,840)$ (35,503,686)$ (31,485,198)$ (36,441,614)$ (26,440,377)$ (26,009,392)$ 198 Page 162 Fiscal Years 2017 2016 2015 2014 General Revenues and Other Changes in Net Position Governmental Activities Taxes Property 25,928,864$ 25,006,224$ 24,468,769$ 23,744,650$ Sales 2,829,607 2,889,306 2,851,103 3,047,529 Income and Use 2,306,546 2,251,828 2,386,567 2,182,325 Telecommunications and Utility 3,596,175 3,551,491 3,954,001 4,026,972 Real Estate Transfer Tax 1,398,160 1,288,175 1,224,610 1,633,580 Other 636,368 514,231 534,625 581,443 Investment Earnings 1,042,049 145,329 547,118 637,193 Miscellaneous - - 73,613 669,145 Transfers (360,000) (924,496) (168,750) (97,000) Total Government Activities 37,377,769 34,722,088 35,871,656 36,425,837 Business-type Activities Investment Earnings 58,366$ 40,362$ 33,408 38,550 Other 2,450 6,033 1,621 - Transfers 360,000 924,496 168,750 97,000 Total Business-type Activities 420,816 970,891 203,779 135,550 Total Primary Government 37,798,585$ 35,692,979$ 36,075,435$ 36,561,387$ Change in Net Position Governmental Activities (4,530,460)$ 1,829,224$ (1,278,126)$ 308,813$ Business-type Activities (705,103) 1,100,426 (343,481) 23,279 Total Primary Government Change in Net Position (5,235,563)$ 2,929,650$ (1,621,607)$ 332,092$ Data Source Audited Financial Statements CITY OF LAKE FOREST Change in Net Position (Cont.) Last Ten Fiscal Years *Starting in 2015, all taxes administered by the State and disbursed to the City are reported as intergovernmental revenues on the face of the financial statements. They have been grouped by tax type for comparison purposes above. 199 Page 163 2013 2012 2011 2010 2009 2008 25,051,411$ 25,428,378$ 24,739,956$ 24,383,716$ 23,067,216$ 22,324,863$ 3,183,479 2,577,304 2,554,772 2,392,497 3,010,457 3,118,339 2,131,711 1,938,686 1,849,046 1,762,425 2,018,177 2,175,196 3,736,586 3,981,548 3,968,072 3,967,398 4,407,235 4,454,442 1,209,113 1,215,407 1,279,935 878,925 962,840 1,984,052 493,418 492,746 422,080 372,640 391,347 489,018 491,196 264,432 573,508 852,245 35,853 1,771,629 573,705 33,724 150,049 60,000 22,729 627,188 (77,100) (37,746) (102,150) (615,816) 10,111,313 (3,931) 36,793,519 35,894,479 35,435,268 34,054,030 44,027,167 36,940,796 37,853 51,376 58,776 64,001 169,717 525,833 - - - - - - 77,100 37,746 102,150 615,816 (10,111,313) 3,931 114,953 89,122 160,926 679,817 (9,941,596) 529,764 36,908,472$ 35,983,601$ 35,596,194$ 34,733,847$ 34,085,571$ 37,470,560$ (2,238,164)$ 1,031,914$ 4,580,896$ (1,639,700)$ 17,903,084$ 10,770,497$ 286,796 (551,999) (469,900) (68,067) (10,257,890) 690,671 (1,951,368)$ 479,915$ 4,110,996$ (1,707,767)$ 7,645,194$ 11,461,168$ 200 Page 164 Fiscal Years 2017 2016 2015 2014 General Fund Nonspendable 778,160$ 1,272,224$ 1,648,832$ 2,126,990$ Restricted - - 957,420 957,420 Unassigned 28,799,288 22,509,969 17,910,037 14,530,550 Reserved - - - - Unreserved - - - - Total General Fund 29,577,448 23,782,193 20,516,289 17,614,960 All other Governmental Funds Non Spendable 536,121 408,539 381,173 - Restricted 19,420,288 20,337,111 14,726,999 16,127,257 Assigned - 1,456,053 1,448,736 1,449,284 Unassigned - - (1,022,136) - Reserved - - - - Special Revenue Funds - - - - Capital Project Funds - - - - Debt Service Funds - - - - Unreserved, Reported in - - - - Special Revenue Funds - - - - Capital Projects Funds - - - - Debt Service Funds - - - - Total All other Governmental Funds 19,956,409 22,201,703 15,534,772 17,576,541 Total Governmental Funds 49,533,857$ 45,983,896$ 36,051,061$ 35,191,501$ *The City implemented GASB Statement #54 in FY2012. Data Source Audited Financial Statements CITY OF LAKE FOREST Fund Balances of Governmental Funds Last Ten Fiscal Years 201 Page 165 2013 2012*2011 2010 2009 2008 2,775,449$ 2,159,403$ -$ -$ -$ -$ 957,420 957,420 - - - - 11,020,723 10,601,190 - - - - - - 2,988,884 1,071,068 2,218,570 1,041,187 - - 9,239,135 9,815,220 8,618,251 9,585,445 14,753,592 13,718,013 12,228,019 10,886,288 10,836,821 10,626,632 43,333 43,333 - - - - 15,605,203 16,171,794 - - - - 1,598,819 1,591,600 - - - - - - - - - - - - - - - - - - 4,333 43,306 128,516 130,173 - - - - - - - - 2,808,826 2,839,264 2,632,215 2,708,268 - - - - - - - - 9,869,178 8,209,263 6,747,544 8,063,766 - - 6,189,372 3,171,421 6,538,074 17,815,488 - - - - - - 17,247,355 17,806,727 18,871,709 14,263,254 16,046,349 28,717,695 32,000,947$ 31,524,740$ 31,099,728$ 25,149,542$ 26,883,170$ 39,344,327$ 202 Page 166 CITY OF LAKE FOREST Change in Fund Balances of Governmental Funds Last Ten Fiscal Years Fiscal Years 2017 2016 2015 2014 2013 Revenues Property Taxes 25,928,864$ 25,006,224$ 24,468,769$ 23,744,650$ 25,051,411$ Other Taxes 4,609,057 4,317,316 4,641,466 11,471,849 10,754,307 Intergovenmental revenues 6,656,768 6,680,193 6,972,923 576,125 612,357 Grants and contributions 1,419,736 1,056,523 950,823 962,249 1,190,377 Charges for Services 8,005,317 8,506,756 7,935,973 7,373,500 7,319,673 Liscenses and permits 5,157,398 5,222,568 2,821,066 2,477,338 2,450,194 Fines and forefeitures 321,168 260,407 287,333 297,005 368,941 Investment income 989,515 115,462 524,150 610,601 462,579 Miscellaneous revenue 841,731 779,137 790,344 759,384 1,225,082 Total Revenue 53,929,554 51,944,586 49,392,847 48,272,701 49,434,921 Expenditure General Government 11,581,286$ 10,811,408$ 10,248,830 10,112,393 14,242,768 Highways and streets 3,118,461 2,157,463 2,371,461 2,293,840 2,044,225 Sanitation 2,311,435 2,276,433 2,235,135 2,212,166 2,193,091 Culture and recreation 8,532,289 8,338,284 8,457,043 8,686,298 9,282,695 Public Safety 15,126,874 15,090,712 14,469,408 14,299,583 13,826,732 Capital Outlay 5,439,469 10,992,926 7,582,668 5,527,772 4,586,574 Debt Service Principal 7,906,696 1,791,579 1,623,436 1,400,950 1,377,736 Interest 1,639,191 1,293,634 1,400,609 1,319,276 1,392,342 Total Expenditures 55,655,701 52,752,439 48,388,590 45,852,278 48,946,163 Excess (Deficiency) of Revenues over Expenditures (1,726,147) (807,853) 1,004,257 2,420,423 488,758 Other Financing Sources (Uses) Transfers in 7,776,661$ 2,846,321$ 2,020,085 3,224,306 2,829,243 Transfers out (8,136,661) (2,895,321) (2,188,835) (3,321,306) (2,906,343) Bonds issued - 9,780,000 - - - Installment note proceeds - - - - - Loan proceeds - 830,080 - - - Premium (discount) on bonds issued - 106,384 - 26,093 - Proceeds from refunding G.O. bonds - - - 9,715,000 - Payments for refunding G.O. bonds - - - (9,665,000) - Sale of capital assets 5,636,108 73,224 24,053 791,038 64,549 Total Other Financing Sources (Uses)5,276,108 10,740,688 (144,697) 770,131 (12,551) Net Change in Fund Balance 3,549,961$ 9,932,835$ 859,560$ 3,190,554$ 476,207$ Debt Service as a Percentage of Non-Capital Expenditures 17.36%6.54%6.43%6.17%5.85% 203 Page 167 2012 2011 2010 2009 2008 25,428,378$ 24,739,956$ 24,383,716$ 23,067,216$ 22,324,863$ 10,205,691 10,073,905 9,433,885 10,790,056 12,221,047 589,960 523,185 1,304,368 684,872 790,979 1,039,737 1,306,195 706,250 - - 7,028,800 7,427,784 7,844,119 8,295,760 7,193,242 2,475,739 2,246,336 2,135,888 2,117,774 2,345,931 372,607 409,539 372,924 387,629 469,208 225,225 531,666 815,520 (11,695) 1,673,038 730,813 1,074,576 1,374,476 1,420,815 1,870,927 48,096,950 48,333,142 48,371,146 46,752,427 48,889,235 10,313,031 11,929,446 12,226,189 12,778,200 10,569,268 2,139,656 2,449,911 3,897,758 2,567,220 2,332,972 2,228,844 2,194,511 2,056,528 2,096,044 2,125,284 8,463,547 8,559,331 8,816,962 8,511,075 7,925,598 13,723,801 13,291,727 13,062,453 12,820,200 12,169,723 6,641,923 6,348,572 11,376,490 28,537,234 8,324,272 2,531,876 15,659,313 2,877,662 2,954,681 4,797,104 1,667,372 1,284,755 1,173,967 694,355 781,529 47,710,050 61,717,566 55,488,009 70,959,009 49,025,750 386,900 (13,384,424) (7,116,863) (24,206,582) (136,515) 2,296,270 1,844,410 1,847,105 5,425,090 3,201,175 (2,334,016) (1,946,560) (2,462,921) (4,454,665) (3,041,224) - 18,090,000 3,680,000 - 9,750,000 - - 2,300,000 10,700,000 - - - - - - 120,828 279,130 19,051 - (50,668) 5,690,000 - - - - (5,769,025) - - - - 34,055 1,067,630 - 75,000 773,034 38,112 19,334,610 5,383,235 11,745,425 10,632,317 425,012$ 5,950,186$ (1,733,628)$ (12,461,157)$ 10,495,802$ 8.31%8.62%8.62%8.08%12.60% 204 Page 168 CITY OF LAKE FOREST Assessed Value and Actual Value of Taxable Property Last Ten Levy Years Total Estimated Estimated Tax Total Taxable Direct Actual Actual Levy Residential Commercial Industrial Other Increment Assessed Tax Taxable Taxable Year Property Property Property Property Financing Value Rate Value Value 2007 2,610,727,055 191,390,427 65,007 5,765,126 59,284,794 2,867,232,409 0.8510 8,601,697,227 33.333% 2008 2,674,566,048 217,608,832 79,283 5,817,809 60,603,515 2,958,675,487 0.8700 8,876,026,461 33.333% 2009 2,609,955,147 214,117,162 71,603 5,887,945 60,622,651 2,890,654,508 0.9020 8,671,963,524 33.333% 2010 2,452,291,451 203,193,623 66,933 5,871,505 56,123,585 2,717,547,097 0.9900 8,152,641,291 33.333% 2011 2,302,061,004 203,074,638 70,382 5,409,080 54,464,919 2,565,080,023 1.0350 7,695,240,069 33.333% 2012 2,166,702,992 207,360,589 65,556 3,918,002 - 2,378,047,139 1.1480 7,134,141,417 33.333% 2013 2,047,760,158 200,625,492 62,064 5,099,690 - 2,253,547,404 1.2480 6,760,642,212 33.333% 2014 2,047,998,906 196,562,054 61,541 5,846,135 - 2,250,468,636 1.2741 6,751,405,908 33.333% 2015 2,105,361,682 196,233,065 46,548 6,294,764 - 2,307,936,059 1.2794 6,923,808,177 33.333% 2016 2,226,672,717 209,668,706 49,445 6,591,173 90,630 2,443,072,671 1.2268 7,329,218,013 33.333% Data Source Office of the County Clerk Note : Property is assessed at 33 1/3% of actual value; property tax rates per $100 of assessed valuation. The City's TIF Increment Financing district expired for 2012 205 Page 169 CITY OF LAKE FOREST Property Tax Rates - Direct and Overlapping Governments Based on Shields Township Last Ten Levy Years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Bonds 0.083 0.086 0.090 0.096 0.068 0.071 0.088 0.090 0.067 0.059 Corporate 0.443 0.449 0.405 0.446 0.483 0.544 0.580 0.590 0.619 0.603 Firemen's Pension 0.025 0.028 0.034 0.037 0.041 0.046 0.052 0.054 0.053 0.050 IMRF 0.051 0.052 0.054 0.059 0.032 0.035 0.037 0.038 0.037 0.035 Library 0.101 0.101 0.105 0.116 0.126 0.141 0.152 0.155 0.153 0.146 Library Sites & Building 0.011 0.013 0.013 0.014 0.015 0.016 0.017 0.017 0.017 0.016 Parks/Park Maintenance 0.052 0.050 0.097 0.106 0.114 0.123 0.191 0.194 0.196 0.187 Playground & Recreation **0.038 0.042 0.043 0.046 0.050 0.055 0.000 0.000 0.000 0.000 Police Pension 0.037 0.039 0.050 0.057 0.060 0.066 0.076 0.080 0.082 0.078 Recreation for Handicapped Rec.0.010 0.010 0.011 0.013 0.014 0.016 0.018 0.018 0.018 0.018 Social Security - - - - 0.032 0.035 0.037 0.038 0.037 0.035 City Direct Rates *0.851 0.870 0.902 0.990 1.035 1.148 1.248 1.274 1.279 1.227 Overlapping Rates College of Lake County 0.192 0.196 0.200 0.218 0.240 0.272 0.296 0.306 0.299 0.285 County of Lake 0.444 0.453 0.464 0.505 0.554 0.608 0.663 0.682 0.663 0.632 Lake County Forest Preserve 0.201 0.199 0.200 0.198 0.201 0.212 0.218 0.210 0.208 0.193 North Shore Sanitary District 0.120 0.121 0.124 0.136 0.150 0.150 0.164 0.169 0.166 0.157 School District 67, Elem.0.944 0.965 0.998 1.095 1.186 1.322 1.424 1.452 1.429 1.367 School District 115, High School 0.959 1.001 1.069 1.101 1.191 1.322 1.420 1.450 1.409 1.329 Township 0.050 0.050 0.048 0.039 0.043 0.036 0.037 0.039 0.038 0.036 Township Road and Bridge 0.016 0.019 0.020 0.023 0.026 0.029 0.032 0.033 0.032 0.031 Total tax rate 3.777 3.874 4.025 4.305 4.626 5.099 5.502 5.615 5.523 5.257 City's share of total tax rate 23%22%22%23%22%23%23%23%23%23% Data Source Office of the County Clerk - Shields Township * Excludes rates for the Special Service Areas * Includes the City's component unit, Lake Forest Library ** Parks and Playgrounds combined in 2013 Lake Forest lies within five townships - Moraine, Shields, Vernon, West Deerfield and Libertyville. Therefore, the tax rates for support of the Township government and for the Township Road and Bridge purposes vary. Parts of Shields Township in Lake Forest lie in the Lake Bluff Park District. All of Moraine Township is in Lake Forest and parts of Shields and West Deerfield Townships in Lake Forest lie in the North Shore Sanitary District. 206 Page 170 CITY OF LAKE FOREST Principal Property Taxpayers Current Year and Nine Years Ago Percentage Percentage of Total of Total City City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Rank Valuation Value Rank Valuation Hospira Inc 19,814,290$ 1 0.81%16,567,811$ 2 0.58% Abbot Laboratories 14,185,075 2 0.58% The Presbyterian Home 12,567,495 3 0.51%19,857,414 1 0.69% CBIZ Property Tax Solutions 8,914,942 4 0.36%13,102,961 3 0.46% Trustmark Insurance Co 8,180,878 5 0.33%7,562,841 6 0.26% Northwestern Lake Forest Hospital 7,453,191 6 0.31%7,857,813 5 0.27% Lake Forest Landmark Co. LLC 7,078,668 7 0.29%7,166,288 7 0.25% Lake Forest Investments 6,792,936 8 0.28% Lake Forest Landmark II 6,027,860 9 0.25% STRS L3 ACQ2 LLc 5,539,593 10 0.23% Tap Holdings Inc.12,689,770 4 0.44% James Campbell Company LLC 6,659,076 8 0.23% Northern Trust Lake Forest 474402040 5,136,972 9 0.18% Northern Trust/Katrina Giangiorgi 4,984,324 10 0.17% 96,554,928$ 3.95%101,585,270$ 3.53% Data Source Office of the County Clerk Note: Every effort has been made to seek out and report the largest taxpayers. However, many of the taxpayers contain multiple parcels, and it is possible that some parcels and their valuations have been overlooked. 2017 Column is 2016 Assessed Valuation 2008 Column is 2007 Assessed Valuation 2017 2008 207 Page 171 CITY OF LAKE FOREST Property Tax Levies and Collections Last Ten Levy Years Subsequent Levy Percentage Year Taxes Percentage Year Tax Levied Amount of Levy Collections Received of Levy 2007 23,895,634 23,851,132 99.81%12,038 23,863,170 99.86% 2008 25,213,226 25,166,378 99.81%8,545 25,174,923 99.85% 2009 25,526,887 25,468,324 99.77%18,421 25,486,745 99.84% 2010 26,348,093 26,304,316 99.83%8,193 26,312,509 99.86% 2011 25,984,866 25,911,115 99.72%135 25,911,250 99.72% 2012 27,299,981 27,198,985 99.63%384 27,199,369 99.63% 2013 28,124,272 28,002,008 99.57%14,464 28,016,472 99.62% 2014 28,673,693 28,608,680 99.77%14,056 28,622,736 99.82% 2015 29,528,749 29,468,310 99.80%10,693 29,479,003 99.83% 2016 29,970,536 N/A N/A N/A N/A N/A Data Source Lake County Treasurer and City Note: Property is assessed at 33 1/3 % of actual value. Collected within the Fiscal Year after the Levy Total Collections Per Levy 208 Page 172 Tax Extensions for City Funds Last Ten Levy Years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 General 0.443 0.449 0.405 0.446 0.483 0.544 0.580 0.590 0.619 0.603 0.051 0.052 0.054 0.059 0.064 0.070 0.074 0.076 0.074 0.070 Firefighter Pension 0.025 0.028 0.034 0.037 0.041 0.046 0.052 0.054 0.053 0.050 Police Pension 0.037 0.039 0.050 0.057 0.060 0.066 0.076 0.080 0.082 0.078 Parks and Recreation 0.090 0.092 0.140 0.152 0.164 0.178 0.191 0.194 0.196 0.187 Special Recreation 0.010 0.010 0.011 0.013 0.014 0.016 0.018 0.018 0.018 0.018 General Obligation Bond 1998 B 0.023 - - - - - - - - - General Obligation Bond 2000 0.023 0.023 0.023 0.025 - - - - - - General Obligation Bond 2001 B 0.004 0.004 0.004 0.004 - - - - - - General Obligation Bond 2003 A 0.033 0.035 0.036 - - - - - - - General Obligation Bond 2008 - 0.024 0.022 0.032 0.034 0.036 0.037 0.037 0.026 - General Obligation Bond 2009 - - 0.005 0.011 0.011 0.012 0.013 0.013 0.009 0.012 General Obligation Bond 2010 0.000 0.020 0.023 0.023 0.012 0.025 0.015 0.020 General Obligation Bond 2013 - - 0.000 0.000 0.000 0.000 0.026 0.015 0.010 0.018 General Obligation Bond 2015 - - - - - - - - 0.008 0.009 Total tax rate 0.739 0.756 0.784 0.856 0.894 0.991 1.079 1.102 1.110 1.065 Data Source Office of the County Clerk The tax rate for the City's component unit, Lake Forest Library is excluded from this table. This table excludes the tax rates for the Special Service Areas. IMRF/Social Security CITY OF LAKE FOREST 209 Page 173 CITY OF LAKE FOREST Sales Tax Base and Number of Principal Payers Taxable Sales by Category - .5% Sales Tax Last Ten Calendar Years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 General Merchandise 26,184$ 10,741$ 8,492$ 8,460$ 36,478$ 12,219$ 9,722$ 7,005$ 7,471$ 5,072$ Food 89,969 97,870 83,567 89,338 90,613 91,999 93,952 105,771 96,009 92,936 Drinking and Eating Places 139,291 147,973 127,679 133,028 140,639 155,188 165,386 180,023 163,447 173,473 Apparel 60,423 54,674 55,300 51,968 53,727 64,317 68,135 68,291 75,606 73,785 Furniture & H.H. & Radio 58,530 51,881 42,526 38,958 10,187 37,536 38,821 39,494 36,526 32,774 Lumber, Building, Hardware 30,834 26,223 20,405 19,010 (6,528) 6,867 9,862 - - 7,537 Automobile and Filling Stations 44,478 37,349 27,399 35,443 38,209 38,900 37,025 34,895 28,267 26,735 Drugs and Miscellaneous Retail 116,910 117,787 178,470 91,397 105,512 81,022 110,554 117,262 118,740 117,224 Agriculture and All Others 96,048 100,902 88,052 94,649 97,776 110,446 121,651 105,139 129,721 116,945 Manufacturers 102,914 109,291 21,860 14,322 (4,963) - - 7,095 (3,818) - Total 765,581$ 754,691$ 653,750$ 576,572$ 561,650$ 598,494$ 655,108$ 664,975$ 651,969$ 646,481$ Total Number of Payers N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A City direct sales tax rate 0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50% Data Source Illinois Department of Revenue Note: Blank categories have less than 4 taxpayers, therefore no data is shown to protect the confidentiality of individual taxpayers. Effectively July 2003, an additional .5% non home rule sales tax was collected. The City of Lake Forest became a home rule community in November 2004. 210 Page 174 CITY OF LAKE FOREST Sales Tax Base and Number of Principal Payers Taxable Sales by Category - 1% Sales Tax Last Ten Calendar Years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 General Merchandise 52,664$ 21,504$ 16,984$ 17,248$ 72,955$ 24,726$ 19,656$ 14,010$ 14,930$ 11,412$ Food 635,560 629,087 562,455 570,803 579,914 585,517 593,446 673,803 591,893 564,049 Drinking and Eating Places 285,968 302,523 260,953 271,753 286,472 317,291 338,382 364,221 329,303 350,024 Apparel 124,644 109,349 110,600 103,935 107,453 128,633 136,270 136,582 151,212 147,576 Furniture & H.H. & Radio 117,060 103,763 85,052 77,915 20,373 75,071 77,642 78,988 73,061 65,571 Lumber, Building, Hardware 61,668 52,445 40,810 38,019 (13,037) 13,742 19,724 - - 15,076 Automobile and Filling Stations 165,896 130,459 109,080 150,101 138,744 146,865 241,339 178,178 133,684 139,764 Drugs and Miscellaneous Retail 441,773 438,917 546,202 322,376 371,420 400,096 433,159 430,482 414,407 431,966 Agriculture and All Others 208,076 219,358 198,803 267,227 254,225 274,807 285,401 255,189 295,974 271,061 Manufacturers 205,978 218,715 43,909 28,947 (9,729) - - 14,415 (5,107) - Total 2,299,287$ 2,226,120$ 1,974,848$ 1,848,324$ 1,808,790$ 1,966,748$ 2,145,019$ 2,145,868$ 1,999,357$ 1,996,499$ Total Number of Payers 837 849 843 663 647 637 637 673 687 687 City direct sales tax rate 1.00%1.00%1.00%1.00%1.00%1.00%1.00%1.00%1.00%1.00% Data Source Illinois Department of Revenue Note: Blank categories have less than 4 taxpayers, therefore no data is shown to protect the confidentiality of individual taxpayers. The categories, Lumber, Bldg. and Hardware and General Merchandise became a censored status in the 2nd quarter of 2008. The category of Furniture & H.H. & Radio became a sensored status in the 4th quarter of 2011 211 Page 175 CITY OF LAKE FOREST Direct and Overlapping Sales Tax Rates Last Ten Fiscal Years City Special Fiscal Direct State Metra County Year Rate Rate Rate Rate Total 2008 1.50%5.00%0.50%0.50%7.50% 2009 1.50%5.00%0.50%0.50%7.50% 2010 1.50%5.00%0.50%0.50%7.50% 2011 1.50%5.00%0.50%0.50%7.50% 2012 1.50%5.00%0.50%0.50%7.50% 2013 1.50%5.00%0.50%0.50%7.50% 2014 1.50%5.00%0.50%0.50%7.50% 2015 1.50%5.00%0.50%0.50%7.50% 2016 1.50%5.00%0.50%0.50%7.50% 2017 1.50%5.00%0.50%0.50%7.50% Data Source City records The City of Lake Forest became a home rule community in November 2004. 212 Page 176 CITY OF LAKE FOREST Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-Type Activities Ratio of Total Perecentage Total Fiscal General Installment General Total Outstanding Debt of Outstanding Year Obligation Purchase Obligation Revenue Primary To Equalized Personal Debt Per Ended Bonds Contracts Bonds Bonds Government Assessed Valuation*Income*Capita* 2008 26,631,080 558,334 28,095,000 - 55,284,414 1.93%3.32%2,559.46 2009 24,188,066 11,166,667 26,280,000 - 61,634,733 2.08%3.70%2,853.46 2010 25,457,071 13,000,000 24,925,000 - 63,382,071 2.19%3.81%2,934.36 2011 40,887,758 - 23,525,000 - 64,412,758 2.37%4.31%3,324.53 2012 38,580,882 - 22,804,000 - 61,384,882 2.39%4.11%3,168.25 2013 37,203,146 - 21,060,000 - 58,263,146 2.45%3.90%3,007.13 2014 35,852,197 - 19,245,000 - 55,097,197 2.44%3.69%2,843.73 2015 34,258,902 - 17,602,838 - 51,861,740 2.30%3.47%2,676.73 2016 42,510,566 - 15,679,654 - 58,190,220 2.52%3.90%3,003.37 2017 34,775,542 - 13,737,111 - 48,512,653 1.99%3.25%2,503.88 Note: Details of the City's outstanding debt can be found in the notes to the financial statements. * See the Schedule of Demographic and Economic Statistics for equalized assessed valuation of property, population data and personal income. 213 Page 177 CITY OF LAKE FOREST Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years Percentage of Less: Amounts Estimated General Available Actual Taxable Fiscal Obligation In Debt Value of Per Year Bonds Service Fund Total Property*Capita 2008 54,726,080 2,708,268 52,017,812 0.60%2,408.23 2009 50,468,066 2,632,215 47,835,851 0.54%2,214.62 2010 50,382,071 2,839,265 47,542,806 0.55%2,201.06 2011 64,412,758 2,808,827 61,603,931 0.76%3,179.56 2012 61,384,882 2,316,219 59,068,663 0.77%3,048.71 2013 58,263,146 2,407,275 55,855,871 0.78%2,882.88 2014 55,097,197 1,144,118 53,953,079 0.80%2,784.68 2015 51,861,740 1,316,900 50,544,840 0.75%2,608.77 2016 58,190,220 1,201,300 56,988,920 0.82%2,941.36 2017 48,512,653 1,067,027 47,445,626 0.65%2,448.81 Note: Details of the City's outstanding debt can be found in the notes to the financial statements. * See the Schedule of Assessed Value and estimated Actual Value of Taxable Property for property value data. 214 Page 178 CITY OF LAKE FOREST Direct and Overlapping Governmental Activities Debt As of April 30, 2017 Percentage City of Debt Applicable Lake Forest Gross to the City of Share Governmental unit Debt Lake Forest*of Debt Lake County 186,350,000$ 9.94%18,523,190$ Lake County Community College #532 67,415,000 10.48%7,065,092 Lake County Forest Preserve District 270,760,000 9.94%26,913,544 School District #67 493,661 100.00%493,661 School District #103 6,265,000 0.01%627 High School District #115 32,215,000 79.50%25,610,925 High School District #128 6,135,000 3.02%185,277 Subtotal, overlapping debt 569,633,661 78,792,316 City of Lake Forest direct debt 34,775,542 100.00%34,775,542$ Total direct and overlapping debt 604,409,203$ 113,567,858$ Source: Lake County Clerk * Determined by ratio of assessed valuation of property subject to taxation in the City of Lake Forest to valuation of property subject to taxation in overlapping unit. The Percentage of debt is calculated by the percentage of the City's EAV in relation to the overlapping government's EAV. The gross debt is found on the Lake County website. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This s chedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Lake Forest. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. 215 Page 179 CITY OF LAKE FOREST Legal Debt Margin Information Last Ten Fiscal Years 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Debt limit N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Total net debt applicable to limit N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Legal debt margin N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Total net debt applicable to the limit as a percentage of debt limit N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Note: Legal debt margin from 1997-2004 was 8.625% of assessed value. * City of Lake Forest achieved home rule status in November 2004. To date the General Assembly has set no limits for home rule municipalities. 216 Page 180 CITY OF LAKE FOREST Pledged Revenue Coverage Last Ten Fiscal Years Less:Net Fiscal Gross Operating Available Debt Service Year Revenue Expenses Revenue Principal Interest Coverage 2008 9,870,570 6,532,687 3,337,883 1,430,000 1,236,624 1.25 2009**9,901,537 6,738,037 3,163,500 1,265,000 1,168,738 1.30 2010 8,446,734 5,397,283 3,049,451 1,358,325 1,126,001 1.23 2011 8,690,738 5,609,379 3,081,359 1,400,000 1,071,748 1.25 2012 8,767,029 6,358,960 2,408,069 1,651,000 661,906 1.04 2013 9,956,387 6,938,272 3,018,115 1,744,000 482,866 1.36 2014 9,043,227 5,406,022 3,637,205 1,815,000 433,125 1.62 2015 8,918,081 5,445,461 3,472,620 1,847,000 402,951 1.54 2016 10,190,948 5,826,164 4,364,784 1,877,000 373,266 1.94 2017 9,881,831 6,438,798 3,443,033 1,902,000 339,386 1.54 Note: Details of the City's outstanding debt can be found in the notes to the financial statements. Water Charges and Other includes investment earnings but excludes sale of property and grants Operating expenses does not include debt service, depreciation or reserve requirements ** In FY2009, the Paid Parking Fund was closed to the General Fund. Debt payments will be paid from a new Debt Service Fund. Waterworks and Sewerage and Golf Course Bonds 217 Page 181 CITY OF LAKE FOREST Demographic and Economic Information Last Ten Fiscal Years Equalized Per Accessed Per Capita Fiscal Value Capita Personal Personal Unemployment Year Population (EAV)EAV Income Income Rate 2008 21,600 (E)2,867,232,409 132,742 1,665,187,200 77,092 2.8% 2009 21,600 (E)2,958,675,487 136,976 1,665,187,200 77,092 3.9% 2010 21,600 (E)2,890,654,508 133,827 1,665,187,200 77,092 5.8% 2011 *19,375 (A)2,717,547,097 140,260 1,493,657,500 77,092 7.5% 2012 *19,375 (A)2,565,080,023 132,391 1,493,657,500 77,092 6.8% 2013 *19,375 (A)2,378,047,139 122,738 1,493,657,500 77,092 6.7% 2014 *19,375 (A)2,253,547,404 116,312 1,493,657,500 77,092 6.7% 2015 *19,375 (A)2,250,468,636 116,153 1,493,657,500 77,092 5.4% 2016 *19,375 (A)2,307,936,059 119,119 1,493,657,500 77,092 4.7% 2017 *19,375 (A)2,443,072,671 126,094 1,493,657,500 77,092 4.6% (A) Actual (E) Estimate by City of Lake Forest Data Source City records, Department of Labor and Office of the County Clerk. 2010 Census information for Per Capita Personal Income was not available. * The State of Illinois revised the annual unemployment rates for small communities back to 2010 in 2014 218 Page 182 CITY OF LAKE FOREST Principal Employers Current Year and Nine Years Ago % of % of Total City Total City Employer Employees Rank Population Employees Rank Population Northwest Lake Forest Hospital 1,438 1 7.42%1,600 1 7.44% Hospira Inc.- 1,350 2 6.28% Pfizer **2 Abbott 721 3 3.72% Trustmark Insurance Company 704 4 3.63%814 3 3.79% TAP Pharmaceutical Products 804 4 3.74% Lake Forest College excludes student employees 448 5 2.31%514 5 2.39% Pactiv Corporation 333 6 1.72%500 6 2.33% Lake Forest H.S. District 115 teacher, support staff 327 7 1.69%360 7 1.67% Lake Forest Elem. S.D. No. 67 305 8 1.57%240 10 1.12% Packaging Corporation of America 275 9 1.42% City of Lake Forest 213 10 1.10%255 9 1.19% Brunswick Corporation Packaging Corp - 308 8 1.43% Data Source City staff contacted companies via mail. ** No response received 2017 2008 219 Page 183 CITY OF LAKE FOREST Full-Time Equivalent Employees Last Ten Fiscal Years Function/Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 General Government Administration 30 30 29 26 25 25 25.0 25.0 25.0 25.4 Community Development 18 18 15 12.5 12.5 13.0 13.0 13.0 13.0 13.0 Public Safety Fire Protection Firefighters 37 37 36 34 33 33 33 33 33 33 Administrative 1.5 1.5 2.5 2.5 2.5 2.0 2.0 2.0 2.0 2.0 Police Officers 43 43 41.5 40 40 40 40 40 40 40 Civilians 18.5 18.5 18.5 17.5 18.0 18.0 18.0 18.0 8.0 9.0 Public Works Public Works Administration 5 5 5 5 4 4 4 4 4 4 Building Maintenance 6 6 6 6 6 6 7 7 7 7 Engineering 7 7 7 6 5 5 5 5 5 5 Streets 8 8 8 8 7 7.5 7.5 7.5 7.5 8.0 Sanitation 14 12 12 12 12 11.5 10.5 10.5 10.5 10.0 Forestry 9 9 9 0 0 0 0 0 0 0 Fleet (vehicle) Maintenance 5 5 7 6 6 6 6 6 6 6 Water Water Plant 9 9 9 8 7 7 6.5 6.5 6.5 6.5 Water and Sewer 10 10 10 10 10 10 8.5 8.5 8.5 8.5 Parks 7.25 7.25 7.25 16.4 15.4 15.4 15.4 15.4 15.4 15.0 Recreation 17.5 17.5 17.5 17.4 15.4 15.4 15.4 15.4 15.4 16.0 Golf Course 4.25 4.25 3.25 3.2 3.2 2.2 2.2 2.2 2.2 0.0 Cemetery 2 2 2 2 2 2 2 2 2 2 Senior Resources 3 3 3 3 3 3 3 3 3 3 Sub - total City 255 253 248.5 235.5 227 226 224 224 214 213.4 Library 30 29 27.24 29.6 27.9 27.8 28.2 28.2 29.2 30.5 Total all 285 282 275.74 265.1 254.9 253.8 252.2 252.2 243.2 243.9 Data Source City Departments and employee totals as of April 30th Full-Time-Equivalent Budgeted Employees as of April 30 220 Page 184 CITY OF LAKE FOREST Operating Indicators Last Ten Fiscal Years Function/Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 General Government City Clerk Real Estate Transfer Tax (1) Number of Transactions 283 183 261 293 297 382 440 394 355 361 Rebates Issued 35 23 30 37 37 40 67 40 44 37 Birth Certificates Issued 2,790 2,690 2,751 1,940 2,821 2,675 2,250 2,556 2,575 2,474 Passports Issued (2)132 89 108 48 29 0 0 0 0 0 Community Development Building permits issued 3,491 3,142 2,610 3072 3451 3197 3418 3667 3855 3632 Residential construction 33 23 4 7 11 7 13 20 27 21 Commercial construction 1 3 1 0 1 2 1 1 1 1 Building inspections conducted 11,343 9,284 8,060 8392 8645 8925 8651 9657 11009 11707 Public Safety Fire protection I.S.O. rating 4 4 4 4 4 4 4 4 4 3 Number of calls answered EMS 1,624 1,558 1,041 1,211 1,607 1,726 1,574 1,785 1,712 1,923 Fire 1,576 1,759 1,233 1,177 1,734 1,403 1,497 1,503 1,367 1,385 Police (calendar year) Non traffic arrests 450 449 424 385 335 237 191 89 166 129 Parking violations 9,530 9,626 8,472 8,757 7,114 7,013 5,979 5,250 3,907 5,396 Traffic violations 3,287 5,320 3,190 2,997 2,028 2,220 1,877 1,741 1,985 1,718 Public Works Streets Street resurfacing (miles) (calender year)10.36 3.08 5.76 6.57 7.09 5.92 5.00 5.50 2.40 3.28 Number of snow events Salting 20 8 14 15 14 23 27 21 24 15 Plowing 36 25 15 20 12 12 21 20 10 5 Inches of snow 83 72 56 60 21 36 48 50 24 22 Sanitation Refuse collection customers 6,356 6,361 6,361 6,471 6,471 6,472 6,462 6,654 6,295 6,467 Parks and Recreation (3) Fitness Number of programs 370 348 349 334 322 264 336 181 346 215 Units of participation 1,796 1,648 1,355 1,393 1,196 1,060 1,587 1,216 1,271 1,473 Athletics Number of programs 220 213 278 157 309 283 270 341 168 275 Units of Participation 3,232 3,253 3,148 2,416 2,932 2,704 2,524 2,282 1,348 2,006 Lakefront, Early Childhood Education and Lifetime Activities Number of programs 343 307 306 420 395 319 294 126 130 176 Units of participation 1,873 1,541 1,402 1,344 1,424 1,576 1,380 752 1,393 1,221 Cultural Arts/Special Events Number of programs 326 338 292 320 270 306 286 87 147 286 Units of participation 2,454 2,536 2,274 2,262 2,008 1,972 1,999 1,329 1,579 4,133 221 Page 185 CITY OF LAKE FOREST Operating Indicators (Continued) Last Ten Fiscal Years Function/Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Wildlife Discovery Center, Ridge Teams Course and Adventure Number of programs 221 176 10 124 104 37 47 20 20 26 Units of participation 1,157 969 772 627 582 301 360 2263 2802 3685 Developed parks and recreation areas 10 10 10 10 10 10 10 10 11 11 Developed park acreage 395.5 395.5 395.5 415 404 404 404 404 405 405 Sites with playgrounds 8 8 8 8 8 9 9 9 9 9 Sites with baseball diamonds 7 7 7 7 8 8 8 8 8 8 Sites with soccer fields 7 7 7 7 7 7 7 7 7 7 Sites with basketball standards 4 4 4 5 5 5 5 5 5 5 Sites with tennis courts 6 6 6 6 6 6 6 6 6 6 Deer Path Golf Course Size 18 holes 18 holes 18 holes 18 holes 18 holes 18 holes 18 holes 18 holes 18 holes 18 holes Rounds of Play 39,900 35,494 35,079 32,664 31,949 30,321 29,435 27,956 29,445 27,101 Daily fee 18,000 15,500 15,839 15,102 14,466 13,646 17,449 17,646 20,478 19,755 Seasonal 21,900 19,994 19,240 17,564 17,483 16,675 11,986 10,310 8,967 7,346 Water New Connections (tap-ons)34 39 16 19 22 20 28 33 66 30 Meters in operation 6,681 6,771 6,774 6,761 6,755 6,754 6,751 6,764 6,810 6,854 Meters connected to sewerage system 6,520 6,550 6,570 6,570 6,583 6,584 6,587 6,577 6,645 6,718 Average daily consumption (MGD)4.182 3.737 3.611 3.669 3.759 4.202 3,652 3,250 3,162 3,499 Peak daily consumption (MGD)9.477 9.883 9.389 8.982 11.805 10.298 8.611 7.345 8.268 8,315 Rated daily pumping capacity (MGD)14 14 14 14 14 14 14 14 14 14 Total gallons pumped during fiscal year (in millions)1,525.1 1,441.7 1,321.1 1,336.5 1,372.0 1,534.0 1,332.8 1,187.6 1,157.2 1,277.0 Municipal paid parking facilities Long- term parking spaces Miscellaneous lots 813 813 813 813 813 813 813 813 813 813 Union Pacific (CBD district)98 98 98 98 98 98 98 98 98 98 Metra (Telegraph Road)502 502 502 502 502 502 502 502 502 502 Short-term parking spaces 341 341 341 341 341 341 341 341 341 341 Component Unit Library services Books and non print materials 140,171 143,518 142,654 145,496 145,539 147,330 148,318 146,214 146,153 221,568 Registered borrowers 14,233 14,490 15,145 15,645 16,200 15,160 15,403 15,440 15,460 15,518 Fiscal yearbooks, items or materials circulation 415,547 406,998 488,056 465,927 485,450 457,632 450,876 410,852 383,561 376,144 Data Source City departments (1) Collection of real estate transfer tax began in July 2006 (FY2007). (2) The City began to issue passports in FY2003 and stopped in FY2012. (3) a. Fitness data does not include Fitness Center memberships. b. Units of participation may include an individual participant more than once. N/A equals data not available 222 Page 186 CITY OF LAKE FOREST Capital Asset Statistics Last Ten Fiscal Years Function/Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Public Safety Police Stations 1 1 1 1 1 1 1 1 1 1 Vehicles 23 23 23 23 23 25 23 23 21 24 Fire protection Stations 2 2 2 2 2 2 2 2 2 2 Vehicles 14 14 14 14 14 14 17 15 17 17 Public Works Bridges Vehicle 14 14 14 14 14 14 14 14 14 14 Pedestrian 7 7 7 7 7 7 7 7 7 7 Streets Streets (centerline miles)118.66 119 119 119 119 119 119.24 119.24 119.24 119.24 Streetlights Gas 438 438 438 438 438 438 438 438 438 438 Electric 1460 1460 1473 1526 1526 1526 1536 1570 1570 1570 Storm sewer (miles)218.26 218.29 219.17 219.35 219.41 219.41 219.41 219.41 219.43 219.43 Parks and Recreation Acreage 395.5 395.5 395.5 415 403.73 404 403.73 403.73 405 405 Water Water mains (miles)164.27 165.25 165.25 165.25 165.25 165.25 165.79 166.44 166.44 166.89 Fire hydrants 1331 1362 1362 1362 1362 1362 1362 1511 1511 1511 Wastewater Sanitary sewers (miles)138.39 138.71 138.9 138.9 138.95 138.9 138.95 138.95 139.43 139.43 Data Source City departments N/A = data not available 223 The City of Lake Forest CITY COUNCIL Proceedings of the Monday, October 16, 2017 City Council Meeting - City Council Chambers, 7:55pm CALL TO ORDER AND ROLL CALL: Honorable Mayor Lansing called the meeting to order at 7:55pm, and City Clerk Margaret Boyer called the roll of Council members. Present: Honorable Mayor Lansing, Alderman Beidler, Alderman Morris, Alderman Newman, Alderman Rummel, Alderman Tack, Alderman Reisenberg and Alderman Buschmann. Absent: Alderman Moreno Also present were: Robert Kiely Jr., City Manager; Catherine Czerniak, Director of Community Development, Elizabeth Holleb, Director of Finance; Victor Filippini, City Attorney; Michael Thomas, Director of Public Works; Pete Siebert, Fire Chief; Sally Swarthout, Director of Parks & Recreation; Mike Strong, Assistant to the City Manager along with other members of City Staff. There were approximately 20 persons present in the Council Chamber. CALL TO ORDER AND ROLL CALL 7:55 pm PLEDGE OF ALLEGIANCE was recited by all those present in the Chamber. REPORTS OF CITY OFFICERS COMMENTS BY MAYOR Mayor Lansing thanked the League of Women Voters for moderating the Fiscal Management forum held at Gorton on October 3 and the Freight Train Symposium at Trinity University in Bannockburn on October 11. Mayor Lansing stated that the Public Works Committee will be looking into the City’s Noise Ordinance relating to leaf blowers and will report its findings back to the City Council in the coming months. COMMENTS BY CITY MANAGER City Manager Robert Kiely reported that the East side Train Station renovation will be complete soon and that the City Council can expect a recap on the financials from this project sometime in November. City Manager Robert Kiely introduced Michael Thomas, Director of Public Works, who gave an overview of the October 14, 2017 storm flooding event that included short and long term actions by the City and residents, with an emphasis on mitigating flood hazards. Mr. Thomas invited residents to attend a free Lake County Storm Water Management workshop on Thursday, October 19. City Manager Robert Kiely introduced Sally Swarthout, Director of Parks & Recreation, who provided a recap of Octoberfest. Ms. Swarthout reported that due to lighting, and heavy rains/flooding, the event was cancelled after 2 hours. COMMENTS BY CITY CCOUNCIL MEMBERS FINANCE COMMITTEE 224 Proceedings of the Monday, October 16, 2017 Regular City Council Meeting- 1.Acknowledge Receipt of the FY2017 Treasurer’s Report James Morris, Finance Committee Chairman, reported that this item was seen at the Finance Committee meeting and asked if Elizabeth Holleb, Finance Director would recap for the Council. Ms. Holleb reported pursuant to Illinois Statute, a Treasurer’s Report must be filed with the City Clerk, the County Clerk, and published in a Lake Forest newspaper within six months after the end of each fiscal year. Mayor Lansing asked if there was anyone form the public who would like to comment. Seeing none, he asked for a motion. COUNCIL ACTION: Acknowledge receipt of the FY2017 Treasurer’s Report Alderman Morris made a motion to acknowledge receipt of the FY2017 Treasurer’s Report, seconded by Alderman Reisenberg. The following voted “Aye”: Aldermen Beidler, Morris, Newman, Rummel, Tack, Reisenberg and Buschmann. The following voted “Nay”: None. 7- Ayes, 0 Nays, motion carried. OPPORTUNITY FOR CITIZENS TO ADDRESS THE CITY COUNCIL ON NON-AGENDA ITEMS None. ITEMS FOR OMNIBUS VOTE CONSIDERATION 1.Approval of the October 2, 2017 City Council Meeting Minutes 2.Approval of an Ordinance amending City Code Relating to Real Estate Transfer Taxes (2nd Reading and Grant Final Approval) 3.Approval of a Second Amendment to the Water Tower and Ground Lease Agreement between The City of Lake Forest and SprintCom, Inc. 4.Consideration of an Ordinance Approving a Recommendation from the Zoning Board of Appeals. (First Reading, and if Desired by the City Council, Final Approval) COUNCIL ACTION: Approval of the four (4) Omnibus items as presented Mayor Lansing asked members of the Council if they would like to remove any item or take it separately. The City Council had discussion on item #1 that included scrivener’s errors. Mayor Lansing asked for a motion to approve the Four Omnibus items with corrections. Alderman Rummel made a motion to approve the four omnibus items as corrected, seconded by Alderman Beidler. The following voted “Aye”: Aldermen Beidler, Morris, Newman, Rummel, Tack, Reisenberg and Buschmann. The following voted “Nay”: None. 7- Ayes, 0 Nays, motion carried. Information such as Purpose and Action Requested, Background/Discussion, Budget/Fiscal Impact, Recommended Action and a Staff Contact as it relates to the Omnibus items can be found on the agenda. ORDINANCES 1.Approval of Ordinance Establishing Administrative Procedures for Assessing and Determining Claims Under the Public Safety Employee Benefits Act (PSEBA) 225 Proceedings of the Monday, October 16, 2017 Regular City Council Meeting- DeSha Kalmar, Director of Human Resources, reported that the PCA Committee and City staff recommend first reading and final approval of the ordinance revising administrative procedures for assessing and determining claims under PSEBA.The Public Safety Employee Benefit Act (PSEBA) requires insurance benefits be provided to a public safety employee who suffers a catastrophic injury or is killed in the line of duty. The same benefits may be extended to the spouse and eligible dependents of the employee, provided the conditions established by the Act are met. The City may be required to pay the entire premium of the City’s basic health insurance plan for a public safety employee and his/her spouse and eligible dependents for the period of time defined by the Act, if the employee is eligible. Ms. Kalmar reported that the City is proposing to change the eligibility review process. Under State law, the City has the right to establish an administrative procedure for assessing claims it feels is in the best interests of the City and its residents without acting in a manner inconsistent with the requirements of the Act, including the ability to use home rule authority to enact an ordinance that would determine, assess, and outline the administrative process for assessing eligibility under PSEBA. Mayor Lansing asked City Council if there were any questions. Seeing none he asked if there was anyone from the public who would like to comment. Seeing none, he asked for a motion. COUNCIL ACTION: First Reading and Final Approval of Ordinance Establishing Administrative Procedures for Assessing and Determining Claims Under the Public Safety Employee Benefits Act (PSEBA). Alderman Newman made a motion to grant First Reading and Final Approval of Ordinance Establishing Administrative Procedures for Assessing and Determining Claims under the Public Safety Employee Benefits Act (PSEBA), seconded by Alderman Newman. The following voted “Aye”: Aldermen Beidler, Morris, Newman, Rummel, Tack, Reisenberg and Buschmann. The following voted “Nay”: None. 7- Ayes, 0 Nays, motion carried. NEW BUSINESS ADDITIONAL ITEMS FOR COUNCIL DISCUSSION Mayor Lansing reported there will be no further business following executive session and asked for a motion. EXECUTIVE SESSION 1. EXECUTIVE SESSION pursuant to 5ILCS 120/2 (c), (6), The City Council will be discussing the disposition of property and the consideration for the sale or lease of property owned by the Public Body. Alderman Buschmann made a motion to adjourn into executive session pursuant to 5ILCS 120/2 (c), (6), The City Council will be discussing the disposition of property and the consideration for the sale or lease of property owned by the Public Body and 5ILCS 120/2 (c), (5), The City Council will be discussing the consideration of Land Acquisition, seconded by Alderman Newman. The following voted “Aye”: Aldermen Beidler, Morris, Newman, Rummel, Tack, Reisenberg and Buschmann. The following voted “Nay”: None. 7- Ayes, 0 Nays, motion carried. Adjournment into Executive Session at 8:40 pm 226 Proceedings of the Monday, October 16, 2017 Regular City Council Meeting- RECONVENE INTO REGULAR SESSION at 9:25 pm ADJOURNMENT There being no further business. Alderman Tack made a motion to adjourn, seconded by Alderman Newman. Motion carried unanimously by voice vote at 9:26p.m. Respectfully Submitted Margaret Boyer, City Clerk A video of the City Council meeting is available for viewing at the Lake Forest Library and on file in the Clerk’s office at City Hall. You can also view it on the website by visiting www.cityoflakeforest.com. Click on I Want To, then click on View, then choose Archived Meetings Videos. 227 THE CITY OF LAKE FOREST RESOLUTION NO. __________ - 2017 A RESOLUTION AUTHORIZING THE EXECUTION OF A GRANT APPLICATION BETWEEN THE CITY OF LAKE FOREST AND THE ILLINOIS DEPARTMENT OF TRANSPORTATION FOR FUNDING THE ROUTE 60 SHARED-USE PATH PROJECT WHEREAS, The State of Illinois, through the Illinois Department of Transportation (“IDOT”), administers financial assistance from their Illinois Transportation Enhancement Program (“ITEP”) for well-planned projects that support alternate modes of transportation, enhance the transportation system via preservation of visual and cultural resources, and improve the quality of life for members of the communities; and WHEREAS, The City of Lake Forest, Illinois desires financial assistance under the Illinois Department of Transportation's Transportation Enhancement Program to seek grant funding for the design and construction of a proposed shared-use path that would provide connectivity between the new path over the Metra railroad tracks at Middlefork Savanna and Conway Business Park. ("Project"); and WHEREAS, The corporate authorities, after due investigation and consideration, have determined that the acceptance of ITEP financial assistance and entering into a grant agreement with the State of Illinois will serve the public good; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LAKE FOREST: SECTION 1: That the Mayor and City Council hereby find as facts all of the recitals in the Preamble of this Resolution. SECTION 2: That the Mayor and City Council approve filing an application to IDOT’s Illinois Transportation Enhancement Program for financial assistance in supporting the Project. SECTION 3: That City Manager is hereby authorized and directed to execute and file an ITEP Application, and to provide all information and documentation necessary to become eligible for possible funding assistance. SECTION 4: That the City will provide the required Local Sponsor matching funds for this project. SECTION 5: This Resolution shall be in full force and effect from and after its passage and approval as provided by law. PASSED THIS _____ DAY OF _______________, 2017. AYES: ( ) NAYS: ( ) ABSENT: ( ) ABSTAIN: ( ) ________________________________________ MAYOR ATTEST _____________________________________ CITY CLERK 228 THE CITY OF LAKE FOREST RESOLUTION NO. __________ - 2017 A RESOLUTION AUTHORIZING THE EXECUTION OF A GRANT APPLICATION BETWEEN THE CITY OF LAKE FOREST AND THE ILLINOIS DEPARTMENT OF TRANSPORTATION FOR FUNDING THE ROBERT MCCLORY BIKE TRAIL PEDESTRIAN BRIDGE REPLACEMENT PROJECT WHEREAS, The State of Illinois, through the Illinois Department of Transportation (“IDOT”), administers financial assistance from their Illinois Transportation Enhancement Program (“ITEP”) for well-planned projects that support alternate modes of transportation, enhance the transportation system via preservation of visual and cultural resources, and improve the quality of life for members of the communities; and WHEREAS, The City of Lake Forest, Illinois desires financial assistance under the Illinois Department of Transportation's Transportation Enhancement Program to seek grant funding for the Robert McClory Bike Trail Pedestrian Bridge Replacement Project that would replace the two pedestrian bridges on the McClory Bike Path in downtown Lake Forest ("Project"); and WHEREAS, The corporate authorities, after due investigation and consideration, have determined that the acceptance of ITEP financial assistance and entering into a grant agreement with the State of Illinois will serve the public good; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LAKE FOREST: SECTION 1: That the Mayor and City Council hereby find as facts all of the recitals in the Preamble of this Resolution. SECTION 2: That the Mayor and City Council approve filing an application to IDOT’s Illinois Transportation Enhancement Program for financial assistance in supporting the Project. SECTION 3: That City Manager is hereby authorized and directed to execute and file an ITEP Application, and to provide all information and documentation necessary to become eligible for possible funding assistance. SECTION 4: That the City will provide the required Local Sponsor matching funds for this project. SECTION 5: This Resolution shall be in full force and effect from and after its passage and approval as provided by law. PASSED THIS _____ DAY OF _______________, 2017. AYES: ( ) NAYS: ( ) ABSENT: ( ) ABSTAIN: ( ) ________________________________________ MAYOR ATTEST _____________________________________ CITY CLERK 229 Printed 11/2/2017 OPP 2245 (Rev. 04/18/16) Local Assurance This page must be signed by a representative of the local sponsoring agency in order for the project to be considered for funding. The project sponsor certifies that it is willing and able to manage, maintain, and operate the project as a highway authority eligible to receive federal funding. The project sponsor possesses legal authority to nominate the transportation enhancement project and to finance, acquire, and construct the proposed project. The sponsor authorizes the nomination of the transportation enhancement project, including all assurances contained therein. The sponsor authorizes the person identified below as the official project representative to act in connection with the nomination and to provide such additional information as may be required. The project sponsor affirms that, if selected, the project will commence within the time periods defined by the Sunset Clause (refer to Section I of the ITEP Guidelines Manual) and in accordance with departmental policies. I certify that the information contained in this transportation enhancement application, including attachments, is accurate and that I have read and understand the information and agree to the assurances on this form. Name: Please print Title: Please print Signature: Date: Name of Sponsoring Agency: 230 THE CITY OF LAKE FOREST RESOLUTION NO. ____________ A RESOLUTION APPROVING A STORMWATER AND LANDSCAPING EASEMENT WITH THE CATHOLIC BISHOP OF CHICAGO AND AN AFFIDAVIT OF OWNERSHIP WHEREAS, The City of Lake Forest (the “City”) has been approved for a grant pursuant to the Illinois Coastal Management Program Grant ("Grant Program”) that is being administered by the Illinois Department of Natural Resources in order to (i) restore and stabilize the ravine and improve the stormwater system within a ravine located within the Lake Forest Cemetery and the Saint Mary's Catholic Cemetery ("Ravine”) and (ii) plant and maintain native vegetation on each side of the Ravine (collectively, the "Project”); and WHEREAS, the Grant Program requires that the Project be on public land or publicly controlled easement; and WHEREAS, the City is the owner of the Lake Forest Cemetery, and therefore, that portion of the Ravine within the Lake Forest Cemetery is on public land; and WHEREAS, The Catholic Bishop of Chicago, a Corporation Sole of the State of Illinois (''Archdiocese”), is the owner of the Saint Mary's Cemetery, and therefore, the Grant Program requires the City to obtain a publicly controlled easement from the Archdiocese over that portion of the Ravine within the Saint Mary's Cemetery; and WHEREAS, the City and the Archdiocese negotiated a Stormwater and Landscaping Easement in 2002 for a similar grant related project for these purposes, a copy of which is attached as Exhibit A and, by this reference, made a part of this Resolution ("Easement Agreement”); and WHEREAS, the City and the Archdiocese have substantially agreed to all of the terms of the Easement Agreement, and the Archdiocese has executed the Easement Agreement; and 231 2 WHEREAS, the Grant Program also requires a representative of the City to execute an affidavit of ownership, a copy of which is attached as Exhibit B and, by this reference, made a part of this Resolution (''Affidavit”); and WHEREAS, the Mayor and City Council of the City have determined that it is in the best interests of the City and its residents to approve the Easement Agreement and the Affidavit; NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LAKE FOREST, COUNTY OF LAKE, STATE OF ILLINOIS, as follows: SECTION 1. Recitals. The foregoing recitals are incorporated as if fully set forth in this Section 1. SECTION 2. Approval of the Easement Agreement and the Affidavit. The City Manager is hereby authorized and directed to execute the Easement Agreement and the Affidavit in substantially the form attached as Exhibits A and B. SECTION 3. Effective Date. This resolution shall be in full force and effect upon its passage and approval in the manner provided by law. PASSED THIS ___ DAY OF _________, 2017. AYES: NAYS: ABSENT: APPROVED THIS ___ DAY OF ________ 2017. _______________________ Mayor ATTEST: ______________________ City Clerk 232 3 EXHIBIT B LEGAL DESCRIPTION OP THE EASEMENT That portion of the following described property that lies within the ravine that runs along the northerly boundary of such property: All that part of Lots 7 and 1 in Lake Forest Subdivision, being a subdivision of Sections 27, 28, 33 and 34, Township 44 North, Range 12 East of the Third Principal Meridian, and Section 3, Township 43 North Range 12 East of the Third Principal Meridian, according to the plat thereof recorded July 23, 1857 in Book D of Plats, pages 72 to 77, bounded and described as follows: commencing at the Southwest Corner of Lot 7; running thence North along the West bounds of Lots 7 and 1, 15 chains and 34 links to a stake in the center of a ravine; thence along the center of ravines as follows: North 79 degrees East, 80 links; South 75 degrees East, 78 links; North 58 degrees East, 1 chain and 99 links; North 79 degrees East, 2 chains and 23 links; North 87 degrees East, 1 chain and 23 links to the intersection with the center of another ravine; thence South 8 degrees West, 1 chain and 76 links; thence South 39 degrees West, 2 chains and 2 links; thence South 10 degrees East, 1 Chain and 67 links; thence South 52 degrees East, 74 links; thence South 19 degrees West, 1 chain and 59 links; thence South 16 degrees West, 2 chains and 74 links; thence South 14 degrees West, 1 chain and 76 links; thence South 62 degrees West, 2 chains and 95 links; thence South 18 degrees East, 1 chain and 33 links; thence South 32 degrees West, 1 chain to the center of the highway on the South bounds of Lot 7 aforesaid; thence West, 2 chains and 22 links to the point of beginning, the said premises being bounded on the northerly and easterly sides by the centers (or water courses) of ravines, and on the South and West sides by the boundary lines of said lots numbered 7 and 1 aforesaid, in Lake County, Illinois. 233 THIS DOCUMENT PREPARED BY AND AFTER RECORDING RETURN TO: Martin P. Murphy Holland & Knight LLP 55 West Monroe Street Suite 800 Chicago, IL 60603 Above Space For Recorder's Use Only STORMWATER AND LANDSCAPING EASEMENT THIS AGREEMENT is dated as of the i3'tday of Apfi-L , 2002, and is made by and between THE CITY OF LAKE FOREST, an Illinois municipal corporation ("City"), and THE CATHOLIC BISHOP OF CHICAGO, a Corporation Sole of the State of Illinois ("Archdiocese"). RECITALS A. The City is seeking a grant pursuant to the Great Lakes Coastal Restoration Grant Program that is being administered by the lUinois Department of Natural Resources in order to fund a portion of the costs for a project ("Raume Project") contemplated by the City to (i) rehabilitate the stormwater system within a ravine located within property owned by the City and the Archdiocese ("Ravine") and (ii) plant and maintain native vegetation on each side of the Ravine. B. The Archdiocese is the owner of portion of the westerly side of the Ravine located within the property legally described in Exhibit A attached hereto and by this reference made a part hereof ("Easement Premises"). EXHIBIT A 234 C. The Archdiocese desires to grant to the City an easement in, upon, over, under, through, along, and across the Easement Premises for the purpose of allowing the City the right to construct, install, and maintain that portion of the Ravine Project within the Easement Premises, all in accordance with the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and the mutual covenants and agreements set forth herein and other good and valuable consideration paid by the City to the Archdiocese, the receipt and suf&ciency of which are hereby acknowledged, the City and the Archdiocese hereby enter into the following: EASEMENT AGREEMENT Section 1: Incornoration of Recitals. The foregoing recitals are hereby incorporated into this Agreement as substantive provisions hereof. Section 2: Grant of Easement. The Archdlocese hereby grants, conveys, warrants, and dedicates to the City, its successors and assigns, a perpetual easement and right of way to survey, construct, reconstruct, lay, use, own, operate, maintain, test, inspect, repair, replace, enlarge, renew, alter, remove, and abandon in place (collectively, Installation") (i) such storm sewers, pipes, and conduits of such size, material, and number, and with such equipment, attachments, and appurtenances thereto within the bottom of the Ravine as the City may deem desirable for the storm water related aspects of the Ravine Project and (ii) such landscaping along the westerly side of the Ravine as the City may deem desirable for the landscaping aspects of the Ravine Project (collectively, Facilities"), subject to the terms and conditions hereinafter set forth, in, upon, over, under, through, along, and across the Easement Premises, together with aU reasonable rights of ingress and egress in, upon, over, through, along, and across the Easement Premises. The parties agree that the City's rights under this easement may include 235 removal of existing trees and long term burn management of existing and future landscaping within the Easement Premises. Sections: Archdiocese Acknowledement. The Archdiocese agrees and acknowledges that (i) the City is not obligated to undertake or continue the Ravine Project, or any portion thereof, and (ii) even if the City undertakes the Ravine Project, the City has made no warranty or guaranty, or assumes any obligation or liability, regarding the future condition of, or future levels or erosion within, the Ravine, including without limitation that portion of the Ravine located within the Easement Premises. Section 4: Reservation of Rights. The Arehdiocese hereby reserves the right to use the Easement Premises in any manner that wiU not prevent or interfere in any way with the exercise by the City of the rights granted hereunder. The Archdiocese shall have the right to grant other non-exclusive easements over, along, upon, or across the Easement Premises; provided, however, that any such other easements shall be subject and subordinate to this Agreement and the rights granted hereby; and provided further, however, that the City shall have first consented in writing to the terms, nature, and location of any such other easements. Section 6: Further Assurances. The Archdiocese hereby represents and warrants that it shaU take all necessary action so that the Easement Premises shall be released from all liens, including but not limited to, the lien of aU mortgages, mechanics' lien claims, security agreements, assignments of rents and leases, and shall execute aU such documents as may be reasonably necessary to perfect the City's right, title, and interest in the Easement Premises. Section 6: Indemnity. The City agrees to indemnify, defend and hold the Archdiocese harmless from and against all losses, injuries, claims, damages, liabilities, and costs arising out of or in connection with the conduct of aU activities performed by the City 3 236 or caused to be performed by the City upon the Easement Premises pursuant to this Agreement. Section 7: Covenants Running with the Land. The easements and rights granted in this Agreement, the restrictions imposed by this Agreement, and the agreements and covenants contained in this Agreement shaU be easements, rights, restrictions, agreements, and covenants running with the land, shaU be recorded against the Easement Premises and shaU be binding upon and inure to the benefit of the City and the Archdiocese and their respective heirs, devisees, executors, administrators, personal representatives, agents, grantees, successors, assigns, licensees, and invitees, including, without limitation, all subsequent owners of the Easement Premises, or any portion thereof, and all persons claiming under any of them. If any of the easements, rights, restrictions, agreements, or covenants created by this Agreement would otherwise be unlawful or void for violation of (a) any rule against perpetuities or any analogous statutory provision, (b) any rule restricting restraints on alienation, or (c) any other statutory or common law rules imposing time limits, then such easements, rights, restrictions, agreements, or covenants shaU continue only until 21 years after the death of the last survivor of the now living lawful descendants of George Herbert Walker Bush, 41st President of the United States. Section 8: Notices. All notices and other communications in connection with this Agreement shall be in writing and shall be deemed delivered to the addressee thereof (a) when delivered in person and receipted for on a business day at the address set forth below; (b) on the fifth business day after being deposited in any main or branch United States post office, for delivery by properly addressed, postage prepaid, certified or registered mail, return receipt requested, at the address listed below; (c) when delivered to the address listed below by any courier service; (d) on the date of transmission, if 237 transmitted by telecopier at the telecopier number listed below and deposited in the U.S. mail on the same day for delivery to the address hated below: To the Archdiocese: The Catholic Bishop of Chicago c/o Catholic Cemeteries 1400 South Wolf Road HUlside, IlUnois 60162 Attention: Roman Szabelski Telecopier: 708-449-3419 To the City: The City of Lake Forest 110 East Laurel Avenue Lake Forest, Illinois 60045 Attention: City Manager Telecopier: 847-615-4289 By notice complying with the requirements of this Section, each party shall have the right to change the addressee, the address of the addressee, or both for all future notices and communications to such party, but no notice of a change of addressee or address shall be effective until actually received. Section 9: Assignment of Riffhts. The Archdiocese agrees that the City may assign its rights or delegate its duties under this Agreement, in whole or in part, without the consent of the Archdiocese. Section 10: Amendment. This Agreement may be modified, amended, or annulled only by the written agreement of the City and the Archdiocese. Section 11: Survival. AU representations and warranties contained herein shall survive the execution of this Agreement and the recordation thereof and shaU not be merged. (Execution page follows) 238 IN WITNESS WHEREOF the City and the Archdiocese hereto have executed or have caused this instrument to be executed by their proper officers duly authorized to execute same as of the date first hereinabove written, THE CITY OF LAKE FOREST, an Illinois municipal corporation THE CATHOLIC BISHOP OF CHICAGO, a Corporation. Sole of the State of Illinois By..^J^\^ Its: Ci(^ /yi<i^w ,c By:'w^^i&a^. Its: jQiY'ec'/9^ vf- Fm *. 239 STATE OF ILLINOIS ) )SS COUNTY OF LAKE ) I, d?LiZffJbff(k./4/U^)<)nCirf^Nrtary Public in and for said County, m the State aforesaid, do hereby certify that BjdcKfk 6 . (CfcC-ly < -j^rsonally known to me to be the d't'u f Y iCiiQcuer of The City of Lake Forest, and personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day and acknowledged that as the L.L-tAJj I Y IGO^K^ef of the City, he signed and delivered said instrument as his free and voluntary act and as the free and voluntary act of the City for the uses and purposes therein set forth. Given under my hand and official seal this 1 T5 _ day of /^/Of !. L -, 2002. Notary Public My commission expires: (SEAL)"OFFICIAL SEAL" ELIZABETH ANN MARQUEZ Notary Public, State of Illinois My Commtorion Esplfea 09/23/05 240 STATE OF ILLINOIS COUNW OF COOK )SS I, Manreen A -wni-ptiy a Notary Public in and for said County, in the State aforesaid, do hereby certify that Thomas M. Brennan, personally known to me to be the DlFector of Finance of The Catholic Bishop of Chicago, a Corporation Sole of the State of Illinois, and ___ personally known to me to be the of The Catholic Bishop of Chicago, a Corporation Sole of the State of Illinois, and personally known to me to be the same persons whose names are subscribed to the foregoing instrument, appeared before me this day and acknowledged that as the nirertor nf Finsnr-e and _ of The Catholic Bishop of Chicago, a Corporation Sole of the State of Illinois, they signed and delivered said instrument as their free and voluntary act and as the free and voluntary act of The Catholic Bishop of Chicago, a Corporation Sole of the State of Illinois, for the uses and purposes therein set forth. ,#. Given under my hand and official seal this V-ri _ day of appii _, 2002. Notary Public My commission expires: 10 -i^r^O5) (SEAL) "OFFICIAL SEAL" MAUREEN A. MURPHY Notary Public, State of Illinois My Commission Expires 10/29/03 241 EXHIBIT A LEGAL DESCRIPTION OP THE EASEMENT PREMISES That portion of the following described property that lies within the ravine that runs along the easterly boundary of such property: All that part of Lots 7 and 1 in Lake Forest Subdivision, being a subdivision of Sections 27, 28, 33 and 34, Township 44 North, Range 12 East of the Third Principal Meridian, and Section 3, Township 43 North Range 12 East of the Third Principal Meridian, according to the plat thereof recorded July 23, 1857 in Book D of Plats, pages 72 to 77, bounded and described as follows: commencing at the Southwest Corner of Lot 7; running thence North along the West bounds of Lots 7 and 1, 15 chains and 34 links to a stake in the center of a ravine; thence along the center of ravines as foUows: North 79 degrees East, 80 links; South 75 degrees East, 78 links; North 58 degrees East, 1 chain and 99 links; North 79 degrees East, 2 chains and 23 links; North 87 degrees East, 1 chain and 23 links to the intersection with the center of another ravine; thence South 8 degrees West, 1 chain and 76 links; thence South 39 degrees West, 2 chains and 2 links; thence South 10 degrees East, 1 Chain and 67 links; thence South 52 degrees East, 74 links; thence South 19 degrees West, 1 chain and 59 links; thence South 16 degrees West, 2 chains and 74 links; thence South 14 degrees West, 1 chain and 76 links; thence South 62 degrees West, 2 chains and 95 links; thence South 18 degrees East, 1 chain and 33 links; thence South 32 degrees West, 1 chain to the center of the highway on the South bounds of Lot 7 aforesaid; thence West, 2 chains and 22 links to the point of beginning, the said premises being bounded on the northerly and easterly sides by the centers (or water courses) of ravines, and on the South and West sides by the boundary lines of said lots numbered 7 and 1 aforesaid, in Lake County, Illinois. CHI1 #161204 v3 242