2021 Public Annual Financial Report (PAFR)

2021

Popular Financial Annual Report

Village Trustees

A Message from the

BG is...

Village President Andrew Stein

Lester Ottenheimer

David Weidenfeld

Joanne Johnson

Eric Smith

It is with great pleasure that the Village of Buffalo Grove presents the annual “Citizenʼs Guide to Local Financial Activities” for the fiscal year ended December 31, 2021. I take pride in the ability to deliver the residents of Buffalo Grove with an overview of the Villageʼs progress and financial performance that is both transparent and easily understood. This report is a summary of the financial activities of the Village and is not intended to replace the Annual Comprehensive Financial Report (ACFR). The full disclosure financial statements, or ACFR, can be found on the Villageʼs website at www.vbg.org/financialreports.

Analysis conducted within this report outlines growth drivers, capital projects and summarized financial and trend data. The presentation of financial information in the report has been derived from audited financial statements and conforms to generally accepted accounting principles (GAAP) and related reporting standards.

The Village continues to prioritize financial transparency and open communication with its residents and businesses. I hope the information and data contained in this 2021 guide to local financial activities provides you with a snapshot of the challenges and opportunities the Village of Buffalo Grove is managing today and into the future.

Sincerely,

Responsible

Safe

Budget Overview

Buffalo Grove's 2021 budget is designed to provide residents and other interested parties with an easy to navigate format that clearly explains how the Village allocates its resources. Each program strives to make BG more responsible, resilient or safe. Every program consists of major services the Village provides for its residents and the business community. The budget document is therefore organized by areas, programs and major services. The gray boxes on the following pages provide an overview of each area.

Each program provides oversight over the services that are provided either directly to the community or indirectly as an internal support function. How resources are allocated within the annual budget provides the reader insight as to what the strategic priorities are and what services are valued by Village stakeholders. The 2021 budget supports 27 programs that deliver 47 services.

Each year, the Village determines its level of service, strategic goals and expectations and staffing levels based upon the demand for services, anticipated revenues and progress toward long-term operational and capital development goals.

The Village Clerk's office maintains all of the Villageʼs official records, meeting minutes and documents as well as a range of services including business and liquor licensing, voter registration and municipal code updates.

Gregory Pike

Resilient

Janet Sirabian

A Closer Look at BG

The Villageʼs net position increased by $26.6 million (or 35.7 percent) during the fiscal year ending December 31, 2021. The governmental net position increased by $17.5 million (91.1 percent) and the business-type activities net position increased by $9.1 million (16.4 percent).

Equalized assessed valuation decreased by $27.9 million or 1.5 percent to $1.79 billion for the 2020 levy year (collected in 2021). The decrease is due primarily to reductions by the county during the COVID-19 pandemic.

BG Quick Facts

87%

34%

of residents have some level of

of residents were born outside of

post-secondary education

the United States

$115,951

43,212

is the median household income in

Total population in BG

BG

97%

79%

of residents in the labor force are

of residents have access to 4+

currently employed

acres per 1,000 residents

41.5

11,326

is the median age of a BG resident

Single family homes in

BG is...

Responsible BG is committed to being prudent stewards of the public dollar.

To achieve this commitment the village takes the following actions:

Innovating the administrative, personnel, and legislative functions

Buffalo Grove

Where Your Property Tax

Did you know?

Managing the Village's finances, pensions funds and debt service

Open BG provides a hub of direct access to the Villageʼs financial, historical and contractual data. Anyone can use this data to participate in and improve government.

Check it out at vbg.org/openbg!

Overseeing the strategic use of information technology resources

Dollars Go

2021 Top Employers

Local Economy

and Tax Payers

External economic factors at the national and state level continue to impact the Villageʼs revenue profile and, subsequently its ability to manage operating and capital resources.

BG has a distinctive local economy with an employment base of 20,000 daily workers.

BG is...

Resilient BG strives to provide and maintain the highest quality infrastructure.

BG has over 10 million square feet of commercial, office, and industrial space. BG is home to several advanced manufacturing centers as well as many high profile firms such as Siemens, Plexus and Yaskawa.

Revenue Overview

Maintaining the village's streets, grounds, water, drainage, and sewer systems Did you know?

Directing the long term structural needs through engineering

Water and Sewer collections increased from $14,625,649 in 2020 to $16,326,679 in 2021, a total increase of 11.6 percent.

Sales taxes, both state shared and home rule, generated $16,013,176 in 2021 versus $12,139,442 in 2020, an increase of 31.9 percent.

To achieve this commitment the village takes the following actions:

Improving the quality of municipal buildings, parking lots, and vehicles

Property tax collections totaled $16,970,657 which is a slight decrease from the previous yearʼs total of $17,035,362, a decrease of 0.4 percent.

Buffalo Grove was ranked the 3rd Best Place to Live and 5th Best Place to Raise a Family in Illinois by community data aggregator, Niche.com. The community also received an A+ rating, noting Did you know? low crime rates, a diverse resident base, business growth MoneyGeek.com recently evaluated small cities and and quality of life. Additionally, Niche.com rated Buffalo towns across the United States - those with 30,000 to Grove as the #4 Place with the Best Public Schools in 100,000 residents - and ranked them according to the America. Schools attended by Buffalo Grove students per capita cost of crime. They ranked Buffalo Grove the include nationally recognized and award-winning District #1 safest town in the U.S., with a $22 crime cost per 125ʼs Adlai E. Stevenson High School, and Buffalo Grove capita.

High School/District 214, as well as elementary and junior high school districts 21, 96 and 103.

Revenues for the Villageʼs governmental activities for the year ended December 31, 2021 were $59.2 million, an increase of $8.5 million or 16.8 percent. Property taxes continue to be the Villageʼs largest source of revenue (28.7 percent) at $17.0 million. Included within the property tax revenues are the pension levies for the Police and Firefighter Pension Funds and IMRF/Social Security. The pension levies account for 39.5 percent of the property tax levy. Other taxes and intergovernmental revenue including sales tax, state income tax, utility tax, prepared food and beverage tax, hotel tax and real estate transfer tax total $31.5 million or 53.2 percent of total governmental activities revenue.

2021 Revenue by Source Governmental Activities

Charges for service Grants and contributions Property tax Sales and use tax Income tax Telecommunication tax Utility tax Property transfer tax Other taxes

The Clove

The Village Board approved Kensington Development Partners' plans to redevelop the 22-acre Town Center property into a new, modern entertainment and residential district called The Clove. This compact central district will feature contemporary building design, as well as upscale tenants and be a unique destination for residents and visitors alike.

The plan calls for a new 43,000 square foot nationally renowned grocery store with an innovative format to meet the demands of todayʼs consumers. In addition, it includes a 7-story, 297-unit high-end apartment building with 16,000 square feet of commercial space on the ground floor.

Distinctive from traditional multi-family complexes, the proposed “next generation”

BG is...

Safe

apartment building represents the latest in the luxury rental market, where the focus is creating an amenity-rich, convenience-filled environment. The plan also provides nearly 20,000 square feet of new retail and restaurants scattered throughout the site, plus an approximately 0.85-acre “Central Park”

will sit in the middle of the site and can be programmed for concerts, the arts and other civic events.

Revitalizing the remaining 34,000 square feet located on the northern portion of the site, creating new opportunities for existing and future tenants.

Groundbreaking is expected this fall!

BG knows that the community expects to be safe in their homes, at work, and around town.

To achieve this commitment, the village takes the following actions:

Insuring the public's safety through emergency medical , fire, and police services

New Public Works Facility

The Village plans to acquire the building at 1650 Leider Lane to house the Villageʼs public works and engineering services. The new 173,000 square foot facility provides enough space to accommodate public works operations now and well into the future. Repurposing an existing building will save the Village approximately 40% of costs compared to that of a new building.

The project will be financed with AAA-rated bonds, along with capital fund reserves. The remainder of the project cost will come from the sale of the existing public works property and other sources, with no additional cost to BG taxpayers. Occupancy is anticipated in spring 2024.

VIN 90 Kitchen + Bar

The bar, restaurant and patio area at The Arboretum Club have been renovated into a full-service restaurant, VIN 90 Kitchen + Bar. Managed by WJ Golf and led by Chef Yoon Kin, VIN 90 offers a unique dining experience. The menu features a wide variety of options, including an extensive sushi selection, along with a fullservice bar. A large retractable wall creates an open-air concept between the indoor seating and the patio overlooking the course.

Inspecting the environmental and health impacts of businesses

Developing standards for the permitting and zoning of the village's built environment

BGPD Quick Facts

Village Pension Obligations

Finance and Liabilities

The Fire Pension Fund had a funded ratio of 85% as of December 31, 2021. The annual interest rate assumption is 7% with a the five-year average return is 11.45% as of December 31, 2021.

2021

The Police Pension Fund had a funded ratio of 78% as of December 31, 2021. The annual interest rate assumption is 7% with a five-year average return of 11.81% as of December 31, 2021.

Affirmative Action Recruiting Plan has been in place since 1986 and updated every 3 years.

Adequate Reserves The Village had $22,485,209 in unassigned fund balance available in the General Fund on December 31, 2021.

72% of benefit costs are related to pension costs. $7.9 million is the Villageʼs employer obligation for current and future annuitants and $8.8 million will be distributed to retired pensioners.

Debt Reduction The Village retired a total of $2,550,445 in general obligation debt in fiscal year 2021.

Expense Overview

Biased Based Policing Annual review revealed the 20th consecutive year without any complaints of biased based profiling.

The cost of all governmental activities this year was $40.6 million, a decrease of 3.8 percent from 2020 ($42.2 million). The largest decrease was made in Public Safety expenses $2.2 million in 2021. General Government expenses increased by $0.5 million (6.9 percent) and Public Works expenses increased by $0.3 million (3.9 percent).

Buffalo Grove 2020 Expenditures by Function

General government Public safety Public works Interest

Officers complete an 8-hour mental health first aid and a 40-hour crisis intervention training.

Expenses from all business-type activities increased by $0.4 million or 3.6 percent. The Water Fund expenses increased by $0.2 million, which compares favorably to a budgeted increase in expenses. Golf expenses were increased in 2021 to $2.6 million in total or 7.7 percent.

Financial Stability The Village holds a AAA⏤the highest possible⏤bond rating from Standard & Poor's on all current bonded general obligation debt.

Public Safety Pension Funding The Fire Pension Fund is funded at 85.1%, and the Police Pension Fund is funded at 77.8%. State statute mandates that pensions be funded at 100% by 2040.

The Village's financial policy requires a 25% fund balance for general operations.

Learn more at www.vbg.org/financialreports.

Infrastructure Modernization Program Buffalo Grove will...

1.

Embark on the largest infrastructure project in the Village's history.

The Village Board approved two significant revenue streams for this purpose, the implementation of a fixed facility fee and water/sewer rate increase for water and sewer main replacement and a local motor fuel tax to fund road improvements.

The Infrastructure Modernization Program encompasses the largest initiative in the Villageʼs history to replace and rehabilitate core infrastructure assets. Due to the development patterns of the Village since 1958, much of the water and sewer infrastructure as well as road deficiencies exist in the Cook County portions of the Village. However, given the desire to balance the needs of the entire village with this initiative, several projects are planned village-wide now through 2027.

Learn more about key IMP Projects

Cambridge on the Lake Lift Station Relocation Forest/Glendale Street + Utility

2.

Make significant Investments into infrastructure upgrades and replacements.

In 2020, the Board approved a bond issue totaling $24 million - $14 million for water/sewer and $10 million for streets, to begin our infrastructure modernization project, with minimal impact on the property tax levy.

Thompson + Brandywyn Road Contract 3 Maintenance Projects Key IMP Project Impacts and Results Street Miles

Water Miles

Total Cost

Melinda/Hiawatha

0.79

0.78

$2,350,800

Vintage

0.77

0.0

$456,000

Cambridge

0.75

0.70

$3,787,000

Thompson/Brandywyn

1.14

0.0

$4,324,000

TOTAL

6.79

1.49

$10,917,800

Street Miles

Water Miles

Total Cost

COTL Li Station

0

0.1

$3,289,000

Forest/Glendale

1.21

2.7

$6,890,000

Thompson/Brandywyn

1.82

0

$2,842,000

TOTAL

3.03

2.8

$13,021,000

2021 Projects

3.

4.

5.

Complete planned Capital Improvements over time.

Minimize resident disruption.

Secure sustainable funding into the future.

The Village projects investing over $50 million into water, sewer and streets between 2020 and 2023.

To the extent possible, project sequencing will be arranged such that entire neighborhoods will be completed within one to three years based on outside funding in an effort to reduce service interruptions and overall disruption.

The Village Board and staff have devoted a great deal of time to developing sustainable practices to improve and maintain our core infrastructure.

2022 Projects

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