2022 Public Annual Financial Report (PAFR)

2022

Popular Financial Annual Report

Village Trustees

A Message from the Village President

Andrew Stein

Lester Ottenheimer

I'm very pleased for the Village of Buffalo Grove to present its annual “Citizenʼs Guide to Local Financial Activities” (Public Annual Financial Report) for the fiscal year ended December 31, 2022.

I'm proud of our ability to deliver the Buffalo Grove community with an overview of the Villageʼs progress and financial performance in a manner that is both transparent and easy to understand. This report does not replace the Annual Comprehensive Financial Report (ACFR), but rather provides a summary of financial activities. The full disclosure financial statements, or ACFR, are available online at www.vbg.org/financialreports.

David Weidenfeld

Joanne Johnson

Gregory Pike

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 provided in this guide to local financial activities in 2022 gives you a snapshot of the challenges and opportunities the Village of Buffalo Grove is managing today and into the future.

Sincerely,

Frank Cesario

Eric Smith

BG is...

Responsible

Resilient

Safe

Budget Overview

Buffalo Grove's 2022 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 and/or safe. Every program consists of major services the Village provides for its residents and the business community. Therefore, the budget document is 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 2022 budget supports 18 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.

Janet Sirabian

A Closer Look at BG

The Villageʼs net position increased by $5.9 million (or 35.7 percent) during the fiscal year ending December 31, 2021. The governmental net position decreased by $6.2 million (16.9 percent) and the business-type activities net position increased by $12.1 million (18.8 percent).

Equalized assessed valuation decreased by $36.6 million or 2.1 percent to $1.75 billion for the 2021 levy year (collected in 2022).

BG Quick Facts

87%

35%

of residents have some level of

of residents were born outside of

post-secondary education

the United States

$117,921

43,212

Median household income in BG

Total population in BG

97%

79%

of residents in the labor force are

of residents have access to 4+

currently employed

acres per 1,000 residents

41.2

11,434

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 Dollars Go Did you know?

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!

74.3% 16.4% 9.3%

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

Overseeing the strategic use of information technology resources

2022 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

Revenues for the Villageʼs governmental activities for the year ended December 31, 2022 were $66.3 million, an increase of $7.0 million or 11.8 percent. Property taxes continue to be the Villageʼs largest source of revenue (25.7 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 33.2 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 $34.4 million or 52.0 percent of total governmental activities revenue.

Maintaining the village's streets, grounds, water, drainage, and sewer systems.

Did you

Directing the long term structural needs through engineering.

Water and Sewer collections decreased from $16,326,679 in 2021 to $16,119,322 in 2022, a total decrease of 1.3 percent.

Sales taxes, both state shared and home rule, generated $17,037,557 in 2022 versus $16,013,176 in 2021, an increase of .4 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 $17,037,557 which is a slight increase from the previous yearʼs total of $16,970,657, an increase of 0.4 percent.

know?

Did you know?

MoneyGeek.com recently evaluated MoneyGeek.com recently evaluated small small cities cities and and across towns the across theStates United States - those towns United - those with 30,000with to 30,000 to 100,000 residents and ranked them 100,000 residents - and ranked them according to the perThey capita costBuffalo of crime. peraccording capita costtoofthe crime. ranked GroveThey the ranked Buffalo Grove the #1 safest town in the #1 safest town in the U.S., with a $22 crime cost per U.S., with a $22 crime cost per capita. capita.

The Clove

Village leadership, along with developers Kensington Development Partners and Urban Street Group broke ground on the 22acre Town Center property redevelopment.

Construction of The Clove is underway to transform the area into a new, modern entertainment, commercial and residential district. This compact central district will feature contemporary building design, as well as upscale tenants and be a unique destination for residents and visitors alike.

Following the groundbreaking, several buildings were demolished. Construction is underway on the 43,000 square foot grocery store, as well as the 7-story, 297-unit highend apartment building with 16,000 square feet of commercial space on the ground floor. Distinctive of this building, the

BG is...

Safe

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. So far Chick-fil-A and Guzman y Gomez have made commitments and construction for their new restaurants is in the works. A nearly

one-acre Village-owned “Central Park” will sit in the middle of the site and can be programmed for concerts and other events. The 34,000 square feet located on the northern portion of the site, creating new opportunities for existing and future tenants.

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.

Inspecting the environmental and health impacts of businesses.

New Public Works Facility

The Village purchased the building at 1650 Leider Lane and began planning for construction. 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. While construction costs are at a premium, staff has planned for value engineering to keep costs in line. The project will be financed with combination of AAA-rated bonds and 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 sometime in 2024.

NCH and retail outlot

Northwest Community Healthcare (NCH) redeveloped into a new 4-story medical office building that was awarded the 2022 Best Medical Property in the state.

NCH's site plans also include a 4,900 square foot retail outlot at the northwest corner, and construction is underway for Wild Fork and Veterinary Emergency Group.

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 82% as of December 31, 2022. The annual interest rate assumption is 7% with a the five-year average return is 6.36% as of December 31, 2022.

2022

The Police Pension Fund had a funded ratio of 78% as of December 31, 2022. The annual interest rate assumption is 7% with a five-year average return of 5.68% as of December 31, 2022.

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

Adequate Reserves The Village had $17,701,070 in unassigned fund balance available in the General Fund on December 31, 2022.

75% of total retirement expenses are related to pension costs. In 2022, the Village contributed $5.8 million in employer obligations for current and future annuitants and $9.4 million was distributed to retired pensioners.

Debt Reduction The Village retired a total of $2,570,990 in general obligation debt in fiscal year 2022.

Expense Overview

Biased Based Policing Annual review revealed the 21st consecutive year without any complaints of biased based profiling.

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

The cost of all governmental activities this year was $67.1 million, an increase of 65.3 percent from 2021 ($40.6 million). The largest decrease was made in General Government expenses $19.4 million in 2022. Public Safety expenses increased by $6.9 million (28.9 percent) and Public Works expenses remained stable at $8.0 million.

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

Expenses from all business-type activities increased by $5.3 million or 37.3 percent. The Water Fund expenses increased by $5.1 million, which compares favorably to a budgeted increase in expenses. Golf expenses were decreased in 2022 to $2.0 million in total or 4.8 percent.

The Fire Pension Fund is funded at 81.9%, and the Police Pension Fund is funded at 77.5%. 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.

3.

4.

5.

Make significant Investments into infrastructure upgrades and replacements.

Complete planned Capital Improvements over time.

Minimize resident disruption.

Secure sustainable funding into the future.

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.

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.

Thompson + Brandywyn Road Contract 3 Maintenance Projects Key IMP Project Impacts and Results 2021 Projects

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

2022 Projects

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

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