HomeMy WebLinkAbout21-22 Audit Report
CITY OF McHENRY, ILLINOIS
ANNUAL FINANCIAL REPORT
APRIL 30, 2022
CITY OF McHENRY, ILLINOIS
TABLE OF CONTENTS
APRIL 30, 2022
PAGE
INDEPENDENT AUDITOR’S REPORT 1
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTORL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS 5
REQUIRED SUPPLEMENTARY INFORMATION
Management’s Discussion and Analysis 6
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Position 13
Statement of Activities 14
Fund Financial Statements
Balance Sheet – Governmental Funds 15
Reconciliation of the Balance Sheet to the Statement of Net Position 16
Statement of Revenues, Expenditures, and Changes in Fund Balances –
Governmental Funds 17
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Statement of Activities 18
Statement of Net Position – Proprietary Funds 19
Statement of Revenues, Expenses, and Changes in Net Position –
Proprietary Funds 20
Statement of Cash Flows – Proprietary Funds 21
Statement of Fiduciary Net Position – Fiduciary Funds 22
Statement of Changes in Fiduciary Net Position – Fiduciary Funds 23
Notes to Financial Statements 24
REQUIRED SUPPLEMENTARY INFORMATION
Illinois Municipal Retirement Fund – Schedule of Changes in the Employer’s
Net Pension Liability and Related Ratios 51
CITY OF McHENRY, ILLINOIS
TABLE OF CONTENTS
APRIL 30, 2022
PAGE
REQUIRED SUPPLEMENTARY INFORMATION (Continued)
Illinois Municipal Retirement Fund – Schedule of Employer Contribution 52
Police Pension Plan – Schedule of Changes in the Employer’s Net Pension
Liability and Related Ratios 53
Police Pension Plan – Schedule of Employer Contribution 54
Other Post-Employment Benefit – Schedule of Changes in the Employer’s
Total OPEB Liability and Related Ratios 55
Schedule of Revenues, Expenditures, and Changes in Fund Balances –
Budget and Actual – General Fund 56
Notes to Required Supplementary Information 58
SUPPLEMENTAL FINANCIAL INFORMATION
Combining Balance Sheet – General Fund 59
Combining Schedule of Revenues, Expenditures, and Changes in Fund
Balances – General Fund 60
Combining Balance Sheet – Other Governmental Funds 62
Combining Schedule of Revenues, Expenditures, and Changes in Fund
Balances – Other Governmental Funds 63
Combining Schedule of Net Position – Water and Sewer Funds 64
Combining Schedule of Revenues, Expenses, and Changes in Net
Position – Water and Sewer Funds 65
Combining Schedule of Net Position – Internal Service Funds 66
Combining Schedule of Revenues, Expenses, and Changes in Net
Position – Internal Service Funds 67
Combining Schedule of Net Position – Custodial Funds 68
Combining Schedule of Changes in Fiduciary Net Position – Custodial Funds 69
Schedule of Revenues, Expenditures, and Changes in Fund Balances –
Budget and Actual – Special Revenue Fund – Tax Increment
Financing Fund 70
Page 1
INDEPENDENT AUDITOR’S REPORT
To the Mayor and City Council Members
City of McHenry, Illinois
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information of
City of McHenry
as of and for the year ended April 30, 2022, and the related notes to the financial statements, which
collectively comprise the City’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major
fund, and the aggregate remaining fund information of City of McHenry as of April 30, 2022, 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.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America (GAAS) and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report. We are required to be independent of City of McHenry
and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements
relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinions.
Responsibilities of Management 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.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability
to continue as a going concern for one year after the date that the financial statements are issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute
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assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and
Government Auditing Standards will always detect a material misstatement when it exists. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control. Misstatements are considered material if there is a substantial likelihood that, individually or in
the aggregate, they would influence the judgment made by a reasonable user based on the financial
statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risk of material misstatement of the financial statements, whether due to fraud
or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
• Obtain an understanding of internal control relevant to the audit 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 City of McHenry’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that
raise substantial doubt about City of McHenry’s ability to continue as a going concern for a reasonable
period of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control-related
matters that we identified during the audit.
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 is the responsibility of management and, although not a part of
the basic financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited procedures to
the required supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of preparing
the information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information because
the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The supplemental information as listed in the table of
contents, are presented for purposes of additional analysis and are not a required part of the basic
financial statements.
Page 3
The supplemental information is the responsibility of management and was derived from and relate
directly to the underlying accounting and other records used to prepare the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or
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 supplemental
information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 2, 2022 on our consideration of City of McHenry’s internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements
and other matters. The purpose of that report is solely to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing Standards in
considering City of McHenry’s internal control over financial reporting and compliance.
EDER, CASELLA & CO.
Certified Public Accountants
McHenry, Illinois
December 2, 2022
Page 4
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Mayor and City Council Members
City of McHenry, Illinois
We have audited, 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, the financial statements of the governmental
activities, the business-type activities, each major fund and the aggregate remaining fund information
of
City of McHenry
as of and for the year ended April 30, 2022, and the related notes to the financial statements which
collectively comprise City of McHenry’s basic financial statements, and have issued our report
thereon dated December 2, 2022.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered City of McHenry’s
internal control over financial reporting (internal control) as a basis for designing audit procedures
that are appropriate in the circumstances for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of City of McHenry’s
internal control. Accordingly, we do not express an opinion on the effectiveness of City of McHenry’s
internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the City’s financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit attention
by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of McHenry’s financial statements are
free from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the financial statements. However, providing an opinion on compliance with those
Page 5
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
EDER, CASELLA & CO.
Certified Public Accountants
McHenry, Illinois
December 2, 2022
REQUIRED SUPPLEMENTARY INFORMATION
Page 6
CITY OF McHENRY, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS
APRIL 30, 2022
As management of City of McHenry (City), we offer readers of the City’s statements this narrative
overview and analysis of the financial activities of the City for the fiscal year ended April 30, 2022. We
encourage readers to consider the information presented here in conjunction with additional information
found in the notes to the financial statements.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial
statements. The City’s basic financial statements comprise three components: 1) government-wide
financial statements, 2) fund financial statements, and 3) notes to the financial statements. Both
perspectives (government-wide and fund level financial statements) 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.
This report also contains other supplementary information in addition to the basic financial statements
themselves.
Government-wide Financial Statements. The government-wide financial statements are designed to
provide readers with a broad overview of the City’s finances, in a manner similar to a private business.
The Statement of Net Position presents information on all the City’s assets, deferred outflows of
resources, liabilities, and deferred inflows of resources with the difference amongst those being reported
as net position. Increases or decreases in net position may serve as a useful indicator of whether the
financial position of the City is improving or deteriorating when comparing year to year results.
The Statement of Activities presents information showing how the City’s net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event giving
rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses
are reported in this statement for some items that will only result in cash flows in future fiscal periods
(e.g., uncollected taxes and earned but unused vacation leave).
Both government-wide financial statements distinguish functions of the City that are principally supported
by taxes and intergovernmental revenues (governmental activities) from other functions that are intended
to recover all or a significant portion of their costs through user fees and charges (business-type
activities). The governmental activities of the City include general office, public safety, public works, and
parks and recreation. The business-type activities of the City include a water and sewer division.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The City, like other state
and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements. All the funds of the City can be divided into three categories: governmental funds,
proprietary funds, and fiduciary funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available
at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term
financing requirements.
Page 7
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By doing
so, readers may better understand the long-term impact of the City’s near-term financing decisions. Both
the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures,
and Changes in Fund Balances provide a reconciliation to facilitate this comparison between
governmental funds and governmental activities.
The City maintains 13 individual governmental funds. Information is presented separately in the
governmental fund Balance Sheet and in the governmental fund Statement of Revenues, Expenditures,
and Changes in Fund Balances for the General Fund which is considered to be a major fund. Data from
the other twelve governmental funds are combined into a single, aggregated presentation. The other
twelve funds include Pageant, Audit, Recreation Center, Capital Improvements, Capital Equipment, Debt
Service, Motor Fuel Tax, Municipal Motor Fuel Tax, Developer Donations, Tax Increment Financing, and
two Special Service Areas.
Proprietary Funds. The City maintains two different types of proprietary funds. Enterprise funds are used
to report the same functions presented as business-type activities in the government-wide financial
statements. The City uses an enterprise fund to account for the Water and Sewer Division. Internal
service funds are an accounting device used to accumulate and allocate costs internally among the City’s
various functions. The City uses internal service funds to account for its employee insurance, risk
management, and information technology. Because these services predominately benefit governmental
rather than business-type functions, they have been included within governmental activities in the
government-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial statements, only
in more detail. The proprietary fund financial statements provide separate information for the water and
sewer functions. Internal service funds are combined into a single, aggregate presentation in the
proprietary fund financial statements. Individual fund data for the internal service funds is provided in the
form of combining statements.
Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside
the City. Fiduciary funds are not reflected in the government-wide financial statements because the
resources of those funds are not available to support the City’s own programs. The accounting used for
fiduciary funds is much like that used for proprietary funds. The City’s fiduciary funds include the Police
Pension Trust Fund and two Custodial Funds.
Notes to the Financial Statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements.
Other Information. In addition to the basic financial statements and accompanying notes, this report
also presents certain required supplementary information concerning the City’s appropriation to actual
for the General Fund.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government’s financial
position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and
deferred inflows of resources by $90,357,329 at April 30, 2022.
By far, the largest portion of the City’s net position, 93%, reflects its net investment in capital assets (e.g.,
land, construction in progress, buildings, and equipment); less any related debt used to acquire those
assets that is still outstanding. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City’s investment in capital
assets is reported net of related debt, it should be noted that the resources needed to repay this debt
Page 8
must be provided from other sources, since the capital assets themselves cannot be used to liquidate
these liabilities.
4/30/2022 4/30/2021 4/30/2022 4/30/2021 4/30/2022 4/30/2021
Assets
Current and Other Assets 33,833,389$ 25,692,075$ 11,953,256$ 10,302,358$ 45,786,645$ 35,994,433$
Capital Assets 95,044,404 93,079,776 79,296,456 79,117,145 174,340,860 172,196,921
Net Pension Asset - IMRF 1,915,256 - 884 - 1,916,140 -
Net Pension Asset - Police - 5,366,471 - - - 5,366,471
Total Assets 130,793,049$ 124,138,322$ 91,250,596$ 89,419,503$ 222,043,645$ 213,557,825$
Deferred Outflows of Resources 8,234,178$ 5,043,989$ 537,931$ 663,123$ 8,772,109$ 5,707,112$
Liabilities
Long-Term Liabilities
Outstanding 28,826,835$ 30,570,994$ 32,696,374$ 34,489,375$ 61,523,209$ 65,060,369$
Net Pension Liability - IMRF - 1,417,243 - 361,888 - 1,779,131
Net Pension Liability - Police 469,026 - - - 469,026 -
Net OPEB Liability 1,200,063 5,445,540 129,680 271,890 1,329,743 5,717,430
Other Liabilities 2,422,222 2,551,356 520,673 576,039 2,942,895 3,127,395
Total Liabilities 32,918,146$ 39,985,133$ 33,346,727$ 35,699,192$ 66,264,873$ 75,684,325$
Deferred Inflows of Resources 15,751,752$ 15,996,392$ 1,187,812$ 1,091,294$ 16,939,564$ 17,087,686$
Net Position
Net Investment in Capital
Assets 90,072,809$ 87,364,529$ 46,698,746$ 44,729,867$ 136,771,555$ 132,094,396$
Restricted 5,894,047 4,551,421 - - 5,894,047 4,551,421
Unrestricted (5,609,527) (18,715,164) 10,555,242 8,562,273 4,945,715 (10,152,891)
Total Net Position 90,357,329$ 73,200,786$ 57,253,988$ 53,292,140$ 147,611,317$ 126,492,926$
City of McHenry's Statement of Net Position
TotalBusiness-Type ActivitiesGovernmental Activities
An additional portion of the City’s net position, 4%, represents resources that are subject to external
restrictions on how they may be used (e.g. Highways and Streets, Capital Projects, Police Pension and
Special Service Areas). The remaining balance of unrestricted net position ($4,945,715) may be used to
meet the City’s ongoing obligations to citizens and creditors.
Governmental Activities. Governmental activities increased the City’s net position by $17,156,543. Key
differences from the prior year are as follows:
Page 9
FY 2022 FY 2021 FY 2022 FY 2021 FY 2022 FY 2021
Revenues
Program Revenues
Charges for Services 7,142,687$ 6,051,369$ 10,247,466$ 8,823,831$ 17,390,153$ 14,875,200$
Operating Grants and Contributions 3,716,047 1,374,741 - - 3,716,047 1,374,741
Capital Grants and Contributions 5,119,713 5,466,135 2,454,222 4,874,766 7,573,935 10,340,901
General Revenues
Property Taxes 5,565,378 5,638,068 - - 5,565,378 5,638,068
Sales Taxes 12,807,479 11,727,968 - - 12,807,479 11,727,968
Other Taxes 6,433,338 4,960,587 - - 6,433,338 4,960,587
Other 21,008 23,125 30,872 19,764 51,880 42,889
Total Revenues 40,805,650$ 35,241,993$ 12,732,560$ 13,718,361$ 53,538,210$ 48,960,354$
Expenses
General Office 4,118,881$ 4,421,135$ -$ -$ 4,118,881$ 4,421,135$
Public Safety 9,328,245 11,376,829 - - 9,328,245 11,376,829
Public Works 5,068,211 5,246,147 - - 5,068,211 5,246,147
Parks and Recreation 4,305,299 3,277,676 - - 4,305,299 3,277,676
Interest and Fees 714,641 708,614 - - 714,641 708,614
Depreciation 227,178 223,641 - - 227,178 223,641
Water - - 2,160,744 2,056,292 2,160,744 2,056,292
Sewer - - 5,328,003 6,476,625 5,328,003 6,476,625
Utility Work - - 930,611 997,958 930,611 997,958
Total Expenses 23,762,455$ 25,254,042$ 8,419,358$ 9,530,875$ 32,181,813$ 34,784,917$
Increase/(Decrease) in Net Position
Before Transfers 17,043,195$ 9,987,951$ 4,313,202$ 4,187,486$ 21,356,397$ 14,175,437$
Transfers 93,048 93,780 (93,048) (93,780) - -
Gain on Sale of Capital Assets 20,300 28,350 32,760 10,000 53,060 38,350
Increase/(Decrease) in Net Position 17,156,543$ 10,110,081$ 4,252,914$ 4,103,706$ 21,409,457$ 14,213,787$
Net Position - Beginning of Year 73,200,786 63,090,705 53,292,140 49,188,434 126,492,926 112,279,139
Net Position Adjustment - - (291,066) - (291,066) -
Net Position - End of Year 90,357,329$ 73,200,786$ 57,253,988$ 53,292,140$ 147,611,317$ 126,492,926$
City of McHenry's Change in Net Position
Governmental Activities Business-Type Activities Total
Revenues increased in the current year due to increases in charges for services which was due to various
factors, such as increased need/usage, annual rate increases and increases in one time type fees such
as licenses/permits and hookup/connection fees. There was also an increase in Operating Grants, which
was mainly due to the receipt of the American Rescue Plan funds. Sales taxes also rebounded in the
current year after a decline due to the COVID pandemic in the prior years.
Expenses decreased mainly due to decreases in the expenses related to the Police Pension and IMRF
Pension liabilities in the current year.
Business-Type Activities. Business-type activities increased the City’s net position by $4,252,914.
Revenues for business-type activities decreased in the current year due to a decrease in capital grants
and contributions.
Expenses for business-type activities decreased in the current year due to a significant loss related to
the disposal of the old plant with the new Sewer Consolidation project being completed and put into
service in the prior year.
Page 10
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements.
Governmental Funds. The focus of the City’s governmental funds is to provide information on near-
term inflows, outflows, and balances of spendable resources. Such information is useful in assessing
the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure
of the City’s net resources available for spending at the end of the fiscal year.
At April 30, 2022, the City’s governmental funds reported combined ending fund balances of $23,686,300,
an increase of $6,570,991 in comparison with the prior year. Approximately 60% of this total amount
constitutes unassigned fund balance, which is available for spending at the City’s discretion. Of the
remaining fund balance, 21% constitutes assigned fund balance, with the remainder of the fund balance
restricted to indicate that it is not available for new spending because it has already been restricted for
specific purposes or is nonspendable.
The General Fund is the chief operating fund of the City. At April 30, 2022, the fund balance of the
General Fund was $17,117,629, of which $14,542,134 is unassigned. As a measure of the General
Fund’s liquidity, it may be useful to compare unassigned fund balance to total fund expenditures.
Unassigned fund balance represents 61% of total General Fund expenditures.
The General Fund’s fund balance increased by $4,977,096 during the year ended April 30, 2022.This
was mainly due to increases in state sales tax and state income taxes. There was also an increase in
Federal grants, which was mainly due to the receipt of the American Rescue Plan grant.
Other significant highlights in the governmental funds for the year ended April 30, 2022 are outlined
below:
• Debt service expenses of $2,696,487 were paid to meet the debt service requirements of the City.
• Other governmental funds show a total increase in fund balance of $1,593,895.
Proprietary Funds. The City’s proprietary funds provide the same type of information found in the
government-wide financial statements, but in more detail.
Fiduciary Funds (Police Pension and Custodial Funds). At April 30, 2022, the Police Pension Fund’s
net position amounted to $56,638,040. Deductions exceeded additions during the year, resulting in a
decrease of $5,072,940 in net position. The decrease was largely due to a significant decrease in the
fair value of investments.
GENERAL FUND BUDGETARY HIGHLIGHTS
The City amended the budget during the year ended April 30, 2022. A significant difference between
original and final budget was an increase in general office expenditures of $512,898.
The General Fund actual revenue exceeded budgeted revenue by $6,454,853. This difference was
primarily due to more than expected revenue from state sales and income taxes, and receipt of the
American Rescue Plan grant. Budgeted expenditures exceeded actual expenditures by $812,592. The
difference was mainly due to less than expected expenditures in all areas, aside from Parks and
Recreation which was slightly higher than expected.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets. The City’s investment in capital assets for its governmental and business-type activities
as of April 30, 2022 amounts to $174,340,860 (net of accumulated depreciation). This investment
Page 11
includes land, land improvements, art and historical treasures, intangibles, construction in progress,
buildings, vehicles, systems and equipment, and infrastructure.
4/30/2022 4/30/2021 4/30/2022 4/30/2021 4/30/2022 4/30/2021
Land 42,664,844$ 42,130,875$ 2,208,117$ 2,208,117$ 44,872,961$ 44,338,992$
Land Improvements 2,584,275 2,270,560 - - 2,584,275 2,270,560
Art and Historical Treasures 1,658,927 1,658,927 - - 1,658,927 1,658,927
Intangibles 300,000 300,000 - - 300,000 300,000
Construction in Progress 1,463,648 1,189,805 57,193 38,619 1,520,841 1,228,424
Buildings 12,352,919 12,570,264 361,206 388,139 12,714,125 12,958,403
Vehicles 1,574,244 1,672,496 778,749 780,920 2,352,993 2,453,416
Systems and Equipment 1,468,179 1,650,507 75,891,191 75,701,350 77,359,370 77,351,857
Infrastructure 30,977,368 29,636,342 - - 30,977,368 29,636,342
Total 95,044,404$ 93,079,776$ 79,296,456$ 79,117,145$ 174,340,860$ 172,196,921$
City of McHenry's Capital Assets (net of depreciation)
Governmental Activities Business-Type Activities Total
Major capital asset events during the year ended April 30, 2022 included the following:
• Developer donated public improvements for watermains and sanitary sewers, as well as completed
roads totaling $5,574,220.
• The purchase of land totaling $533,969.
• The purchase of four new police vehicles totaling $174,993.
For further information on the City’s capital assets see Note 3 in the notes to the financial statements.
Long-Term Debt. At April 30, 2022, the City had total bonded debt outstanding of $31,200,000, all of
which is backed by the full faith and credit of the City.
4/30/2022 4/30/2021 4/30/2022 4/30/2021 4/30/2022 4/30/2021
General Obligation Bonds 27,205,000$ 28,810,000$ 3,995,000$ 4,350,000$ 31,200,000$ 33,160,000$
IEPA Revolving Loan Fund - - 28,275,383 29,663,434 28,275,383 29,663,434
Notes Payable 956,419 1,121,882 - - 956,419 1,121,882
Bond Premium 40,547 48,925 327,327 373,844 367,874 422,769
Bond Discount (371) (560) - - (371) (560)
Total 28,201,595$ 29,980,247$ 32,597,710$ 34,387,278$ 60,799,305$ 64,367,525$
City of McHenry's Outstanding Debt
Governmental Activities Business-Type Activities Total
For further information on the City’s long-term debt see Note 5 in the notes to the financial statements.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
The City has a diversified economy with the manufacturing and health fields being its primary base.
McHenry is among the State’s fastest growing communities with the official population increasing from
16,177 in 1990 to 27,135 in 2020. In addition, the City experienced significant growth in the retail, office,
and industrial space and a downtown revitalization plan has spurred residential and commercial
development in the Downtown TIF District. The City’s economic conditions are as follows:
• The average unemployment rate for McHenry County in 2021 was 4.8 percent, which is 42.9
percent lower than a year ago. This is lower than the State’s average unemployment rate of 6.2
percent.
• Inflation in the area compares to the national consumer price index. Similar to a nationwide trend,
residential growth in the City has slowed, but has been increasing over the last few years. The
number of single-family residential building permits issued by the City has decreased from 139 in
Page 12
2007 to 85 in 2020 and 42 in 2021. However, there has been a large increase in multi-family from
0 in 2012 to 378 in 2021. The total value of all commercial and residential improvements and new
permits increased from $15.2 million in 2012 to $73.3 million in 2021.
Development and adoption of the 2022/23 budget was premised on providing core municipal services
while having an operationally balanced budget. It was expected there was going to be a volatile economic
forecast when the pandemic began, but the City is fortunate to be in a favorable financial situation
because of rebounding revenues and controlled operating expenses. Property tax revenues were
increased for the first time since 2010, but EAV values have increased slightly causing the City’s tax rate
to decrease from $0.620882 in 2020 to $0.605781 in 2021.
In April 2022, the City Council approved the proposed fiscal year 2022/23 General Fund budget
increasing the prior year’s budget by $2,400,876. These increases were primarily due to personnel and
capital outlay expenses. In the last few years, capital expenditures have been funded with Fund Balance
Reserves which have been built up due to cost reduction measures necessary to adopt a balanced
budget in the past years as well as rebounding state shared revenues. Management is still closely
monitoring revenues as well as expenses for any changes.
REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the
City’s finances for all those with an interest in the City’s finances. Questions concerning any of the
information provided in this report or requests for additional financial information should be addressed to:
City of McHenry, 333 South Green St., McHenry, Illinois, 60050.
BASIC FINANCIAL STATEMENTS
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and Cash Equivalents 17,391,826$ 7,785,955$ 25,177,781$
Deposit with Paying Agent 32,555 - 32,555
Investments 3,523,459 2,620,391 6,143,850
Prepaid Items 119,998 37,103 157,101
Receivables (Net of Allowance for Estimated
Uncollectible Amounts)
Accounts Receivable - Billed 567,164 93,486 660,650
Accounts Receivable - Unbilled 202,900 1,314,672 1,517,572
Property Taxes 5,778,770 - 5,778,770
Accrued Interest 2,039 3,935 5,974
Due from Other Governmental Units 4,120,739 97,714 4,218,453
Grants Receivable 1,841,293 - 1,841,293
Cable Franchise Fee Receivable 130,550 - 130,550
Inventory 122,096 - 122,096
IMRF Net Pension Asset 1,915,256 884 1,916,140
Capital Assets
Land, Construction in Progress, and Other
Non-Depreciable Assets 46,087,419 2,265,310 48,352,729
Other Capital Assets, Net of Depreciation 48,956,985 77,031,146 125,988,131
TOTAL ASSETS 130,793,049$ 91,250,596$ 222,043,645$
DEFERRED OUTFLOWS OF RESOURCES
Pension Expense/Revenue - IMRF 1,847,644$ 338,373$ 2,186,017$
Pension Expense/Revenue - Police Pension 4,536,468 - 4,536,468
OPEB Expense/Revenue 1,850,066 199,558 2,049,624
TOTAL DEFERRED OUTFLOWS OF RESOURCES 8,234,178$ 537,931$ 8,772,109$
LIABILITIES
Accounts Payable and Accrued Expenses 1,409,008$ 253,448$ 1,662,456$
Security Deposits Held - 3,000 3,000
Due to Other Governmental Units 60,576 - 60,576
Due to Other Funds 61,040 (61,040) -
Unearned Revenue 662,618 66,675 729,293
Accrued Interest 228,980 258,590 487,570
Non-Current Liabilities
Due Within One Year 2,650,962 2,047,693 4,698,655
Due in More Than One Year 26,175,873 30,648,681 56,824,554
Police Pension Liability 469,026 - 469,026
Total OPEB Liability 1,200,063 129,680 1,329,743
TOTAL LIABILITIES 32,918,146$ 33,346,727$ 66,264,873$
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes 5,778,770$ -$ 5,778,770$
Unavailable Revenue - State Taxes 8,752 - 8,752
Pension Expense/Revenue - IMRF 4,847,694 887,799 5,735,493
Pension Expense/Revenue - Police Pension 2,335,169 - 2,335,169
OPEB Expense/Revenue 2,781,367 300,013 3,081,380
TOTAL DEFERRED INFLOWS OF RESOURCES 15,751,752$ 1,187,812$ 16,939,564$
NET POSITION
Net Investment in Capital Assets 90,072,809$ 46,698,746$ 136,771,555$
Restricted for:
Public Safety 1,732,273 - 1,732,273
Highways and Streets 2,261,450 - 2,261,450
Capital Projects 870,419 - 870,419
Special Service Areas 408 - 408
Tax Increment Financing 1,029,497 - 1,029,497
Unrestricted/(Deficit)(5,609,527) 10,555,242 4,945,715
TOTAL NET POSITION 90,357,329$ 57,253,988$ 147,611,317$
APRIL 30, 2022
CITY OF MCHENRY, ILLINOIS
STATEMENT OF NET POSITION
GOVERNMENT-WIDE FINANCIAL STATEMENTS
Page 13
The Notes to Financial Statements are an integral part of this statement.
Operating Capital
Charges for Grants and Grants and Governmental Business-Type
Expenses Services Contributions Contributions Activities Activities Total
Functions/Programs
Governmental Activities
General Office 4,118,881$ 5,692,515$ -$ 1,523,784$ 3,097,418$ -$ 3,097,418$
Public Safety 9,328,245 1,244,740 - - (8,083,505) - (8,083,505)
Public Works 5,068,211 - 3,716,047 3,595,929 2,243,765 - 2,243,765
Parks and Recreation 4,305,299 205,432 - - (4,099,867) - (4,099,867)
Interest and Fees on Long-Term Debt 714,641 - - - (714,641) - (714,641)
Depreciation - Unallocated 227,178 - - - (227,178) - (227,178)
23,762,455$ 7,142,687$ 3,716,047$ 5,119,713$ (7,784,008)$ -$ (7,784,008)$
Business-Type Activities
Water 2,160,744$ 3,631,792$ -$ 1,096,340$ -$ 2,567,388$ 2,567,388$
Sewer 5,328,003 6,615,674 - 1,357,882 - 2,645,553 2,645,553
Utility Work 930,611 - - - - (930,611) (930,611)
8,419,358$ 10,247,466$ -$ 2,454,222$ -$ 4,282,330$ 4,282,330$
Total Primary Government 32,181,813$ 17,390,153$ 3,716,047$ 7,573,935$ (7,784,008)$ 4,282,330$ (3,501,678)$
General Revenues
Taxes
Property Tax, Levied for General Purposes 5,565,378$ -$ 5,565,378$
Intergovernmental
State Sales Tax 12,807,479 - 12,807,479
State Income Tax 4,301,251 - 4,301,251
State Motor Fuel Tax 1,477,535 - 1,477,535
Other Taxes 654,552 - 654,552
Unrestricted Investment Earnings 17,056 5,790 22,846
Gain on Sale of Capital Assets 20,300 32,760 53,060
Miscellaneous 3,952 25,082 29,034
Transfers 93,048 (93,048) -
Total General Revenues and Transfers 24,940,551$ (29,416)$ 24,911,135$
Change in Net Position 17,156,543$ 4,252,914$ 21,409,457$
Net Position - May 1, 2021 73,200,786 53,292,140 126,492,926
Net Position Adjustment (Note 9)- (291,066) (291,066)
Net Position - April 30, 2022 90,357,329$ 57,253,988$ 147,611,317$
CITY OF MCHENRY, ILLINOIS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED APRIL 30, 2022
Net (Expense) Revenue and
Changes in Net PositionProgram Revenues
Page 14
The Notes to Financial Statements are an integral part of this statement.
Other Total
General Governmental Governmental
Fund Funds Funds
ASSETS
Cash and Cash Equivalents 11,916,840$ 5,040,305$ 16,957,145$
Deposit with Paying Agent - 32,555 32,555
Investments 2,018,644 1,496,521 3,515,165
Prepaid Items 38,726 - 38,726
Receivables (Net of Allowance for
Estimated Uncollectible Amounts)
Accounts Receivable - Billed 560,832 5,400 566,232
Accounts Receivable - Unbilled 159,637 40,081 199,718
Property Taxes 5,003,951 774,819 5,778,770
Accrued Interest 1,462 577 2,039
Due from Other Governmental Units 3,996,912 123,827 4,120,739
Due from Other Funds - 2,390 2,390
Grants Receivable 1,841,293 - 1,841,293
Cable Franchise Fee Receivable 130,550 - 130,550
Inventory 122,096 - 122,096
TOTAL ASSETS 25,790,943$ 7,516,475$ 33,307,418$
LIABILITIES
Accounts Payable and Accrued Expenditures 1,190,825$ 103,657$ 1,294,482$
Due to Other Governmental Units - 60,576 60,576
Due to Other Funds 63,430 - 63,430
Unearned Revenue 573,815 - 573,815
TOTAL LIABILITIES 1,828,070$ 164,233$ 1,992,303$
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes 5,003,951$ 774,819$ 5,778,770$
Unavailable Revenue - State Taxes - 8,752 8,752
Unavailable Revenue - Grants 1,841,293 - 1,841,293
TOTAL DEFERRED INFLOWS OF RESOURCES 6,845,244$ 783,571$ 7,628,815$
FUND BALANCES
Nonspendable 160,822$ -$ 160,822$
Restricted for:
Capital Projects - 870,419 870,419
Highways and Streets - 2,261,450 2,261,450
Special Service Areas - 408 408
Tax Increment Financing - 1,029,497 1,029,497
Assigned for:
Alarm 985,780 - 985,780
Tourism 140,946 - 140,946
Band 13,293 - 13,293
Highways and Streets - 871,293 871,293
Capital Projects 963,177 1,648,828 2,612,005
Revolving Loan 301,386 - 301,386
Civil Defense 10,091 - 10,091
Debt Service - 5,570 5,570
Parks and Recreation - 101,027 101,027
Unassigned 14,542,134 (219,821) 14,322,313
TOTAL FUND BALANCES 17,117,629$ 6,568,671$ 23,686,300$
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES 25,790,943$ 7,516,475$ 33,307,418$
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
BALANCE SHEET
GOVERNMENTAL FUNDS
APRIL 30, 2022
Page 15
The Notes to Financial Statements are an integral part of this statement.
Total Fund Balances - Governmental Funds 23,686,300$
Amounts reported for governmental activities in the Statement of Net Position
are different because:
Capital assets used in governmental activities are not financial resources
and therefore are not reported in the funds.
Capital Assets, net of accumulated depreciation 95,044,404
Deferred charges and credits for debt issue discounts or premiums and
other debt issue costs are not financial resources and therefore are not
reported in the funds.
Bond Discounts, net of related amortization 371
Other assets/liabilities are not available/used to pay for current period
expenditures and therefore are deferred inflows/outflows of resources
in the funds.
Revenue deferrals - ARP Grant 1,841,293
Some liabilities are not due and payable in the current period and therefore
are not reported in the funds.
Bonds and Notes Payable (28,161,419)$
Bond Premiums, net of related amortization (40,547)
Accrued Interest on Long-Term Debt, net of receivable (228,980)
Compensated Absences (625,240)
Total OPEB Liability (1,200,063)
Net Pension Asset/(Liability) - IMRF 1,915,256
Net Pension Asset/(Liability) - Police Pension (469,026)
(28,810,019)
Deferred pension and OPEB costs in governmental activities are not
financial resources and therefore are not reported in the funds.
Pension Deferred Outflows - Police Pension 4,536,468$
Pension Deferred Outflows - IMRF 1,847,644
Pension Deferred Inflows - Police Pension (2,335,169)
Pension Deferred Inflow - IMRF (4,847,694)
OPEB Deferred Outflows 1,850,066
OPEB Deferred Inflows (2,781,367)
(1,730,052)
Internal service funds are used by management to charge the cost of certain
activities, such as insurance and information technology, to individual funds.
The assets and liabilities of the internal service funds are included in
governmental activities in the government-wide Statement of Net Position
(net of amount allocated to business-type activities). Internal service fund
balances are not included in other reconciling items above except for
long term debt and long term pension items.
Current Assets 528,361$
Current Liabilities (203,329)
325,032
Net Position of Governmental Activities 90,357,329$
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION
APRIL 30, 2022
Page 16
The Notes to Financial Statements are an integral part of this statement.
Other Total
General Governmental Governmental
Fund Funds Funds
REVENUES
Local Taxes
Property Tax 4,844,022$ 721,356$ 5,565,378$
Intergovernmental
State Sales Tax 12,807,479 - 12,807,479
State Income Tax 4,301,251 - 4,301,251
State Replacement Tax 184,105 - 184,105
State Motor Fuel Tax - 1,477,535 1,477,535
State Pull Tab/Games Tax 674 - 674
Inter Track Wagering Tax 31,550 - 31,550
State Telecommunications Tax 209,789 - 209,789
State Grants - 444,720 444,720
Cannabis Use Tax 43,074 - 43,074
Federal Grants 1,841,293 31,211 1,872,504
Bond Interest Rebates - 3,692 3,692
Other Local Sources
Hotel/Motel Tax 185,360 - 185,360
Franchise Fees 386,552 - 386,552
Licenses and Permits 1,291,057 - 1,291,057
Fines and Forfeitures 480,503 - 480,503
Charges for Services 1,371,889 440,952 1,812,841
Interest 12,967 4,089 17,056
Local Grants 33,461 - 33,461
Miscellaneous
Rent 18,694 33,062 51,756
Royalties 175,000 - 175,000
Donations 13,064 1,510,720 1,523,784
Reimbursements 2,686,722 89,870 2,776,592
Other Miscellaneous 119,709 48,677 168,386
31,038,215$ 4,805,884$ 35,844,099$
EXPENDITURES
Current
General Office 4,064,240$ 62,107$ 4,126,347$
Public Safety 11,655,486 - 11,655,486
Public Works 3,224,954 - 3,224,954
Parks and Recreation 2,626,103 1,114,892 3,740,995
Capital Outlay 1,727,328 2,386,486 4,113,814
Debt Service
Principal 312,724 1,605,000 1,917,724
Interest and Fees 35,506 743,257 778,763
23,646,341$ 5,911,742$ 29,558,083$
EXCESS OR (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 7,391,874$ (1,105,858)$ 6,286,016$
OTHER FINANCING SOURCES/(USES)
Transfers (2,606,705)$ 2,699,753$ 93,048$
Proceeds from Loan 171,627 - 171,627
Sale of City Property 20,300 - 20,300
(2,414,778)$ 2,699,753$ 284,975$
NET CHANGE IN FUND BALANCES 4,977,096$ 1,593,895$ 6,570,991$
FUND BALANCES - MAY 1, 2021 12,140,533 4,974,776 17,115,309
FUND BALANCES - APRIL 30, 2022 17,117,629$ 6,568,671$ 23,686,300$
FOR THE YEAR ENDED APRIL 30, 2022
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
Page 17
The Notes to Financial Statements are an integral part of this statement.
Net Change in Fund Balances - Total Governmental Funds 6,570,991$
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
Activities the cost of those assets is allocated over their estimated useful lives and reported
as depreciation expense. This is the amount by which capital outlay exceeds depreciation
expense in the current period.
Depreciation Expense (3,235,810)$
Capital Outlays 2,049,903
(1,185,907)
Donated capital assets used in governmental activities are not current financial resources and
therefore are not reported as revenue in the governmental funds.3,119,998
Some revenue/expenses reported in the Statement of Activities do not provide/use current financial
resources and therefore are deferred in the governmental funds.
Contra Grant Revenue 1,841,293
Long-term debt proceeds provide current financial resources to governmental funds and are
therefore shown as revenue in the Statement of Revenues, Expenditures, and Changes in Fund
Balance, but issuing debt increases long-term liabilities in the Statement of Net Position and
is therefore not reported in the Statement of Activities.
Note Payable Proceeds (171,627)
Some expenses reported in the Statement of Activities do not require the use of current financial
resources and therefore are not reported as expenditures in governmental funds.
Accrued Interest on Long-Term Debt 55,933$
Bond Discount - Amortization (189)
Bond Premium - Amortization 8,378
Pension Expense - Police (366,990)
Pension Expense - IMRF 600,182
OPEB Expense 3,313,533
Compensated Absences (36,552)
3,574,295
Employer Pension and OPEB Contributions are expensed in the fund financial statements but
are treated as a reduction in the Net Pension Liability on the government-wide financial
statements.
Pension Employer Contributions - IMRF 882,174$
Pension Employer Contributions - Police Pension 655,318
OPEB Employer Contributions 157,444
1,694,936
Repayment of long-term debt requires the use of current financial resources of governmental
funds and is therefore shown as an expenditure in the Statement of Revenues, Expenditures,
and Changes in Fund Balances, but the repayment reduces long-term liabilities in the
Statement of Net Position and is therefore not reported in the Statement of Activities.
Repayment of Long-Term Debt 1,917,984
Internal service funds are used by management to charge the costs of certain activities, such
as insurance and information technology, to individual funds. The net revenue of the internal
service funds is reported with governmental activities in the government-wide Statement of
Activities (net of amount allocated to business-type activities).
Change in Net Position (247,400)$
Pension Expense - IMRF (included in Pension - IMRF Expense Above)(15,694)
OPEB Expense (included in OPEB Expense Above)11,462
OPEB Employer Contributions (included in OPEB Employer Contributions Above)(2,425)
Depreciation Expense (included in Change in Net Position above)48,637
(205,420)
Change in Net Position of Governmental Activities 17,156,543$
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
FOR THE YEAR ENDED APRIL 30, 2022
CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
Page 18
The Notes to Financial Statements are an integral part of this statement.
Business Type Governmental
Activities -Activities -
Enterprise Fund Internal
Water and Sewer Service Funds
ASSETS
Current Assets
Cash and Cash Equivalents 7,785,955$ 434,681$
Investments 2,620,391 8,294
Prepaid Items 37,103 81,272
Receivables (Net of Allowance for
Estimated Uncollectible Amounts)
Accounts Receivable - Billed 93,486 932
Accounts Receivable - Unbilled 1,314,672 3,182
Accrued Interest 3,935 -
Due from Other Governmental Units 97,714 -
Due from Other Funds 63,430 -
12,016,686$ 528,361$
Non-Current Assets
IMRF Net Pension Asset 884$ 7,366$
Capital Assets
Land 2,208,117 -
Buildings 2,736,098 -
Systems and Equipment 112,191,349 690,756
Vehicles 1,702,060 -
Construction in Progress 57,193 -
Less: Accumulated Depreciation (39,598,361) (494,217)
79,297,340$ 203,905$
TOTAL ASSETS 91,314,026$ 732,266$
DEFERRED OUTFLOWS OF RESOURCES
Pension Expense/Revenue - IMRF 338,373$ 48,315$
OPEB Expense/Revenue 199,558 28,495
TOTAL DEFERRED OUTFLOWS OF RESOURCES 537,931$ 76,810$
LIABILITIES
Current Liabilities
Accounts Payable and Accrued Expenses 253,448$ 114,526$
Security Deposits Held 3,000 -
Due to Other Funds 2,390 -
Unearned Revenue 66,675 88,803
Accrued Interest 258,590 -
Compensated Absences - Current 98,664 3,646
IEPA Loan Payable - Current 1,532,512 -
Bonds Payable - Current 416,517 -
Lease Payable - Current - 24,103
2,631,796$ 231,078$
Non-Current Liabilities
Total OPEB Liability 129,680$ 17,820$
IEPA Loan Payable (Net of Current Portion Shown Above)26,742,871 -
Bonds Payable (Net of Current Portion Shown Above)3,905,810 -
30,778,361$ 17,820$
TOTAL LIABILITIES 33,410,157$ 248,898$
DEFERRED INFLOWS OF RESOURCES
Pension Expense/Revenue - IMRF 887,799$ 126,769$
OPEB Expense/Revenue 300,013 42,839
TOTAL DEFERRED INFLOWS OF RESOURCES 1,187,812$ 169,608$
NET POSITION
Net Investment in Capital Assets 46,698,746$ 172,436$
Unrestricted/(Deficit)10,555,242 218,134
TOTAL NET POSITION 57,253,988$ 390,570$
APRIL 30, 2022
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
Page 19
The Notes to Financial Statements are an integral part of this statement.
Business Type Governmental
Activities -Activities -
Enterprise Fund Internal
Water and Sewer Service Funds
OPERATING REVENUES
Charges for Services
Customer Fees 6,668,540$ -$
Capital Fees 718,573 -
Debt Service Fees 2,505,977 -
Penalties 173,496 -
Water Meter Sales 52,107 -
Other 16,796 -
Internal Service Funds - 5,007,061
10,135,489$ 5,007,061$
OPERATING EXPENSES
Water Department
Personnel Salaries 435,169$ -$
Miscellaneous Personnel Expenses 139,999 -
Other Operating Expenses 918,302 -
Depreciation 631,243 -
Sewer Department
Personnel Salaries 733,339 -
Miscellaneous Personnel Expenses 270,581 -
Other Operating Expenses 1,599,606 -
Depreciation 2,133,432 -
Utility Work Department
Personnel Salaries 628,246 -
Miscellaneous Personnel Expenses 236,013 -
Other Operating Expenses 63,234 -
Internal Service Funds
Personnel Salaries - 160,214
Miscellaneous Personnel Expenses - 3,471,965
Other Operating Expenses - 1,573,783
Depreciation - 48,637
7,789,164$ 5,254,599$
OPERATING INCOME/(LOSS)2,346,325$ (247,538)$
NON-OPERATING REVENUE/(EXPENSE)
Interest Income 5,790$ 138$
Unrealized Gain/Loss (3,118) -
Rental Income 65,460 -
Interest Rebate Income 25,082 -
Interest and Fees (627,076) -
Amortization 46,517 -
Gain/(Loss) on Sale of Fixed Asset 32,760 -
Donated Public Improvements - Water 1,096,340 -
Donated Public Improvements - Sewer 1,357,882 -
1,999,637$ 138$
INCOME/(LOSS) BEFORE CONTRIBUTIONS
AND TRANSFERS 4,345,962$ (247,400)$
TRANSFERS (TO)/FROM OTHER FUNDS (93,048) -
CHANGE IN NET POSITION 4,252,914$ (247,400)$
NET POSITION - MAY 1, 2021 53,292,140 637,970
NET POSITION ADJUSTMENT (Note 9)(291,066) -
NET POSITION - APRIL 30, 2022 57,253,988$ 390,570$
FOR THE YEAR ENDED APRIL 30, 2022
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
Page 20
The Notes to Financial Statements are an integral part of this statement.
Business Type Governmental
Activities -Activities -
Enterprise Fund Internal
Water and Sewer Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers 10,002,102$ -$
Receipts from Employees for Services - 1,502
Receipts from Other Funds for Services - 5,007,061
Payments to Suppliers for Goods and Services (3,617,689) (4,911,927)
Payments to Employees for Services (2,083,459) (193,909)
Payments to Other Funds for Services 2,390 (66,636)
Internal Activity - Payments (to)/from Other Funds 83,439 -
Net Cash Provided/(Used) by Operating Activities 4,386,783$ (163,909)$
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Transfers (to)/from Other Funds (93,048)$ -$
Net Cash Provided/(Used) by Non-Capital Financing Activities (93,048)$ -$
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Proceeds from the Sale of Capital Assets 32,760$ -$
Purchase of Capital Assets (489,763) (30,537)
Proceeds from Bond Issuance, including Bond Premium 92,911 -
Interest Paid on Capital Debt, Net of Rebate (615,036) -
Principal Paid on Capital Debt (1,835,962) (24,104)
Other Receipts/(Payments)590,460 -
Net Cash Provided/(Used) by Capital and Related Financing Activities (2,224,630)$ (54,641)$
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on Cash and Cash Equivalents and Investments (1,349,195)$ 123$
Net Cash Provided/(Used) by Investing Activities (1,349,195)$ 123$
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 719,910$ (218,427)$
CASH AND CASH EQUIVALENTS BALANCE - MAY 1, 2021
(INCLUDING RESTRICTED CASH AND OVERDRAFTS)7,066,045 653,108
CASH AND CASH EQUIVALENTS BALANCE - APRIL 30, 2022
(INCLUDING RESTRICTED CASH AND OVERDRAFTS)7,785,955$ 434,681$
RECONCILIATION OF OPERATING INCOME/(LOSS) TO NET
CASH PROVIDED/(USED) BY OPERATING ACTIVITIES
Operating Income/(Loss)2,346,325$ (247,538)$
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation Expense 2,764,675 48,637
Change in assets, liabilities and deferred amounts:
Receivables, net (19,948) (1,351)
Prepaid Items (734) (9,456)
Accounts Payable and Other Payables (390,263) 74,582
Unearned Revenue (30,000) 2,853
Pension Liabilities (362,772) (94,271)
OPEB Liabilities (142,210) (4,759)
Deferred Pension Expenses/Revenues 130,401 53,598
Deferred OPEB Expenses/Revenue 91,309 13,796
Net Cash Provided/(Used) by Operating Activities 4,386,783$ (163,909)$
NONCASH CAPITAL FINANCING ACTIVITIES
IEPA Loan Draws 92,911$ -$
FOR THE YEAR ENDED APRIL 30, 2022
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
Page 21
The Notes to Financial Statements are an integral part of this statement.
POLICE
PENSION CUSTODIAL
TRUST FUND FUNDS
ASSETS
Cash and Cash Equivalents 1,576,402$ 56,035$
Investments, at fair value
Corporate Bonds 9,375,006 -
Mutual Funds 36,023,253 -
Municipal Bonds 838,244 -
U.S. Treasury Securities 585,199 -
Foreign Issues 8,042,197 -
Receivables (Net of Allowance for Estimated Uncollectible Amounts)
Accounts Receivable - Unbilled 2,534 -
Accrued Interest 195,205 -
TOTAL ASSETS 56,638,040$ 56,035$
LIABILITIES
TOTAL LIABILITIES -$ -$
NET POSITION
Restricted for Pensions 56,638,040$ -$
Restricted for Developers, Property Owners, and Others - 56,035
TOTLA NET POSITION 56,638,040$ 56,035$
CITY OF MCHENRY, ILLINOIS
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
APRIL 30, 2022
FUND FINANCIAL STATEMENTS
Page 22
The Notes to Financial Statements are an integral part of this statement.
POLICE
PENSION CUSTODIAL
TRUST FUND FUNDS
ADDITIONS
Contributions
Employer 655,318$ -$
Plan Members 494,892 -
Developers, Property Owners, and Others - 80,685
Other Additions 493 -
Total Contributions 1,150,703$ 80,685$
Investment Income
Interest and Dividends 3,503,501$ -$
Gain/(Loss) on Sale of Investments (824,299) -
Net Increase/(Decrease) in Fair Value of Investments (6,303,419) -
(3,624,217)$ -$
Less: Investment Management Fees 128,957 -
Net Investment Income (3,753,174)$ -$
TOTAL ADDITIONS (2,602,471)$ 80,685$
DEDUCTIONS
Benefits 2,328,555$ -$
Refunds of Contributions 100,133 -
Administrative Expenses 41,781 -
Engineering and Legal Fees - 80,685
TOTAL DEDUCTIONS 2,470,469$ 80,685$
NET INCREASE/(DECREASE)(5,072,940)$ -$
NET POSITION - MAY 1, 2021 61,710,980 -
NET POSITION ADJUSTMENT (Note 9)- 56,035
NET POSITION - APRIL 30, 2022 56,638,040$ 56,035$
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED APRIL 30, 2022
Page 23
The Notes to Financial Statements are an integral part of this statement.
Page 24
CITY OF McHENRY, ILLINOIS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
City of McHenry, Illinois’ (City) financial statements are prepared in accordance with generally accepted
accounting principles (GAAP) as applied to local governmental units. The Governmental Accounting
Standards Board (GASB) is the accepted standard-setting body for establishing governmental
accounting and financial reporting principles. The most significant accounting policies used by the City
are discussed below.
A. Reporting Entity
The accompanying financial statements comply with the provisions of GASB statements, in that the
financial statements include all organizations, activities, and functions that comprise the City. Component
units are legally separate entities for which the City (the primary entity) is financially accountable.
Financial accountability is defined as the ability to appoint a voting majority of the organization’s
governing body and either (1) the City’s ability to impose its will over the organization or (2) the potential
that the organization will provide a financial benefit to, or impose a financial burden on, the City. Using
these criteria, the City has determined that the Police Pension Fund meets the above criteria. The Police
Pension Fund is blended into the City’s primary government financial statements as a fiduciary fund
although it remains a separate legal entity. In addition, the City is not included as a component unit in
any other governmental reporting entity as defined by GASB pronouncements.
B. Basic Financial Statements – Government-Wide Statements
The City’s basic financial statements include both government-wide (reporting the City as a whole) and
fund (reporting the City’s major funds) financial statements. Both the government-wide and fund financial
statements categorize primary activities as either governmental or business-type. The City’s general
office, public safety, public works, and parks and recreation services are classified as governmental
activities. The City’s water and sewer services are classified as business-type activities.
In the government-wide Statement of Net Position, both the governmental and business-type activities
columns (a) are presented on a consolidated basis by column, and (b) are reported on a full accrual,
economic resource basis, which recognizes all long-term assets and receivables as well as long-term
debt and obligations. The City’s net position is reported in three parts – net investment in capital assets;
restricted net position; and unrestricted net position. The City first utilizes restricted resources to finance
qualifying activities.
The government-wide Statement of Activities reports both the gross and net cost of each of the City’s
functions and business-type activities. The functions are also supported by general government
revenues (property taxes, sales taxes, unrestricted investment earnings, etc.). The Statement of
Activities reduces gross expenses (including depreciation) by related program revenues, operating and
capital grants. Program revenues must be directly associated with the function (public safety, public
works, parks and recreation, etc.) or a business-type activity. Program revenues include charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function or segment. Program revenues also include grants and contributions that
are restricted to meeting the operational or capital requirements of a particular function or segment.
Operating grants include operating-specific and discretionary (either operating or capital) grants while
the capital grants column reflects capital-specific grants. In the process of aggregating data for the
government-wide financial statements, some amounts reported as interfund activity and balances were
eliminated or reclassified. Interfund services provided and used are not eliminated in the process of
consolidation.
The net costs (by function or business-type activity) are normally covered by general revenue (property
taxes, sales taxes, unrestricted investment earnings, etc.).
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 25
The City does not allocate indirect costs.
This government-wide focus is more on the sustainability of the City as an entity and the change in the
City’s net position resulting from the current year’s activities.
C. Basic Financial Statements – Fund Financial Statements
The financial transactions of the City are reported in individual funds in the fund financial statements.
Each fund is accounted for by providing a separate set of self-balancing accounts that comprise its
assets, liabilities, reserves, fund equity, revenues, and expenditures/expenses. The various funds are
reported by generic classification within the financial statements.
The emphasis in fund financial statements is on the major funds in either the governmental or business-
type activities categories. Nonmajor funds by category are summarized into a single column. GASB
Statement No. 34 sets forth minimum criteria (percentage of the assets, liabilities, revenues, or
expenditures/expenses of either fund category or the governmental and enterprise combined) for the
determination of major funds.
The following fund types are used by the City:
1. Governmental Funds
The focus of the governmental funds’ measurement (in the fund statements) is upon determination of
financial position and changes in financial position (sources, uses, and balances of financial resources)
rather than upon net income. The City reports these governmental funds and fund types:
General Fund – The General Fund is the general operating fund of the City. It is used to account for all
financial resources except those required to be accounted for in another fund. The Annexation, Alarm
Board, Band, Civil Defense, Revolving Loan, Tourism, and Employee Flex Funds are included in this
fund.
Special Revenue Funds – The Special Revenue Funds are used to account for the proceeds of specific
revenue sources that are legally restricted to expenditures for specified purposes.
Debt Service Fund – The Debt Service Fund is used to account for the accumulation of funds for the
periodic payment of principal, interest, and related fees on general long-term debt.
Capital Projects Funds – The Capital Projects Funds are used to account for financial resources to be
used for the acquisition or construction of major capital facilities (other than those financed by business-
type/proprietary funds).
The activities reported in these funds are reported as governmental activities in the government-wide
financial statements.
2. Proprietary Fund Types
The focus of proprietary fund measurement is upon determination of operating income, changes in net
position, financial position, and cash flows. The generally accepted accounting principles applicable are
those similar to businesses in the private sector. The City reports the following proprietary fund types:
Enterprise Funds – Enterprise Funds are required to be used to account for operations for which a fee is
charged to external users for goods or services and the activity is financed with debt that is solely secured
by a pledge of the net revenues. The activities reported in these funds are reported as business-type
activities in the government-wide financial statements.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 26
Internal Service Funds – Internal Service Funds are used to account for the financing of goods or services
provided by an activity to other departments or funds of the City on a cost-reimbursement basis. Because
the principal users of the internal services are the City’s governmental activities, the financial statement
of the Internal Service Fund is consolidated into the governmental column when presented in the
government-wide financial statements.
3. Fiduciary Fund Types
Fiduciary Funds are used to report assets held in a trustee or custodial capacity for others and therefore
are not available to support City programs. The reporting focus is on net position and changes in net
position and is reported using accounting principles similar to proprietary funds.
The City’s Fiduciary Funds are presented in the Fiduciary Fund financial statements by type (pension
and custodial). Since by definition these assets are being held for the benefit of a third party (pension
participants, developers, etc.) and cannot be used to address activities or obligations of the City, these
funds are not incorporated into the government-wide statements.
D. Basis of Accounting
Basis of accounting refers to the point at which revenues or expenditures/expenses are recognized in
the accounts and reported in the financial statements. It relates to the timing of the measurements made
regardless of the measurement focus applied.
1. Accrual
Both governmental and business-type activities in the government-wide financial statements and the
proprietary and fiduciary fund financial statements are presented on the accrual basis of accounting.
Property tax revenues are recognized in the period for which levied. Other nonexchange revenues,
including intergovernmental revenues and grants, are reported when all eligibility requirements are met.
Fees and charges and other exchange revenues are recognized when earned and expenses are
recognized when incurred.
2. Modified Accrual
The governmental fund financial statements are presented on the modified accrual basis of accounting.
Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual; i.e.,
both measurable and available. “Available” means collectible within the current period or within 60 days
after year-end. Property tax revenues are recognized in the period for which levied provided they are
also available. Intergovernmental revenues and grants are recognized when all eligibility requirements
are met and the revenues are available. Expenditures are recognized when the related liability is
incurred. Exceptions to this general rule include principal and interest on general obligation long-term
debt and employee vacation and sick leave, which are recognized when due and payable.
E. Cash and Cash Equivalents and Investments
Separate bank accounts are not maintained for all of the City’s funds. Instead, the funds maintain their
uninvested cash balances in common checking accounts, with accounting records being maintained to
show the portion of the common bank account balances attributable to each participating fund.
Occasionally certain of the funds participating in the common bank accounts will incur overdrafts (deficits)
in the accounts. Such overdrafts in effect constitute cash borrowed from other City funds and are,
therefore, interfund loans that have not been authorized by City Board action.
The following funds incurred overdraft balances at April 30, 2022:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 27
Audit Fund 4,699$
Recreation Center Fund 268,643
Capital Improvements Fund 3,538
Capital Equipment Fund 23,421
Debt Service Fund 43,071
SSA #4 Lakewood Fund 635
SSA #6 Huntersville Fund 179,115
523,122$ Cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term
investments with an original maturity of three months or less from the date of acquisition.
Investments are stated at fair value. Fair value is determined by quoted market prices. Gains or losses
on the sale of investments are recognized as they are incurred.
F. Receivables
Receivables are reported net of estimated uncollectible amounts. No property tax receivable allowance
is recorded as the City receives approximately 100% of the amount levied. The allowance for water and
sewer accounts receivable is $63,450 and all other allowances for other accounts receivable is $664,783.
G. Prepaid Items
Prepaid items are for payments made by the City in the current year for goods and services received in
the subsequent fiscal year.
H. Inventories
Inventories consist of the cost of unused salt for the roads. The salt inventory as of April 30, 2022 is
$122,096.
I. Interfund Activity
Interfund activity is reported either as loans, services provided, reimbursements or transfers. Loans are
reported as interfund receivables and payables as appropriate and are subject to elimination upon
consolidation. Services provided, deemed to be at market or near market rates, are treated as revenues
and expenditures/expenses.
Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund and reduces
its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers
between governmental or between proprietary funds are netted as part of the reconciliation to the
government-wide financial statements.
J. Capital Assets
Capital assets purchased or acquired with an original cost of $5,000 or more, and $10,000 or more for
construction projects, are reported at historical cost or estimated historical cost. Donated capital assets,
donated works of art and similar items, and capital assets received in a service concession arrangement
are reported at acquisition value. Additions, improvements and other capital outlays that significantly
extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are
expensed as incurred. Depreciation on all assets is provided on the straight-line half-year basis over the
following estimated useful lives:
Vehicles 5-15 years
Systems and Equipment 5-40 years
Building and Improvements 5-62 years
Infrastructure 10-40 years
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 28
GASB Statement No. 34 required the City to report and depreciate new infrastructure assets effective as
of May 1, 2003. Infrastructure assets include roads, bridges, underground pipe (other than related to
utilities), traffic signals, etc. These infrastructure assets constitute the largest asset class of the City.
K. Deferred Outflows and Inflows of Resources
In addition to assets and liabilities, the Balance Sheets and Statements of Net Position will sometimes
report separate sections for deferred outflows of resources and deferred inflows of resources. Deferred
outflows of resources represent a consumption of net position that applies to a future period and so will
not be recognized as an outflow of resource until then. Deferred inflows of resources represent an
acquisition of net position that applies to a future period and so will not be recognized as an inflow of
resource until that time.
L. Compensated Absences
The City accrues accumulated unpaid vacation and associated employee-related costs when earned (or
estimated to be earned) by the employee. The noncurrent portion (the amount estimated to be used in
subsequent fiscal years) for governmental funds is reported only as a general long-term debt obligation
in the government-wide Statement of Net Position and represents a reconciling item between the fund
and government-wide presentations. In accordance with the provisions of Statement of Financial
Accounting Standards No. 43, “Accounting for Compensated Absences”, no liability is recorded for
nonvesting accumulating rights to receive sick pay benefits.
M. Long-Term Obligations
In the government-wide financial statements and proprietary fund financial statements, long-term debt
and other long-term obligations are reported as liabilities in the applicable governmental activities or
business-type activities and proprietary fund Statement of Net Position. Bond premiums and discounts
are amortized over the life of the bonds on a straight-line basis, rather than expensed in the current year.
Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are
reported as debt service expenditures in the year they occur.
In the fund financial statements, governmental funds recognize bond premiums and discounts, as well
as bond issuance costs, during the current period. The face amount of debt issued is reported as other
financing sources. Premiums received on debt issuances are reported as other financing sources while
discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service expenditures.
N. Government-Wide and Proprietary Fund Net Position
Government-wide and proprietary fund net position is divided into three components:
1. Net investment in capital assets – consists of the historical cost of capital assets less accumulated
depreciation and less any debt that remains outstanding that was used to finance those assets.
2. Restricted net position – consists of net position that is restricted by the City’s creditors (for example,
through debt covenants), by the state enabling legislation (through restrictions on shared revenues),
by grantors (both federal and state), and by other contributors.
3. Unrestricted – all other net position is reported in this category.
O. Governmental Fund Balances
Governmental fund balances are divided between nonspendable and spendable.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 29
Nonspendable fund balances are balances that cannot be spent because they are not expected to be
converted to cash or they are legally or contractually required to remain intact.
The spendable fund balances are arranged in a hierarchy based on spending constraints.
1. Restricted – Restricted fund balances are restricted when constraints are placed on the use by
either (a) external creditors, grantors, contributors, or laws or regulations of other governments or
(b) law through constitutional provisions or enabling legislation.
2. Committed – Committed fund balances are amounts that can only be used for specific purposes as
a result of constraints of the City Council. Committed amounts cannot be used for any other
purpose unless the City Council removes those constraints by taking the same type of action (e.g.
legislation, resolution, ordinance). Committed fund balances differ from restricted balances
because the constraints on their use do not come from outside parties, constitutional provisions, or
enabling legislation.
3. Assigned – Assigned fund balances are amounts that are constrained by the City’s intent to be used
for specific purposes but are neither restricted nor committed. Intent is expressed by an appointed
body (e.g. a budget or finance committee) or official to which the Board of Trustees has delegated
the authority to assign, modify or rescind amounts to be used for specific purposes. Pursuant to
resolution #R-12-019 by the City Council, the Finance Director has been delegated this authority,
with the advice and consent of the Finance and Personnel Committee.
Assigned fund balances also include (a) all remaining amounts that are reported in governmental
funds (other than the General Fund) that are not classified as nonspendable, restricted or
committed, and (b) amounts in the General Fund that are intended to be used for a specific purpose.
Specific amounts that are not restricted or committed in a special revenue fund are assigned for
purposes in accordance with the nature of their fund type. Assignment within the General Fund
conveys that the intended use of those amounts is for a specific purpose that is narrower than the
general purpose of the City itself. All assigned fund balances are the residual amounts of the fund.
4. Unassigned – Unassigned fund balance is the residual classification for the General Fund. This
classification represents the General Fund balance that has not been assigned to other funds, and
that has not been restricted, committed, or assigned to specific purposes within the General Fund.
This classification is also used to represent negative fund balances in other funds.
The City permits funds to be expended in the following order: Restricted, Committed, Assigned and
Unassigned.
P. Minimum Fund Balance
The City has adopted a formal minimum fund balance policy. For the General, Recreation Center, and
Information Technology Funds, fund balance will be maintained at 120 days of estimated operating
expenditures. If the balance falls below this minimum a plan will be developed to return to the minimum
balance within a reasonable period of time. Funds in excess of the minimum may be considered for the
funding of one-time, nonrecurring expenditures, assigned for future capital activities, or used for the
funding of other long-term obligations.
Q. Property Tax Calendar and Revenues
The City’s property tax is levied each calendar year on all taxable real property located in the City’s district
on or before the last Tuesday in December. The 2021 levy was passed by the Board on
December 20, 2021. Property taxes attach as an enforceable lien on property as of January 1 of the
calendar year they are for and are payable in two installments early in June and early in September of
the following calendar year. The City receives significant distributions of tax receipts approximately one
month after these dates.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 30
R. Defining Operating Revenues and Expenses
The City’s proprietary funds distinguish between operating and nonoperating revenues and expenses.
Operating revenues and expenses of the City’s Water and Sewer Fund consist of charges for services
(including tap fees for the water function and systems development charges for the sewer function) and
the costs of providing those services, including depreciation and excluding interest cost. All other revenue
and expenses are reported as nonoperating.
S. Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results may differ from those estimates.
NOTE 2 - DEPOSITS, INVESTMENTS, AND FAIR VALUE MEASUREMENTS
Deposits with financial institutions are fully insured or collateralized by securities held in the City’s name.
The City is allowed to invest in securities as authorized by the Illinois Compiled Statutes, Chapter 30, Act
235/Articles 2 and 6, and Chapter 40, Act 5/Article 3 – Pensions.
Investments
As of April 30, 2022, the City and Police Pension had the following investments, maturities, and fair value
measurements:
City
Credit Quality/ Segmented Time
Types of investments Ratings Distribution A mount Level 1 Level 2 N/A
Debt Securities:
U.S. Treasury Securities Not Rated less than 1 year 4,100,609$ 4,100,609$ -$ -$
External Investment Pools AAAmmf less than 1 year 18,208,389 - - 18,208,389
Certificates of Deposit N/A less than 1 year 2,048,245 - 2,048,245 -
Total Debt Securities 24,357,243$ 4,100,609$ 2,048,245$ 18,208,389$
Total Investments 24,357,243$ 4,100,609$ 2,048,245$ 18,208,389$
Fair Value Measurement Using
Police Pension
Credit Quality/ Segmented Time
Types of investments Ratings Distribution Amount Level 1 Level 2 N/A
Debt Securities:
U.S. Treasury Securities Not Rated More than 10 years 585,199$ 585,199$ -$ -$
Municipal Bonds BBB - AAA less than 1 year 302,063 - 302,063 -
Municipal Bonds BBB - AAA 1 to 5 years 124,881 - 124,881 -
Municipal Bonds BBB - AAA 5 to 10 years 326,452 - 326,452 -
Municipal Bonds BBB - AAA More than 10 years 84,848 - 84,848 -
Corporate Bonds BBB - AAA less than 1 year 4,856,257 - 4,856,257 -
Corporate Bonds BBB - AAA 1 to 5 years 4,162,112 - 4,162,112 -
Corporate Bonds BBB - AAA 5 to 10 years 356,637 - 356,637 -
External Investment Pools AAAmmf less than 1 year 609,103 - - 609,103
Foreign Issues BBB - AAA less than 1 year 3,916,074 - 3,916,074 -
Foreign Issues BBB - AAA 1 to 5 years 4,126,123 - 4,126,123 -
Total Debt Securities 19,449,749$ 585,199$ 18,255,447$ 609,103$
Equity Securities:
Mutual Funds Not Rated less than 1 year 36,023,253$ 36,023,253$ -$ -$
Total Equity Securities 36,023,253$ 36,023,253$ -$ -$
Total Investments 55,473,002$ 36,608,452$ 18,255,447$ 609,103$
Fair Value Measurement Using
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 31
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; debt securities
and certificates of deposit classified in Level 2 of the fair value hierarchy are valued using a matrix pricing
technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark
quoted prices; Level 3 inputs are significant unobservable inputs.
Debt and equity securities classified in Level 1 of the fair value hierarchy are valued using prices quoted
in active markets for those securities. Debt securities and certificates of deposit classified in Level 2 of
the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value
securities based on the securities’ relationship to benchmark quoted prices.
The fair value of investments in the External Investment Pools is the same as the value of pool shares.
The External Investment Pools are not SEC-registered but have regulatory oversight through the State
of Illinois.
Interest Rate Risk. The City will minimize the risk that the market value of securities in the portfolio will
fall due to changes in general interest rates, 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.
• Investing operating funds primarily in shorter-term securities, money market mutual funds, or similar
investment pools.
Credit Risk. The City minimizes credit risk, the risk of loss due to the failure of the security issuer or
backer, by:
• Limiting investments to the safest type of securities.
• Pre-qualifying the financial institutions, brokers/dealers, intermediaries, and advisers with which the
City will do business.
• Diversifying the investment portfolio so that potential losses on individual securities will be
minimized.
Concentration of Credit Risk. The City places no specific limit on the amount the City may invest in any
one issuer. There are currently no investments in any one organization that represent 5% or more of the
City’s total investments.
NOTE 3 - CAPITAL ASSETS
Capital asset activity for the year ended April 30, 2022 was as follows:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 32
Balance Balance
May 1, 2021 Increases Decreases April 30, 2022
Governmental Activities
Capital Assets not being depreciated
Land 42,130,875$ 533,969$ -$ 42,664,844$
Art and Historical Treasures 1,658,927 - - 1,658,927
Intangibles 300,000 - - 300,000
Construction in Progress 1,189,805 424,207 150,364 1,463,648
Total Capital Assets not being depreciated 45,279,607$ 958,176$ 150,364$ 46,087,419$
Other Capital Assets
Land Improvements 6,551,923$ 558,363$ 69,966$ 7,040,320$
Buildings 18,502,058 203,179 - 18,705,237
Vehicles 4,823,009 266,039 224,648 4,864,400
Equipment 4,758,464 110,145 - 4,868,609
Infrastructure 80,535,272 3,254,900 - 83,790,172
Total Other Capital Assets at Historical Cost 115,170,726$ 4,392,626$ 294,614$ 119,268,738$
Less Accumulated Depreciation for:
Land Improvements 4,281,363$ 244,648$ 69,966$ 4,456,045$
Buildings 5,931,794 420,524 - 6,352,318
Vehicles 3,150,513 364,291 224,648 3,290,156
Equipment 3,107,957 292,473 - 3,400,430
Infrastructure 50,898,930 1,913,874 - 52,812,804
Total Accumulated Depreciation 67,370,557$ 3,235,810$ 294,614$ 70,311,753$
Other Capital Assets, Net 47,800,169$ 1,156,816$ -$ 48,956,985$
Governmental Activities Capital Assets, Net 93,079,776$ 2,114,992$ 150,364$ 95,044,404$
Business-Type Activities
Capital Assets not being depreciated
Land 2,208,117$ -$ -$ 2,208,117$
Construction in Progress 38,619 162,020 143,446 57,193
Total Capital Assets not being depreciated 2,246,736$ 162,020$ 143,446$ 2,265,310$
Other Capital Assets
Buildings 2,736,098$ -$ -$ 2,736,098$
Vehicles 1,855,839 64,789 218,568 1,702,060
Systems and Equipment 109,330,726 2,860,623 - 112,191,349
Total Other Capital Assets at Historical Cost 113,922,663$ 2,925,412$ 218,568$ 116,629,507$
Less Accumulated Depreciation for:
Buildings 2,347,959$ 26,933$ -$ 2,374,892$
Vehicles 1,074,919 66,960 218,568 923,311
Systems and Equipment 33,629,376 2,670,782 - 36,300,158
Total Accumulated Depreciation 37,052,254$ 2,764,675$ 218,568$ 39,598,361$
Other Capital Assets, Net 76,870,409$ 160,737$ -$ 77,031,146$
Business-Type Activities Capital Assets, Net 79,117,145$ 322,757$ 143,446$ 79,296,456$
Depreciation expense was charged to functions as follows:
Governmental Activities
Public Safety 330,906$
Public Works 2,210,059
Parks and Recreation 467,667
Unallocated 227,178
Total Governmental Activities Depreciation Expense 3,235,810$
Business-Type Activities
Water 631,243$
Sewer 2,133,432
Total Business-Type Activities Depreciation Expense 2,764,675$ NOTE 4 - NET INVESTMENT IN CAPITAL ASSET CALCULATION
Net investment in capital asset calculation as of April 30, 2022 was as follows:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 33
Governmental Activities
Capital Assets, Net of Accumulated Depreciation 95,044,404$
Less:
Capital Related Debt (4,971,595)
Investment in Capital Assets 90,072,809$
Business-Type Activities
Capital Assets, Net of Accumulated Depreciation 79,296,456$
Less:
Capital Related Debt (32,597,710)
Investment in Capital Assets 46,698,746$
NOTE 5 - LONG-TERM LIABILITY ACTIVITY
Long-term liability activity for the year ended April 30, 2022 was as follows:
Amounts
Balance Balance Due Within
May 1, 2021 Additions Retirements April 30, 2022 One Year
Governmental Activities
Bonds and Notes Payable
General Obligation Bonds 28,810,000$ -$ 1,605,000$ 27,205,000$ 1,675,000$
Unamortized Bond Discount (560) 189 - (371) (189)
Unamortized Bond Premium 48,925 - 8,378 40,547 8,378
Note Payable 1,121,882 171,627 337,090 956,419 342,533
Total Bonds and Notes Payable 29,980,247$ 171,816$ 1,950,468$ 28,201,595$ 2,025,722$
Other Long-Term Liabilities
Compensated Absences 590,747$ 625,240$ 590,747$ 625,240$ 625,240$
Total Other Long-Term Liabilities 590,747$ 625,240$ 590,747$ 625,240$ 625,240$
Governmental Activities Long-Term
Obligations 30,570,994$ 797,056$ 2,541,215$ 28,826,835$ 2,650,962$
Business-Type Activities
Bonds and Notes Payable
General Obligation Bonds 4,350,000$ -$ 355,000$ 3,995,000$ 370,000$
IEPA Revolving Loan Fund 29,663,434 92,911 1,480,962 28,275,383 1,532,512
Unamortized Bond Premium 373,844 - 46,517 327,327 46,517
Total Bonds and Notes Payable 34,387,278$ 92,911$ 1,882,479$ 32,597,710$ 1,949,029$
Other Long-Term Liabilities
Compensated Absences 102,097$ 98,664$ 102,097$ 98,664$ 98,664$
Total Other Long-Term Liabilities 102,097$ 98,664$ 102,097$ 98,664$ 98,664$
Business-Type Activities Long-Term
Obligations 34,489,375$ 191,575$ 1,984,576$ 32,696,374$ 2,047,693$
Bonds and notes payable consisted of the following at April 30, 2022:
Maturity Interest Face Carrying
Date Rate Amount Amount
Governmental Activities
General Obligation Bonds 2012 12/15/2027 2.00% - 2.50%850,000$ 380,000$
General Obligation Bonds 2013 5/1/2027 0.40% - 2.75%415,000 200,000
General Obligation Bonds 2015 12/15/2035 2.00% - 3.25%6,375,000 3,395,000
General Obligation Bonds 2020B 4/30/2040 0.849% - 3.376%24,265,000 23,230,000
Note Payable 2/20/2024 3.50%574,171 128,691
4 parcels of land pledged as collateral to this loan
Note Payable 5/25/2024 3.10%1,300,151 803,625
26 vehicles pledged as collateral to this loan
Capital Lease - Dell Financial 7/31/2022 0.00%72,310 24,103
Total 33,851,632$ 28,161,419$
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 34
Maturity Interest Face Carrying
Date Rate Amount Amount
Business-Type Activities
General Obligation Bonds 2012 12/15/2032 2.00% - 2.80%2,250,000$ 1,390,000$
General Obligation Bonds 2020A 4/30/2030 4%2,855,000 2,605,000
IEPA Revolving Loan Fund 12/30/2037 1.86%31,507,182 28,275,383
Total 36,612,182$ 32,270,383$
At April 30, 2022 the annual debt service requirements to service all long-term debt attributable to
governmental activities are:
Year Ending April 30 Principal Interest Total
2023 2,017,533$ 702,271$ 2,719,804$
2024 2,023,690 670,482 2,694,172
2025 1,974,798 636,599 2,611,397
2026 1,565,398 600,660 2,166,058
2027 1,560,000 573,793 2,133,793
2028 - 2032 6,945,000 2,390,868 9,335,868
2033 - 2037 7,395,000 1,461,702 8,856,702
2038 - 2040 4,680,000 317,858 4,997,858
28,161,419$ 7,354,233$ 35,515,652$
At April 30, 2022 the annual debt service requirements to service all long-term debt attributable to
business-type activities are:
Year Ending April 30 Principal Interest Total
2023 1,902,512$ 657,436$ 2,559,948$
2024 1,956,149 616,099 2,572,248
2025 2,005,322 573,217 2,578,539
2026 2,050,039 529,084 2,579,123
2027 2,100,312 483,509 2,583,821
2028 - 2032 10,510,827 1,698,258 12,209,085
2033 - 2037 9,722,146 688,759 10,410,905
2038 2,023,076 28,266 2,051,342
32,270,383$ 5,274,628$ 37,545,011$
Industrial Development Revenue Bonds, Series 2016A and 2016B
During fiscal year 2017, the City issued Industrial Development Revenue Bonds on behalf of Fabrik
Industries. The bonds are not obligations of the City; therefore, the City does not record the assets or
liabilities resulting from the bond issuance as its primary function is to arrange financing between Fabrik
and the bond holders. All funds are controlled by the trustee of the bonds (American Community Bank &
Trust). The original issue of the bonds aggregated to $7,500,000, and at April 30, 2022 the outstanding
balance on the bonds was $1,405,489.
Long-term liabilities are being repaid from the following funds:
Obligation Fund
Governmental Activities
General Obligation Bonds General Fund, Annexation Fund, Capital Improvements Fund,
TIF Fund, Recreation Center Fund, Water and Sewer Fund
Note Payable General Fund, Tourism Fund, Information Technology Fund
Compensated Absences General Fund, Infromation Technology Fund
Business-Type Activities
General Obligation Bonds Water and Sewer Fund
IEPA Revolving Loan Fund Water and Sewer Fund
Compensated Absences Water and Sewer Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 35
NOTE 6 - RESTRICTED EQUITY
The following amounts are restricted equity balances at April 30, 2022:
Restricted Restricted
Restricted for Net Position Fund Balance
Governmental Activities/Governmental Funds
Public Safety 1,732,273$ -$
Highways and Streets 2,261,450 2,261,450
Capital Projects 870,419 870,419
Special Service Areas 408 408
Tax Increment Financing 1,029,497 1,029,497
5,894,047$ 4,161,774$
NOTE 7 - DESIGNATED NET POSITION
City management has designated certain Water and Sewer Fund revenues to be used only for debt
service. The amount designated at April 30, 2022 was $3,979,811.
NOTE 8 - DEFICIT FUND BALANCE
At April 30, 2022 a deficit fund balance existed in the following funds:
Audit Fund 4,196$
SSA #4 Lakewood Fund 231
SSA #6 Huntersville Fund 179,115
183,542$
NOTE 9 - NET POSITION/FUND BALANCE ADJUSTMENT
During the year, the City made the following net position/fund balance adjustments:
Proprietary Funds Net Positon Fiduciary Funds Net Position
Water and Sewer Fund Developmental Escrow Funds
Adjustment related to incorrect prior year Adjustment related to recording beginning
accounts payable (291,066)$ net position due to GASB 84 6,831$
Retained Personnel Escrow Funds
Adjustment related to recording beginning
net position due to GASB 84 49,204$
Business-Type Activities Net Position Fiduciary Fund Activities Net Position
Water and Sewer Fund Custodial Funds
Adjustment related to incorrect prior year Adjustment related to recording beginning
accounts payable (291,066)$ net position due to GASB 84 56,035$
NOTE 10 - PROPERTY TAXES
Property taxes receivable and unavailable revenue recorded in these financial statements, in the amount
of $5,778,770, are from the 2021 tax levy. The unavailable revenue is 100% of the 2021 tax levy. These
taxes are unavailable as none of the taxes are collected before the end of the fiscal year and the City
does not consider the amounts to be available and does not budget for their use in fiscal year 2022. The
City has determined that 100% of the amounts collected for the 2020 levy ($5,565,378) are allocable for
use in fiscal year 2022 and, therefore, are recorded in these financial statements as property taxes
revenue. A summary of the assessed valuation, rates, and extensions for the years 2021, 2020, and
2019 follows:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 36
Tax Year
Assessed Valuation
Rates Extensions Rates Extensions Rates Extensions
General 0.0524 410,155$ 0.0344 255,869$ 0.0499 349,728$
Bond 0.2129 1,664,873 0.2241 1,667,294 - -
Police Protection 0.0701 547,965 0.0737 547,966 0.0781 547,964
Insurance 0.0639 499,998 0.0672 499,999 0.0713 500,000
Retirement 0.0510 399,197 0.0537 399,198 0.0569 399,199
Social Security 0.0721 563,749 0.0758 563,751 0.0804 563,745
Audit 0.0034 26,428 0.0036 26,431 0.0038 26,430
Police Pension 0.0800 625,607 0.0885 658,311 0.3182 2,231,744
Total Taxes Extended 0.6058 4,737,972$ 0.6209 4,618,819$ 0.6585 4,618,810$
Road and Bridge
(from Townships)- 292,407$ - 273,254$ - 371,126$
Special Service Area #4A - 15,580$ - 16,123$ - 16,123$
Tax Increment Financing - 732,268$ - 680,014$ - 710,181$
2019
$701,420,237
2021
$782,126,233
2020
$743,912,520
NOTE 11 - EXCESS OF EXPENDITURES OVER BUDGET
For the year ended April 30, 2022, the following funds had expenditures that exceeded the budget:
Fund Budget Actual
Capital Improvements $ 10,000 $ 37,923 27,923$
Audit 45,125 51,275 6,150
Risk Management 943,503 979,625 36,122
Retained Personnel Escrow 75,000 80,685 5,685
Police Pension 2,399,286 2,599,426 200,140
Excess of Actual
Over Budget
NOTE 12 - ILLINOIS MUNICIPAL RETIREMENT FUND
A. Plan Description
The City’s defined benefit pension plan for regular employees provides retirement and disability benefits,
post-retirement increases, and death benefits to plan members and beneficiaries. The City’s plan is
managed by the Illinois Municipal Retirement Fund (IMRF), the administrator of a multi-employer public
pension fund. A summary of IMRF’s pension benefits is provided in the “Benefits Provided” section of
this document. Details of all benefits are available from IMRF. Benefit provisions are established by
statute and may only be changed by the General Assembly of the State of Illinois. IMRF issues a publicly
available Annual Comprehensive Financial Report that includes financial statements, detailed information
about the pension plan’s fiduciary net position, and required supplementary information. The report is
available for download at www.imrf.org.
B. Benefits Provided
IMRF has three benefit plans. The vast majority of IMRF members participate in the Regular Plan (RP).
The Sheriff’s Law Enforcement Personnel (SLEP) plan is for sheriffs, deputy sheriffs, and selected police
chiefs. Counties could adopt the Elected County Official (ECO) plan for officials elected prior to
August 8, 2011 (the ECO plan was closed to new participants after that date).
All three IMRF benefit plans have two tiers. Employees hired before January 1, 2011 are eligible for Tier
1 benefits. Tier 1 employees are vested for pension benefits when they have at least eight years of
qualifying service credit. Tier 1 employees who retire at age 55 (at reduced benefits) or after age 60
(at full benefits) with eight years of service are entitled to an annual retirement benefit, payable monthly
for life, in an amount equal to 1-2/3% of the final rate of earnings for the first 15 years of service credit,
plus 2% for each year of service credit after 15 years to a maximum of 75% of their final rate of earnings.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 37
Final rate of earnings is the highest total earnings during any consecutive 48 months within the last ten
years of service, divided by 48. Under Tier 1, the pension is increased by 3% of the original amount on
January 1 every year after retirement.
Employees hired on or after January 1, 2011 are eligible for Tier 2 benefits. For Tier 2 employees,
pension benefits vest after ten years of service. Participating employees who retire at age 62 (at reduced
benefits) or after age 67 (at full benefits) with ten years of service are entitled to an annual retirement
benefit, payable monthly for life, in an amount equal to 1-2/3% of the final rate of earnings for the
first 15 years of service credit, plus 2% for each year of service credit 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 ten years of service, divided by 96. Under Tier 2, the pension is
increased on January 1 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.
C. Employees Covered by Benefit Terms
All appointed employees of a participating employer who are employed in a position normally requiring
600 hours (1,000 hours for certain employees hired after 1981) or more of work in a year are required
to participate. As of December 31, 2021, the following employees were covered by the benefit terms:
Retirees and beneficiaries currently receiving benefits 101
Inactive plan members entitled to but not yet receiving benefits 45
Active plan members 101
Total 247
D. Contributions
As set by statute, the City’s Regular Plan Members are required to contribute 4.5% of their annual
covered salary. The statute requires employers to contribute the amount necessary, in addition to
member contributions, to finance the retirement coverage of its own employees. The City’s annual
contribution rate for calendar year’s 2022 and 2021 was 10.82% and 12.24%. For the fiscal year ended
April 30, 2022, the City contributed $939,948 to the plan. The City also contributes for disability benefits,
death benefits, and supplemental retirement benefits, all of which are pooled at the IMRF level.
Contribution rates for disability and death benefits are set by IMRF’s Board of Trustees, while the
supplemental retirement benefits rate is set by statute.
E. Net Pension Liability
The components of the net pension liability of the IMRF actuarial valuation performed as of
December 31, 2021, and a measurement date as of December 31, 2021, calculated in accordance with
GASB Statement No. 68, were as follows:
Total Pension Liability 46,142,272$
IMRF Fiduciary Net Position 48,058,412
City's Net Pension Liability (1,916,140)
IMRF Fiduciary Net Position as a Percentage
of the Total Pension Liability 104.15%
See the Schedule of Changes in the Employer’s Net Pension Liability and Related Ratios in the Required
Supplementary Information following the notes to the financial statements for additional information
related to the funded status of the plan.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 38
F. Actuarial Assumptions
The total pension liability above was determined by an actuarial valuation performed as of
December 31, 2021 using the following actuarial methods and assumptions:
Assumptions
Inflation 2.25%
Salary Increases 2.85% - 13.75% including inflation
Interest Rate 7.25%
Asset Cost Method Entry Age Normal
Asset Valuation Method Market Value of Assets
Projected Retirement Age
Experience-based Table of Rates,specific to the type of eligibility condition,last
updated for the 2020 valuation according to an experience study from years
2017 to 2019
For non-disabled retirees, the Pub-2010, Amount-Weighted, below-median income, General, Retiree,
Male (adjusted 106%) and Female (adjusted 105%) tables, and future mortality improvements projected
using scale MP-2020 were used. For disabled retirees, the Pub-2010, Amount-Weighted, below-median
income, General, Disabled Retiree, Male and Female (both unadjusted) tables, and future mortality
improvements projected using scale MP-2020 were used. For active members, the Pub-2010, Amount-
Weighted, below-median income, General, Employee, Male and Female (both unadjusted) tables, and
future mortality improvements projected using scale MP-2020 were used.
G. Long-Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-
block method in which best-estimate ranges of expected future real rates of return (expected returns, net
of pension plan investment expense, and inflation) are developed for each major asset class. These
ranges are combined to produce the long-term expected rate of return by weighting the expected future
real rates of return to the target asset allocation percentage and adding expected inflation. The target
allocation and best estimates of geometric real rates of return for each major asset class are summarized
in the following table as of December 31, 2021:
Asset Class
Target
Allocation
Projected
Return
Equities 39.00% 1.90%
International Equities 15.00% 3.15%
Fixed Income 25.00% -0.60%
Real Estate 10.00% 3.30%
Alternatives 10.00%
Private Equity 5.50%
Hedge Funds N/A
Commodities 1.70%
Cash 1.00% -0.90%
100.00%
H. Single Discount Rate
A Single Discount Rate of 7.25% was used to measure the total pension liability as of
December 31, 2021. The projection of cash flow used to determine this Single Discount Rate assumed
that the plan members’ contributions will be made at the current contribution rate, and that employer
contributions will be made at rates equal to the difference between actuarially determined contribution
rates and the member rate. The Single Discount Rate reflects:
1. The long-term expected rate of return on pension plan investments (during the period in which the
fiduciary net position is projected to be sufficient to pay benefits), and
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 39
2. The tax-exempt municipal bond rate based on an index of 20-year general obligation bonds with an
average AA credit rating (which is published by the Federal Reserve) as of the measurement date
(to the extent that the contributions for use with the long-term expected rate of return are not met).
For the purpose of this discount rate, the expected rate of return on pension plan investments is 7.25%;
the municipal bond rate is 1.84%; and resulting single discount rate is 7.25%. The prior year single
discount rate was 7.25% and increased 0.00% to the current year single discount rate.
I. Changes in Net Pension Liability
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(A)(B)(A)-(B)
Balances at December 31, 2020 43,538,937$ 41,759,806$ 1,779,131$
Changes for the year:
Service Cost 728,190$ -$ 728,190$
Interest on the Total Pension Liability 3,102,945 - 3,102,945
Differences Between Expected and Actual
Experience of the Total Pension Liability 979,789 - 979,789
Changes of Assumptions - - -
Contributions - Employer - 1,068,306 (1,068,306)
Contributions - Employee - 385,024 (385,024)
Net Investment Income - 7,088,187 (7,088,187)
Benefit Payments, including Refunds
of Employee Contributions (2,207,589) (2,207,589) -
Other (Net Transfer)- (35,322) 35,322
Net Changes 2,603,335$ 6,298,606$ (3,695,271)$
Balances at December 31, 2021 46,142,272$ 48,058,412$ (1,916,140)$
J. Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the plan’s net pension liability, calculated using a Single Discount Rate of 7.25%,
as well as what the plan’s net pension liability would be if it were calculated using a single Discount Rate
that is 1% lower or 1% higher than the current rate:
Current
1% Decrease Discount Rate 1% Increase
6.25%7.25%8.25%
Net Pension Liability/(Asset)4,203,401$ (1,916,140)$ (6,717,922)$
K. Pension Expense/(Income) and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
For the year ended April 30, 2022, the City recognized pension expense/(income) of $(710,055). At
April 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related
to pensions from the following sources:
Outflows of Inflows of Net Outflows
Expense in Future Periods Resources Resources of Resources
Differences between expected and actual experience 1,582,440$ -$ 1,582,440$
Changes of assumptions 300,802 374,309 (73,507)
Net difference between projected and actual
earnings on pension plan investments - 5,361,184 (5,361,184)
Total deferred amounts to be recognized in
pension expense in future periods 1,883,242$ 5,735,493$ (3,852,251)$
Pension contributions made subsequent to
the measurement date 302,778 - 302,778
Total deferred amounts related to pensions 2,186,020$ 5,735,493$ (3,549,473)$
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 40
$302,778 reported as deferred outflows of resources related to pensions resulting from the City’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the reporting year ended April 30, 2023. Other amounts reported as deferred outflows of
resources and deferred inflows of resources related to pensions will be recognized in pension expense
as follows:
Net Deferred
Year Ending Outflows of
December 31 Resources
2021 (582,055)$
2022 (1,569,715)
2023 (1,054,368)
2024 (646,113)
2025 -
Thereafter -
(3,852,251)$ NOTE 13 - POLICE PENSION PLAN
A. Plan Administration
Full-time police sworn personnel of the City are covered by The Police Pension Fund of the City (Plan).
Although this is a single-member pension plan, the defined benefits and employee and employer
contribution levels are governed by Illinois Compiled Statues (40 IL CS 5/3-1) and may be amended only
by the Illinois legislature. The City accounts for the Plan as a pension trust fund.
The Pension Board administers the Plan and the Illinois Department of Insurance is the oversight agency.
The Board consists of five elected or appointed members.
B. Plan Membership
At May 1, 2021, the date of the latest actuarial valuation, Plan participation consisted of:
Retirees and beneficiaries receiving benefits 32
Terminated plan members entitled to but not yet receiving benefits 9
Active plan members 48
Total 89
C. Benefits Provided
The Plan provides retirement, disability, and death benefits to Plan members and their beneficiaries.
Chapter 40-Pensions-Act 5/Article 3 of the Illinois Compiled Statutes assigns the authority to establish
and amend the benefit provisions of the Plan to the Illinois legislature.
D. Contributions
Employees are required by Illinois Compiled Statutes (ILCS) to contribute 9.91% of their base salary to
the 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 plan and the administrative costs as actuarially
determined by an enrolled actuary. Effective January 1, 2011, the City has until the year 2040 to fund
90% of the past service cost for the Plan. For the year ended April 30, 2022 the City’s contribution was
13.89% of covered payroll.
E. Investment Policy
ILCS limit the Plan’s investments to those allowable by ILCS and require the Plan’s Board of Trustees to
adopt an investment policy which can be amended by a majority vote of the Board of Trustees. The
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 41
Plan’s investment policy authorizes the Plan to make deposits/invest in insured commercial banks,
savings and loan institutions, obligations of the U.S. Treasury and U.S. agencies, insured credit union
shares, money market mutual funds with portfolios of securities issued or guaranteed by the United States
or agreements to repurchase these same obligations, repurchase agreements, short-term commercial
paper rated within the three highest classifications by at least two standard rating services, investment
grade corporate bonds and Illinois Funds. The Plan may also invest in certain non-U.S. obligations,
Illinois municipal corporations tax anticipation warrants, veteran’s loans, obligations of the State of Illinois
and its political subdivisions, Illinois insurance company general and separate accounts, mutual funds
and corporate equity securities.
Shortly after year-end, all investments were transferred into the Illinois Police Officers' Pension
Investment Fund (IPOPIF) due to the pension consolidation act - Public Act (P.A.) 101-0610. Due to this,
the following long-term expected rates below are representative expectations as disclosed in the IPOPIF
actuarial experience study dated March 4, 2022.
Long-Term Expected Long-Term Long-Term Expected Target
Asset Class Rate of Return Inflation Expectations Real Rate of Return Allocation
US Large 6.65%2.50%4.15%23.00%
US Small 7.04%2.50%4.54%5.00%
International Developed 7.14%2.50%4.64%18.00%
International Developed Small 2.25%2.50%-0.25%5.00%
Emerging Markets 7.81%2.50%5.31%7.00%
Private Equity (Direct)9.65%2.50%7.15%7.00%
Bank Loans 4.98%2.50%2.48%3.00%
High Yield Corp. Credit 4.98%2.50%2.48%3.00%
Emerging Market Debt 5.32%2.50%2.82%3.00%
Private Credit 6.87%2.50%4.37%5.00%
US TIPS 2.38%2.50%-0.12%3.00%
Real Estate/Infrastructure 6.50%2.50%4.00%8.00%
Cash 2.23%2.50%-0.27%1.00%
Short-Term Gov't/Credit 3.23%2.50%0.73%3.00%
US Treasury 1.90%2.50%-0.60%3.00%
Core Plus Fixed Income 3.23%2.50%0.73%3.00%
F. Investment Valuations
All Investments in the Plan are stated at fair value and are recorded as of the trade date. Fair value is
based on quoted market prices at April 30, 2022 for debt securities, equity securities, and mutual funds.
G. Investment Concentrations
There are no significant investments (other than U.S. Government guaranteed obligations) in any one
organization that represent 5.0% or more of the Plan’s investments.
H. Investment Rate of Return
For the year ended April 30, 2022, the annual money-weighted rate of return on pension plan
investments, net of pension plan investment expense, was (5.64)%. The money-weighted rate of return
expresses investment performance, net of investment expense, adjusted for the changing amounts
actually invested.
I. Deposits with Financial Institutions
Custodial credit risk for deposits with financial institutions is the risk that in the event of a bank’s failure,
the Plan’s deposits may not be returned to it. The Plan’s investment policy requires all bank balances to
be covered by federal depository insurance.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 42
J. Interest Rate Risk
The investments, maturities, and fair value measurements of the Plan’s debt securities can be found in
Note 2.
In accordance with its investment policy, the Plan limits its exposure to interest rate risk by structuring
the portfolio to provide liquidity for operating funds and maximizing yields for funds not needed for
expected current cash flows. The investment policy does not limit the maximum maturity length of
investments in the Plan.
K. Credit Risk
The Plan limits its exposure to credit risk, the risk that the issuer of a debt security will not pay its par
value upon maturity, by primarily investing in obligations guaranteed by the United States Government,
securities issued by agencies of the United States Government that are explicitly or implicitly guaranteed
by the United States Government, and investment grade corporate bonds rated by at least one of the two
largest rating services at the time of purchase. If subsequently downgraded below investment grade, the
bonds must be liquidated by the manager from the portfolio within 90 days after being downgraded.
However, certain fixed income securities are not rated. As of April 30, 2022, the Plan’s investments
ratings can be found in Note 2.
L. Net Pension (Asset)/Liability
The components of the net pension liability of the Plan as of April 30, 2022, calculated in accordance with
GASB Statement No. 68, were as follows:
Total Pension Liability 57,107,066$
Plan Fiduciary Net Position 56,638,040
City's Net Pension (Asset)/Liability 469,026
Plan Fiduciary Net Position as a Percentage
of the Total Pension Liability 99.18%
See the Schedule of Changes in the Employer’s Net Pension Liability and Related Ratios in the Required
Supplementary Information for additional information related to the funded status of the Plan.
M. Actuarial Assumptions
The total pension liability above was determined by an actuarial valuation performed as of April 30, 2022
using the following actuarial methods and assumptions:
Actuarial Valuation Date May 1, 2021
Actuarial Cost Method Entry Age Normal (Level %)
Assumptions
Inflation 2.25%
Salary Increases 3.75% - 10.02%
Investment Rate of Return 7.00%
Asset Valuation Method Market Value
Mortality rates were based on the PubS-2010(A). The other non-economic actuarial assumptions used
in the May 1, 2021 valuation were based on a review of assumptions in the L&A 2020 study for Illinois
Police Officers.
Active Mortality follows the Sex Distinct Raw Rates as developed in the PubS-2010(A) Study. Mortality
improvement uses MP-2019 Improvement Rates applied on a fully generational basis. 50% of active
Member deaths are assumed to be in the Line of Duty.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 43
Retiree Mortality follows the L&A Assumption Study for Police 2020. These rates are experience weighted
with the Sex District Raw Rates as developed in the PubS-2010(A) Study improved to 2017 using MP-
2019 Improvement Rates. These rates are then improved fully generationally using MP-2019
Improvement Rates.
Disabled Mortality follows the Sex Distinct Raw Rates as developed in the PubS-2019 Study for disabled
participants. Mortality improvement uses MP-2019 Improvement Rates applied on a fully generational
basis.
Spouse Mortality follows the Sex Distinct Raw Rates as developed in the PubS-2010(A) Study for
contingent survivors. For all rates not provided there (ages 45 and younger) the PubG-2010 Study for
general employees was used. Mortality improvement uses MP-2019 Improvement Rates applied on a
fully generational basis.
Other actuarial assumption (demographic) rates are based on a review of the L&A Assumption Study for
Police 2020.
N. Discount Rate
The discount rate used to measure the total pension liability was 7%. The discount rate used in the
determination of the Total Pension Liability is based on a combination of the expected long-term rate of
return on plan investments and the municipal bond rate.
Cash flow projections were used to determine the extent which the plan’s future net position will be able
to cover future benefit payments. To the extent future benefit payments are covered by the plan’s
projected net position, the expected rate of return on plan investments is used to determine the portion
of the net pension liability associated with those payments. To the extent future benefit payments are not
covered by the plan’s projected net position, the municipal bond rate is used to determine the portion of
the net pension liability associated with those payments.
O. Changes in the Net Pension Liability
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(A)(B)(A)-(B)
Balances at April 30, 2021 56,351,734$ 61,710,979$ (5,359,245)$
Changes for the year:
Service Cost 1,104,977$ -$ 1,104,977$
Interest on the Total Pension Liability 3,739,492 - 3,739,492
Differences Between Expected and Actual Experience (1,660,449) - (1,660,449)
Contributions - Employer - 655,318 (655,318)
Contributions - Employee - 467,800 (467,800)
Contributions - Other - 27,092 (27,092)
Net Investment Income - (3,752,680) 3,752,680
Benefit Payments, including Refunds of Employee Contributions (2,428,688) (2,428,688) -
Administrative Expense - (41,781) 41,781
Net Changes 755,332$ (5,072,939)$ 5,828,271$
Balances at April 30, 2022 57,107,066$ 56,638,040$ 469,026$
P. Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the plan’s net pension liability, calculated using a Single Discount Rate of 7.00%,
as well as what the plan’s net pension liability would be if it were calculated using a single Discount Rate
that is 1% lower or 1% higher:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 44
Current
1% Decrease Discount Rate 1% Increase
6.00% 7.00% 8.00%
Net Pension Liability/(Asset)9,096,440$ 469,026$ (6,538,787)$
Q. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions
For the year ended April 30, 2022, the City recognized pension expense of $366,990. At April 30, 2022,
the City reported deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Outflows of Inflows of Net Outflows
Expense in Future Periods Resources Resources of Resources
Differences between expected and actual experience 710,769$ 1,944,382$ (1,233,613)$
Assumption changes 681,272 390,787 290,485
Net difference between projected and
actual earnings on pension investments 3,144,427 - 3,144,427
Total deferred amounts to be recognized in
pension expense in future periods 4,536,468$ 2,335,169$ 2,201,299$
Amounts reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be recognized in pension expense as follows:
Net Deferred
Year Ending Outflows of
April 30 Resources
2023 365,629$
2024 299,102
2025 55,994
2026 1,599,288
2027 (19,069)
Thereafter (99,645)
2,201,299$
NOTE 14 - POST EMPLOYMENT BENEFIT COMMITMENTS
A. Retiree Insurance Plan
Plan Overview
In addition to the retirement plans described in Notes 12 and 13, the City provides post-employment
benefits other than pensions (“OPEB”) for retired employees through a single-employer defined benefit
plan. The benefits, benefit levels, employee contributions and employer contributions are governed by
the City and can be amended by the City through its personnel manual and union contracts. The plan is
not accounted for as a trust fund, as an irrevocable trust has not been established to account for the plan.
The plan does not issue a separate report. The activity of the plan is reported in the City’s governmental
activities.
Benefits Provided
The City provides postemployment health care benefits to its retirees and certain disable employees. To
be eligible for benefits, an employee must qualify for retirement under one of the City’s retirement plans
or meet COBRA requirements. All health care benefits are provided through the City’s insured health
plan. The benefit levels are the same as those afforded to active employees. The Plan provides the
following coverage:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 45
Medical Coverage
Employees may continue coverage into retirement on the City medical plans if they pay the entire premium. Coverage is also
available for eligible dependents on a pay-all basis. Coverage may continue when Medicare eligibility is reached. Coverage for
dependents can continue upon the death of the retiree given that contributions continue.
Full-time sworn Police employees that suffer a catastrophic injury or are killed in the line of duty receive free lifetime coverage
for the employee, their spouse, and each dependent child under the Public Safety Employee Benefits Act.
Membership
Membership in the plan consisted of the following at May 1, 2021, the date of the latest actuarial valuation:
Active employees 112
Inactive employees entitled to but not yet receiving benefits -
Inactive employees currently receiving benefits 15
Total 127
Total OPEB Liability
The City’s total OPEB liability was measured as of April 30, 2022, and the total OPEB liability was
determined by an actuarial valuation as of May 1, 2021.
Actuarial Assumptions
The total OPEB liability in the May 1, 2021 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
Actuarial Method Entry Age Normal
Discount rate 3.98%
Inflation 3.00%
Salary Rate Increase 4.00%
Health Care Trend
Initial Trend Rate 5.50%
Ultimate Trend Rate 4.50%
FY the Ultimate Rate is Reached 2038
Mortality
Disability Rates
Election at Retirement
Marital Status
Active Employees: PubG.H-2010(B) Mortality Table - General (below median
income) with future mortality improvements using Scale MP-2020
70% of active employees are assumed to be married and elect spousal
coverage upon retirement. Males are assumed to be three years older than
f emales. Actual spouse date was used for current retirees.
Retirees: PubG.H-2010(B) Mortality Table - General (below-median income).
Male adjusted 106% and Female adjusted 105% tables, with future mortality
improvements using scale MP-2020
Police Employees and Retirees: PubS.H-2010(A) Mortality Table - Safety with
future mortality improvements using Scale MP-2020.
IMRF Employees: Rates from the December 31, 2020 IMRF Actuarial Valuation
Report
Police Employees: Rates from the City of McHenry Police Pension Fund
Actuarial Valuation for the Year Beginning May 1, 2020
10% of active employees are assumed to elect coverage at retirement
The actuarial assumptions used in the May 1, 2021 valuation were based on information found in the
most recent IMRF and Police Pension actuarial valuation reports. Assumption changes reflect a change
in the discount rate of 2.15 from 1.83% for the beginning of the year values and 3.98% for the disclosure
date.
There is no long-term expected rate of return on OPEB plan investments because the City does not have
a trust dedicated exclusively to the payment of OPEB benefits.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 46
Discount Rate
The City does not have a dedicated trust to pay retiree healthcare benefits. Per GASB 75, the discount
rate should be a yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an
average rating of AA/Aa or higher (or equivalent quality on another rating scale).
A rate of 3.98% is used, which is the S&P Municipal Bond 20-Year High-Grade Rate Index as of
April 30, 2022.
Changes in the Total OPEB Liability
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
(a)(b)(a) - (b)
Balances at April 30, 2021 5,717,430$ -$ 5,717,430$
Changes for the year:
Service Cost 38,558$ -$ 38,558$
Interest on Total OPEB Liability 103,035 - 103,035
Changes of Benefit Terms (3,356,991) - (3,356,991)
Difference between Expected & Actual Experience 393,032 - 393,032
Assumption Changes (1,390,894) - (1,390,894)
Benefit Payments (174,427) - (174,427)
Net Changes (4,387,687)$ -$ (4,387,687)$
Balances at April 30, 2022 1,329,743$ -$ 1,329,743$
Increase/(Decrease)
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability
would be if it were calculated using a discount rate that is 1 percentage-point lower or 1 percentage-point
higher than the current discount rate:
1% Increase Valuation Rate 1% Decrease
1,202,913$ 1,329,743$ 1,486,500$
Plan's Total OPEB Liability/(Asset)
Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability
would be if it were calculated using healthcare cost trend rates that are 1 percentage-point lower or 1
percentage-point higher than the current healthcare cost trend rates:
Healthcare Cost
1% Increase Valuation Rate 1% Decrease
1,505,527$ 1,329,743$ 1,188,028$
Plan's Total OPEB Liability/(Asset)
OPEB Expense/(Income) and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB
For the fiscal year ended April 30, 2022, the City recognized OPEB expense/(income) of $(3,347,451).
At April 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources
related to OPEB from the following sources:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 47
Deferred Outflows Deferred Inflows of Net Inflows
of Resources Resources of Resources
Differences Between Expected and Actual Experience 352,088$ 1,125,009$ (772,921)$
Changes of Assumptions 1,697,536 1,956,371 (258,835)
Total 2,049,624$ 3,081,380$ (1,031,756)$
Changes in total OPEB liability related to the difference in actual and expected experience, or changes
in assumptions regarding future events, are recognized in OPEB expense over the expected remaining
service life of all employees (9.6 years, active and retired) in the postretirement plan.
Amounts reported as deferred outflows of resources related to OPEB will be recognized as future OPEB
expense as follows:
Year ending April 30
Net Inflows of
Resources
2023 (132,052)$
2024 (132,052)
2025 (132,052)
2026 (132,052)
2027 (132,052)
2028-2031 (371,496)
(1,031,756)$
B. Social Security
All employees are covered under Social Security. The City paid the total required contribution for the
current fiscal year.
NOTE 15 - INTERFUND BALANCES AND TRANSFERS
Interfund balances at April 30, 2022 consisted of the following:
Due From Due To Amount
General Fund Water and Sewer Fund 61,040$
The above interfund balances resulted from a time lag between the dates that (1) revenue was collected
and remitted to the appropriate funds and (2) expenditures were incurred and reimbursed between funds.
Interfund transfers for the year ended April 30, 2022 consisted of the following:
Transfer From Transfer To A mount
Water and Sewer Fund Nonmajor Governmental Funds 93,048$
General Fund Nonmajor Governmental Funds 2,606,705
Transfers are used to (1) move revenues from the fund that is required to collect them to the fund that is
required to expend them, and (2) move receipts restricted to debt service from the funds collecting the
receipts to the Debt Service Fund as debt service payments become due.
NOTE 16 - RISK MANAGEMENT
The City is exposed to various risks related to torts; theft of, damage to, and destruction of assets; errors
and omissions; and injuries to employees. The City is a member of the McHenry County Municipal Risk
Management Agency (MCMRMA), a public entity risk pool through which property, general liability,
automobile liability, crime, excess property, excess liability, and boiler and machinery coverage is
provided in excess of specified limits for the members, acting as a single insurable unit.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 48
The relationship between the City and MCMRMA is governed by a contract and by-laws that have been
adopted by resolution of each unit’s governing body. The City is contractually obligated to make all
annual and supplementary contributions for MCMRMA, to report claims on a timely basis, cooperate with
MCMRMA, its claims administrator and attorneys in claims investigation and settlement, and to follow
risk management procedures as outlined by MCMRMA. Members have a contractual obligation to fund
any deficit of MCMRMA attributable to a membership year during which they were a member. MCMRMA
is responsible for administering the self-insurance program and purchasing excess insurance according
to the direction of the Board of Directors. MCMRMA also provides its members with risk management
services, including the defense of and settlement of claims, and establishes reasonable and necessary
loss of reduction and prevention procedures to be followed by the members. During fiscal year 2022
there was no significant reduction in insurance coverage for any category.
There have been no settlement amounts that have exceeded insurance coverage. The City is insured
under a retrospectively-rated policy for workers’ compensation coverage. Whereas the initial premium
may be adjusted based on actual experience. Adjustments in premiums are recorded when paid or
received. During the year ended April 30, 2022, there were no significant adjustments in premiums based
on actual experience.
NOTE 17 - CONSTRUCTION COMMITMENTS
At any point in time the City is involved in numerous construction contracts. For the governmental
activities, there were contract commitments in place for various road projects, parking lot improvements,
riverwalk construction, horse barn improvements, and other various parks projects as of April 30, 2022
totaling $1,277,305. Beginning in May 2022 the City has a contract commitment in place for various road
projects for $3,256,103. For the Water and Sewer Fund as of April 30, 2022, there were contract
commitments in place for Route 31 Utility Relocation, City Wide Water and Sewer Model update, and
Sanitary Sewer Lining totaling $335,670.
NOTE 18 - CONTINGENCIES
There is no outstanding litigation which may have a materially adverse effect on the City’s financial
position.
NOTE 19 - LEGAL DEBT LIMITATION
The Illinois Compiled Statutes limits the amount of indebtedness to 8.625% of the most recent available
equalized assessed valuation (EAV) of the City.
2021 EAV 782,126,233$
X 8.625%
Debt Margin 67,458,388$
Current Debt 32,156,419
Remaining Debt Margin 35,301,969$
NOTE 20 - TAX ABATEMENT AGREEMENTS
The City negotiates property and sales tax abatement agreements on an individual basis. All abatement
agreements are entered into under the authority of the Mayor, City Clerk, and City Council. The City has
tax abatement agreements with various entities as of April 30, 2022 as follows:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 49
Name of Eligibility Criteria Amount of Taxes
Abatement Type of Taxes and Mechanism Abated During
Agreement Abated of Abatement the Fiscal Year
Gary Lang
Business District
Development
Agreement
Sales taxes
First $450,000 in s ales tax revenues generated within
the Business District Property are retained by the City,
100% of the sales tax revenue generated within the
Business District Property between $450,000 and
$750,000 annuallyshall be rebated to Gary Lang,60%
of sales tax revenue generated within the Business
District Property above $750,000 shall be rebated to
Gary Lang.The total rebate for the year cannotexceed
55% of the total annual sales tax revenue generated
with the Business District Property.The total rebate
payments cannot exceed $8,441,377.04 or 20 years.
564,524$
1110 N Green LLC
Redevelopment
Agreement
TIF property
taxes
Rebate 100% of th e TIF Increment assessed up to
$624,028.-$
McHenry
Commons
Shopping Center
Economic
Incentive
Agreement
Sales taxes
Rebate 100% of bas e sales tax received by the State
attributable to the gross sales generated at the Hobby
Lobby Store.The total rebate payments cannotexceed
$677,500 or 20 years.
41,355$
CVS Pharmacy
Economic
Incentive
Agreement
Sales taxes
Rebate 50% of s ales tax revenues generated by CVS
Pharmacy in calendar years 2016 through 2020 and
25% of sales tax revenues generated by CVS
Pharmacy in calendar years 2021 through 2025.The
total rebate payments cannot exceed $175,000.
-$
Tea Olive, I LLC Sales taxes
Rebate 100% of bas e sales tax received by the State
attributable to the gross sales generated at the Big R
Store.The total rebate payments cannot exceed
$400,000 and end December 31, 2020.
-$
3017 Route 120 &
Northwest
Suburban Auto
Group Economic
Incentive
Agreement
Sales taxes
Rebate 50% of bas e sales tax in calendar years 2017
through 2021 and 25% of base sales tax in calendar
years 2022 through 2026 received by the State
attributable to the gross sales generated atNorthwest
Suburban Auto Group.The total rebate payments
cannot exceed $150,000.
-$
McHenry Donuts,
Inc. Economic
Incentive
Agreement
Sales taxes Rebate 100% of Non-Home Rule Sales taxes in 2017
through 2026 up to $62,500.13,399$
Sunnyside Auto
Finance Company
Economic
Incentive
Agreement
Sales taxes
Rebate percentage during years 2017-2019 75%
above $66,212.Years 2020-2027 50% above $66,212.
Years 2028-2036 25% above $66,212. Not to exceed
$300,000.
14,757$
Curt Ames DBA
Chain O'Lakes
Brewing Company
Redevelopment
Agreement
TIF Property
Taxes
Rebate 100% of th e TIF Increment assessed up to
$17,585.-$
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 50
Name of Eligibility Criteria Amount of Taxes
Abatement Type of Taxes and Mechanism Abated During
Agreement Abated of Abatement the Fiscal Year
Seth Wagner and
Associates Real
Estate Company
Property Tax
Abatement
Agreement
Property Taxes
Abate real e state taxes levied against the subject
property each year that the taxing body's propertytaxes
exceed the dollar amount from the 2014 base property
tax year ($3,458.64) through December 31, 2026.
5,583$
Boone Creek
Crossing LLC
Redevelopment
Agreement
TIF Property
Taxes Rebate 100% of th e TIF Increment assessed up to
$25,000
1,300$
Graham Enterprise
Inc Economic
Incentive
Agreement
Sales taxes
Rebate 50% ofbas e and home rule sales tax received
above $1,666.67 per month by the State attributable to
the gross sales generated at McHenry BP sites at
5301 Bull Valley Road and 5520 W.Elm Street.The
total rebate payments cannot exceed $1,000,000 and
end December 31,2039. These rebates do not begin
until buildings are torn down at 5301 Bull ValleyRoad,
5520 W.Elm St,and 4410 W.Elm St;and a new
building is built at 5301 Bully Valley Road.
91,185$
BPI, Break Parts
Inc LLC Property
Tax Abatement
Agreement
Property Taxes 10-year 100% abatement over and above the 2018
taxes commencing with the 2019 tax bill payable in
2020 through the 2028 tax bill payable in 2029.
12,297$
RR McHenry LLC
Economic
Incentive
Agreement
Sales taxes
Rebate 50% ofbas e and home rule sales tax received
by the State attributable to the property at the NW
corner of IL Route 120 and Chapel Hill Road,
excluding the Riverside Chocolate Factory parcel.The
total rebate payments cannot exceed $1,000,000 and
end after the 20th Sales Tax Incentive Year.
30,585$
NOTE 21 - SUBSEQUENT EVENTS
On December 18, 2019, Governor JB Pritzker signed SB1300. The law, a Public Act (P.A.), 101-0610,
represents the culmination of more than a decade of work by the Illinois Municipal League (IML). The law
consolidates the assets of the state’s more than 650 downstate and suburban public safety pension funds
into two consolidated investment funds, one for police officers (Article 3) and one for firefighters (Article
4), which will improve investment returns, eliminate unnecessary and redundant administrative costs,
ensure more money is available to fund pension benefits, and reduce the burden on local taxpayers. The
law was effective as of January 1, 2020. All pension fund assets, currently reported within the fiduciary
fund statements of the Plan, will be transferred to Police’s pension investment fund no later than 30
months after the effective date of the transitions. This may change the reporting of the Fund as a fiduciary
fund in future reporting periods. The Pension Plan transferred assets to the fund on September 1, 2022.
REQUIRED SUPPLEMENTARY INFORMATION
4/30/2022*4/30/2021*4/30/2020*4/30/2019*4/30/2018*4/30/2017*4/30/2016*
TOTAL PENSION LIABILITY
Service Cost 728,190$ 805,614$ 781,612$ 740,595$ 707,796$ 704,466$ 652,882$
Interest on Total Pension Liability 3,102,945 2,967,915 2,796,732 2,641,076 2,542,116 2,419,748 2,286,008
Differences Between Expected and Actual Experience 979,789 680,117 594,214 381,201 646,124 (98,080) 86,269
Changes of Assumptions - (475,311) - 1,199,530 (1,124,675) (136,959) 44,481
Benefit Payments, Including Refunds of Member Contributions (2,207,589) (1,946,703) (1,700,114) (1,543,189) (1,393,390) (1,384,293) (1,144,016)
Net Change in Total Pension Liability 2,603,335$ 2,031,632$ 2,472,444$ 3,419,213$ 1,377,971$ 1,504,882$ 1,925,624$
Total Pension Liability - Beginning 43,538,937 41,507,305 39,034,861 35,615,648 34,237,677 32,732,795 30,807,171
Total Pension Liability - Ending 46,142,272$ 43,538,937$ 41,507,305$ 39,034,861$ 35,615,648$ 34,237,677$ 32,732,795$
PLAN FIDUCIARY NET POSITION
Contributions - Employer 1,068,306$ 1,137,523$ 787,631$ 918,212$ 915,963$ 844,878$ 801,851$
Contributions - Member 385,024 361,437 344,894 340,841 328,547 366,710 277,350
Net Investment Income 7,088,187 5,164,342 5,817,683 (1,672,533) 4,871,136 1,840,322 133,288
Benefit Payments, Including Refunds of Member Contributions (2,207,589) (1,946,703) (1,700,114) (1,543,189) (1,393,390) (1,384,293) (1,144,016)
Administrative Expenses (35,322) 131,829 196,150 493,832 (352,231) 293,436 (161,598)
Net Change in Plan Fiduciary Net Position 6,298,606$ 4,848,428$ 5,446,244$ (1,462,837)$ 4,370,025$ 1,961,053$ (93,125)$
Plan Net Position - Beginning 41,759,806 36,911,378 31,465,134 32,927,971 28,557,946 26,596,893 26,690,018
Plan Net Position - Ending 48,058,412$ 41,759,806$ 36,911,378$ 31,465,134$ 32,927,971$ 28,557,946$ 26,596,893$
City's Net Pension Liability (1,916,140)$ 1,779,131$ 4,595,927$ 7,569,727$ 2,687,677$ 5,679,731$ 6,135,902$
Plan Fiduciary Net Position as a Percentage
of the Total Pension Liability 104.15%95.91%88.93%80.61%92.45%83.41%81.25%
Covered-Valuation Payroll 7,995,414$ 8,031,924$ 7,718,418$ 7,538,685$ 7,241,274$ 6,362,027$ 6,163,340$
Employer's Net Pension Liability as a Percentage
of Covered-Valuation Payroll -23.97%22.15%59.54%100.41%37.12%89.28%99.55%
* This information presented is based on the actuarial valuation performed as of the December 31 year end prior to the fiscal year end listed above.
This schedule is presented to illustrate the requirement to show information for ten years.However,until a full ten-year trend is compiled,information is presented for those years for which information is
available.
CITY OF MCHENRY, ILLINOIS
ILLINOIS MUNICIPAL RETIREMENT FUND
SCHEDULE OF CHANGES IN THE EMPLOYER'S NET PENSION
LIABILITY AND RELATED RATIOS
APRIL 30, 2022
Page 51
See Accompanying Independent Auditor's Report
4/30/2022*4/30/2021*4/30/2020*4/30/2019*4/30/2018*4/30/2017*4/30/2016*
Actuarially-Determined Contribution 978,639$ 983,107$ 796,541$ 918,212$ 908,056$ 844,877$ 801,851$
Contributions in Relation to Actuarially-Determined Contribution 1,068,306 1,137,523 787,631 918,212 915,963 844,878 801,851
Contribution Deficiency/(Excess)(89,667)$ (154,416)$ 8,910$ -$ (7,907)$ (1)$ -$
Covered Payroll 7,213,419$ 7,135,984$ 7,780,883$ 7,594,095$ 7,469,026$ 6,362,027$ 6,163,340$
Contributions as a Percentage of Covered Payroll 14.81%15.94%10.12%12.09%12.26%13.28%13.01%
Notes to Schedule:
Actuarially determined contribution rates are calculated as of December 31 each year, which are 12 months prior to the beginning of the fiscal year in which contributions are reported.
Remaining Amortization Period: 22-year closed period
Price Inflation: 2.50%, approximate; No explicit price inflation assumption is used in this valuation.
Retirement Age: Experience-based table of rates that are specific to the type of eligibility condition; last updated for the 2017 valuation pursuant to an experience study of the period 2014 to 2016.
Actuarial Cost Method: Aggregate entry age = normal
Amortization Method: Level percentage of payroll, closed
Asset Valuation Method: 5-year smoothed market; 20% corridor
Wage Growth: 3.25%
CITY OF MCHENRY, ILLINOIS
ILLINOIS MUNICIPAL RETIREMENT FUND
SCHEDULE OF EMPLOYER CONTRIBUTION
LAST TEN FISCAL YEARS
Actuarial Method and Assumptions Used on the Calculation of the 2021 Contribution Rate *
Salary Increases: 3.35% to 14.25%, including inflation
Investment Rate of Return: 7.25%
Mortality:For non-disabled retirees,an IMRF specific mortality table was used with fully generational projection scale MP-2017 (base year 2015).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 rates were used with fully generational projection scale MP-2017 (base year 2015).The IMRF specific
rates were developed from the RP-2014 Disabled Retirees Mortality Table applying the same adjustments that were applied for non-disabled lives.For active members,an IMRF specific mortality rates were used with fully
generational projection scale MP-2017 (base year 2015). The IMRF specific rates were developed from the RP-2014 Employee Mortality Table with adjustments to match current IMRF experience.
*Based on Valuation Assumptions used in the December 31, 2019 actuarial valuation; note two year lag between valuation and rate setting.
This schedule is presented to illustrate the requirement to show information for ten years. However, until a full ten-year trend is compiled, information is presented for those years for which information is available.
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4/30/2022 4/30/2021 4/30/2020 4/30/2019 4/30/2018 4/30/2017 4/30/2016 4/30/2015
TOTAL PENSION LIABILITY
Service Cost 1,104,977$ 1,106,282$ 1,020,016$ 964,573$ 969,843$ 906,395$ 948,282$ 876,654$
Interest 3,739,492 3,687,359 3,400,174 3,244,523 3,100,186 3,130,927 2,940,204 2,804,198
Changes in Benefit Terms - - 267,927 - - - - -
Differences Between Expected and Actual Experience (1,660,449) (143,994) 953,997 165,685 (13,601) (1,315,850) (531,862) (300,710)
Changes in Assumptions - - 1,039,838 - - (1,259,209) 4,137,023 391,028
Benefit Payments, Including Refunds of Member Contributions (2,428,688) (2,441,099) (2,225,355) (2,077,032) (1,911,914) (1,890,931) (2,046,745) (1,868,756)
Net Change in Total Pension Liability 755,332$ 2,208,548$ 4,456,597$ 2,297,749$ 2,144,514$ (428,668)$ 5,446,902$ 1,902,414$
Total Pension Liability - Beginning 56,351,734 54,143,186 49,686,589 47,388,840 45,244,326 45,672,994 40,226,092 38,323,678
Total Pension Liability - Ending 57,107,066$ 56,351,734$ 54,143,186$ 49,686,589$ 47,388,840$ 45,244,326$ 45,672,994$ 40,226,092$
PLAN FIDUCIARY NET POSITION
Contributions - Employer 655,318$ 26,150,315$ 2,077,704$ 2,017,300$ 1,868,798$ 1,521,914$ 1,386,205$ 1,295,101$
Contributions - Member 467,800 469,279 500,202 427,378 409,415 397,515 513,111 381,363
Contributions - Other 27,092 435,068 - 1,221 - - - -
Net Investment Income (3,752,680) 9,474,445 249,889 1,454,043 2,225,784 2,041,694 (228,847) 1,101,915
Benefit Payments, Including Refunds of Member Contributions (2,428,688) (2,441,099) (2,225,355) (2,077,032) (1,911,914) (1,890,931) (2,046,745) (1,868,756)
Administrative Expenses (49,007) (25,668) (100,204) (17,813) (18,717) (41,164) (29,539) (36,845)
Net Change in Plan Fiduciary Net Position (5,080,165)$ 34,062,340$ 502,236$ 1,805,097$ 2,573,366$ 2,029,028$ (405,815)$ 872,778$
Plan Net Position - Beginning 61,718,205 27,655,865 27,153,629 25,348,532 22,775,166 20,746,138 21,151,953 20,279,175
Plan Net Position - Ending 56,638,040$ 61,718,205$ 27,655,865$ 27,153,629$ 25,348,532$ 22,775,166$ 20,746,138$ 21,151,953$
City's Net Pension Liability 469,026$ (5,366,471)$ 26,487,321$ 22,532,960$ 22,040,308$ 22,469,160$ 24,926,856$ 19,074,139$
Plan Fiduciary Net Position as a Percentage
of the Total Pension Liability 99.18%109.52%51.08%54.65%53.49%50.34%45.42%52.58%
Covered-Employee Payroll 4,717,332$ 4,686,805$ 4,444,767$ 4,224,124$ 4,204,784$ 4,082,315$ 3,880,748$ 3,791,467$
Employer's Net Pension Liability as a Percentage
of Covered-Employee Payroll 9.94%-114.50%595.92%533.44%524.17%550.40%642.32%503.08%
2022 2021 2020 2019 2018 2017 2016 2015
Annual Money-Weighted Rate of Return,
Net of Investment Expenses 4.26%32.11%-0.48%5.73%9.60%5.60%-1.53%5.41%
This schedule is presented to illustrate the requirement to show information for ten years. However, until a full ten-year trend is compiled, information is presented for those years for which information is available.
CITY OF MCHENRY, ILLINOIS
POLICE PENSION PLAN
SCHEDULE OF CHANGES IN THE EMPLOYER'S NET PENSION
LIABILITY AND RELATED RATIOS
APRIL 30, 2022
Page 53
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4/30/2022 4/30/2021 4/30/2020 4/30/2019 4/30/2018 4/30/2017 4/30/2016 4/30/2015
Actuarially-Determined Contribution 2,576,006$ 2,231,742$ 2,082,421$ 2,019,703$ 1,874,219$ 1,524,244$ 1,387,374$ 1,295,577$
Contributions in Relation to Actuarially-Determined Contribution 655,318 26,150,315 2,077,704 2,017,300 1,868,798 1,521,914 1,386,205 1,295,101
Contribution Deficiency/(Excess)1,920,688$ (23,918,573)$ 4,717$ 2,403$ 5,421$ 2,330$ 1,169$ 476$
Covered-Employee Payroll 4,717,332$ 4,686,805$ 4,422,539$ 4,324,167$ 4,291,809$ 4,082,315$ 3,880,748$ 3,791,467$
Contributions as a Percentage of Covered-Employee Payroll 13.89%557.96%46.98%46.65%43.54%37.28%35.72%34.16%
Notes to Schedule:
Salary Increases: 3.75% to 10.02%, including inflation
This schedule is presented to illustrate the requirement to show information for ten years. However, until a full ten-year trend is compiled, information is presented for those years for which information is available.
Actuarial Method and Assumptions Used on the Calculation of the 2021 Contribution Rate *
Actuarial Cost Method: Entry age normal
Amortization Method: Level percentage of payroll, closed
Termination Rates: 100% of L&A 2020 Illinois Police Termination Rates
Disability Rates: 100% of L&A 2020 Illinois Police Disability Rates
*Based on Valuation Assumptions used in the May 1, 2020 actuarial valuation for the December 2020 tax levy, if applicable
Investment Rate of Return: 7.00%
Retirement Age: 100% of L&A 2020 Illinois Police Retirement Rates Capped at Age 65
Remaining Amortization Period: 20-year closed period
Asset Valuation Method: 5-year smoothed market; 20% corridor
Wage Growth: 3.00%
Price Inflation: 2.25%, approximate; No explicit price inflation assumption is used in this valuation.
CITY OF MCHENRY, ILLINOIS
POLICE PENSION PLAN
SCHEDULE OF EMPLOYER CONTRIBUTION
LAST TEN FISCAL YEARS
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4/30/2022 4/30/2021 4/30/2020 4/30/2019
TOTAL OPEB LIABILITY
Service Cost 38,558$ 38,278$ 36,378$ 32,964$
Interest 103,035 165,119 171,790 209,775
Changes in Benefit Terms (3,356,991) - - -
Differences Between Expected and Actual Experience 393,032 (646,027) - (1,070,724)
Benefit Payments (174,427) (214,301) (162,019) (167,232)
Changes in Assumptions (1,390,894) 473,546 513,575 417,482
Other Changes - - (91,626) 147,912
Net Change in Total OPEB Liability (4,387,687)$ (183,385)$ 468,098$ (429,823)$
Total OPEB Liability - Beginning 5,717,430 5,900,815 5,432,717 5,862,540
Total OPEB Liability - Ending 1,329,743$ 5,717,430$ 5,900,815$ 5,432,717$
Covered-Employee Payroll 9,802,365$ 9,342,565$ 8,796,233$ *8,796,233$
Employer's Net OPEB Liability as a Percentage
of Covered-Valuation Payroll 13.57%61.20%67.08%61.76%
Notes to Schedule:
The following are the discount rates used in each period:3.98%1.83%3.21%3.21%
No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75.
This schedule is presented to illustrate the requirement to show information for ten years.However,until a full ten-year trend is compiled,
information is presented for those years for which information is available.
Changes of Assumptions. Changes of assumptions and other inputs reflect the effects of changes in the discount rate of each period.
There is no actuarially-determined contribution (ADC)or employer contribution in relation to the ADC as the total OPEB liabilities are currently an
unfunded obligation.
* - Covered-Employee Payroll is the same as the prior year due to the valuation being a rollforward instead of a new valuation.
CITY OF MCHENRY
OTHER POST-EMPLOYMENT BENEFIT
SCHEDULE OF CHANGES IN THE EMPLOYER'S TOTAL OPEB
LIABILITY AND RELATED RATIOS
APRIL 30, 2022
Page 55
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Actual
Original Final Amounts
REVENUES
Local Taxes
Property Tax 4,950,359$ 4,950,359$ 4,844,022$
Intergovernmental
State Sales Tax 10,975,350 10,975,350 12,807,479
State Income Tax 2,993,413 2,993,413 4,301,251
State Replacement Tax 65,000 65,000 184,105
State Pull Tab/Games Tax 900 900 674
Inter Track Wagering Tax 15,000 15,000 31,550
State Telecommunications Tax 270,000 270,000 209,789
Cannabis Use Tax 18,000 18,000 43,074
Federal Grants - - 1,841,293
Other Local Sources
Hotel/Motel Tax 100,000 100,000 185,360
Franchise Fees 350,000 350,000 386,552
Licenses and Permits 787,500 787,500 1,291,057
Fines and Forfeitures 367,500 367,500 480,503
Charges for Services 1,193,289 1,193,289 1,371,889
Interest 21,550 21,550 12,967
Local Grants - - 33,461
Miscellaneous
Rent 18,000 18,000 18,694
Royalties 175,000 175,000 175,000
Donations - - 13,064
Annexation Fees 150,000 150,000 -
Reimbursements 2,059,251 2,059,251 2,686,722
Other Miscellaneous 73,250 73,250 119,709
Total Revenues 24,583,362$ 24,583,362$ 31,038,215$
EXPENDITURES
Current
General Office
Administration 1,242,589$ 1,252,589$ 1,025,130$
Elected Officials 85,983 85,983 65,311
Community Development 908,233 970,833 919,456
Finance Department 1,382,522 1,382,522 1,451,648
Human Resources 268,821 268,821 273,833
Economic Development 402,922 402,922 328,862
4,291,070$ 4,363,670$ 4,064,240$
Public Safety
Police Commission 6,953$ 6,953$ 6,788$
Police Department 9,254,838 9,254,838 9,068,621
Dispatch Center 2,679,504 2,679,504 2,580,077
11,941,295$ 11,941,295$ 11,655,486$
Public Works
Administration 435,669$ 435,669$ 441,762$
Street Department 2,866,676 2,866,676 2,783,192
3,302,345$ 3,302,345$ 3,224,954$
Parks and Recreation
Parks and Recreation 2,497,962$ 2,497,962$ 2,626,103$
2,497,962$ 2,497,962$ 2,626,103$
Budgeted Amounts
CITY OF MCHENRY, ILLINOIS
FOR THE YEAR ENDED APRIL 30, 2022
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Page 56
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Actual
Original Final Amounts
Budgeted Amounts
CITY OF MCHENRY, ILLINOIS
FOR THE YEAR ENDED APRIL 30, 2022
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
EXPENDITURES (Continued)
Capital Outlay
General Office
Administration 985,000$ 1,425,298$ 1,205,794$
Public Safety
Police Department 3,500 29,773 39,330
Public Works
Street Department 525,000 525,000 476,687
Parks and Recreation
Parks and Recreation - - 5,517
Unallocated - 22,022 -
1,513,500$ 2,002,093$ 1,727,328$
Debt Service
Principal 344,568$ 344,568$ 312,724$
Interest and Fees 7,000 7,000 35,506
351,568$ 351,568$ 348,230$
Total Expenditures 23,897,740$ 24,458,933$ 23,646,341$
EXCESS OR (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 685,622$ 124,429$ 7,391,874$
OTHER FINANCING SOURCES/(USES)
Transfers (1,994,757)$ (1,994,757)$ (2,606,705)$
Proceeds from Loan - - 171,627
Sale of City Property 10,000 10,000 20,300
(1,984,757)$ (1,984,757)$ (2,414,778)$
NET CHANGE IN FUND BALANCE (1,299,135)$ (1,860,328)$ 4,977,096$
FUND BALANCE - MAY 1, 2021 12,140,533
FUND BALANCE - APRIL 30, 2022 17,117,629$
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Page 58
CITY OF MCHENRY, ILLINOIS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
APRIL 30, 2022
NOTE 1 - BUDGET
Budgets are adopted on a basis consistent with generally accepted accounting principles. Annual
budgets are adopted for all funds except custodial funds. All annual budgets lapse at fiscal year-end.
Budgeted expenditures are controlled at the departmental level with the City Administrator’s oversight.
All transfers and any revision that changes the total expenditures not contemplated of any fund must be
approved by the City Council. All budget amendments must be approved by the City Council.
The budget was approved on April 19, 2021 and was amended twelve times during the fiscal year with
the final amendment occurring on March 21, 2022.
NOTE 2 - EXCESS OF EXPENDITURES OVER BUDGET
For the year ended April 30, 2022, the funds presented as Required Supplementary Information did not
have expenditures that exceeded the budget.
SUPPLEMENTAL FINANCIAL INFORMATION
Civil Revolving Total
General Annexation Alarm Board Band Defense Loan Tourism General
Fund Fund Fund Fund Fund Fund Fund Fund
ASSETS
Cash and Cash Equivalents 9,632,367$ 936,435$ 985,019$ 11,705$ 10,091$ 238,190$ 103,033$ 11,916,840$
Investments 1,976,497 20,291 - 1,588 - 3,691 16,577 2,018,644
Prepaid Items 38,726 - - - - - - 38,726
Receivables (Net of Allowance for
Estimated Uncollectible Amounts)
Accounts Receivable - Billed 459,331 6,450 21,420 - - 61,631 12,000 560,832
Accounts Receivable - Unbilled 103,582 - 36,720 - - - 19,335 159,637
Property Taxes 5,003,951 - - - - - - 5,003,951
Accrued Interest 1,124 1 - - - 336 1 1,462
Due from Other Governmental Units 3,996,912 - - - - - - 3,996,912
Grants Receivable 1,841,293 - - - - - - 1,841,293
Cable Franchise Fee Receivable 130,550 - - - - - - 130,550
Inventory 122,096 - - - - - - 122,096
TOTAL ASSETS 23,306,429$ 963,177$ 1,043,159$ 13,293$ 10,091$ 303,848$ 150,946$ 25,790,943$
LIABILITIES
Accounts Payable and Accrued Expenditures 1,120,984$ -$ 57,379$ -$ -$ 2,462$ 10,000$ 1,190,825$
Due to Other Funds 63,430 - - - - - - 63,430
Unearned Revenue 2,415,108 - - - - - - 2,415,108
TOTAL LIABILITIES 3,599,522$ -$ 57,379$ -$ -$ 2,462$ 10,000$ 3,669,363$
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes 5,003,951$ -$ -$ -$ -$ -$ -$ 5,003,951$
TOTAL DEFERRED INFLOWS OF RESOURCES 5,003,951$ -$ -$ -$ -$ -$ -$ 5,003,951$
FUND BALANCES
Nonspendable 160,822$ -$ -$ -$ -$ -$ -$ 160,822$
Assigned for:
Alarm - - 985,780 - - - - 985,780
Tourism - - - - - - 140,946 140,946
Band - - - 13,293 - - - 13,293
Capital Projects - 963,177 - - - - - 963,177
Revolving Loan - - - - - 301,386 - 301,386
Civil Defense - - - - 10,091 - - 10,091
Unassigned 14,542,134 - - - - - - 14,542,134
TOTAL FUND BALANCES 14,702,956$ 963,177$ 985,780$ 13,293$ 10,091$ 301,386$ 140,946$ 17,117,629$
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES 23,306,429$ 963,177$ 1,043,159$ 13,293$ 10,091$ 303,848$ 150,946$ 25,790,943$
CITY OF MCHENRY, ILLINOIS
COMBINING BALANCE SHEET - GENERAL FUND
APRIL 30, 2022
Page 59
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Alarm Civil Revolving Total
Annexation Board Band Defense Loan Tourism General
General Fund Fund Fund Fund Fund Fund Fund Fund
REVENUES
Local Taxes
Property Tax 4,844,022$ -$ -$ -$ -$ -$ -$ 4,844,022$
Intergovernmental
State Sales Tax 12,807,479 - - - - - - 12,807,479
State Income Tax 4,301,251 - - - - - - 4,301,251
State Replacement Tax 184,105 - - - - - - 184,105
State Pull Tab/Games Tax 674 - - - - - - 674
Inter Track Wagering Tax 31,550 - - - - - - 31,550
State Telecommunications Tax 209,789 - - - - - - 209,789
Cannabis Use Tax 43,074 43,074
Federal Grants 1,841,293 - - - - - - 1,841,293
Other Local Sources
Hotel/Motel Tax - - - - - - 185,360 185,360
Franchise Fees 386,552 - - - - - - 386,552
Licenses and Permits 1,291,057 - - - - - - 1,291,057
Fines and Forfeitures 480,503 - - - - - - 480,503
Charges for Services 1,150,023 - 221,866 - - - - 1,371,889
Interest 12,153 138 188 5 1 368 114 12,967
Local Grants 33,461 - - - - - - 33,461
Miscellaneous
Rent 18,694 - - - - - - 18,694
Royalties - 175,000 - - - - - 175,000
Donations 13,064 - - - - - - 13,064
Reimbursements 2,686,722 - - - - - - 2,686,722
Other Miscellaneous 48,493 - - - - - 71,216 119,709
Total Revenues 30,383,959$ 175,138$ 222,054$ 5$ 1$ 368$ 256,690$ 31,038,215$
EXPENDITURES
Current
General Office
Administration 945,727 -$ -$ -$ -$ -$ 79,403$ 1,025,130$
Elected Officials 65,311 - - - - - - 65,311
Community Development 919,456 - - - - - - 919,456
Finance Department 1,451,648 - - - - - - 1,451,648
Human Resources 273,833 - - - - - - 273,833
Economic Development 328,862 - - - - - - 328,862
3,984,837$ -$ -$ -$ -$ -$ 79,403$ 4,064,240$
Public Safety
Police Commission 6,788$ -$ -$ -$ -$ -$ -$ 6,788$
Police Department 8,957,772 - 106,299 - 4,550 - - 9,068,621
Dispatch Center 2,580,077 - - - - - - 2,580,077
11,544,637$ -$ 106,299$ -$ 4,550$ -$ -$ 11,655,486$
Public Works
Administration 441,762$ -$ -$ -$ -$ -$ -$ 441,762$
Street Department 2,783,192 - - - - - - 2,783,192
3,224,954$ -$ -$ -$ -$ -$ -$ 3,224,954$
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GENERAL FUND
FOR THE YEAR ENDED APRIL 30, 2022
Page 60
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Alarm Civil Revolving Total
Annexation Board Band Defense Loan Tourism General
General Fund Fund Fund Fund Fund Fund Fund Fund
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GENERAL FUND
FOR THE YEAR ENDED APRIL 30, 2022
EXPENDITURES (Continued)
Current (Continued)
Parks and Recreation
Parks and Recreation 2,614,746$ -$ -$ 11,357 -$ -$ -$ 2,626,103$
2,614,746$ -$ -$ 11,357$ -$ -$ -$ 2,626,103$
Capital Outlay
General Office
Administration 1,205,794$ -$ -$ -$ -$ -$ -$ 1,205,794$
Public Safety
Police Department 39,330 - - - - - - 39,330
Public Works
Street Department 476,687 - - - - - - 476,687
Parks and Recreation
Parks and Recreation 5,517 - - - - - - 5,517
1,727,328$ -$ -$ -$ -$ -$ -$ 1,727,328$
Debt Service
Principal 251,957$ -$ -$ -$ -$ -$ 60,767$ 312,724$
Interest and Fees 29,053 - - - - - 6,453 35,506
281,010$ -$ -$ -$ -$ -$ 67,220$ 348,230$
Total Expenditures 23,377,512$ -$ 106,299$ 11,357$ 4,550$ -$ 146,623$ 23,646,341$
EXCESS OR (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 7,006,447$ 175,138$ 115,755$ (11,352)$ (4,549)$ 368$ 110,067$ 7,391,874$
OTHER FINANCING SOURCES/(USES)
Transfers (2,478,705)$ (35,000)$ -$ -$ 6,000$ -$ (99,000)$ (2,606,705)$
Loan Proceeds 171,627 - - - - - - 171,627
Sale of City Property 20,300 - - - - - - 20,300
(2,286,778)$ (35,000)$ -$ -$ 6,000$ -$ (99,000)$ (2,414,778)$
NET CHANGE IN FUND BALANCE 4,719,669$ 140,138$ 115,755$ (11,352)$ 1,451$ 368$ 11,067$ 4,977,096$
FUND BALANCE - MAY 1, 2021 9,983,287 823,039 870,025 24,645 8,640 301,018 129,879 12,140,533
FUND BALANCE - APRIL 30, 2022 14,702,956$ 963,177$ 985,780$ 13,293$ 10,091$ 301,386$ 140,946$ 17,117,629$
Page 61
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Special Special
Municipal Service Service Total
Recreation Capital Capital Debt Motor Motor Developer Area #4 -Area #6 -Other
Pageant Audit Center Improvements Equipment Service Fuel Tax Fuel Tax Donations TIF Lakewood Huntersville Governmental
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Funds
ASSETS
Cash and Cash Equivalents 1,947$ -$ -$ -$ -$ -$ 2,982,475$ 14,036$ 1,571,343$ 993,626$ -$ -$ 5,563,427$
Deposit with Paying Agent - - - - - 32,555 - - - - - - 32,555
Investments - 503 379,001 1,012,223 23,785 16,404 - - 64,201 - 404 - 1,496,521
Receivables (Net of Allowance for
Estimated Uncollectible Amounts)
Accounts Receivable - Billed - - - - - - - - 5,400 - - - 5,400
Accounts Receivable - Unbilled - - 3,915 - - - - 36,166 - - - - 40,081
Property Taxes - 26,428 - - - - - - - 732,268 16,123 - 774,819
Accrued Interest - - 16 557 1 - - - 3 - - - 577
Due from Other Governmental Units - - - 8,351 - - 112,774 - 2,702 - - - 123,827
Due from Other Funds - - - - - - - 2,390 - - - - 2,390
TOTAL ASSETS 1,947$ 26,931$ 382,932$ 1,021,131$ 23,786$ 48,959$ 3,095,249$ 52,592$ 1,643,649$ 1,725,894$ 16,527$ -$ 8,039,597$
LIABILITIES
Accounts Payable and Accrued Expenditures -$ -$ 15,209$ -$ -$ 318$ 6,346$ -$ 81,784$ -$ -$ -$ 103,657$
Overdrafts - 4,699 268,643 3,538 23,421 43,071 - - - - 635 179,115 523,122
Due to Other Governmental Units - - - - - - - - 60,576 - - - 60,576
TOTAL LIABILITIES -$ 4,699$ 283,852$ 3,538$ 23,421$ 43,389$ 6,346$ -$ 142,360$ -$ 635$ 179,115$ 687,355$
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes -$ 26,428$ -$ -$ -$ -$ -$ -$ -$ 732,268$ 16,123$ -$ 774,819$
Unavailable Revenue - State Taxes - - - - - - 8,752 - - - - - 8,752
TOTAL DEFERRED INFLOWS OF RESOURCES -$ 26,428$ -$ -$ -$ -$ 8,752$ -$ -$ 732,268$ 16,123$ -$ 783,571$
FUND BALANCES
Restricted for:
Capital Projects -$ -$ -$ -$ -$ -$ -$ -$ 870,419$ -$ -$ -$ 870,419$
Special Service Areas - - - - - - - - - - 408 - 408
Tax Increment Financing - - - - - - - - - 1,029,497 - - 1,029,497
Highways and Streets - - - - - - 2,208,858 52,592 - - - - 2,261,450
Assigned for:
Highways and Streets - - - - - - 871,293 - - - - - 871,293
Capital Projects - - - 1,017,593 365 - - - 630,870 - - - 1,648,828
Parks and Recreation 1,947 - 99,080 - - - - - - - - - 101,027
Debt Service - - - - - 5,570 - - - - - - 5,570
Unassigned - (4,196) - - - - - - - (35,871) (639) (179,115) (219,821)
TOTAL FUND BALANCES 1,947$ (4,196)$ 99,080$ 1,017,593$ 365$ 5,570$ 3,080,151$ 52,592$ 1,501,289$ 993,626$ (231)$ (179,115)$ 6,568,671$
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES 1,947$ 26,931$ 382,932$ 1,021,131$ 23,786$ 48,959$ 3,095,249$ 52,592$ 1,643,649$ 1,725,894$ 16,527$ -$ 8,039,597$
CITY OF MCHENRY, ILLINOIS
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
APRIL 30, 2022
Page 62
See Accompanying Independent Auditor's Report
Special Special
Municipal Service Service Total
Recreation Capital Capital Debt Motor Motor Developer Area #4 -Area #6 -Other
Pageant Audit Center Improvements Equipment Service Fuel Tax Fuel Tax Donations TIF Lakewood Huntersville Governmental
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Funds
REVENUES
Local Taxes
Property Tax -$ 26,313$ -$ -$ -$ -$ -$ -$ -$ 678,920$ 16,123$ -$ 721,356$
Intergovernmental
State Motor Fuel Tax - - - - - - 1,128,538 348,997 - - - - 1,477,535
State Grants - - - - - - 444,720 - - - - - 444,720
Federal Grants - - - - - - 31,211 - - - - - 31,211
Bond Interest Rebates - - - - - 3,692 - - - - - - 3,692
Other Local Sources
Charges for Services - 16,145 424,807 - - - - - - - - - 440,952
Interest - 1 758 560 43 33 2,025 - 547 121 1 - 4,089
Miscellaneous
Rent - - 13,413 - - - - - 19,649 - - - 33,062
Donations - - - - - - - - 1,510,720 - - - 1,510,720
Reimbursements - - - 34,870 - - - - - 55,000 - - 89,870
Other Miscellaneous - - 100 2,134 - - - - 46,443 - - - 48,677
-$ 42,459$ 439,078$ 37,564$ 43$ 3,725$ 1,606,494$ 348,997$ 1,577,359$ 734,041$ 16,124$ -$ 4,805,884$
EXPENDITURES
Current
General Office 7$ 51,275$ -$ -$ -$ -$ -$ -$ -$ 10,825$ -$ -$ 62,107$
Parks and Recreation - - 554,899 - - - - - 559,993 - - - 1,114,892
Capital Outlay - - - 37,923 - - 868,681 500,000 755,712 224,170 - - 2,386,486
Debt Service
Principal - - - - - 1,605,000 - - - - - - 1,605,000
Interest and Fees - - - - - 743,257 - - - - - - 743,257
7$ 51,275$ 554,899$ 37,923$ -$ 2,348,257$ 868,681$ 500,000$ 1,315,705$ 234,995$ -$ -$ 5,911,742$
EXCESS OR (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (7)$ (8,816)$ (115,821)$ (359)$ 43$ (2,344,532)$ 737,813$ (151,003)$ 261,654$ 499,046$ 16,124$ -$ (1,105,858)$
OTHER FINANCING SOURCES/(USES)
Transfers - - (21,971) 696,503 - 2,350,326 (84,555)- - (224,835) (15,715) - 2,699,753
NET CHANGE IN FUND BALANCES (7)$ (8,816)$ (137,792)$ 696,144$ 43$ 5,794$ 653,258$ (151,003)$ 261,654$ 274,211$ 409$ -$ 1,593,895$
FUND BALANCES - MAY 1, 2021 1,954 4,620 236,872 321,449 322 (224) 2,426,893 203,595 1,239,635 719,415 (640) (179,115) 4,974,776
FUND BALANCES - APRIL 30, 2022 1,947$ (4,196)$ 99,080$ 1,017,593$ 365$ 5,570$ 3,080,151$ 52,592$ 1,501,289$ 993,626$ (231)$ (179,115)$ 6,568,671$
CITY OF MCHENRY, ILLINOIS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED APRIL 30, 2022
Page 63
See Accompanying Independent Auditor's Report
Capital Utility Marina Total
Water/Sewer Development Improvements Operations Water and
Fund Fund Fund Fund Sewer Funds
ASSETS
Current Assets
Cash and Cash Equivalents 5,651,996$ 4,052,782$ -$ 361,264$ 10,066,042$
Investments 428,802 259,140 1,832,717 99,732 2,620,391
Prepaid Items 37,103 - - - 37,103
Receivables (Net of Allowance for
Estimated Uncollectible Amounts)
Accounts Receivable - Billed 93,486 - - - 93,486
Accounts Receivable - Unbilled 1,314,672 - - - 1,314,672
Accrued Interest 1,543 790 1,317 285 3,935
Due from Other Governmental Units 97,714 - - - 97,714
Due from Other Funds 6,266 57,164 - - 63,430
7,631,582$ 4,369,876$ 1,834,034$ 461,281$ 14,296,773$
Non-Current Assets
IMRF Net Pension Asset 884$ -$ -$ -$ 884$
Capital Assets
Land 2,208,117 - - - 2,208,117
Buildings 2,736,098 - - - 2,736,098
Systems and Equipment 112,191,349 - - - 112,191,349
Vehicles 1,702,060 - - - 1,702,060
Construction in Progress 57,193 - - - 57,193
Less: Accumulated Depreciation (39,598,361) - - - (39,598,361)
79,297,340$ -$ -$ -$ 79,297,340$
TOTAL ASSETS 86,928,922$ 4,369,876$ 1,834,034$ 461,281$ 93,594,113$
DEFERRED OUTFLOWS OF RESOURCES
Pension Expense/Revenue - IMRF 338,373$ -$ -$ -$ 338,373$
OPEB Expense/Revenue 199,558 - - - 199,558
TOTAL DEFERRED OUTFLOWS OF RESOURCES 537,931$ -$ -$ -$ 537,931$
LIABILITIES
Current Liabilities
Accounts Payable and Accrued Expenses 253,448$ -$ -$ -$ 253,448$
Overdraft - - 2,280,087 - 2,280,087
Security Deposits Held - 3,000 - - 3,000
Due to Other Funds 2,390 - - - 2,390
Unearned Revenue 66,675 - - - 66,675
Accrued Interest 258,590 - - - 258,590
Compensated Absences - Current 98,664 - - - 98,664
IEPA Loan Payable - Current 1,532,512 - - - 1,532,512
Bonds Payable - Current 416,517 - - - 416,517
2,628,796$ 3,000$ 2,280,087$ -$ 4,911,883$
Non-Current Liabilities
Total OPEB Liability 129,680$ -$ -$ -$ 129,680$
IEPA Loan Payable (Net of Current Portion Shown Above)26,742,871 - - - 26,742,871
Bonds Payable (Net of Current Portion Shown Above)3,905,810 - - - 3,905,810
30,778,361$ -$ -$ -$ 30,778,361$
TOTAL LIABILITIES 33,407,157$ 3,000$ 2,280,087$ -$ 35,690,244$
DEFERRED INFLOWS OF RESOURCES
Pension Revenue/Expense - IMRF 887,799$ -$ -$ -$ 887,799$
OPEB Revenue/Expense 300,013 - - - 300,013
TOTAL DEFERRED INFLOWS OF RESOURCES 1,187,812$ -$ -$ -$ 1,187,812$
NET POSITION
Net Investment in Capital Assets 46,698,746$ -$ -$ -$ 46,698,746$
Unrestricted/(Deficit)6,173,138 4,366,876 (446,053) 461,281 10,555,242
TOTAL NET POSITION 52,871,884$ 4,366,876$ (446,053)$ 461,281$ 57,253,988$
CITY OF MCHENRY, ILLINOIS
COMBINING SCHEDULE OF NET POSITION
WATER AND SEWER FUNDS
APRIL 30, 2022
Page 64
See Accompanying Independent Auditor's Report
Capital Utility Marina Total
Water/Sewer Development Improvements Operations Water and
Fund Fund Fund Fund Sewer Funds
OPERATING REVENUES
Charges for Services
Customer Fees 5,429,528$ 1,239,012$ -$ -$ 6,668,540$
Capital Fees 718,573 - - - 718,573
Debt Service Fees 2,505,977 - - - 2,505,977
Penalties 173,496 - - - 173,496
Water Meter Sales 52,107 - - - 52,107
Other 16,796 - - - 16,796
8,896,477$ 1,239,012$ -$ -$ 10,135,489$
OPERATING EXPENSES
Water Department
Personnel Salaries 435,169$ -$ -$ -$ 435,169$
Miscellaneous Personnel Expenses 139,999 - - - 139,999
Other Operating Expenses 918,302 - - - 918,302
Depreciation 631,243 - - - 631,243
Sewer Department
Personnel Salaries 733,339 - - - 733,339
Miscellaneous Personnel Expenses 270,581 - - - 270,581
Other Operating Expenses 1,573,920 - - 25,686 1,599,606
Depreciation 2,133,432 - - - 2,133,432
Utility Work Department
Personnel Salaries 628,246 - - - 628,246
Miscellaneous Personnel Expenses 236,013 - - - 236,013
Other Operating Expenses 63,234 - - - 63,234
7,763,478$ -$ -$ 25,686$ 7,789,164$
OPERATING INCOME/(LOSS)1,132,999$ 1,239,012$ -$ (25,686)$ 2,346,325$
NON-OPERATING REVENUE/(EXPENSE)
Interest Income 4,041$ 533$ 1,018$ 198$ 5,790$
Unrealized Gain/Loss - - (3,118)- (3,118)
Rental Income 30,000 - - 35,460 65,460
Interest Rebate Income 25,082 - - - 25,082
Interest and Fees (627,076) - - - (627,076)
Amortization 46,517 - - - 46,517
Gain/(Loss) on Sale of Fixed Asset 32,760 - - - 32,760
Donated Public Improvements - Water 1,096,340 - - - 1,096,340
Donated Public Improvements - Sewer 1,357,882 - - - 1,357,882
1,965,546$ 533$ (2,100)$ 35,658$ 1,999,637$
INCOME/(LOSS) BEFORE CONTRIBUTIONS
AND TRANSFERS 3,098,545$ 1,239,545$ (2,100)$ 9,972$ 4,345,962$
TRANSFERS (TO)/FROM OTHER FUNDS (115,013) (143,750) 165,715 - (93,048)
CHANGE IN NET POSITION 2,983,532$ 1,095,795$ 163,615$ 9,972$ 4,252,914$
NET POSITION - MAY 1, 2021 50,179,418 3,271,081 (609,668) 451,309 53,292,140
NET POSITION ADJUSTMENT (Note 9)(291,066) - - - (291,066)
NET POSITION - APRIL 30, 2022 52,871,884$ 4,366,876$ (446,053)$ 461,281$ 57,253,988$
CITY OF MCHENRY, ILLINOIS
COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
WATER AND SEWER FUNDS
FOR THE YEAR ENDED APRIL 30, 2022
Page 65
See Accompanying Independent Auditor's Report
Employee Risk Information Total
Insurance Management Technology Internal Service
Fund Fund Fund Funds
ASSETS
Current Assets
Cash and Cash Equivalents -$ 89,638$ 424,709$ 514,347$
Investments - - 8,294 8,294
Prepaid Items 73,929 - 7,343 81,272
Receivables (Net of Allowance for
Estimated Uncollectible Amounts)
Accounts Receivable - Billed 932 - - 932
Accounts Receivable - Unbilled - 3,182 - 3,182
74,861$ 92,820$ 440,346$ 608,027$
Non-Current Assets
IMRF Net Pension Asset -$ -$ 7,366$ 7,366$
Capital Assets
Systems and Equipment - - 690,756 690,756
Less: Accumulated Depreciation - - (494,217) (494,217)
-$ -$ 203,905$ 203,905$
TOTAL ASSETS 74,861$ 92,820$ 644,251$ 811,932$
DEFERRED OUTFLOWS OF RESOURCES
Pension Expense/Revenue - IMRF -$ -$ 48,315$ 48,315$
OPEB Expense / Revenue - - 28,495 28,495
TOTAL DEFERRED OUTFLOWS OF RESOURCES -$ -$ 76,810$ 76,810$
LIABILITIES
Current Liabilities
Accounts Payable and Accrued Expenses 133$ 4,602$ 109,791$ 114,526$
Overdrafts 79,666 - - 79,666
Unearned Revenue 88,803 - - 88,803
Compensated Absences - - 3,646 3,646
Capital Lease Payable - - 24,103 24,103
168,602$ 4,602$ 137,540$ 310,744$
Non-Current Liabilities
Total OPEB Liability -$ -$ 17,820$ 17,820$
-$ -$ 17,820$ 17,820$
TOTAL LIABILITIES 168,602$ 4,602$ 155,360$ 328,564$
DEFERRED INFLOWS OF RESOURCES
Pension Revenue/Expense - IMRF -$ -$ 126,769$ 126,769$
OPEB Revenue/Expense - - 42,839 42,839
DEFERRED INFLOWS OF RESOURCES -$ -$ 169,608$ 169,608$
NET POSITION
Net Investment in Capital Assets -$ -$ 172,436$ 172,436$
Unrestricted/(Deficit)(93,741) 88,218 223,657 218,134
TOTAL NET POSITION (93,741)$ 88,218$ 396,093$ 390,570$
CITY OF MCHENRY, ILLINOIS
COMBINING SCHEDULE OF NET POSITION
INTERNAL SERVICE FUNDS
APRIL 30, 2022
Page 66
See Accompanying Independent Auditor's Report
Employee Risk Information Total
Insurance Management Technology Internal Service
Fund Fund Fund Funds
OPERATING REVENUES
Charges for Services 3,416,539$ 718,291$ 872,231$ 5,007,061$
3,416,539$ 718,291$ 872,231$ 5,007,061$
OPERATING EXPENSES
Personnel Salaries -$ -$ 160,214$ 160,214$
Miscellaneous Personnel Expenses 3,418,695 - 53,270 3,471,965
Other Operating Expenses 1,088 979,625 593,070 1,573,783
Depreciation - - 48,637 48,637
3,419,783$ 979,625$ 855,191$ 5,254,599$
OPERATING INCOME/(LOSS)(3,244)$ (261,334)$ 17,040$ (247,538)$
NON-OPERATING REVENUE/(EXPENSE)
Interest Income 61 13 64 138
INCOME/(LOSS) BEFORE CONTRIBUTIONS
AND TRANSFERS (3,183)$ (261,321)$ 17,104$ (247,400)$
CAPITAL CONTRIBUTIONS - - - -
CHANGE IN NET POSITION (3,183)$ (261,321)$ 17,104$ (247,400)$
NET POSITION - MAY 1, 2021 (90,558) 349,539 378,989 637,970
NET POSITION - APRIL 30, 2022 (93,741)$ 88,218$ 396,093$ 390,570$
CITY OF MCHENRY, ILLINOIS
COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED APRIL 30, 2022
Page 67
See Accompanying Independent Auditor's Report
Retained
Developmental Personnel Total
Escrow Escrow Custodial
Fund Fund Funds
ASSETS
Current Assets
Cash and Cash Equivalents 6,831$ 49,204$ 56,035$
TOTAL ASSETS 6,831$ 49,204$ 56,035$
LIABILITIES -$ -$ -$
NET POSITION
Restricted for Developers, Property Owners, and Others 6,831$ 49,204$ 56,035$
TOTAL NET POSITION 6,831$ 49,204$ 56,035$
CITY OF MCHENRY, ILLINOIS
COMBINING SCHEDULE OF NET POSITION
CUSTODIAL FUNDS
APRIL 30, 2022
Page 68
See Accompanying Independent Auditor's Report
Developmental Retained Total
Escrow Personnel Escrow Custodial
Funds Funds Funds
ADDITIONS
Contributions
Developers, Property Owners, and Others -$ 80,685$ 80,685$
Total Contributions -$ 80,685$ 80,685$
TOTAL ADDITIONS -$ 80,685$ 80,685$
DEDUCTIONS
Engineering and Legal Fees -$ 80,685 80,685$
Refund - - -
TOTAL DEDUCTIONS -$ 80,685$ 80,685$
NET INCREASE/(DECREASE)-$ -$ -$
NET POSITION - MAY 1, 2021 - - -
NET POSITION ADJUSTMENT (Note 9)6,831 49,204 56,035
NET POSITION - APRIL 30, 2022 6,831$ 49,204$ 56,035$
CITY OF MCHENRY, ILLINOIS
CUSTODIAL FUNDS
YEAR ENDED APRIL 30, 2022
COMBINING SCHEDULE OF CHANGES IN FIDUCIARY NET POSITION
Page 69
See Accompanying Independent Auditor's Report
Actual
Original Final Amounts
REVENUES
Local Taxes
Property Tax 720,000$ 720,000$ 678,920$
Other Local Sources
Interest - - 121
Miscellaneous
Reimbursements 60,000 60,000 55,000
Total Revenues 780,000$ 780,000$ 734,041$
EXPENDITURES
Current
General Office 50,000$ 50,000$ 10,825$
Capital Outlay 440,000$ 1,084,304$ 224,170$
Total Expenditures 490,000$ 1,134,304$ 234,995$
EXCESS OR (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 290,000$ (354,304)$ 499,046$
OTHER FINANCING SOURCES/(USES)
Transfers (224,835) (224,835) (224,835)
NET CHANGE IN FUND BALANCE 65,165$ (579,139)$ 274,211$
FUND BALANCE - MAY 1, 2021 719,415
FUND BALANCE - APRIL 30, 2022 993,626$
Budgeted Amounts
CITY OF MCHENRY, ILLINOIS
FOR THE YEAR ENDED APRIL 30, 2022
SPECIAL REVENUE FUND - TAX INCREMENT FINANCING FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Page 70
See Accompanying Independent Auditor's Report