HomeMy WebLinkAbout22-23 Audit Report
CITY OF McHENRY, ILLINOIS
ANNUAL FINANCIAL REPORT
APRIL 30, 2023
CITY OF McHENRY, ILLINOIS
TABLE OF CONTENTS
APRIL 30, 2023
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 4
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 52
CITY OF McHENRY, ILLINOIS
TABLE OF CONTENTS
APRIL 30, 2023
PAGE
REQUIRED SUPPLEMENTARY INFORMATION (Continued)
Illinois Municipal Retirement Fund – Schedule of Employer Contribution 53
Police Pension Plan – Schedule of Changes in the Employer’s Net Pension
Liability and Related Ratios 54
Police Pension Plan – Schedule of Employer Contribution 55
Other Post-Employment Benefit – Schedule of Changes in the Employer’s
Total OPEB Liability and Related Ratios 56
Schedule of Revenues, Expenditures, and Changes in Fund Balances –
Budget and Actual – General Fund 57
Notes to Required Supplementary Information 59
SUPPLEMENTAL FINANCIAL INFORMATION
Combining Balance Sheet – General Fund 60
Combining Schedule of Revenues, Expenditures, and Changes in Fund
Balances – General Fund 61
Combining Balance Sheet – Other Governmental Funds 63
Combining Schedule of Revenues, Expenditures, and Changes in Fund
Balances – Other Governmental Funds 64
Combining Schedule of Net Position – Water and Sewer Funds 65
Combining Schedule of Revenues, Expenses, and Changes in Net
Position – Water and Sewer Funds 66
Combining Schedule of Net Position – Internal Service Funds 67
Combining Schedule of Revenues, Expenses, and Changes in Net
Position – Internal Service Funds 68
Combining Schedule of Net Position – Custodial Funds 69
Combining Schedule of Changes in Fiduciary Net Position – Custodial Funds 70
Schedule of Revenues, Expenditures, and Changes in Fund Balances –
Budget and Actual – Special Revenue Fund – Tax Increment
Financing Fund 71
Page 1
INDEPENDENT AUDITOR’S REPORT
To the Mayor and City Council Members
City of McHenry
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, 2023, 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, 2023, 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.
Change in Accounting Principle
As described in Note 22 to the financial statements, the City implemented GASB Statement No. 87,
Leases. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
Page 2
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 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 on 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
Page 3
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 supplementary 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.
The supplementary information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements.
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 supplementary
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
November 10, 2023 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 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.
Eccezion
Consulting • CPAs • Technology
McHenry, Illinois
November 10, 2023
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
McHenry, Illinois
We have audited, in accordance with the 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, 2023, 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 November 10, 2023.
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.
Page 5
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 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.
Eccezion
Consulting • CPAs • Technology
McHenry, Illinois
November 10, 2023
REQUIRED SUPPLEMENTARY INFORMATION
Page 6
CITY OF McHENRY, ILLINOIS
MANAGEMENT’S DISCUSSION AND ANALYSIS
APRIL 30, 2023
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, 2023. 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 14 individual governmental funds. Information is presented separately in the
governmental fund Balance Sheet and in the governmental fund Statement of Revenues, Expenditures,
and Changes in Fund Balances for the General Fund which is considered to be a major fund. Data from
the other 13 governmental funds are combined into a single, aggregated presentation. The other 13
funds include Pageant, Audit, Recreation Center, Capital Improvements, Capital Asset Maintenance and
Replacement, 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
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 $148,516,513 at April 30, 2023.
By far, the largest portion of the City’s net position, 93%, reflects its net investment in capital assets (e.g.,
land, construction in progress, buildings, and equipment); less any related debt used to acquire those
assets that is still outstanding. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City’s investment in capital
assets is reported net of related debt, it should be noted that the resources needed to repay this debt
Page 8
must be provided from other sources, since the capital assets themselves cannot be used to liquidate
these liabilities.
4/30/2023 4/30/2022 4/30/2023 4/30/2022 4/30/2023 4/30/2022
Assets
Current and Other Assets 32,992,919$ 33,833,389$ 13,576,743$ 11,953,256$ 46,569,662$ 45,786,645$
Capital Assets 96,526,534 95,044,404 77,053,660 79,296,456 173,580,194 174,340,860
Net Pension Asset - IMRF - 1,915,256 - 884 - 1,916,140
Total Assets 129,519,453$ 130,793,049$ 90,630,403$ 91,250,596$ 220,149,856$ 222,043,645$
Deferred Outflows of Resources 11,959,807$ 8,234,178$ 1,325,114$ 537,931$ 13,284,921$ 8,772,109$
Liabilities
Long-Term Liabilities
Outstanding 26,838,310$ 28,826,835$ 30,747,863$ 32,696,374$ 57,586,173$ 61,523,209$
Net Pension Liability - IMRF 5,508,725 - 1,769,693 - 7,278,418 -
Net Pension Liability - Police 4,348,724 469,026 - - 4,348,724 469,026
Total OPEB Liability 948,640 1,200,063 174,609 129,680 1,123,249 1,329,743
Other Liabilities 2,673,995 2,422,222 354,638 520,673 3,028,633 2,942,895
Total Liabilities 40,318,394$ 32,918,146$ 33,046,803$ 33,346,727$ 73,365,197$ 66,264,873$
Deferred Inflows of Resources 10,456,210$ 15,751,752$ 1,096,857$ 1,187,812$ 11,553,067$ 16,939,564$
Net Position
Net Investment in Capital
Assets 91,764,145$ 90,072,809$ 46,377,371$ 46,698,746$ 138,141,516$ 136,771,555$
Restricted 2,036,911 5,894,047 - - 2,036,911 5,894,047
Unrestricted (3,096,400) (5,609,527) 11,434,486 10,555,242 8,338,086 4,945,715
Total Net Position 90,704,656$ 90,357,329$ 57,811,857$ 57,253,988$ 148,516,513$ 147,611,317$
City of McHenry's Statement of Net Position
TotalBusiness-Type ActivitiesGovernmental Activities
An additional portion of the City’s net position, 1%, 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 ($8,338,086) 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 $1,208,651,
which was then partially offset by a net position adjustment of $(861,324). Key differences from the prior
year are as follows:
Page 9
FY 2023 FY 2022 FY 2023 F Y 2022 FY 2023 FY 2022
Revenues
Program Revenues
Charges for Services 7,241,916$ 7,142,687$ 9,427,881$ 10,247,466$ 16,669,797$ 17,390,153$
Operating Grants and Contributions 46,113 3,716,047 - - 46,113 3,716,047
Capital Grants and Contributions 773,717 5,119,713 - 2,454,222 773,717 7,573,935
General Revenues
Taxes
Property Taxes 5,711,748 5,565,378 - - 5,711,748 5,565,378
Intergovernmental
Sales Taxes 13,346,454 12,807,479 - - 13,346,454 12,807,479
Other Taxes 7,702,910 6,433,338 - - 7,702,910 6,433,338
Other 541,044 21,008 189,104 30,872 730,148 51,880
Total Revenues 35,363,902$ 40,805,650$ 9,616,985$ 12,732,560$ 44,980,887$ 53,538,210$
Expenses
General Office 8,125,923$ 4,118,881$ -$ -$ 8,125,923$ 4,118,881$
Public Safety 13,663,828 9,328,245 - - 13,663,828 9,328,245
Public Works 7,469,021 5,068,211 - - 7,469,021 5,068,211
Parks and Recreation 4,069,254 4,305,299 - - 4,069,254 4,305,299
Interest and Fees 689,635 714,641 - - 689,635 714,641
Depreciation 245,712 227,178 - - 245,712 227,178
Water - - 2,196,433 2,160,744 2,196,433 2,160,744
Sewer - - 5,651,641 5,328,003 5,651,641 5,328,003
Utility Work - - 1,122,120 930,611 1,122,120 930,611
Total Expenses 34,263,373$ 23,762,455$ 8,970,194$ 8,419,358$ 43,233,567$ 32,181,813$
Increase/(Decrease) in Net Position
Before Transfers 1,100,529$ 17,043,195$ 646,791$ 4,313,202$ 1,747,320$ 21,356,397$
Transfers 94,922 93,048 (94,922) (93,048) - -
Gain on Sale of Capital Assets 13,200 20,300 6,000 32,760 19,200 53,060
Increase/(Decrease) in Net Position 1,208,651$ 17,156,543$ 557,869$ 4,252,914$ 1,766,520$ 21,409,457$
Net Position - Beginning of Year 90,357,329 73,200,786 57,253,988 53,292,140 147,611,317 126,492,926
Net Position Adjustment (861,324) - - (291,066) (861,324) (291,066)
Net Position - End of Year 90,704,656$ 90,357,329$ 57,811,857$ 57,253,988$ 148,516,513$ 147,611,317$
City of McHenry's Change in Net Position
Governmental Activities Business-Type Activities Total
Revenues decreased in the current year due to decreases in operating grants and contributions as well
as capital grants and contributions which was mainly due to the receipt of the American Rescue Plan
funds during FY’22 but not during the current year, as well as developer donations of over $3.1 million in
the prior year but only $20,000 during FY’23.
Expenses increased mainly due to increases in the expenses related to the Police Pension and IMRF
Pension liabilities, increases related to OPEB expense, and increased repairs and maintenance
expenses.
Business-Type Activities. Business-type activities increased the City’s net position by $557,869.
Revenues for business-type activities decreased in the current year due to a decrease in capital grants
and contributions from developer donations.
Expenses for business-type activities increased in the current year due to slight increases across the
water, sewer, and utility work departments from miscellaneous personnel expenses and also increased
expenses related to IMRF and OPEB liabilities.
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, 2023, the City’s governmental funds reported combined ending fund balances of $24,338,475,
an increase of $652,175 in comparison with the prior year, which includes a fund balance adjustment of
$(861,324). Approximately 39% of this total amount constitutes unassigned fund balance which is
available for spending at the City’s discretion. Of the remaining fund balance, 52% 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, 2023, the fund balance of the
General Fund was $19,553,883, of which $9,739,783 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 36% of total General Fund expenditures.
The General Fund’s fund balance increased by $2,436,254 during the year ended April 30, 2023, which
includes a fund balance adjustment of $(861,324). 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, 2023 are outlined
below:
• Debt service expenses of $2,677,337 were paid to meet the debt service requirements of the City.
• Other governmental funds show a total decrease in fund balance of $1,784,079.
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, 2023, the Police Pension Fund’s
net position amounted to $55,718,519. Deductions exceeded additions during the year, resulting in a
decrease of $919,521 in net position. The decrease was largely due to losses on sales of investments.
GENERAL FUND BUDGETARY HIGHLIGHTS
The City amended their budget during the year ended April 30, 2023. A significant difference between
original and final budget was an increase in capital outlay expenditures of $960,000.
The General Fund actual revenue exceeded budgeted revenue by $5,265,609. This difference was
primarily due to more than expected revenue from state sales and income taxes, receipt of the American
Rescue Plan grant, and interest income. Budgeted expenditures exceeded actual expenditures by
$746,982. The difference was mainly due to less than expected expenditures in all areas, aside from
Public Safety and Parks and Recreation which were slightly higher than expected.
Page 11
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, 2023 amounts to $173,580,194 (net of accumulated depreciation). This investment
includes land, land improvements, art and historical treasures, intangibles, construction in progress,
buildings, vehicles, systems and equipment, and infrastructure.
4/30/2023 4/30/2022 4/30/2023 4/30/2022 4/30/2023 4/30/2022
Land 43,651,504$ 42,664,844$ 2,208,117$ 2,208,117$ 45,859,621$ 44,872,961$
Land Improvements 2,946,509 2,584,275 - - 2,946,509 2,584,275
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 1,831,979 1,463,648 92,944 57,193 1,924,923 1,520,841
Buildings 12,924,652 12,352,919 334,701 361,206 13,259,353 12,714,125
Vehicles 1,810,670 1,574,244 727,933 778,748 2,538,603 2,352,992
Systems and Equipment 1,505,373 1,468,179 73,689,965 75,891,191 75,195,338 77,359,370
Infrastructure 29,896,920 30,977,368 - - 29,896,920 30,977,368
Total 96,526,534$ 95,044,404$ 77,053,660$ 79,296,455$ 173,580,194$ 174,340,859$
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, 2023 included the following:
• Construction in progress additions totaling $2,715,606
• The purchase of three land parcels totaling $986,660
• The purchase of eleven new vehicles totaling $634,484
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, 2023, the City had total bonded debt outstanding of $29,155,000, all of
which is backed by the full faith and credit of the City.
4/30/2023 4/30/2022 4/30/2023 4/30/2022 4/30/2023 4/30/2022
General Obligation Bonds 25,530,000$ 27,205,000$ 3,625,000$ 3,995,000$ 29,155,000$ 31,200,000$
IEPA Revolving Loan Fund - - 26,742,871 28,275,383 26,742,871 28,275,383
Notes Payable 635,548 956,419 - - 635,548 956,419
Bond Premium 32,169 40,547 280,809 327,327 312,978 367,874
Bond Discount (182) (371) - - (182) (371)
Total 26,197,535$ 28,201,595$ 30,648,680$ 32,597,710$ 56,846,215$ 60,799,305$
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 4.3 percent, which is 10.4 percent
lower than a year ago. This is lower than the State’s average unemployment rate of 4.6 percent.
Page 12
• 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
2007 to 85 in 2020 and 22 in 2022. 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 and $56.3 million in 2022.
Development and adoption of the 2023/24 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 in 2021, but then left flat for 2022. EAV values have been gradually
increasing which caused the City’s tax rate to continue to decrease from $0.605781 in 2021 to $0.555713
in 2022.
In April 2023, the City Council approved the proposed fiscal year 2023/24 General Fund budget
increasing the prior year’s budget by $3,759,316. These increases were primarily due to personnel and
capital outlay expenses. In the last few years, capital expenditures have been funded with Fund Balance
Reserves which have been built up due to cost reduction measures necessary to adopt a balanced
budget in the past years as well as rebounding state shared revenues. These reserves have been
decreasing over the years due to this Capital Spending Policy which has highlighted the need for a
dedicated revenue source for the replacement and maintenance of capital assets. With the adoption of
the Electric Utility Tax (adopted February 2, 2022 and placed in effect June 1, 2022), there is now a
dedicated revenue stream for the replacement and maintenance of City capital assets. Management is
always closely monitoring revenues as well as expenses for any changes.
REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the
City’s finances for all those with an interest in the City’s finances. Questions concerning any of the
information provided in this report or requests for additional financial information should be addressed to:
City of McHenry, 333 South Green St., McHenry, Illinois, 60050.
BASIC FINANCIAL STATEMENTS
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and Cash Equivalents 18,663,151$ 4,899,474$ 23,562,625$
Deposit with Paying Agent 32,240 - 32,240
Investments 3,574,643 6,637,249 10,211,892
Prepaid Items 266,209 42,118 308,327
Receivables (Net of Allowance for Estimated
Uncollectible Amounts)
Accounts Receivable - Billed 472,544 48,211 520,755
Accounts Receivable - Unbilled 281,102 1,333,209 1,614,311
Property Taxes 5,875,439 - 5,875,439
Accrued Interest 13,145 14,187 27,332
Due from Other Governmental Units 3,328,801 97,714 3,426,515
Grants Receivable 178,164 - 178,164
Cable Franchise Fee Receivable 122,912 - 122,912
Inventory 184,569 - 184,569
Right-of-Use Lease Receivable - 504,581 504,581
Capital Assets
Land, Construction in Progress, and Other
Non-Depreciable Assets 47,442,410 2,301,061 49,743,471
Other Capital Assets, Net of Depreciation 49,084,124 74,752,599 123,836,723
TOTAL ASSETS 129,519,453$ 90,630,403$ 220,149,856$
DEFERRED OUTFLOWS OF RESOURCES
Pension Expense/Revenue - IMRF 3,744,278$ 1,054,909$ 4,799,187$
Pension Expense/Revenue - Police Pension 6,729,641 - 6,729,641
OPEB Expense/Revenue 1,485,888 270,205 1,756,093
TOTAL DEFERRED OUTFLOWS OF RESOURCES 11,959,807$ 1,325,114$ 13,284,921$
LIABILITIES
Accounts Payable and Accrued Expenses 1,869,257$ 238,775$ 2,108,032$
Security Deposits Held - 3,000 3,000
Due to Other Governmental Units 49,041 - 49,041
Due to Other Funds 129,766 (129,766) -
Due to Police Pension Fund 4,908 - 4,908
Unearned Revenue 399,787 - 399,787
Accrued Interest 221,236 242,629 463,865
Non-Current Liabilities
Due Within One Year 2,672,661 2,101,849 4,774,510
Due in More Than One Year 24,165,649 28,646,014 52,811,663
Police Pension Liability 4,348,724 - 4,348,724
IMRF Net Pension Liability 5,508,725 1,769,693 7,278,418
Total OPEB Liability 948,640 174,609 1,123,249
TOTAL LIABILITIES 40,318,394$ 33,046,803$ 73,365,197$
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes 5,875,439$ -$ 5,875,439$
Unavailable Revenue - Right-of-Use Leases - Lessor - 545,559 545,559
Pension Expense/Revenue - IMRF 426,822 120,253 547,075
Pension Expense/Revenue - Police Pension 1,783,585 - 1,783,585
OPEB Expense/Revenue 2,370,364 431,045 2,801,409
TOTAL DEFERRED INFLOWS OF RESOURCES 10,456,210$ 1,096,857$ 11,553,067$
NET POSITION
Net Investment in Capital Assets 91,764,145$ 46,377,371$ 138,141,516$
Restricted for:
Highways and Streets 1,608,945 - 1,608,945
Capital Projects 195,936 - 195,936
Special Service Areas 29 - 29
Tax Increment Financing 232,001 - 232,001
Unrestricted/(Deficit)(3,096,400) 11,434,486 8,338,086
TOTAL NET POSITION 90,704,656$ 57,811,857$ 148,516,513$
APRIL 30, 2023
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 8,125,923$ 5,593,799$ -$ 279,073$ (2,253,051)$ -$ (2,253,051)$
Public Safety 13,663,828 1,229,601 - - (12,434,227) - (12,434,227)
Public Works 7,469,021 - 46,113 494,644 (6,928,264) - (6,928,264)
Parks and Recreation 4,069,254 418,516 - - (3,650,738) - (3,650,738)
Interest and Fees on Long-Term Debt 689,635 - - - (689,635) - (689,635)
Depreciation - Unallocated 245,712 - - - (245,712) - (245,712)
34,263,373$ 7,241,916$ 46,113$ 773,717$ (26,201,627)$ -$ (26,201,627)$
Business-Type Activities
Water 2,196,433$ 3,405,570$ -$ -$ -$ 1,209,137$ 1,209,137$
Sewer 5,651,641 6,021,470 - - - 369,829 369,829
Utility Work 1,122,120 841 - - - (1,121,279) (1,121,279)
8,970,194$ 9,427,881$ -$ -$ -$ 457,687$ 457,687$
Total Primary Government 43,233,567$ 16,669,797$ 46,113$ 773,717$ (26,201,627)$ 457,687$ (25,743,940)$
General Revenues
Taxes
Property Tax, Levied for General Purposes 5,711,748$ -$ 5,711,748$
Intergovernmental
State Sales Tax 13,346,454 - 13,346,454
State Income Tax 4,384,429 - 4,384,429
State Motor Fuel Tax 1,503,741 - 1,503,741
Other Taxes 1,814,740 - 1,814,740
Unrestricted Investment Earnings 541,044 189,104 730,148
Gain on Sale of Capital Assets 13,200 6,000 19,200
Transfers 94,922 (94,922) -
Total General Revenues and Transfers 27,410,278$ 100,182$ 27,510,460$
Change in Net Position 1,208,651$ 557,869$ 1,766,520$
Net Position - May 1, 2022 90,357,329 57,253,988 147,611,317
Net Position Adjustment (Note 9)(861,324) - (861,324)
Net Position - April 30, 2023 90,704,656$ 57,811,857$ 148,516,513$
CITY OF MCHENRY, ILLINOIS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED APRIL 30, 2023
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 14,948,173$ 3,376,949$ 18,325,122$
Deposit with Paying Agent - 32,240 32,240
Investments 2,055,728 1,510,620 3,566,348
Prepaid Items 173,819 - 173,819
Receivables (Net of Allowance for
Estimated Uncollectible Amounts)
Accounts Receivable - Billed 443,728 28,517 472,245
Accounts Receivable - Unbilled 158,311 114,553 272,864
Property Taxes 5,017,348 858,091 5,875,439
Accrued Interest 3,121 9,884 13,005
Due from Other Governmental Units 3,176,525 152,276 3,328,801
Grants Receivable - 178,164 178,164
Cable Franchise Fee Receivable 122,912 - 122,912
Inventory 184,569 - 184,569
TOTAL ASSETS 26,284,234$ 6,261,294$ 32,545,528$
LIABILITIES
Accounts Payable and Accrued Expenditures 1,264,703$ 567,170$ 1,831,873$
Due to Other Governmental Units - 49,041 49,041
Due to Other Funds 133,401 - 133,401
Unearned Revenue 314,899 2,400 317,299
TOTAL LIABILITIES 1,713,003$ 618,611$ 2,331,614$
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes 5,017,348$ 858,091$ 5,875,439$
TOTAL DEFERRED INFLOWS OF RESOURCES 5,017,348$ 858,091$ 5,875,439$
FUND BALANCES
Nonspendable 173,819$ -$ 173,819$
Restricted for:
Capital Projects - 195,936 195,936
Highways and Streets - 1,608,945 1,608,945
Special Service Areas - 29 29
Tax Increment Financing - 232,001 232,001
Assigned for:
Alarm 1,106,887 - 1,106,887
Tourism 161,550 - 161,550
Band 11,040 - 11,040
Highways and Streets - 926,898 926,898
Capital Projects 8,050,248 1,878,224 9,928,472
Revolving Loan 302,408 - 302,408
Civil Defense 8,148 - 8,148
Debt Service - 7,611 7,611
Parks and Recreation - 114,087 114,087
Unassigned 9,739,783 (179,139) 9,560,644
TOTAL FUND BALANCES 19,553,883$ 4,784,592$ 24,338,475$
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES 26,284,234$ 6,261,294$ 32,545,528$
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
BALANCE SHEET
GOVERNMENTAL FUNDS
APRIL 30, 2023
Page 15
The Notes to Financial Statements are an integral part of this statement.
Total Fund Balances - Governmental Funds 24,338,475$
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 96,526,534
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 182
Some liabilities are not due and payable in the current period and therefore
are not reported in the funds.
Bonds and Notes Payable (26,165,548)$
Bond Premiums, net of related amortization (32,169)
Accrued Interest on Long-Term Debt, net of receivable (221,236)
Compensated Absences (640,775)
Total OPEB Liability (948,640)
Net Pension Asset/(Liability) - IMRF (5,508,725)
Net Pension Asset/(Liability) - Police Pension (4,348,724)
(37,865,817)
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 6,729,641$
Pension Deferred Outflows - IMRF 3,744,278
Pension Deferred Inflows - Police Pension (1,783,585)
Pension Deferred Inflow - IMRF (426,822)
OPEB Deferred Outflows 1,485,888
OPEB Deferred Inflows (2,370,364)
7,379,036
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 447,391$
Current Liabilities (121,145)
326,246
Net Position of Governmental Activities 90,704,656$
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION
APRIL 30, 2023
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 4,975,755$ 735,993$ 5,711,748$
Intergovernmental
State Sales Tax 13,346,454 - 13,346,454
State Income Tax 4,384,429 - 4,384,429
State Replacement Tax 246,433 - 246,433
State Motor Fuel Tax - 1,503,741 1,503,741
State Pull Tab/Games Tax 1,312 - 1,312
Inter Track Wagering Tax 39,296 - 39,296
State Telecommunications Tax 198,361 - 198,361
State Grants - 474,644 474,644
Cannabis Use Tax 42,240 - 42,240
Federal Grants 1,841,293 - 1,841,293
Other Local Sources
Hotel/Motel Tax 243,574 - 243,574
Electric Use Tax - 1,043,524 1,043,524
Franchise Fees 379,078 - 379,078
Licenses and Permits 1,247,056 - 1,247,056
Fines and Forfeitures 451,894 - 451,894
Charges for Services 1,423,862 537,711 1,961,573
Interest 454,024 87,020 541,044
Local Grants 46,113 - 46,113
Miscellaneous
Rent 14,489 59,238 73,727
Royalties 175,000 - 175,000
Donations 13,348 265,725 279,073
Reimbursements 2,554,441 104,425 2,658,866
Other Miscellaneous 255,656 59,066 314,722
32,334,108$ 4,871,087$ 37,205,195$
EXPENDITURES
Current
General Office 4,897,571$ 163,187$ 5,060,758$
Public Safety 12,386,012 - 12,386,012
Public Works 4,189,954 182 4,190,136
Parks and Recreation 2,847,744 730,418 3,578,162
Capital Outlay 2,383,586 5,600,783 7,984,369
Debt Service
Principal 296,769 1,675,000 1,971,769
Interest and Fees 29,800 675,768 705,568
27,031,436$ 8,845,338$ 35,876,774$
EXCESS OR (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 5,302,672$ (3,974,251)$ 1,328,421$
OTHER FINANCING SOURCES/(USES)
Transfers (2,018,294)$ 2,190,172$ 171,878$
Sale of City Property 13,200 - 13,200
(2,005,094)$ 2,190,172$ 185,078$
NET CHANGE IN FUND BALANCES 3,297,578$ (1,784,079)$ 1,513,499$
FUND BALANCES - MAY 1, 2022 17,117,629 6,568,671 23,686,300
FUND BALANCE ADJUSTMENT (Note 9)(861,324) - (861,324)
FUND BALANCES - APRIL 30, 2023 19,553,883$ 4,784,592$ 24,338,475$
FOR THE YEAR ENDED APRIL 30, 2023
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 1,513,499$
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 (3,387,313)$
Capital Outlays 4,823,587
1,436,274
Donated capital assets used in governmental activities are not current financial resources and
therefore are not reported as revenue in the governmental funds.20,000
Some revenue/expenses reported in the Statement of Activities do not provide/use current financial
resources and therefore are deferred in the governmental funds.
Prior Year Fund Deferred Grant Revenue (1,841,293)
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 7,743$
Bond Discount - Amortization (189)
Bond Premium - Amortization 8,378
Pension Expense - Police (1,756,911)
Pension Expense - IMRF (1,772,114)
OPEB Expense 190,758
Compensated Absences (11,189)
(3,333,524)
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 665,638$
Pension Employer Contributions - Police Pension 621,970
OPEB Employer Contributions 107,490
1,395,098
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 1,971,768
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 (42,233)$
Pension Expense - IMRF (included in Pension - IMRF Expense above)58,100
IMRF Employer Contributions (included in IMRF Contributions above)(23,522)
OPEB Expense (included in OPEB Expense above)3,820
OPEB Employer Contributions (included in OPEB Employer Contributions above)(2,275)
Depreciation Expense (included in Change in Net Position above)52,939
46,829
Change in Net Position of Governmental Activities 1,208,651$
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
FOR THE YEAR ENDED APRIL 30, 2023
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 4,899,474$ 338,029$
Investments 6,637,249 8,295
Prepaid Items 42,118 92,390
Receivables (Net of Allowance for
Estimated Uncollectible Amounts)
Accounts Receivable - Billed 48,211 299
Accounts Receivable - Unbilled 1,333,209 8,238
Accrued Interest 14,187 140
Due from Other Governmental Units 97,714 -
Due from Other Funds 129,766 -
13,201,928$ 447,391$
Non-Current Assets
Right-of-Use Lease Receivable 504,581$ -$
Capital Assets
Land 2,208,117 -
Buildings 2,736,098 -
Systems and Equipment 112,701,173 716,613
Vehicles 1,679,661 -
Construction in Progress 92,944 -
Less: Accumulated Depreciation (42,364,333) (547,155)
77,558,241$ 169,458$
TOTAL ASSETS 90,760,169$ 616,849$
DEFERRED OUTFLOWS OF RESOURCES
Pension Expense/Revenue - IMRF 1,054,909$ 122,761$
OPEB Expense/Revenue 270,205 31,444
TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,325,114$ 154,205$
LIABILITIES
Current Liabilities
Accounts Payable and Accrued Expenses 238,775$ 37,384$
Security Deposits Held 3,000 -
Due to Other Funds - 1,273
Unearned Revenue - 82,488
Accrued Interest 242,629 -
Compensated Absences - Current 99,183 7,993
IEPA Loan Payable - Current 1,561,149 -
Bonds Payable - Current 441,517 -
2,586,253$ 129,138$
Non-Current Liabilities
IMRF Net Pension Liability 1,769,693$ 214,432$
Total OPEB Liability 174,609 14,992
IEPA Loan Payable (Net of Current Portion Shown Above)25,181,722 -
Bonds Payable (Net of Current Portion Shown Above)3,464,292 -
30,590,316$ 229,424$
TOTAL LIABILITIES 33,176,569$ 358,562$
DEFERRED INFLOWS OF RESOURCES
Pension Expense/Revenue - IMRF 120,253$ 13,994$
OPEB Expense/Revenue 431,045 50,161
Unavailable Revenue - Right-of-Use Leases - Lessor 545,559 -
TOTAL DEFERRED INFLOWS OF RESOURCES 1,096,857$ 64,155$
NET POSITION
Net Investment in Capital Assets 46,377,371$ 163,592$
Unrestricted/(Deficit)11,434,486 184,745
TOTAL NET POSITION 57,811,857$ 348,337$
APRIL 30, 2023
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 5,712,050$ -$
Capital Fees 1,055,565 -
Debt Service Fees 2,346,224 -
Penalties 134,143 -
Water Meter Sales 20,650 -
Other 29,922 -
Internal Service Funds - 5,555,806
9,298,554$ 5,555,806$
OPERATING EXPENSES
Water Department
Personnel Salaries 432,534$ -$
Miscellaneous Personnel Expenses 233,500 -
Other Operating Expenses 849,256 -
Depreciation 647,212 -
Sewer Department
Personnel Salaries 790,937 -
Miscellaneous Personnel Expenses 515,086 -
Other Operating Expenses 1,474,307 -
Depreciation 2,157,391 -
Utility Work Department
Personnel Salaries 640,079 -
Miscellaneous Personnel Expenses 427,624 -
Other Operating Expenses 54,417 -
Internal Service Funds
Personnel Salaries - 221,138
Miscellaneous Personnel Expenses - 3,686,832
Other Operating Expenses - 1,563,864
Depreciation - 52,939
8,222,343$ 5,524,773$
OPERATING INCOME/(LOSS)1,076,211$ 31,033$
NON-OPERATING REVENUE/(EXPENSE)
Interest Income 136,664$ 3,690$
Unrealized Gain/Loss 52,440 -
Rental Income 82,810 -
Interest and Fees (747,851) -
Amortization 46,517 -
Gain/(Loss) on Sale of Fixed Asset 6,000 -
(423,420)$ 3,690$
INCOME/(LOSS) BEFORE CONTRIBUTIONS
AND TRANSFERS 652,791$ 34,723$
TRANSFERS (TO)/FROM OTHER FUNDS (94,922) (76,956)
CHANGE IN NET POSITION 557,869$ (42,233)$
NET POSITION - MAY 1, 2022 57,253,988 390,570
NET POSITION - APRIL 30, 2023 57,811,857$ 348,337$
FOR THE YEAR ENDED APRIL 30, 2023
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 9,391,967$ -$
Receipts from Employees for Services - (10,738)
Receipts from Other Funds for Services - 5,555,806
Payments to Suppliers for Goods and Services (3,573,878) (5,269,795)
Payments to Employees for Services (1,471,222) (180,669)
Payments to Other Funds for Services (2,390) (69,161)
Internal Activity - Payments (to)/from Other Funds (66,336) 1,273
Net Cash Provided/(Used) by Operating Activities 4,278,141$ 26,716$
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Transfers (to)/from Other Funds (94,922)$ (76,956)$
Net Cash Provided/(Used) by Non-Capital Financing Activities (94,922)$ (76,956)$
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Proceeds from the Sale of Capital Assets 6,000$ -$
Purchase of Capital Assets (561,808) (25,857)
Interest Paid on Capital Debt, Net of Rebate (763,811) -
Principal Paid on Capital Debt (1,902,513) (24,103)
Other Receipts/(Payments)57,113 -
Net Cash Provided/(Used) by Capital and Related Financing Activities (3,165,019)$ (49,960)$
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on Cash and Cash Equivalents and Investments 123,115$ 3,548$
Purchase of Investments (3,961,121) -
Net Cash Provided/(Used) by Investing Activities (3,838,006)$ 3,548$
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (2,819,806)$ (96,652)$
CASH AND CASH EQUIVALENTS BALANCE - MAY 1, 2022
(INCLUDING RESTRICTED CASH AND OVERDRAFTS)7,785,955 434,681
CASH AND CASH EQUIVALENTS BALANCE - APRIL 30, 2023
(INCLUDING RESTRICTED CASH AND OVERDRAFTS)4,966,149$ 338,029$
RECONCILIATION OF OPERATING INCOME/(LOSS) TO NET
CASH PROVIDED/(USED) BY OPERATING ACTIVITIES
Operating Income/(Loss)1,076,211$ 31,033$
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation Expense 2,804,603 52,939
Change in assets, liabilities and deferred amounts:
Receivables, net (39,598) (4,423)
Prepaid Items (5,015) (11,118)
Accounts Payable and Other Payables (16,544) (71,522)
Unearned Revenue 66,675 (6,315)
Pension Liabilities 1,770,577 221,798
OPEB Liabilities 44,929 (2,828)
Deferred Pension Expenses/Revenues (1,484,082) (187,221)
Deferred OPEB Expenses/Revenue 60,385 4,373
Net Cash Provided/(Used) by Operating Activities 4,278,141$ 26,716$
NONCASH CAPITAL FINANCING ACTIVITIES -$ -$
FOR THE YEAR ENDED APRIL 30, 2023
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 1,162,974$ 42,364$
Investments, at fair value
Illinois Police Pension Consolidated Investment Fund 54,550,697 -
Receivables (Net of Allowance for Estimated Uncollectible Amounts)
Accounts Receivable - Unbilled - 13,938
Due from General Fund 3,635 -
Due from Internal Service Fund 1,273 -
TOTAL ASSETS 55,718,579$ 56,302$
LIABILITIES
Accounts Payable 60$ 243$
TOTAL LIABILITIES 60$ 243$
NET POSITION
Restricted for Pensions 55,718,519$ -$
Restricted for Developers, Property Owners, and Others - 56,059
TOTLA NET POSITION 55,718,519$ 56,059$
CITY OF MCHENRY, ILLINOIS
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
APRIL 30, 2023
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 621,970$ -$
Plan Members 491,717 -
Developers, Property Owners, and Others - 34,573
Other Additions 16,531 -
Total Contributions 1,130,218$ 34,573$
Investment Income
Interest and Dividends 1,326,285$ 24$
Gain/(Loss) on Sale of Investments (5,542,682) -
Net Appreciation/(Depreciation) in Fair Value of Investments 4,572,665 -
356,268$ 24$
Less: Investment Management Fees 102,095 -
Net Investment Income 254,173$ 24$
TOTAL ADDITIONS 1,384,391$ 34,597$
DEDUCTIONS
Benefits 2,279,928$ -$
Administrative Expenses 23,631 -
Engineering and Legal Fees 353 34,573
TOTAL DEDUCTIONS 2,303,912$ 34,573$
CHANGE IN NET POSITION (919,521)$ 24$
NET POSITION - MAY 1, 2022 56,638,040 56,035
NET POSITION - APRIL 30, 2023 55,718,519$ 56,059$
CITY OF MCHENRY, ILLINOIS
FUND FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED APRIL 30, 2023
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, 2023
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.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 25
The net costs (by function or business-type activity) are normally covered by general revenue (property
taxes, sales taxes, unrestricted investment earnings, etc.).
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, 2023:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 27
Audit Fund 536$
Recreation Center Fund 260,833
Capital Improvements Fund 781,040
Debt Service Fund 40,993
SSA #4 Lakewood Fund 382
SSA #6 Huntersville Fund 179,115
1,262,899$ 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 $53,512 and all other allowances for other accounts receivable is $555,624.
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, 2023 is
$184,569.
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 y ears
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 2022 levy was passed by the Board on
December 19, 2022. 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. Lease Arrangements
The City recognizes a right-to-use liability and a right-to-use asset for various lease agreements in the
government-wide financial statements.
At the commencement of a lease, the City initially measures the right-to-use liability at the present value
of payments expected to be made during the agreement term. Subsequently, the right-to-use liability is
reduced by the principal portion payments made. The right-to-use asset is initially measured as the initial
amount of the right-to-use liability, adjusted for payments made at or before the commencement date,
plus certain initial direct costs. Subsequently, the right-to-use asset is amortized on a straight-line basis
over the term of the lease agreement. Key estimates and judgments related to lease agreements include
how the City determines (1) the discount rate it uses to discount the expected payments to present value,
(2) lease term, and (3) lease payments.
The City currently does not have any material lessee lease agreements that fall under this type of
arrangement.
The City is a lessor for a lease related to the use of a cell tower by a mobile phone carrier. At the
commencement of the lease, the District initially measures the lease receivable at the present value of
payments expected to be made during the lease term. Subsequently, the lease receivable is reduced by
the principal portion of lease payments made. The unavailable lease revenue is initially measured as the
initial amount of the lease receivable. Subsequently, the unavailable lease revenue is recognized on a
straight-line basis over the lease term. Key estimates and judgments related to leases include how the
District determines (1) the discount rate it uses to discount the expected lease payments to present value,
(2) lease term, and (3) lease payments.
The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged
by the lessor is not provided, the City uses its estimated incremental borrowing rate as the discount rate
for lease agreements.
The term includes the noncancellable period of the lease agreement. Payments included in the
measurement of the right-to-use liability are composed of fixed payments and purchase option prices that
the City is reasonably certain to exercise.
The City monitors changes in circumstances that would require a remeasurement of its lease agreements
and will remeasure the right-to-use asset and liability if certain changes occur that are expected to
significantly affect the amount of the right-to-use liability. Right-to-use assets are reported with Capital
Assets and right-to-use liabilities are reported with Long Term Liabilities on the Statement of Net Position.
S. 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.
T. 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.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 31
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
The Police Pension Fund holds all investments within the Illinois Police Officers’ Pension Investment
Fund (IPOPIF). IPOPIF was created by Public Act 101-0610 and codified within the Illinois Pension
Code, becoming effective January 1, 2020, to streamline investments and eliminate unnecessary and
redundant administrative costs, thereby ensuring assets are available to fund pension benefits for the
beneficiaries of the participating pension funds as defined in 40 ILCS 5/22B-105. Participation in IPOPIF
by Illinois suburban and downstate police pension funds is mandatory and investments were contributed
to the IPOPIF Investment Fund on August 1, 2022. IPOPIF’s investment police was originally adopted
by the Board of Trustees on December 17, 2021. IPOPIF has the authority to invest trust fund assets in
any type of security subject to the requirements and restrictions set forth in the Illinois Pension Code and
is not restricted by the Pension Code sections that pertained exclusively to the Article 3 participating
police pension funds.
As of April 30, 2023, the City and Police Pension had the following investments, maturities, and fair value
measurements:
City
Credit Quality/ Segmented Time Net Asset
Types of investments Ratings Distribution A mount Level 1 Level 2 Value (NAV)
Debt Securities:
U.S. Treasury Securities Not Rated less than 1 year 8,160,308$ 8,160,308$ -$ -$
External Investment Pools AAAmmf less than 1 year 21,299,653 - - 21,299,653
Certificates of Deposit N/A less than 1 year 1,729,354 - 1,729,354 -
Certificates of Deposit N/A 1 to 5 years 322,228 - 322,228 -
Total Debt Securities 31,511,543$ 8,160,308$ 2,051,582$ 21,299,653$
Total Investments 31,511,543$ 8,160,308$ 2,051,582$ 21,299,653$
Fair Value Measurement Using
Police Pension
Credit Quality/ Segmented Time Net Asset
Types of investments Ratings Distribution Amount Level 1 Level 2 Value (NAV)
External Investment Pool AAAmmf less than 1 year 415,414$ -$ -$ 415,414$
IPOPIF Consolidated Investment Fund Not Rated less than 1 year 54,550,697 - - 54,550,697
Total Investments 54,966,111$ -$ -$ 54,966,111$
Fair Value Measurement Using
The City and Police Pension Fund 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 Police Pension Fund held no investments subject to fair value measurement as of April 30, 2023.
The Police Pension Fund’s pooled investment in IPOPIF, as noted in the table above, is valued at Net
Asset Value per share. The pooled investments consist of the investments as noted in the target
allocation table available at www.ipopif.org under Governing Documents, Policies, and Investment Policy
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 32
Statement. Investments in IPOPIF are valued at IPOPIF’s share price, which is the amount it would cost
to buy the shares in the investment pool.
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, 2023 was as follows:
Balance Balance
May 1, 2022 Increases Decreases April 30, 2023
Governmental Activities
Capital Assets not being depreciated
Land 42,664,844$ 986,660$ -$ 43,651,504$
Art and Historical Treasures 1,658,927 - - 1,658,927
Intangibles 300,000 - - 300,000
Construction in Progress 1,463,648 2,715,606 2,347,275 1,831,979
Total Capital Assets not being depreciated 46,087,419$ 3,702,266$ 2,347,275$ 47,442,410$
Other Capital Assets
Land Improvements 7,040,320$ 637,489$ -$ 7,677,809$
Buildings 18,705,237 1,017,304 - 19,722,541
Vehicles 4,864,400 618,251 54,499 5,428,152
Equipment 4,868,609 337,740 11,633 5,194,716
Infrastructure 83,790,172 903,668 - 84,693,840
Total Other Capital Assets at Historical Cost 119,268,738$ 3,514,452$ 66,132$ 122,717,058$
Less Accumulated Depreciation for:
Land Improvements 4,456,045$ 275,255$ -$ 4,731,300$
Buildings 6,352,318 445,571 - 6,797,889
Vehicles 3,290,156 381,825 54,499 3,617,482
Equipment 3,400,430 300,546 11,633 3,689,343
Infrastructure 52,812,804 1,984,116 - 54,796,920
Total Accumulated Depreciation 70,311,753$ 3,387,313$ 66,132$ 73,632,934$
Other Capital Assets, Net 48,956,985$ 127,139$ -$ 49,084,124$
Governmental Activities Capital Assets, Net 95,044,404$ 3,829,405$ 2,347,275$ 96,526,534$
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 33
Balance Balance
May 1, 2022 Increases Decreases April 30, 2023
Business-Type Activities
Capital Assets not being depreciated
Land 2,208,117$ -$ -$ 2,208,117$
Construction in Progress 57,193 130,739 94,988 92,944
Total Capital Assets not being depreciated 2,265,310$ 130,739$ 94,988$ 2,301,061$
Other Capital Assets
Buildings 2,736,098$ -$ -$ 2,736,098$
Vehicles 1,702,060 16,233 38,632 1,679,661
Systems and Equipment 112,191,349 509,824 - 112,701,173
Total Other Capital Assets at Historical Cost 116,629,507$ 526,057$ 38,632$ 117,116,932$
Less Accumulated Depreciation for:
Buildings 2,374,892$ 26,505$ -$ 2,401,397$
Vehicles 923,312 67,048 38,632 951,728
Systems and Equipment 36,300,158 2,711,050 - 39,011,208
Total Accumulated Depreciation 39,598,362$ 2,804,603$ 38,632$ 42,364,333$
Other Capital Assets, Net 77,031,145$ (2,278,546)$ -$ 74,752,599$
Business-Type Activities Capital Assets, Net 79,296,455$ (2,147,807)$ 94,988$ 77,053,660$
Depreciation expense was charged to functions as follows:
NOTE 4 - NET INVESTMENT IN CAPITAL ASSET CALCULATION
Net investment in capital asset calculation as of April 30, 2023 was as follows:
Governmental Activities
Capital Assets, Net of Accumulated Depreciation 96,526,534$
Less:
Capital Related Debt (4,057,535)
Capital Assets in Accounts Payable (704,854)
Investment in Capital Assets 91,764,145$
Business-Type Activities
Capital Assets, Net of Accumulated Depreciation 77,053,660$
Less:
Capital Related Debt (30,648,680)
Capital Assets in Accounts Payable (27,609)
Investment in Capital Assets 46,377,371$
NOTE 5 - LONG-TERM LIABILITY ACTIVITY
Long-term liability activity for the year ended April 30, 2023 was as follows:
Governmental Activities
Public Safety 365,184$
Public Works 2,274,259
Parks and Recreation 502,158
Unallocated 245,712
Total Governmental Activities Depreciation Expense 3,387,313$
Business-Type Activities
Water 647,212$
Sewer 2,157,391
Total Business-Type Activities Depreciation Expense 2,804,603$
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 34
Amounts
Balance Balance Due Within
May 1, 2022 Additions Retirements April 30, 2023 One Year
Governmental Activities
Bonds and Notes Payable
General Obligation Bonds 27,205,000$ -$ 1,675,000$ 25,530,000$ 1,695,000$
Unamortized Bond Discount (371) 189 - (182) (182)
Unamortized Bond Premium 40,547 - 8,378 32,169 8,378
Note Payable 956,419 - 320,871 635,548 328,690
Total Bonds and Notes Payable 28,201,595$ 189$ 2,004,249$ 26,197,535$ 2,031,886$
Other Long-Term Liabilities
Compensated Absences 625,240$ 640,775$ 625,240$ 640,775$ 640,775$
Total Other Long-Term Liabilities 625,240$ 640,775$ 625,240$ 640,775$ 640,775$
Governmental Activities Long-Term
Obligations 28,826,835$ 640,964$ 2,629,489$ 26,838,310$ 2,672,661$
Business-Type Activities
Bonds and Notes Payable
General Obligation Bonds 3,995,000$ -$ 370,000$ 3,625,000$ 395,000$
IEPA Revolving Loan Fund 28,275,383 - 1,532,512 26,742,871 1,561,149
Unamortized Bond Premium 327,327 - 46,518 280,809 46,517
Total Bonds and Notes Payable 32,597,710$ -$ 1,949,030$ 30,648,680$ 2,002,666$
Other Long-Term Liabilities
Compensated Absences 98,664$ 99,183$ 98,664$ 99,183$ 99,183$
Total Other Long-Term Liabilities 98,664$ 99,183$ 98,664$ 99,183$ 99,183$
Business-Type Activities Long-Term
Obligations 32,696,374$ 99,183$ 2,047,694$ 30,747,863$ 2,101,849$
Bonds and notes payable consisted of the following at April 30, 2023:
Maturity Interest Face Carrying
Date Rate Amount Amount
Governmental Activities
General Obligation Bonds 2012 12/15/2027 2.00% - 2.50%850,000$ 320,000$
General Obligation Bonds 2013 5/1/2027 0.40% - 2.75%415,000 170,000
General Obligation Bonds 2015 12/15/2035 2.00% - 3.25%6,375,000 2,900,000
General Obligation Bonds 2020B 4/30/2040 0.849% - 3.376%24,265,000 22,140,000
Note Payable 2/20/2024 3.50%574,171 65,477
4 parcels of land pledged as collateral to this loan
Note Payable 5/25/2024 3.10%1,300,151 570,071
26 vehicles pledged as collateral to this loan
Capital Lease - Dell Financial 7/31/2022 0.00%72,310 -
Total 33,851,632$ 26,165,548$
Business-Type Activities
General Obligation Bonds 2012 12/15/2032 2.00% - 2.80%2,250,000$ 1,285,000$
General Obligation Bonds 2020A 4/30/2030 4.00%2,855,000 2,340,000
IEPA Revolving Loan Fund 12/30/2037 1.86%31,507,182 26,742,871
Total 36,612,182$ 30,367,871$
At April 30, 2023, the annual debt service requirements to service all long-term debt attributable to
governmental activities are:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 35
Year Ending April 30 Principal Interest Total
2024 2,023,690$ 670,482$ 2,694,172$
2025 1,996,460 636,599 2,633,059
2026 1,565,398 600,660 2,166,058
2027 1,560,000 573,793 2,133,793
2028 1,595,000 543,817 2,138,817
2029 - 2033 6,770,000 2,221,895 8,991,895
2034 - 2038 7,485,000 1,243,344 8,728,344
2039 - 2040 3,170,000 161,372 3,331,372
26,165,548$ 6,651,962$ 32,817,510$ At April 30, 2023 the annual debt service requirements to service all long-term debt attributable to
business-type activities are:
Year Ending April 30 Principal Interest Total
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 2,156,151 436,650 2,592,801
2029 - 2033 10,348,882 1,472,943 11,821,825
2034 - 2038 9,751,016 505,689 10,256,705
30,367,871$ 4,617,191$ 34,985,062$ 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, 2023 the outstanding
balance on the bonds was $1,114,812.
Long-term liabilities are being repaid from the following funds:
Obligation Fund
Governmental Activities
General Obligation Bonds General Fund, Annexation Fund, Capital Improvements Fund,
TIF Fund, Recreation Center Fund, Water and Sewer Fund
Note Payable General Fund, Tourism Fund, Information Technology Fund
Compensated Absences General Fund, Information Technology Fund
Business-Type Activities
General Obligation Bonds Water and Sewer Fund
IEPA Revolving Loan Fund Water and Sewer Fund
Compensated Absences Water and Sewer Fund
NOTE 6 - RESTRICTED EQUITY
The following amounts are restricted equity balances at April 30, 2023:
Restricted Restricted
Restricted for Net Position Fund Balance
Governmental Activities/Governmental Funds
Highways and Streets 1,608,945$ 1,608,945$
Capital Projects 195,936 195,936
Special Service Areas 29 29
Tax Increment Financing 232,001 232,001
2,036,911$ 2,036,911$
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 36
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, 2023 was $4,998,159.
NOTE 8 - DEFICIT FUND BALANCE
At April 30, 2023 a deficit fund balance existed in the following funds:
Audit Fund 24$
SSA #6 Huntersville Fund 179,115
179,139$
NOTE 9 - NET POSITION/FUND BALANCE ADJUSTMENT
During the year, the City made the following net position/fund balance adjustments:
Governmental Funds Fund Balance
General Fund
Adjustment to reverse FY'22 Income Tax Accrual (861,324)$
Governmental Activities Net Position
Adjustment to reverse FY'22 Income Tax Accrual (861,324)$
In prior years, the City accrued two months of income and personal property from the State of Illinois. In
the current year, the City began recognizing these revenues based on when the state has vouchered or
allocated these payments as these amounts are not derived tax revenues at the local government level.
Instead, these revenues fall in line with a voluntary non-exchange transaction, in which eligibility then
availability requirements should both be determined before recognizing the revenue. In the case of
revenues, these eligibility and availability requirements are not met until the month the funds are
vouchered by the state. Due to this, a fund balance adjustment and corresponding net position
adjustment were made for the prior year accrual amount noted above, as these eligibility requirements
were not met in the prior year as well.
NOTE 10 - PROPERTY TAXES
Property taxes receivable and unavailable revenue recorded in these financial statements, in the amount
of $5,875,439, are from the 2022 tax levy. The unavailable revenue is 100% of the 2022 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 2023. The
City has determined that 100% of the amounts collected for the 2021 levy ($5,711,748) are allocable for
use in fiscal year 2023 and, therefore, are recorded in these financial statements as property taxes
revenue. A summary of the assessed valuation, rates, and extensions for the years 2022, 2021, and
2020 follows:
Tax Year
Assessed Valuation
Rates Extensions Rates Extensions Rates Extensions
General 0.0427 364,100$ 0.0524 410,155$ 0.0344 255,869$
Bond 0.1953 1,665,073 0.2129 1,839,230 0.2241 1,667,294
Police Protection 0.0643 547,962 0.0701 547,965 0.0737 547,966
Insurance 0.0586 499,995 0.0639 499,998 0.0672 499,999
Retirement 0.0468 399,202 0.0510 399,197 0.0537 399,198
Social Security 0.0661 563,752 0.0721 563,749 0.0758 563,751
Audit 0.0031 26,431 0.0034 26,428 0.0036 26,431
Police Pension 0.0788 671,460 0.0800 625,607 0.0885 658,311
Total Taxes Extended 0.5557 4,737,975$ 0.6058 4,912,329$ 0.6209 4,618,819$
2020
$743,912,520
2022
$864,035,912
2021
$782,126,233
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 37
Tax Year
Rates Extensions Rates Extensions Rates Extensions
Road and Bridge
(from Townships)- 305,803$ - 292,407$ - 273,254$
Special Service Area #4A - 15,580$ - 15,580$ - 16,123$
Tax Increment Financing - 816,081$ - 732,268$ - 680,014$
202020222021
NOTE 11 - EXCESS OF EXPENDITURES OVER BUDGET
For the year ended April 30, 2023, the following funds had expenditures that exceeded the budget:
Fund Budget Actual
Audit $ 51,000 $ 51,825 825$
Recreation Center 551,463 606,912 55,449
Capital Asset Maintenance and Replacement 177,515 179,313 1,798
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 an agent
multiple-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.
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:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 38
• 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, 2022, the following employees were covered by the benefit terms:
Inactive plan members or beneficiaries currently receiving benefits 101
Inactive plan members entitled to but not yet receiving benefits 53
Active plan members 97
Total 251
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 2022 and 2023 was 10.82% and 9.42%, respectively. For the fiscal
year ended April 30, 2023, the City contributed $878,407 to the plan. The City also contributes for
disability benefits, death benefits, and supplemental retirement benefits, all of which are pooled at the
IMRF level. Contribution rates for disability and death benefits are set by IMRF’s Board of Trustees, while
the supplemental retirement benefits rate is set by statute.
E. Net Pension (Asset)/Liability
The components of the net pension (asset)/liability of the IMRF actuarial valuation performed as of
December 31, 2022, with a measurement date as of that date, calculated in accordance with GASB
Statement No. 68, were as follows:
Total Pension (Asset)/Liability 47,463,892$
IMRF Fiduciary Net Position 40,185,474
City's Net Pension Liability 7,278,418
IMRF Fiduciary Net Position as a Percentage
of the Total Pension Liability 84.67%
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.
F. Actuarial Assumptions
The total pension liability above was determined by an actuarial valuation performed as of
December 31, 2022 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
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 39
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, 2022:
Asset Class
Target
Allocation
Projected
Return
Equities 35.50% 6.50%
International Equities 18.00% 7.60%
Fixed Income 25.50% 4.90%
Real Estate 10.50% 6.20%
Alternatives 9.50%
Private Equity 9.90%
Hedge Funds N/A
Commodities 6.25%
Cash Equivalents 1.00% 4.00%
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, 2022. 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. Based on those assumptions, the pension plan’s fiduciary net position was
projected to be available to make all projected future benefit payments of current active and inactive
employees. Therefore, the long-term expected rate of return on pension plan investments was applied
to all periods of projected benefit payments to determine the total pension liability. 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
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 4.05%; 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.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 40
I. Changes in Net Pension (Asset)/Liability
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(A)(B)(A)-(B)
Balances at December 31, 2021 46,142,272$ 48,058,375$ (1,916,103)$
Changes for the year:
Service Cost 763,605$ -$ 763,605$
Interest on the Total Pension Liability 3,290,347 - 3,290,347
Differences Between Expected and Actual
Experience of the Total Pension Liability (452,379) - (452,379)
Contributions - Employer - 903,892 (903,892)
Contributions - Employee - 375,925 (375,925)
Net Investment Income - (6,083,896) 6,083,896
Benefit Payments, including Refunds
of Employee Contributions (2,279,953) (2,279,953) -
Other (Net Transfer)- (788,869) 788,869
Net Changes 1,321,620$ (7,872,901)$ 9,194,521$
Balances at December 31, 2022 47,463,892$ 40,185,474$ 7,278,418$
J. Sensitivity of the Net Pension (Asset)/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 (Asset)/Liability 13,541,084$ 7,278,418$ 2,387,521$
K. Pension Expense/(Income) and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
For the year ended April 30, 2023, the City recognized pension expense/(income) of $2,271,343. At
April 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related
to pensions from the following sources:
Deferred Deferred
Outflows of Inflows of Net Outflows
Expense in Future Periods Resources Resources of Resources
Differences between expected and actual experience 1,006,560$ 357,606$ 648,954$
Changes of assumptions 76,120 189,469 (113,349)
Net difference between projected and actual
earnings on pension plan investments 3,439,214 - 3,439,214
Total deferred amounts to be recognized in
pension expense in future periods 4,521,894$ 547,075$ 3,974,819$
Pension contributions made subsequent to
the measurement date 277,293 - 277,293
Total deferred amounts related to pensions 4,799,187$ 547,075$ 4,252,112$
$277,293 reported as deferred outflows of resources related to pensions resulting from the City’s
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the reporting year ended April 30, 2024. Other amounts reported as deferred outflows of
resources and deferred inflows of resources related to pensions will be recognized in pension expense
in future periods as follows:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 41
Net Deferred
Year Ending Outflows of
December 31 Resources
2023 236,167$
2024 751,514
2025 1,159,770
2026 1,827,368
2027 -
Thereafter -
3,974,819$ L. Social Security
Employees not qualifying for coverage under the Illinois Municipal Retirement Fund are considered “non-
participating employees”. These employees and those qualifying for coverage under the Illinois Municipal
Retirement Fund are covered under Social Security. The City paid the total required contribution for the
current fiscal year.
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, 2022, the date of the latest actuarial valuation, Plan participation consisted of:
Inactive plan members or beneficiaries currently receiving benefits 33
Terminated plan members entitled to but not yet receiving benefits 10
Active plan members 48
Total 91
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, 2023 the City’s contribution was
12.54% of covered payroll.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 42
E. Net Pension (Asset)/Liability
The components of the net pension liability of the Plan as of April 30, 2023, calculated in accordance with
GASB Statement No. 68, were as follows:
Total Pension Liability 60,067,242$
Plan Fiduciary Net Position 55,718,518
City's Net Pension (Asset)/Liability 4,348,724
Plan Fiduciary Net Position as a Percentage
of the Total Pension Liability 92.76%
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.
F. Actuarial Assumptions
The total pension liability above was determined by an actuarial valuation performed as of May 1, 2022
using the following actuarial methods and assumptions:
Actuarial Cost Method Entry Age Normal
Amortization Method Straight Line
Remaining Amortization Period 20 Years
Actuarial Experience and Changes in Assumptions 6.81 Years
Asset Experience 5 Years
Assumptions
Inflation 2.25%
Salary Increases 3.75% - 10.02%
Interest Rate 7.00%
Payroll Growth 3.00%
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, 2022 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.
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.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 43
G. Discount Rate
The discount rate used to measure the total pension liability was 7.00%. 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.
The Plan’s projected net position is expected to cover future benefit payments in full for the current
employees.
Projected benefit payments are determined during the actuarial process based on assumptions. More
details on the assumptions are in the prior section. The expected contributions are based on the funding
policy of the Plan.
H. Changes in the Net Pension (Asset)/Liability
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(A)(B)(A)-(B)
alances at April 30, 2022 57,107,066$ 56,638,040$ 469,026$
hanges for the year:
Service Cost 1,133,068$ -$ 1,133,068$
Interest on the Total Pension Liability 3,939,393 - 3,939,393
Changes of Benefit Terms (53,189) - (53,189)
Differences Between Expected and Actual Experience 226,460 - 226,460
Contributions - Employer - 621,970 (621,970)
Contributions - Employee - 491,717 (491,717)
Net Investment Income - 276,331 (276,331)
Benefit Payments, including Refunds of Employee Contributions (2,285,556) (2,285,556) -
Administrative Expense - (23,984) 23,984
Net Changes 2,960,176$ (919,522)$ 3,879,698$
alances at April 30, 2023 60,067,242$ 55,718,518$ 4,348,724$
I. Sensitivity of the Net Pension (Asset)/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:
Current
1% Decrease Discount Rate 1% Increase
6.00% 7.00% 8.00%
Net Pension (Asset)/Liability 13,292,510$ 4,348,724$ (2,927,901)$
J. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions
For the year ended April 30, 2023, the City recognized pension expense/(income) of $1,756,911. At
April 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related
to pensions from the following sources:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 44
Deferred Deferred Net Deferred
Outflows of Inflows of Outflows of
Expense in Future Periods Resources Resources Resources
Differences between expected and actual experience 774,332$ 1,537,535$ (763,203)$
Assumption changes 561,750 246,050 315,700
Net difference between projected and
actual earnings on pension investments 5,393,559 - 5,393,559
Total deferred amounts to be recognized in
pension expense in future periods 6,729,641$ 1,783,585$ 4,946,056$
Amounts reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be recognized in pension expense in future periods as follows:
Net Deferred
Year Ending Outflows of
April 30 Resources
2024 1,061,653$
2025 818,545
2026 2,361,839
2027 743,479
2028 (43,010)
Thereafter 3,550
4,946,056$
NOTE 14 - POST EMPLOYMENT BENEFIT COMMITMENTS
Retiree Insurance Plan
A. 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.
B. 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:
Medical Coverage
Employees may continue c overage 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.
C. Membership
Membership in the plan consisted of the following at May 1, 2022, the date of the latest actuarial valuation:
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 45
Active employees 117
Inactive employees entitled to but not yet receiving benefits -
Inactive employees currently receiving benefits 11
Total 128
D. Total OPEB Liability
The City’s total OPEB liability was measured as of April 30, 2023, and the total OPEB liability was
determined by an actuarial valuation as of May 1, 2022.
E. Actuarial Assumptions
The total OPEB liability in the May 1, 2022 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 4.14%
Inflation 3.00%
Salary Rate Increase 4.00%
Health Care Trend
Initial Trend Rate 5.00%
Ultimate Trend Rate 4.50%
FY the Ultimate Rate is Reached 2039
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
60% of active employees are assumed to be married and elect spousal
coverage upon retirement. Males are assumed to be three years older than
females. 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,w ith future mortality
improvements using scale MP-2020
Police Employees and Retirees: PubS.H-2010(A)Mortality Table -Safety w ith
future mortality improvements using Scale MP-2020.
IMRF Employees: Rates from the December 31, 2022 IMRF Actuarial Valuation
Report
Police Employees: Rates from the City of McHenry Police Pension Fund
Actuarial Valuation for the Year Beginning May 1, 2021
10% of active employees are assumed to elect coverage at retirement
The actuarial assumptions used in the May 1, 2022 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 0.16 from 3.98% for the beginning of the year values and 4.14% 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.
F. 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 4.14% is used, which is the S&P Municipal Bond 20-Year High-Grade Rate Index as of
April 30, 2023.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 46
G. Changes in the Total OPEB Liability
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
(a)(b)(a) - (b)
Balances at April 30, 2022 1,329,743$ -$ 1,329,743$
Changes for the year:
Service Cost 31,957$ -$ 31,957$
Interest on Total OPEB Liability 50,394 - 50,394
Difference between Expected & Actual Experience (120,341) - (120,341)
Assumption Changes (41,468) - (41,468)
Benefit Payments (127,036) - (127,036)
Net Changes (206,494)$ -$ (206,494)$
Balances at April 30, 2023 1,123,249$ -$ 1,123,249$
Increase/(Decrease)
H. 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% Decrease
10.25%Valuation Rate
1% Increase
8.63%
1,238,358$ 1,123,249$ 1,026,334$
Plan's Total OPEB Liability/(Asset)
46
I. 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:
1% Decrease Healthcare Cost 1% Increase
10.13%Valuation Rate 12.28%
1,009,423$ 1,123,249$ 1,261,192$
Plan's Total OPEB Liability/(Asset)
J. OPEB Expense/(Income) and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB
For the fiscal year ended April 30, 2023, the City recognized OPEB expense/(income) of $(65,897). At
April 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related
to OPEB from the following sources:
Deferred Outflows Deferred Inflows Net Inflows
of Resources of Resources of Resources
Differences Between Expected and Actual Experience 311,144$ 1,049,479$ (738,335)$
Changes of Assumptions 1,444,949 1,751,930 (306,981)
Total 1,756,093$ 2,801,409$ (1,045,316)$
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 (9.99 years, active and retired) in the postretirement plan.
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 47
Amounts reported as deferred outflows of resources related to OPEB will be recognized as future OPEB
expense in future periods as follows:
Year ending April 30
Net Inflows of
Resources
2024 (148,250)$
2025 (148,250)
2026 (148,250)
2027 (148,250)
2028 (124,771)
2029-2032 (327,545)
(1,045,316)$
NOTE 15 - INTERFUND BALANCES AND TRANSFERS
Interfund balances at April 30, 2023 consisted of the following:
Due From Due To A mount
General Fund Water and Sewer Fund 129,766$
General Fund Police Pension Fund 3,635
Internal Service Fund Police Pension Fund 1,273
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, 2023 consisted of the following:
Transfer From Transfer To A mount
Water and Sewer Fund Nonmajor Governmental Funds 94,922$
General Fund Nonmajor Governmental Funds 2,095,250
Internal Service Fund General Fund 76,956
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. The transfer from the Internal
Service Fund to the General Fund nets to zero on the government-wide financials due to the internal
service funds being combined into the governmental activities’ column.
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.
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
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 48
loss of reduction and prevention procedures to be followed by the members. During fiscal year 2023
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, 2023, 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, 2023
totaling $2,455,285. Beginning in May 2023, the City has contract commitments in place for various road,
parking lot, and other projects for $3,740,193. For the Water and Sewer Fund as of April 30, 2023, there
were contract commitments in place for Well #14 engineering totaling $40,689.
NOTE 18 - CONTINGENCIES
There is no outstanding litigation which may have a materially adverse effect on the City’s financial
position.
NOTE 19 - LEGAL DEBT LIMITATION
The Illinois Compiled Statutes limits the amount of indebtedness to 8.625% of the most recent available
equalized assessed valuation (EAV) of the City.
2022 EAV 861,184,991$
X 8.625%
Debt Margin 74,277,205$
Current Debt 29,790,548
Remaining Debt Margin 44,486,657$
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, 2023 as follows:
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 sales 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 $8,441,377.04 or 20 years.
549,803$
1110 N Green LLC
Redevelopment
Agreement
TIF property
taxes
Rebate 100% of the TIF Increment assessed up to
$624,028.-$
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
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
$677,500 or 20 years.
41,547$
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 $175,000.
-$
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 $62,500.13,818$
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
$300,000.
5,387$
Curt Ames DBA
Chain O'Lakes
Brewing Company
Redevelopment
Agreement
TIF Property
Taxes
Rebate 100% of th e TIF Increment assessed up to
$17,585.216$
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 ($3,458.64) through December 31, 2026.
5,607$
Boone Creek
Crossing LLC
Redevelopment
Agreement
TIF Property
Taxes
Rebate 100% of th e TIF Increment assessed up to
$25,000 2,180$
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 $1,000,000 and
end December 31,2039. These rebates do not begin
until buildings are torn down at 5301 Bull ValleyRoad,
5520 W.Elm St,and 4410 W.Elm St;and a new
building is built at 5301 Bully Valley Road.
114,741$
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.
12,300$
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
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 $1,000,000 and
end after the 20th Sales Tax Incentive Year.
84,649$
Advance Real
Estate
Management LLC
Economic
Incentive
Agreement
Sales taxes
Rebate $75,000 from the base sales tax generated
from the subject property, and in addition, 50% of the
base sales tax in excess of the sales tax revenue
baseline received by the city of$195,745. $250,000 in
tenant incentive improvements are paid when
improvements are made in two tenant spaces. Total
rebate cannot exceed $1,500,000 and ends after the
20th anniversary of the completion date.
89,713$
Jessup
Manufacturing
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 2018 base property
tax year ($4,570.54) through December 31, 2026
1,351$
Munson Ski &
Inboard Water
Sports, Inc. DBA
Munson Ski &
Marine Economic
Incentive
Agreement
Sales taxes
Rebate 100% of bas e sales tax received by the State
attributable to the gross sales generated at Munson
Ski &Marine at Watertower. Total rebate payments
cannot exceed $500,000 and ends on December 31,
2043.
2,591$
1325 Riverside Inc.
DBA Whiskey
Diablo Economic
Incentive
Agreement
Sales taxes
Rebate 100% of bas e sales tax received by the State
attributable to the gross sales generated at 1325
Riverside Dr McHenry,IL .Total rebate payments
cannot exceed $62,149.
-$
NOTE 21 - LEASE ARRANGEMENTS
The City, as lessor, has the following lease arrangements:
Contract
Start
Contract
End Items
Initial
Terms
Optional
Terms
Initial
Contract
V alue
Borrowing
Rate
(per year)
Business-Type Activities
Cell Tower 7/21/2014 7/21/2044 Cell Tower 120 months see below 300,000$ N/A
Lease revenue for the fiscal year ended April 30, 2023 was $25,697.
A summary of deferred inflows - leases activity during the year ended April 30, 2023 is as follows:
Balance Balance
May 1, 2022 Additions Deletions April 30, 2023
Business-Type Activities
Deferred Inflows - Leases:571,256$ -$ -$ 571,256$
Total Deferred Inflows - Leases 571,256$ -$ -$ 571,256$
Less earned revenue amounts:
Deferred Inflows - Leases -$ 25,697$ -$ 25,697$
Total Revenue Earned -$ 25,697$ -$ 25,697$
Total Deferred Inflows - Leases, Net 571,256$ (25,697)$ -$ 545,559$
NOTES TO FINANCIAL STATEMENTS (Continued)
Page 51
Revenue was recognized in rental income within the Water and Sewer Fund.
The cell tower lease has an initial lease term of ten years running from July 21, 2014 through
July 21, 2024. The lease also contains an optional extension provision. The parties may extend the term
of the lease for four additional five-year terms by mutual agreement or terminate the lease no later than
May 21, 2024. These additional terms have been taken into account as both parties are reasonably
certain that the extension will take place as of the current fiscal year end. Lease payments for each five-
year extension term are as follows:
Lease Term Rental Payment
7/21/2024 - 7/21/2029 156,000$
7/21/2029 - 7/21/2034 162,000
7/21/2034 - 7/21/2039 168,000
7/21/2039 - 7/21/2044 174,000
The lease payments are required to be paid up front at the start of each lease term and are shown as
unavailable revenue within both the proprietary fund and government-wide financial statements. The
City will recognize revenue each year as it is earned.
At April 30, 2023, the annual lease payments and subsequent receipts are as follows:
Year Ending April 30 Principal Interest Total
2024 -$ -$ -$
2025 122,324 33,676 156,000
2026 - - -
2027 - - -
2028 - - -
2029-2033 104,630 57,370 162,000
2034-2038 126,333 41,667 168,000
2039-2043 151,294 22,706 174,000
2044-2048 - - -
Total 504,581$ 155,419$ 660,000$
NOTE 22 - CHANGE IN ACCOUNTING PRINCIPLE
The City has implemented GASB Statement No. 87, Leases. This statement establishes financial
reporting standards related to leases. Implementation of this standard resulted in recognizing the fair
market value of the liability and asset at the commencement of the agreement. There have been no
changes to the previously issued audited financial statements which would be required on a retrospective
basis.
REQUIRED SUPPLEMENTARY INFORMATION
4/30/2023*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 763,605$ 728,190$ 805,614$ 781,612$ 740,595$ 707,796$ 704,466$ 652,882$
Interest on Total Pension Liability 3,290,347 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 (452,379) 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 (2,279,953) (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 1,321,620$ 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 46,142,272 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 47,463,892$ 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 903,892$ 1,068,306$ 1,137,523$ 787,631$ 918,212$ 915,963$ 844,878$ 801,851$
Contributions - Member 375,925 385,024 361,437 344,894 340,841 328,547 366,710 277,350
Net Investment Income (6,083,896) 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 (2,279,953) (2,207,589) (1,946,703) (1,700,114) (1,543,189) (1,393,390) (1,384,293) (1,144,016)
Administrative Expenses (788,906) (35,322) 131,829 196,150 493,832 (352,231) 293,436 (161,598)
Net Change in Plan Fiduciary Net Position (7,872,938)$ 6,298,606$ 4,848,428$ 5,446,244$ (1,462,837)$ 4,370,025$ 1,961,053$ (93,125)$
Plan Net Position - Beginning 48,058,412 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 40,185,474$ 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 7,278,418$ (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 84.67%104.15%95.91%88.93%80.61%92.45%83.41%81.25%
Covered Payroll 8,353,902$ 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 Payroll 87.13%-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, 2023
Page 52
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4/30/2023*4/30/2022*4/30/2021*4/30/2020*4/30/2019*4/30/2018*4/30/2017*
Actuarially-Determined Contribution 903,892$ 978,639$ 983,107$ 796,541$ 918,212$ 908,056$ 844,877$
Contributions in Relation to Actuarially-Determined Contribution 903,892 1,068,306 1,137,523 787,631 918,212 915,963 844,878
Contribution Deficiency/(Excess)-$ (89,667)$ (154,416)$ 8,910$ -$ (7,907)$ (1)$
Covered Payroll 8,499,251$ 7,213,419$ 7,135,984$ 7,780,883$ 7,594,095$ 7,469,026$ 6,362,027$
Contributions as a Percentage of Covered Payroll 10.63%14.81%15.94%10.12%12.09%12.26%13.28%
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: 21-year closed period
Price Inflation: 2.25%, 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 2020 valuation pursuant to an experience study of the period 2017 to 2019.
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: 2.75%
CITY OF MCHENRY, ILLINOIS
ILLINOIS MUNICIPAL RETIREMENT FUND
SCHEDULE OF EMPLOYER CONTRIBUTION
APRIL 30, 2023
Actuarial Method and Assumptions Used on the Calculation of the 2022 Contribution Rate *
Salary Increases: 2.85% to 13.75%, including inflation
Investment Rate of Return: 7.25%
Mortality: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-
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.For active members,the P
Weighted, below-median income, General, Employee, Male and Female (both unadjusted) tables, and future mortality improvements projected using scale MP-2020.
*Based on Valuation Assumptions used in the December 31, 2020 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.
Page 53
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4/30/2023 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 1,133,068$ 1,104,977$ 1,106,282$ 1,020,016$ 964,573$ 969,843$ 906,395$ 948,282$ 876,654$
Interest 3,939,393 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 (53,189) - - 267,927 - - - - -
Differences Between Expected and Actual Experience 226,460 (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 (2,285,556) (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 2,960,176$ 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 57,107,066 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 60,067,242$ 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 621,970$ 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 491,717 467,800 469,279 500,202 427,378 409,415 397,515 513,111 381,363
Contributions - Other - 27,092 435,068 - 1,221 - - - -
Net Investment Income 276,331 (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 (2,285,556) (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 (23,984) (49,007) (25,668) (100,204) (17,813) (18,717) (41,164) (29,539) (36,845)
Net Change in Plan Fiduciary Net Position (919,522)$ (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 56,638,040 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 55,718,518$ 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 4,348,724$ 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 92.76%99.18%109.52%51.08%54.65%53.49%50.34%45.42%52.58%
Covered-Employee Payroll 4,959,035$ 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 87.69%9.94%-114.50%595.92%533.44%524.17%550.40%642.32%503.08%
2023 2022 2021 2020 2019 2018 2017 2016 2015
Annual Money-Weighted Rate of Return,
Net of Investment Expenses -1.63%4.26%32.11%-0.48%5.73%9.60%5.60%-1.53%5.41%
*For the year ended April 30, 2023, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was not available due to the transition of all investments into the consolidated police pension
fund.
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, 2023
Page 54
See Accompanying Independent Auditor's Report
4/30/2023 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 625,600$ 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 621,970 655,318 26,150,315 2,077,704 2,017,300 1,868,798 1,521,914 1,386,205 1,295,101
Contribution Deficiency/(Excess)3,630$ 1,920,688$ (23,918,573)$ 4,717$ 2,403$ 5,421$ 2,330$ 1,169$ 476$
Covered-Employee Payroll 4,959,035$ 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 12.54%13.89%557.96%46.98%46.65%43.54%37.28%35.72%34.16%
Notes to Schedule:
Mortality Rates: Pub-2010 Adjusted for plan Status, Demographics, and Illinois Public Pension Data, as described
Price Inflation: 2.25%
CITY OF MCHENRY, ILLINOIS
POLICE PENSION PLAN
SCHEDULE OF EMPLOYER CONTRIBUTION
LAST TEN FISCAL YEARS
Salary Increases: 3.75% to 10.02%
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 2022 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, 2021 actuarial valuation for the December 2021 tax levy, if applicable
Investment Rate of Return: 7.00%
Retirement Rates: 100% of L&A 2020 Illinois Police Retirement Rates Capped at Age 65
Equivalent Single Amortization Period: 100% funded over 15 years
Asset Valuation Method: 5-year smoothed fair value
Wage Growth: 3.00%
Page 55
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4/30/2023 4/30/2022 4/30/2021 4/30/2020 4/30/2019
TOTAL OPEB LIABILITY
Service Cost 31,957$ 38,558$ 38,278$ 36,378$ 32,964$
Interest 50,394 103,035 165,119 171,790 209,775
Changes in Benefit Terms - (3,356,991) - - -
Differences Between Expected and Actual Experience (120,341) 393,032 (646,027) - (1,070,724)
Benefit Payments (127,036) (174,427) (214,301) (162,019) (167,232)
Changes in Assumptions (41,468) (1,390,894) 473,546 513,575 417,482
Other Changes - - - (91,626) 147,912
Net Change in Total OPEB Liability (206,494)$ (4,387,687)$ (183,385)$ 468,098$ (429,823)$
Total OPEB Liability - Beginning 1,329,743 5,717,430 5,900,815 5,432,717 5,862,540
Total OPEB Liability - Ending 1,123,249$ 1,329,743$ 5,717,430$ 5,900,815$ 5,432,717$
Covered-Employee Payroll 10,588,482$ 9,802,365$ 9,342,565$ 8,796,233$ *8,796,233$
Employer's Net OPEB Liability as a Percentage
of Covered-Valuation Payroll 10.61%13.57%61.20%67.08%61.76%
Notes to Schedule:
The following are the discount rates used in each period:4.14%3.98%1.83%3.21%3.21%
CITY OF MCHENRY
OTHER POST-EMPLOYMENT BENEFIT
SCHEDULE OF CHANGES IN THE EMPLOYER'S TOTAL OPEB
LIABILITY AND RELATED RATIOS
APRIL 30, 2023
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.
Page 56
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Actual
Original Final Amounts
REVENUES
Local Taxes
Property Tax 5,037,941$ 5,037,941$ 4,975,755$
Intergovernmental
State Sales Tax 12,490,464 12,490,464 13,346,454
State Income Tax 3,589,961 3,589,961 4,384,429
State Replacement Tax 80,000 80,000 246,433
State Pull Tab/Games Tax 850 850 1,312
Inter Track Wagering Tax 25,000 25,000 39,296
State Telecommunications Tax 200,000 200,000 198,361
Cannabis Use Tax 35,000 35,000 42,240
Federal Grants - - 1,841,293
Other Local Sources
Hotel/Motel Tax 170,000 170,000 243,574
Franchise Fees 380,000 380,000 379,078
Licenses and Permits 1,142,500 1,142,500 1,247,056
Fines and Forfeitures 402,000 402,000 451,894
Charges for Services 1,268,789 1,268,789 1,423,862
Interest 2,500 2,500 454,024
Local Grants - - 46,113
Miscellaneous
Rent 18,000 18,000 14,489
Royalties 175,000 175,000 175,000
Donations - - 13,348
Annexation Fees 50,000 50,000 -
Reimbursements 1,925,394 1,925,394 2,554,441
Other Miscellaneous 75,100 75,100 255,656
Total Revenues 27,068,499$ 27,068,499$ 32,334,108$
EXPENDITURES
Current
General Office
Administration 1,241,669$ 1,284,379$ 1,149,942$
Elected Officials 99,310 99,310 70,055
Community Development 1,319,951 1,515,236 1,262,634
Finance Department 1,533,380 1,618,380 1,750,399
Human Resources 309,057 309,057 294,344
Economic Development 405,510 415,510 370,197
4,908,877$ 5,241,872$ 4,897,571$
Public Safety
Police Commission 6,953$ 6,953$ 4,584$
Police Department 9,682,259 9,785,259 9,766,599
Dispatch Center 2,447,519 2,447,519 2,614,829
12,136,731$ 12,239,731$ 12,386,012$
Public Works
Administration 506,812$ 506,812$ 490,904$
Street Department 3,857,382 3,857,382 3,699,050
4,364,194$ 4,364,194$ 4,189,954$
Parks and Recreation
Parks and Recreation 2,721,821$ 2,721,821$ 2,847,744$
2,721,821$ 2,721,821$ 2,847,744$
Budgeted Amounts
CITY OF MCHENRY, ILLINOIS
FOR THE YEAR ENDED APRIL 30, 2023
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Page 57
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Actual
Original Final Amounts
Budgeted Amounts
CITY OF MCHENRY, ILLINOIS
FOR THE YEAR ENDED APRIL 30, 2023
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
EXPENDITURES (Continued)
Capital Outlay
General Office
Administration 1,708,500$ 2,668,500$ 2,106,275$
Public Safety
Police Department 24,950 24,950 243,617
Public Works
Street Department - - 12,876
Parks and Recreation
Parks and Recreation 24,000 24,000 20,818
1,757,450$ 2,717,450$ 2,383,586$
Debt Service
Principal 459,250$ 459,250$ 296,769$
Interest and Fees 34,100 34,100 29,800
493,350$ 493,350$ 326,569$
Total Expenditures 26,382,423$ 27,778,418$ 27,031,436$
EXCESS OR (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 686,076$ (709,919)$ 5,302,672$
OTHER FINANCING SOURCES/(USES)
Transfers (2,095,250)$ (2,095,250)$ (2,018,294)$
Sale of City Property 10,000 10,000 13,200
(2,085,250)$ (2,085,250)$ (2,005,094)$
NET CHANGE IN FUND BALANCE (1,399,174)$ (2,795,169)$ 3,297,578$
FUND BALANCE - MAY 1, 2022 17,117,629
FUND BALANCE ADJUSTMENT (Note 9)(861,324)
FUND BALANCE - APRIL 30, 2023 19,553,883$
Page 58
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Page 59
CITY OF MCHENRY, ILLINOIS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
APRIL 30, 2023
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 18, 2022 and was amended fourteen times during the fiscal year with
the final amendment occurring on February 21, 2023.
NOTE 2 - EXCESS OF EXPENDITURES OVER BUDGET
For the year ended April 30, 2023, the fund 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 12,318,405$ 1,079,641$ 1,094,298$ 9,440$ 12,388$ 290,060$ 143,941$ 14,948,173$
Investments 2,013,579 20,292 - 1,588 - 3,691 16,578 2,055,728
Prepaid Items 173,819 - - - - - - 173,819
Receivables (Net of Allowance for
Estimated Uncollectible Amounts)
Accounts Receivable - Billed 395,007 6,450 31,691 - - 8,580 2,000 443,728
Accounts Receivable - Unbilled 104,201 - 38,421 - - - 15,689 158,311
Property Taxes 5,017,348 - - - - - - 5,017,348
Accrued Interest 2,394 343 - 27 - 77 280 3,121
Due from Other Governmental Units 3,176,525 - - - - - - 3,176,525
Cable Franchise Fee Receivable 122,912 - - - - - - 122,912
Inventory 184,569 - - - - - - 184,569
TOTAL ASSETS 23,508,759$ 1,106,726$ 1,164,410$ 11,055$ 12,388$ 302,408$ 178,488$ 26,284,234$
LIABILITIES
Accounts Payable and Accrued Expenditures 1,185,987$ -$ 57,523$ 15$ 4,240$ -$ 16,938$ 1,264,703$
Due to Other Funds 133,401 - - - - - - 133,401
Unearned Revenue 314,899 - - - - - - 314,899
TOTAL LIABILITIES 1,634,287$ -$ 57,523$ 15$ 4,240$ -$ 16,938$ 1,713,003$
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes 5,017,348$ -$ -$ -$ -$ -$ -$ 5,017,348$
TOTAL DEFERRED INFLOWS OF RESOURCES 5,017,348$ -$ -$ -$ -$ -$ -$ 5,017,348$
FUND BALANCES
Nonspendable 173,819$ -$ -$ -$ -$ -$ -$ 173,819$
Assigned for:
Alarm - - 1,106,887 - - - - 1,106,887
Tourism - - - - - - 161,550 161,550
Band - - - 11,040 - - - 11,040
Capital Projects 6,943,522 1,106,726 - - - - - 8,050,248
Revolving Loan - - - - - 302,408 - 302,408
Civil Defense - - - - 8,148 - - 8,148
Unassigned 9,739,783 - - - - - - 9,739,783
TOTAL FUND BALANCES 16,857,124$ 1,106,726$ 1,106,887$ 11,040$ 8,148$ 302,408$ 161,550$ 19,553,883$
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES 23,508,759$ 1,106,726$ 1,164,410$ 11,055$ 12,388$ 302,408$ 178,488$ 26,284,234$
CITY OF MCHENRY, ILLINOIS
COMBINING BALANCE SHEET - GENERAL FUND
APRIL 30, 2023
Page 60
See Accompanying Independent Auditor's Report
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 4,975,755$ -$ -$ -$ -$ -$ -$ 4,975,755$
Intergovernmental
State Sales Tax 13,346,454 - - - - - - 13,346,454
State Income Tax 4,384,429 - - - - - - 4,384,429
State Replacement Tax 246,433 - - - - - - 246,433
State Pull Tab/Games Tax 1,312 - - - - - - 1,312
Inter Track Wagering Tax 39,296 - - - - - - 39,296
State Telecommunications Tax 198,361 - - - - - - 198,361
Cannabis Use Tax 42,240 - - - - - - 42,240
Federal Grants 1,841,293 - - - - - - 1,841,293
Other Local Sources
Hotel/Motel Tax 44,057 - - - - - 199,517 243,574
Franchise Fees 379,078 - - - - - - 379,078
Licenses and Permits 1,247,056 - - - - - - 1,247,056
Fines and Forfeitures 451,894 - - - - - - 451,894
Charges for Services 1,194,120 - 229,742 - - - - 1,423,862
Interest 439,622 3,549 6,329 55 42 1,022 3,405 454,024
Local Grants 46,113 - - - - - - 46,113
Miscellaneous
Rent 14,489 - - - - - - 14,489
Royalties - 175,000 - - - - - 175,000
Donations 13,348 - - - - - - 13,348
Reimbursements 2,554,441 - - - - - - 2,554,441
Other Miscellaneous 182,154 - - - - - 73,502 255,656
Total Revenues 31,641,945$ 178,549$ 236,071$ 55$ 42$ 1,022$ 276,424$ 32,334,108$
EXPENDITURES
Current
General Office
Administration 1,060,342$ -$ -$ -$ -$ -$ 89,600$ 1,149,942$
Elected Officials 70,055 - - - - - - 70,055
Community Development 1,262,634 - - - - - - 1,262,634
Finance Department 1,750,399 - - - - - - 1,750,399
Human Resources 294,344 - - - - - - 294,344
Economic Development 370,197 - - - - - - 370,197
4,807,971$ -$ -$ -$ -$ -$ 89,600$ 4,897,571$
Public Safety
Police Commission 4,584$ -$ -$ -$ -$ -$ -$ 4,584$
Police Department 9,645,650 - 114,964 - 5,985 - - 9,766,599
Dispatch Center 2,614,829 - - - - - - 2,614,829
12,265,063$ -$ 114,964$ -$ 5,985$ -$ -$ 12,386,012$
Public Works
Administration 490,904$ -$ -$ -$ -$ -$ -$ 490,904$
Street Department 3,699,050 - - - - - - 3,699,050
4,189,954$ -$ -$ -$ -$ -$ -$ 4,189,954$
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, 2023
Page 61
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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, 2023
EXPENDITURES (Continued)
Current (Continued)
Parks and Recreation
Parks and Recreation 2,833,436$ -$ -$ 14,308$ -$ -$ -$ 2,847,744$
2,833,436$ -$ -$ 14,308$ -$ -$ -$ 2,847,744$
Capital Outlay
General Office
Administration 2,106,275$ -$ -$ -$ -$ -$ -$ 2,106,275$
Public Safety
Police Department 243,617 - - - - - - 243,617
Public Works
Street Department 12,876 - - - - - - 12,876
Parks and Recreation
Parks and Recreation 20,818 - - - - - - 20,818
2,383,586$ -$ -$ -$ -$ -$ -$ 2,383,586$
Debt Service
Principal 233,555$ -$ -$ -$ -$ -$ 63,214$ 296,769$
Interest and Fees 25,794 - - - - - 4,006 29,800
259,349$ -$ -$ -$ -$ -$ 67,220$ 326,569$
Total Expenditures 26,739,359$ -$ 114,964$ 14,308$ 5,985$ -$ 156,820$ 27,031,436$
EXCESS OR (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 4,902,586$ 178,549$ 121,107$ (14,253)$ (5,943)$ 1,022$ 119,604$ 5,302,672$
OTHER FINANCING SOURCES/(USES)
Transfers (1,900,294)$ (35,000)$ -$ 12,000$ 4,000$ -$ (99,000)$ (2,018,294)$
Sale of City Property 13,200 - - - - - - 13,200
(1,887,094)$ (35,000)$ -$ 12,000$ 4,000$ -$ (99,000)$ (2,005,094)$
NET CHANGE IN FUND BALANCE 3,015,492$ 143,549$ 121,107$ (2,253)$ (1,943)$ 1,022$ 20,604$ 3,297,578$
FUND BALANCE - MAY 1, 2022 14,702,956 963,177 985,780 13,293 10,091 301,386 140,946 17,117,629
FUND BALANCE ADJUSTMENT (Note 9)(861,324) - - - - - - (861,324)
FUND BALANCE - APRIL 30, 2023 16,857,124$ 1,106,726$ 1,106,887$ 11,040$ 8,148$ 302,408$ 161,550$ 19,553,883$
Page 62
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Special Special
Capital Asset Municipal Service Service Total
Recreation Capital Maintenance and Capital Debt Motor Motor Developer Area #4 -Area #6 -Other
Pageant Audit Center Improvements Replacement Equipment Service Fuel Tax Fuel Tax Donations TIF Lakewood Huntersville Governmental
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Funds
ASSETS
Cash and Cash Equivalents 1,954$ -$ -$ -$ 788,018$ 29,851$ -$ 2,277,633$ 84,412$ 1,040,810$ 417,170$ -$ -$ 4,639,848$
Deposit with Paying Agent - - - - - - 32,240 - - - - - - 32,240
Investments - 503 379,019 1,026,299 - 23,786 16,405 - - 64,204 - 404 - 1,510,620
Receivables (Net of Allowance for
Estimated Uncollectible Amounts)
Accounts Receivable - Billed - - - - - - - - - 5,400 23,117 - - 28,517
Accounts Receivable - Unbilled - - 3,915 - 77,803 - - - 32,835 - - - - 114,553
Property Taxes - 26,430 - - - - - - - - 816,081 15,580 - 858,091
Accrued Interest - 9 6,408 1,696 - 402 277 - - 1,085 - 7 - 9,884
Due from Other Governmental Units - - - 8,351 - - - 141,223 - 2,702 - - - 152,276
Grants Receivable - - - - - - - - - - 178,164 - - 178,164
TOTAL ASSETS 1,954$ 26,942$ 389,342$ 1,036,346$ 865,821$ 54,039$ 48,922$ 2,418,856$ 117,247$ 1,114,201$ 1,434,532$ 15,991$ -$ 7,524,193$
LIABILITIES
Accounts Payable and Accrued Expenditures -$ -$ 16,376$ -$ -$ 22,613$ 318$ 260$ -$ 141,153$ 386,450$ -$ -$ 567,170$
Overdrafts - 536 260,833 781,040 - - 40,993 - - - - 382 179,115 1,262,899
Due to Other Governmental Units - - - - - - - - - 49,041 - - - 49,041
Due to Other Funds - - - - - - - - - - - - -
Unearned Revenue - Fees - - - - - - - - 2,400 - - - 2,400
TOTAL LIABILITIES -$ 536$ 277,209$ 781,040$ -$ 22,613$ 41,311$ 260$ -$ 192,594$ 386,450$ 382$ 179,115$ 1,881,510$
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes -$ 26,430$ -$ -$ -$ -$ -$ -$ -$ -$ 816,081$ 15,580$ -$ 858,091$
TOTAL DEFERRED INFLOWS OF RESOURCES -$ 26,430$ -$ -$ -$ -$ -$ -$ -$ -$ 816,081$ 15,580$ -$ 858,091$
FUND BALANCES
Restricted for:
Capital Projects -$ -$ -$ -$ -$ -$ -$ -$ -$ 195,936$ -$ -$ -$ 195,936$
Special Service Areas - - - - - - - - - - - 29 - 29
Tax Increment Financing - - - - - - - - - - 232,001 - - 232,001
Highways and Streets - - - - - - - 1,491,755 117,190 - - - - 1,608,945
Assigned for:
Highways and Streets - - - - - - - 926,841 57 - - - - 926,898
Capital Projects - - - 255,306 865,821 31,426 - - - 725,671 - - - 1,878,224
Parks and Recreation 1,954 - 112,133 - - - - - - - - - - 114,087
Debt Service - - - - - - 7,611 - - - - - - 7,611
Unassigned - (24) - - - - - - - - - - (179,115) (179,139)
TOTAL FUND BALANCES 1,954$ (24)$ 112,133$ 255,306$ 865,821$ 31,426$ 7,611$ 2,418,596$ 117,247$ 921,607$ 232,001$ 29$ (179,115)$ 4,784,592$
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES 1,954$ 26,942$ 389,342$ 1,036,346$ 865,821$ 54,039$ 48,922$ 2,418,856$ 117,247$ 1,114,201$ 1,434,532$ 15,991$ -$ 7,524,193$
CITY OF MCHENRY, ILLINOIS
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
APRIL 30, 2023
Page 63
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Special Special
Capital Asset Municipal Service Service Total
Recreation Capital Maintenance and Capital Debt Motor Motor Developer Area #4 -Area #6 -Other
Pageant Audit Center Improvements Replacement Equipment Service Fuel Tax Fuel Tax Donations TIF Lakewood Huntersville Governmental
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Funds
REVENUES
Local Taxes
Property Tax -$ 26,275$ -$ -$ -$ -$ -$ -$ -$ -$ 694,137$ 15,581$ -$ 735,993$
Intergovernmental
State Motor Fuel Tax - - - - - - - 1,139,143 364,598 - - - - 1,503,741
State Grants - - - - - - - 296,480 - - 178,164 - - 474,644
Other Local Sources
Electric Use Tax - - - - 1,043,524 - - - - - - - - 1,043,524
Charges for Services - 29,700 508,011 - - - - - - - - - - 537,711
Interest 7 22 9,325 2,362 1,610 507 1,384 55,730 57 13,368 2,622 26 - 87,020
Miscellaneous
Rent - - 22,800 - - - - - - 36,438 - - - 59,238
Donations - - - - - - - - - 245,725 20,000 - - 265,725
Reimbursements - - - 39,037 - - - - - - 65,388 - - 104,425
Other Miscellaneous - - - 14,071 - - - - - 44,995 - - - 59,066
7$ 55,997$ 540,136$ 55,470$ 1,045,134$ 507$ 1,384$ 1,491,353$ 364,655$ 340,526$ 960,311$ 15,607$ -$ 4,871,087$
EXPENDITURES
Current
General Office -$ 51,825$ -$ -$ -$ -$ -$ -$ -$ -$ 111,362$ -$ -$ 163,187$
Public Works - - - - - - - 182 - - - - - 182
Parks and Recreation - - 606,912 - - - - - - 123,506 - - - 730,418
Capital Outlay - - - 665,857 179,313 121,346 - 2,152,726 300,000 796,702 1,384,839 - - 5,600,783
Debt Service
Principal - - - - - - 1,675,000 - - - - - - 1,675,000
Interest and Fees - - - - - - 675,768 - - - - - - 675,768
-$ 51,825$ 606,912$ 665,857$ 179,313$ 121,346$ 2,350,768$ 2,152,908$ 300,000$ 920,208$ 1,496,201$ -$ -$ 8,845,338$
EXCESS OR (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 7$ 4,172$ (66,776)$ (610,387)$ 865,821$ (120,839)$ (2,349,384)$ (661,555)$ 64,655$ (579,682)$ (535,890)$ 15,607$ -$ (3,974,251)$
OTHER FINANCING SOURCES/(USES)
Transfers - - 79,829 (151,900) - 151,900 2,351,425 - - - (225,735) (15,347) - 2,190,172
NET CHANGE IN FUND BALANCES 7$ 4,172$ 13,053$ (762,287)$ 865,821$ 31,061$ 2,041$ (661,555)$ 64,655$ (579,682)$ (761,625)$ 260$ -$ (1,784,079)$
FUND BALANCES - MAY 1, 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
FUND BALANCES - APRIL 30, 2023 1,954$ (24)$ 112,133$ 255,306$ 865,821$ 31,426$ 7,611$ 2,418,596$ 117,247$ 921,607$ 232,001$ 29$ (179,115)$ 4,784,592$
CITY OF MCHENRY, ILLINOIS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED APRIL 30, 2023
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
ASSETS
Current Assets
Cash and Cash Equivalents 6,371,420$ 274,469$ -$ 390,061$ 7,035,950$
Investments 430,403 4,246,277 1,860,537 100,032 6,637,249
Prepaid Items 42,118 - - - 42,118
Receivables (Net of Allowance for
Estimated Uncollectible Amounts)
Accounts Receivable - Billed 48,211 - - - 48,211
Accounts Receivable - Unbilled 1,333,209 - - - 1,333,209
Accrued Interest 2,823 2,506 7,824 1,034 14,187
Due from Other Governmental Units 97,714 - - - 97,714
Due from Other Funds 92 129,674 - - 129,766
8,325,990$ 4,652,926$ 1,868,361$ 491,127$ 15,338,404$
Non-Current Assets
Right-of-Use Lease Receivable 504,581$ -$ -$ -$ 504,581$
Capital Assets
Land 2,208,117 - - - 2,208,117
Buildings 2,736,098 - - - 2,736,098
Systems and Equipment 112,701,173 - - - 112,701,173
Vehicles 1,679,661 - - - 1,679,661
Construction in Progress 63,716 - 29,228 - 92,944
Less: Accumulated Depreciation (42,364,333) - - - (42,364,333)
77,529,013$ -$ 29,228$ -$ 77,558,241$
TOTAL ASSETS 85,855,003$ 4,652,926$ 1,897,589$ 491,127$ 92,896,645$
DEFERRED OUTFLOWS OF RESOURCES
Pension Expense/Revenue - IMRF 1,054,909$ -$ -$ -$ 1,054,909$
OPEB Expense/Revenue 270,205 - - - 270,205
TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,325,114$ -$ -$ -$ 1,325,114$
LIABILITIES
Current Liabilities
Accounts Payable and Accrued Expenses 205,032$ -$ 19,938$ 13,805$ 238,775$
Overdraft - - 2,136,476 - 2,136,476
Security Deposits Held - 3,000 - - 3,000
Accrued Interest 242,629 - - - 242,629
Compensated Absences - Current 99,183 - - - 99,183
IEPA Loan Payable - Current 1,561,149 - - - 1,561,149
Bonds Payable - Current 441,517 - - - 441,517
2,549,510$ 3,000$ 2,156,414$ 13,805$ 4,722,729$
Non-Current Liabilities
IMRF Net Pension Liability 1,769,693$ -$ -$ -$ 1,769,693$
Total OPEB Liability 174,609 - - - 174,609
IEPA Loan Payable (Net of Current Portion Shown Above)25,181,722 - - - 25,181,722
Bonds Payable (Net of Current Portion Shown Above)3,464,292 - - - 3,464,292
30,590,316$ -$ -$ -$ 30,590,316$
TOTAL LIABILITIES 33,139,826$ 3,000$ 2,156,414$ 13,805$ 35,313,045$
DEFERRED INFLOWS OF RESOURCES
Pension Revenue/Expense - IMRF 120,253$ -$ -$ -$ 120,253$
OPEB Revenue/Expense 431,045 - - - 431,045
Unavailable Revenue - Right-of-Use Leases - Lessor 545,559 - - - 545,559
TOTAL DEFERRED INFLOWS OF RESOURCES 1,096,857$ -$ -$ -$ 1,096,857$
NET POSITION
Net Investment in Capital Assets 46,368,081$ -$ 9,290$ -$ 46,377,371$
Unrestricted/(Deficit)6,575,353 4,649,926 (268,115) 477,322 11,434,486
TOTAL NET POSITION 52,943,434$ 4,649,926$ (258,825)$ 477,322$ 57,811,857$
CITY OF MCHENRY, ILLINOIS
COMBINING SCHEDULE OF NET POSITION
WATER AND SEWER FUNDS
APRIL 30, 2023
Page 65
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 5,330,765$ 381,285$ -$ -$ 5,712,050$
Capital Fees 1,055,565 - - - 1,055,565
Debt Service Fees 2,346,224 - - - 2,346,224
Penalties 134,143 - - - 134,143
Water Meter Sales 20,650 - - - 20,650
Other 29,922 - - - 29,922
8,917,269$ 381,285$ -$ -$ 9,298,554$
OPERATING EXPENSES
Water Department
Personnel Salaries 432,534$ -$ -$ -$ 432,534$
Miscellaneous Personnel Expenses 233,500 - - - 233,500
Other Operating Expenses 839,138 - 10,118 - 849,256
Depreciation 647,212 - - - 647,212
Sewer Department
Personnel Salaries 790,937 - - - 790,937
Miscellaneous Personnel Expenses 515,086 - - - 515,086
Other Operating Expenses 1,432,186 - - 42,121 1,474,307
Depreciation 2,157,391 - - - 2,157,391
Utility Work Department
Personnel Salaries 640,079 - - - 640,079
Miscellaneous Personnel Expenses 427,624 - - - 427,624
Other Operating Expenses 54,417 - - - 54,417
8,170,104$ -$ 10,118$ 42,121$ 8,222,343$
OPERATING INCOME/(LOSS)747,165$ 381,285$ (10,118)$ (42,121)$ 1,076,211$
NON-OPERATING REVENUE/(EXPENSE)
Interest Income 104,291$ 21,577$ 9,747$ 1,049$ 136,664$
Unrealized Gain/Loss - 25,188 27,252 - 52,440
Rental Income 25,697 - - 57,113 82,810
Interest and Fees (747,851) - - - (747,851)
Amortization 46,517 - - - 46,517
Gain/(Loss) on Sale of Fixed Asset 6,000 - - - 6,000
(565,346)$ 46,765$ 36,999$ 58,162$ (423,420)$
INCOME/(LOSS) BEFORE CONTRIBUTIONS
AND TRANSFERS 181,819$ 428,050$ 26,881$ 16,041$ 652,791$
TRANSFERS (TO)/FROM OTHER FUNDS (110,269) (145,000) 160,347 - (94,922)
CHANGE IN NET POSITION 71,550$ 283,050$ 187,228$ 16,041$ 557,869$
NET POSITION - MAY 1, 2022 52,871,884 4,366,876 (446,053) 461,281 57,253,988
NET POSITION - APRIL 30, 2023 52,943,434$ 4,649,926$ (258,825)$ 477,322$ 57,811,857$
CITY OF MCHENRY, ILLINOIS
COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
WATER AND SEWER FUNDS
FOR THE YEAR ENDED APRIL 30, 2023
Page 66
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Employee Risk Information Total
Insurance Management Technology Internal Service
Fund Fund Fund Funds
ASSETS
Current Assets
Cash and Cash Equivalents -$ -$ 458,658$ 458,658$
Investments - - 8,295 8,295
Prepaid Items 81,376 - 11,014 92,390
Receivables (Net of Allowance for
Estimated Uncollectible Amounts)
Accounts Receivable - Billed 299 - - 299
Accounts Receivable - Unbilled - 8,238 - 8,238
Accrued Interest - - 140 140
81,675$ 8,238$ 478,107$ 568,020$
Non-Current Assets
Capital Assets
Systems and Equipment -$ -$ 716,613$ 716,613$
Less: Accumulated Depreciation - - (547,155) (547,155)
-$ -$ 169,458$ 169,458$
TOTAL ASSETS 81,675$ 8,238$ 647,565$ 737,478$
DEFERRED OUTFLOWS OF RESOURCES
Pension Expense/Revenue - IMRF -$ -$ 122,761$ 122,761$
OPEB Expense/Revenue - - 31,444 31,444
TOTAL DEFERRED OUTFLOWS OF RESOURCES -$ -$ 154,205$ 154,205$
LIABILITIES
Current Liabilities
Accounts Payable and Accrued Expenses 115$ 2,877$ 34,392$ 37,384$
Overdrafts 89,079 31,550 - 120,629
Due to Other Funds 1,273 - - 1,273
Unearned Revenue 82,488 - - 82,488
Compensated Absences - - 7,993 7,993
172,955$ 34,427$ 42,385$ 249,767$
Non-Current Liabilities
IMRF Net Pension Liability -$ -$ 214,432$ 214,432$
Total OPEB Liability - - 14,992 14,992
-$ -$ 229,424$ 229,424$
TOTAL LIABILITIES 172,955$ 34,427$ 271,809$ 479,191$
DEFERRED INFLOWS OF RESOURCES
Pension Revenue/Expense - IMRF -$ -$ 13,994$ 13,994$
OPEB Revenue/Expense - - 50,161 50,161
DEFERRED INFLOWS OF RESOURCES -$ -$ 64,155$ 64,155$
NET POSITION
Net Investment in Capital Assets -$ -$ 163,592$ 163,592$
Unrestricted/(Deficit)(91,280) (26,189) 302,214 184,745
TOTAL NET POSITION (91,280)$ (26,189)$ 465,806$ 348,337$
CITY OF MCHENRY, ILLINOIS
COMBINING SCHEDULE OF NET POSITION
INTERNAL SERVICE FUNDS
APRIL 30, 2023
Page 67
See Accompanying Independent Auditor's Report
Employee Risk Information Total
Insurance Management Technology Internal Service
Fund Fund Fund Funds
OPERATING REVENUES
Charges for Services 3,561,716$ 918,502$ 1,075,588$ 5,555,806$
3,561,716$ 918,502$ 1,075,588$ 5,555,806$
OPERATING EXPENSES
Personnel Salaries -$ -$ 221,138$ 221,138$
Miscellaneous Personnel Expenses 3,560,759 - 126,073 3,686,832
Other Operating Expenses 856 955,986 607,022 1,563,864
Depreciation - - 52,939 52,939
3,561,615$ 955,986$ 1,007,172$ 5,524,773$
OPERATING INCOME/(LOSS)101$ (37,484)$ 68,416$ 31,033$
NON-OPERATING REVENUE/(EXPENSE)
Interest Income 2,360 33 1,297 3,690
INCOME/(LOSS) BEFORE CONTRIBUTIONS
AND TRANSFERS 2,461$ (37,451)$ 69,713$ 34,723$
CAPITAL CONTRIBUTIONS - - - -
TRANSFERS (TO)/FROM OTHER FUNDS - (76,956) - (76,956)
CHANGE IN NET POSITION 2,461$ (114,407)$ 69,713$ (42,233)$
NET POSITION - MAY 1, 2022 (93,741) 88,218 396,093 390,570
NET POSITION - APRIL 30, 2023 (91,280)$ (26,189)$ 465,806$ 348,337$
CITY OF MCHENRY, ILLINOIS
COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED APRIL 30, 2023
Page 68
See Accompanying Independent Auditor's Report
Retained
Developmental Personnel Total
Escrow Escrow Custodial
Fund Fund Funds
ASSETS
Current Assets
Cash and Cash Equivalents 6,855$ 35,509$ 42,364$
Accounts Receivable (Net of Allowance for
Estimated Uncollectible Amounts)- 13,938 13,938
TOTAL ASSETS 6,855$ 49,447$ 56,302$
LIABILITIES
Current Liabilities
Accounts Payable and Accrued Expenses -$ 243$ 243$
TOTAL LIABILITIES -$ 243$ 243$
NET POSITION
Restricted for Developers, Property Owners, and Others 6,855$ 49,204$ 56,059$
TOTAL NET POSITION 6,855$ 49,204$ 56,059$
CITY OF MCHENRY, ILLINOIS
COMBINING SCHEDULE OF NET POSITION
CUSTODIAL FUNDS
APRIL 30, 2023
Page 69
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Developmental Retained Total
Escrow Personnel Escrow Custodial
Funds Funds Funds
ADDITIONS
Contributions
Developers, Property Owners, and Others -$ 34,573$ 34,573$
Total Contributions -$ 34,573$ 34,573$
Investment Income
Interest and Dividends 24$ -$ 24$
Net Investment Income 24$ -$ 24$
TOTAL ADDITIONS 24$ 34,573$ 34,597$
DEDUCTIONS
Engineering and Legal Fees -$ 34,573$ 34,573$
TOTAL DEDUCTIONS -$ 34,573$ 34,573$
NET INCREASE/(DECREASE)24$ -$ 24$
NET POSITION - MAY 1, 2022 6,831 49,204 56,035
NET POSITION - APRIL 30, 2023 6,855$ 49,204$ 56,059$
CITY OF MCHENRY, ILLINOIS
CUSTODIAL FUNDS
YEAR ENDED APRIL 30, 2023
COMBINING SCHEDULE OF CHANGES IN FIDUCIARY NET POSITION
Page 70
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Actual
Original Final Amounts
REVENUES
Local Taxes
Property Tax 720,000$ 720,000$ 694,137$
Intergovernmental
State Grants 200,000 200,000 178,164
Other Local Sources
Interest - - 2,622
Miscellaneous
Donations - - 20,000
Reimbursements 355,000 355,000 65,388
Total Revenues 1,275,000$ 1,275,000$ 960,311$
EXPENDITURES
Current
General Office 50,000$ 50,000$ 111,362$
Capital Outlay 2,145,000$ 2,151,440$ 1,384,839$
Total Expenditures 2,195,000$ 2,201,440$ 1,496,201$
EXCESS OR (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (920,000)$ (926,440)$ (535,890)$
OTHER FINANCING SOURCES/(USES)
Transfers (225,735) (225,735) (225,735)
NET CHANGE IN FUND BALANCE (1,145,735)$ (1,152,175)$ (761,625)$
FUND BALANCE - MAY 1, 2022 993,626
FUND BALANCE - APRIL 30, 2023 232,001$
Budgeted Amounts
CITY OF MCHENRY, ILLINOIS
FOR THE YEAR ENDED APRIL 30, 2023
SPECIAL REVENUE FUND - TAX INCREMENT FINANCING FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
Page 71
See Accompanying Independent Auditor's Report