Comprehensive Annual Financial Report · $141,000; an almost 39% decline in median values. However, in 2013, home values in McHenry County began a strong recovery, rising more than

A component unit of the County of McHenry, Illinois

US Highway 14, Woodstock, IL 60098 • MCCDistrict.org • 815.338.6223

Comprehensive Annual Financial Report

Fiscal Year, beginning April 1, 2016 and ending March 31, 2017

MCHENRY COUNTY CONSERVATION DISTRICT

MCHENRY COUNTY, ILLINOIS

(A Component Unit of the County of McHenry, Illinois)

COMPREHENSIVE ANNUAL FINANCIAL REPORT

For the Year Ended

March 31, 2017

Prepared by:

Andy Dylak

Director of Administration and Finance



TABLE OF CONTENTS

Page(s)

INTRODUCTORY SECTION

Principal Officials ............................................................................................................. i

Organization Chart ............................................................................................................ ii

Letter of Transmittal ......................................................................................................... iii-x

Certificate of Achievement for Excellence in Financial Reporting .................................. xi

FINANCIAL SECTION

INDEPENDENT AUDITOR’S REPORT ........................................................................ 1-3

GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS

Management’s Discussion and Analysis .................................................................. MD&A 1-17

Basic Financial Statements

Government-Wide Financial Statements

Statement of Net Position ................................................................................... 4

Statement of Activities ....................................................................................... 5

Fund Financial Statements

Governmental Funds

Balance Sheet ................................................................................................. 6-7

Reconciliation of Fund Balances of Governmental Funds to

the Governmental Activities in the Statement of Net Position .................... 8

Statement of Revenues, Expenditures, and Changes in Fund Balances ........ 9-10

Reconciliation of the Governmental Funds Statement of Revenues,

Expenditures, and Changes in Fund Balances to the Governmental

Activities in the Statement of Activities ...................................................... 11

Notes to Financial Statements ................................................................................. 12-34



TABLE OF CONTENTS (Continued)

Page(s)

FINANCIAL SECTION (Continued) GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS (Continued) Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund ........................................................................ 35 Schedule of Funding Progress Other Postemployment Benefits Plan ................................................................. 36 Schedule of Employer Contributions Illinois Municipal Retirement Fund ................................................................... 37 Other Postemployment Benefits Plan ................................................................. 38 Schedule of Changes in the Employer’s Net Pension Liability and Related Ratios Illinois Municipal Retirement Fund ................................................................... 39 Notes to Required Supplementary Information ...................................................... 40 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES MAJOR GOVERNMENTAL FUNDS Schedule of Revenues - Budget and Actual General Fund ................................................................................................................ 41 Schedule of Expenditures - Budget and Actual General Fund ................................................................................................................ 42-51 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Debt Service Fund ........................................................................................................ 52 Capital Improvements Fund ......................................................................................... 53 Dedicated Projects Fund .......................................................................................... 54 NONMAJOR GOVERNMENTAL FUNDS Combining Balance Sheet ............................................................................................ 55 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ........................................................................................................ 56 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Insurance Fund ........................................................................................................ 57 Natural Resources Fund ..................................................................................... 58



TABLE OF CONTENTS (Continued)

Page(s)

STATISTICAL SECTION

Financial Trends

Net Position by Component .............................................................................................. 59

Change in Net Position ...................................................................................................... 60-61

Fund Balances of Governmental Funds ............................................................................ 62

Changes in Fund Balances of Governmental Funds ......................................................... 63-64

Revenue Capacity

Assessed Value and Estimated Actual Value of Taxable Property .................................. 65

Property Tax Rates - Direct and Overlapping Governments ............................................ 66

Principal Property Taxpayers ............................................................................................ 67

Property Tax Levies and Collections ................................................................................ 68

Debt Capacity

Ratios of Outstanding Debt by Type ................................................................................. 69

Ratios of General Bonded Debt Outstanding .................................................................... 70

Direct and Overlapping Governmental Activities Debt .................................................... 71

Legal Debt Margin ............................................................................................................ 72

Demographic and Economic Information

Demographic and Economic Statistics .............................................................................. 73

Principal Employers .......................................................................................................... 74

Operating Information

Full-Time Equivalent Employees by Function ................................................................. 75

Operating Indicators by Function ...................................................................................... 76

Capital Asset Statistics by Function .................................................................................. 77

OTHER INFORMATION - UNAUDITED

Municipal Securities Disclosure Requirements of the

Securities Exchange Commission (SEC) Rule 15c2-12

Debt Service Extension Base ....................................................................................... 78

Balance Sheets - General Fund .................................................................................... 79-80

Schedule of Revenues, Expenditures, and

Changes in Fund Balance - General Fund.................................................................. 81-82

INTRODUCTORY SECTION

- i -

Board of Trustees

Bona Heinsohn, President Harvard, IL

Stephen Barrett, Vice President

Trout Valley, IL

Brandon Thomas, Treasurer Huntley, IL

David Kranz, Secretary

Woodstock, IL

Peter Merkel McHenry, IL

Vernon Scacci Woodstock, IL

David Brandt

Wonder Lake, IL

Executive Leadership Team

Elizabeth S. Kessler, MBA, CPRE Executive Director

John Kremer, CPRP

Director of Operations & Public Safety

Andy Dylak Director of Administration & Finance

Ed Collins

Director of Land Preservation & Natural Resources

Wendy Kummerer, CPRP Marketing & Communications Manager

Effective 4/1/2016

- ii -

Residents

Board of

Trustees

Executive

Director

Executive

Administrative

Assistant

Marketing &

Communications

Manager

Director of

Administration &

Finance

Director of

Operations &

Public Safety

Director of Land

Preservation &

Natural Resources

Human

Resources

Administrative

Services

Administrative

Assistant

Sites & Fleet

Police

Education

Services

Facility

Maintenance

Planning

Administrative

Assistant

Natural

Resources

Wildlife Resource

Center

Land Preservation

- iii -

September 15th, 2017

To: The Board of Trustees and Citizens of the McHenry County Conservation District I am pleased to submit the Comprehensive Annual Financial Report (CAFR) of the McHenry County Conservation District for the fiscal year ended March 31, 2017. Illinois State Statutes require the Conservation District to produce a complete set of audited financial statements for each fiscal year. This CAFR is provided to fulfill that requirement for the fiscal year 2017. The financial statements contained within the CAFR are prepared in accordance with Generally Accepted Accounting Principles (GAAP) of the United States of America, as established by the Governmental Accounting Standards Board. These financial statements were prepared by District Management, who is responsible for both the accuracy of the data, and the completeness and fairness of the report taken as a whole. The financial statements included in the CAFR were audited by the independent certified public accounting firm of Sikich, LLP and received an unmodified opinion. (See the Independent Auditors’ Report on page I of the financial section.) Also, included within the CAFR is a section titled Management’s Discussion and Analysis (MD&A). The MD&A provides an analytical overview and comparative summary of the District’s financial activities and should be considered an integral part of the CAFR.

The Management of the Conservation District has the responsibility to establish and maintain accounting policies and procedures and other internal controls for the preparation of complete and accurate financial statements in accordance with GAAP. Because the cost of internal controls should not exceed the anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. We believe the data, as presented, is accurate in all material respects; that it is presented in a manner designed to fairly set forth the financial position and changes in financial position of the District as measured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain maximum understanding of the District’s financial affairs have been included.

Profile of the Conservation District

The Conservation District is a separate, autonomous, special –purpose taxing district created by a group of ecologically conscientious citizens in 1971 and supported by the Illinois Conservation District Act of 1963. It is governed by a seven-member, volunteer Board of Trustees who each serve a five-year term.

The District exists to preserve, restore, and manage natural areas and open spaces within McHenry County for their intrinsic value and for the benefit of present and future generations. The District owns and manages 25,371 acres of open space, which consists of diverse woodlands, prairies, wetlands, ponds, creeks, and rivers. Within the District’s land holdings there are (17) dedicated State Nature Preserves and (33) sites open to the public; featuring trails, picnic shelters, camp sites, fishing sites, rare plant and animal examples, and educational facilities. Safety and security at its sites and programs are provided by the District’s police department; consisting of a well-trained staff of police officers, who are certified under the laws of the State of Illinois with full arresting authority.

- iv -

Local Economy The McHenry County Conservation District is statutorily restricted to fulfilling its mission within the geographic area of McHenry County. McHenry County covers a total area of 611 square miles and is located in the northeastern part of Illinois. The County is approximately 50 miles northwest of Chicago and consists of over 30 communities with considerable residential development concentrated in the eastern half of the County and more open space and less development toward the western half.

The U.S. Census Bureau estimates the County’s population to be 307,004 as of July 1, 2016; which is down slightly from the previous year’s estimated population of 307,188. While this is a relatively minimal decrease of just 0.1%, it is reflective of a continued trend of a decline in population which has been experienced since 2010. The population decrease is a marked change from an annual growth rate which had averaged almost 3% during the fifteen years prior to 2010. More specifically, from 2000 through 2008, the County’s population grew 23.4% and ranked fourth in the state with a population growth of 60,884 residents over the nine- year period. The State of Illinois is also experiencing a declining population, with the 2016 population estimated to have decreased by 0.17%. It is one of only seven states that has experienced a decrease in population during 2016.

The following chart shows the County’s population by decade from 1950 through 2010 and the U.S. Census Bureau’s estimated population for calendar years 2011 through 2016.

147,897

183,241

260,077

308,820 307,820 307,529 306,944 306,749 307,188 307,004

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

1980 1990 2000 2010 2011 2012 2013 2014 2015 2016

McHenry County Population

Actual 1980- 2010; Estimated 2011-2016 (as of July 1) per US Census Bureau

- v -

McHenry County continues to see positive signs in its local economy, with the 2016 average annual unemployment rate (not seasonally adjusted) falling to 5.3% from 5.4% in 2015. As of April 1st, 2017, the County’s unemployment rate had fallen to 3.9%.

Comparatively, the State average unemployment rate for 2016 was 5.9% and the national rate was 4.9%. As of April 1, 2017, the County’s labor force was 163,489; consisting of 157,040 employed and 6,449 unemployed. The comparable statistics for 2016 show a higher total labor force of 167,280; which consisted of 158,156 employed and a significantly higher number of unemployed individuals at 9,124.

The following chart shows the median single family home sales price by year from 2006-2016.

$229,500 $227,000

$200,000

$181,000

$171,000

$152,000

$141,000

$152,500

$165,000

$175,530

$190,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$240,000

$260,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Median Home Sales Value

McHenry County was not immune to the nationwide collapse of the housing market that followed the economic recession of 2007-2009 and continued locally through 2012. From 2007 through 2012, the annual average median home value in McHenry County fell from a high of $227,000 to a low of $141,000; an almost 39% decline in median values. However, in 2013, home values in McHenry County began a strong recovery, rising more than 8%, which continued over the next three consecutive years. For the calendar year 2016, average median residential home values were up 35% from their 2012 lows and this upward trend is continuing through the first quarter of 2017.

- vi -

Long-Term Financial Planning

In November of 2014, Standard & Poor’s assigned a debt rating of AA+/Stable and Moody’s assigned a debt rating of Aa1/ with a ‘neutral’ outlook, which was an improvement from its most recent prior rating of AA1/ with a ‘negative’ outlook. With low unemployment, a solid recovery in the housing market and a return to growth of the County’s Equalized Assessed Value (EAV), the District is in a much more favorable financial position than it was 2014.

One of the key components of the District’s financial viability is property tax revenue, which accounted for approximately 83% of the District’s total FY 2017 budgeted operating revenue. Historically, property taxes are typically a very stable source of revenue and help ensure the District has the resources needed to carry out its operations. The reliability of this main source of revenue allows the District’s Board of Trustees to set the General Fund’s unassigned reserve balance to a minimal level of 25% (or 3 months) of total annual operating expenses. The District’s General Fund levy is subject to a maximum statutory tax rate as established within the Illinois Conservation District Act (70 ILCS 410/). The maximum statutory rate is 1/10th of 1% of the Equalized Assessed Value (EAV) of the County.

With more than 80% of McHenry County’s EAV being made up of residential homes, the EAV closely follows the changes of assessed values of residential properties over time. The EAV is determined using a three- year average of assessed property values which helps to even out the tax impacts of sudden changes in home values to both homeowners and taxing bodies alike. While home values started to decline in 2008; due to the three- year averaging the EAV did not begin a notable decline until 2010. McHenry County’s EAV fell more than 34% from 2008 through 2014; from a high of $10.5 billion in 2008 to a low of $6.9 billion in 2013.

The below graph shows the EAV of McHenry County for the calendar years 2007 through 2016.

$10.2 $10.5 $10.4

$9.7

$8.8

$7.9

$7.2 $6.9 $7.1

$7.5

$-

$2

$4

$6

$8

$10

$12

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Bil

lio

ns

McHenry CountyEqualized Assessed Value

- vii -

The sharp decline in the EAV of the County resulted in the District reaching the 1/10th of 1% maximum General Fund statutory tax rate in 2013. As a result, the property tax levy was reduced accordingly and the District received $137,661 less in property tax revenue in FY 2015 than it did in FY 2014. However, in August of 2014, the Illinois Property Tax code was amended to allow taxing bodies to issue a separate levy for Social Security and Medicare taxes and this new levy was not subject to the District’s General Fund statutory tax rate. This gave the District much needed General Fund statutory rate relief until the County’s EAV could begin to recover.

Due to the critical importance of property tax revenue to the District’s financial stability, the District developed a financial model to forecast the County’s EAV. The model has proven to be very accurate over the last seven years (with a correlation coefficient > .97) and allows the District to accurately forecast changes to the EAV two years into the future and quantify the potential impact of those changes on property tax revenues. The District was able to identify the pending property tax reduction which was realized with the 2013 levy, late in the 2011 calendar year. This gave the District ample time to develop a strategic plan and implement the operational and fiscal changes necessary to deal with the reduced tax revenues. The District initiated significant measures to reduce its cost structure and streamline its operations, including; minimizing staffing levels, reducing wage increases and costs of employee benefits, focusing resources to strategic and core operational areas, and increasing its non-tax based revenues wherever possible. These proactive measures, along with the Social Security property tax levy relief and return to growth of the EAV, have placed the District in a stable and healthy financial position. (The model projects the EAV will grow by 7.6% and 6.8% for calendar years 2017 and 2018 respectively; moving the District’s current General Fund levy comfortably away from the maximum statutory rate.)

The District’s ability to increase its property tax levy is statutorily restricted by the Illinois Property Tax Extension Limitation Law (PTELL). PTELL statutorily restricts the increase to the General Fund, Social Security and Insurance/Tort levies to 5% or the change in the Consumer Price Index (CPI) for the previous calendar year, whichever is lower. PTELL also allows for a small additional increase in the property tax levy for new development within the County; which has averaged only approximately $50,000 over the last several years.

The District’s General Fund ‘unrestricted’ fund balance reflects the District’s success at conservatively managing its financial resources and efficiently managing the operations of the District. In December of 2016, the District Board of Trustees ‘assigned’ $3,562,729 of the unrestricted fund balance to be utilized for the repair and replacement of capital infrastructure as defined within the District’s Capital Asset Management Plan (CAMP).

- viii -

The following chart shows a history of the General Fund’s Unrestricted and Unassigned Fund Balances for fiscal years 2008 through fiscal year 2017. The chart shows the Fund Balance as a ‘%’ of total annual operating expenses, excluding capital outlays.

60% 57

%

60

%

55%

56% 53%

60

%

65

%

69%

75%

60% 57%

60

%

55%

56

% 53%

60

%

65

%

69%

28

%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

General FundUrestricted & Unassigned Fund Balance

FY2008 - FY2017

Unrestricted Fund Balance Unassigned Fund Balance

Relevant Financial Policies

Internal Controls Management of the District is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the District are protected from loss, theft, or misuse, and to ensure that adequate accounting data is compiled to allow the preparation of financial statements in conformity with Generally Accepted Accounting Principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes; (1) the cost of a control should not exceed the benefits likely to be derived, and (2) the valuation of costs and benefits requires estimates and judgments by management.

- ix -

Budgetary Controls The Conservation District’s budget process must conform with the directives of both the Illinois Conservation District Act (70 ILCS 410/) as well as the Illinois Municipal Budget Law (50 ILCS 330/1). The budget process starts with the Board and Executive Leadership Team developing a strategic plan and operational budget directives that support the plan. Each departmental manager is responsible for developing their department’s operational budget in conformance with the established budget directives. A ‘zero-based’ budget methodology is utilized, requiring all department managers to ‘reset’ the assumed budget amount of each line item expense to zero ($0.00) at the beginning of the budget development process. They must then provide costs and detailed descriptions to support every budget expense they are requesting. Working from the completed department operational budgets, the Executive Leadership Team then develops a Tentative Budget for all funds which is presented to the Board of Trustees for approval. After formal Board approval, the Tentative Budget is made available for the public to review and comment on for a period of 30 days. At the request of the County, the District may also make budget presentations to committees of the County and/or the County Board Chairman. After the 30- day review period, there is a formal public hearing held on the Tentative Budget, followed by another public presentation of any changes made to the Tentative Budget before it is formally adopted by ordinance by the District’s Board of Trustees. Once these steps are completed, a resolution accepting the District’s budget ordinance is statutorily required to be adopted by the Board of McHenry County, Illinois. During the fiscal year, budget variances are reviewed by District management on a monthly basis and are reviewed by the Board of Trustees on a quarterly basis. Debt Administration As of March 31, 2017, the District had $97,885,000 of General Obligation bonds outstanding. In December of 2014, the District issued $108,215,000 in General Obligation refunding bonds (and additional premium) to retire $116,370,000 of General Obligation Bonds in order take advantage of a very favorable interest rate environment. The bond refunding yielded a net present value savings of $12.1 million dollars over the life of the refunded bonds. Under current statute, the District’s total debt is subject to a legal limitation not to exceed 1.725% of the County’s EAV. As such, the District’s statutory debt capacity as of March 31, 2017, was $27,818,761. As of March 31, 2017, the District carried a debt rating of ‘Aa1’ as assigned by Moody’s Ratings Services and ‘AA+’ as assigned by Standard & Poor’s for the 2014 refunding bond issuance. Both of these ratings are the second highest ratings available by the agencies and reflect the sound financial position of the District. (The main reason sited during the 2014 reviews, by both Moody’s and Standard & Poor’s, for not receiving the highest rating was concern over the County’s declining EAV at that time.)

- x -

Major Initiatives

With no new debt issuances, no significant sources of new revenue, and the addition of approximately 10,000 acres of open space over the last 15 years, the District continues to be in a ‘maintenance’ mode; focusing on maintaining existing infrastructure vs. investing in new initiatives. Existing funding is used almost exclusively for the repair and replacement of existing infrastructure; , trails, roads and site amenities in accordance with the District’s 10-year Capital Asset Management Plan. New projects are only initiated when a new specific funding source can be identified or when a minimal investment can be maximized through intergovernmental agreements and/or the joint cost sharing of projects. The District will likely continue in this ‘maintenance’ mode for at least the next several years.

Site & Trail Improvements

Improvements to the Harrison Benwell Conservation Site were completed and included: replacement of the asphalt entrance drive and parking lot, updated the amenities to meet current design standards, resolved ADA non-compliance issues and transformed the site infrastructure to reduce the long-term maintenance costs.

Improvements were completed to the Glacial Park Conservation Site at two (2) trail heads: Keystone Road Canoe Landing and Pioneer Road Canoe Landing. Both areas received necessary repairs to the asphalt walkways that connect the parking lots to the amenities and trails.

Construction was completed on multiple asphalt re-surfacing projects throughout the District; sites included: Exner Marsh – Lakewood Access, The Hollows Conservation Area and the Hickory Grove Highlands. Each existing asphalt walkway, entrance drive and parking lot received a new layer of asphalt.

Construction was completed on two (2) stages within the regional trail system intended to connect Woodstock to Crystal Lake, Ridgefield Trace. This section of trail runs from McHenry County College on US Highway Route 14 to West Lakeshore Drive on the north side of State Highway Route 14.

Acknowledgements This Comprehensive Annual Financial Report is being submitted to the Government Finance Officers Association of the United States and Canada in pursuit of a Certificate of Achievement for Excellence in Financial Reporting. In order to be awarded the certificate, a governmental unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, whose contents conform to program standards. The certificate is the highest form of recognition in the area of governmental accounting and financial reporting, and its attainment represents a significant accomplishment. The preparation of this report could not have been accomplished without the services of the Accounting Supervisor, the Division Directors and Department Managers who assisted in gathering information. I would also like to express my appreciation for the support and encouragement provided by our Executive Director and Board of Trustees. And lastly, I would like to acknowledge our independent auditors, Sikich LLP, whose professional assistance and guidance were instrumental in completing this report.

Respectfully submitted,

Andy Dylak Director of Finance

- xi -

FINANCIAL SECTION

- 1 -

INDEPENDENT AUDITOR’S REPORT The Honorable President Members of the Board of Trustees McHenry County Conservation District McHenry County, Illinois We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the McHenry County Conservation District (the District), a discretely presented component unit of the County of McHenry, Illinois, as of and for the year ended March 31, 2017 and the related notes to financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

- 1 -

- 1 -

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the McHenry County Conservation District as of and for the year ended March 31, 2017, in conformity with accounting principles generally accepted in the United States of America. We have previously audited the District’s financial statements, and our report dated June 24, 2016, expressed an unmodified opinion on those audited financial statements. In our opinion, the summarized comparative information presented herein as of and for the year ended March 31, 2016, is consistent, in all material respects, with the audited financial statements from which it has been derived.

Other Matters

Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and the required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements as a whole. The introductory section, combining and individual fund financial statements and schedules, statistical section, and other information are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole.

- 2 -

- 2 -

The introductory section, statistical section, and other information have not been subjected to the

auditing procedures applied in the audit of the basic financial statements and, accordingly, we do

not express an opinion or provide any assurance on them.

Naperville, Illinois

July 13, 2017

- 3 -

GENERAL PURPOSE EXTERNAL

FINANCIAL STATEMENTS

(See independent auditor’s report)

- MD&A 1 -

MANAGEMENT DISCUSSION AND ANALYSIS

This section of the McHenry County Conservation District’s Comprehensive Annual Financial Report presents

management’s discussion and analysis of the District’s financial activity during the fiscal year ended March 31,

2017. As the management of the District, we welcome this opportunity to offer readers this narrative overview

and analysis designed to focus on current activities, comparative changes and currently known facts. For a more

complete perspective of the District’s financial condition, please read this discussion and analysis in conjunction

with the District’s basic financial statements and footnotes.

PROFILE OF THE DISTRICT

Created by a group of ecologically conscientious citizens in 1971 and supported by the Illinois Conservation

District Act of 1963, the McHenry County Conservation District began with the mission to preserve open space,

and to provide environmental education programs and resources for recreational opportunities to the public. Forty-

six (46) years later, the McHenry County Conservation District continues as a special district governed by a seven-

member Board of Trustees who are appointed by the Chairman of the McHenry County Board, with the consent

of the McHenry County Board.

While the District is considered a ‘component unit’ of the County of McHenry, it is an independent agency with

its own taxing authority which is utilized to support its mission of preservation, education and recreation. The

majority of funding for the District’s operations is generated through a General Fund (‘Corporate’) tax levy which

is statutorily limited to 1/10th of one percent of the equalized assessed value (EAV) of all properties in McHenry

County. The Corporate levy request is driven by the District’s annual operating budget in support of the goals

and objectives as approved by the District’s Board of Trustees. Additionally, the District has statutory authority

to issue both referendum and non-referendum debt for the purposes of land acquisition, site improvements and

the protection and restoration of wildlife and natural habitats. As a component unit of the County, the District’s

annual budget is not considered adopted until a resolution accepting the District’s budget is formally adopted by

the County Board of McHenry County, Illinois.

FINANCIAL HIGHLIGHTS

Financial highlights of the fiscal year 2017 include the following:

The total net position of the District, the amount by which assets plus deferred outflows of resources exceeds

liabilities plus deferred inflows of resources, was $132,529,712 as of March 31, 2017 and includes:

o $4,650,302 which is unrestricted and available to meet the on-going needs of the agency.

o $1,320,105 which is restricted for specific purposes.

o $126,559,305 which is the net investment in capital assets.

The District’s net position increased by $9,206,926 or 7.5% during the fiscal year. This is the amount by

which total revenues exceeded total expenses for the reporting period.

As of March 31, 2017, the District’s governmental funds reported a combined ending fund balance of

$10,714,412. This is a decrease of $837,464 or 7.2% which is explained in detail in the ‘Governmental Fund

Financial Analysis’ section of this report.

$1,348,718 dollars were expended to acquire 155.67 acres of land known as the Monastery marsh/Alden

Greenway Project/Hackmatack Ecosystem Partnership. $1,070,131of this amount was funded by a grant from

the Illinois Clean Energy Community Foundation.

An additional principal payment of $500,000 was made on an outstanding installment loan that was entered

into to acquire land known as the Harry J. and Helen R. Pichen Trust parcel in 2006, reducing the loan balance

to $4.3 million which is due in full by December 31, 2021.


- MD&A 2 -

$580,225 was expended for site and trail improvements and natural restoration projects.

$9,284,800 or 86.7% of the combined ending fund balance constitutes unrestricted fund balance. The District

has ‘committed’ or ‘assigned’ $7,046,502 dollars of the unrestricted fund balance for specific future needs of

the District.

The District’s equalized assessed value (EAV) for all taxable properties increased from $7,075,931,483 to

$7,536,449,930 or by 6.5% for the 2016 calendar year.

As of March 31, 2017, the District’s statutory debt capacity was $27,818,761.

OVERVIEW OF THE FINANCIAL STATEMENTS

The McHenry County Conservation District’s basic financial statements comprise three components: 1) District-

wide Financial Statements; 2) Fund Financial Statements; and 3) Notes to the Financial Statements. Required

Supplementary Information is included in addition to the basic financial statements.

District-wide Financial Statements are designed to provide readers with a broad overview of the District’s

finances, in accordance with full accrual accounting concepts, in a manner similar to a private-sector business.

Revenues are recognized when they are earned, and expenses are recognized as soon as a liability is incurred,

regardless of the timing of the cash flows.

The Statement of Net Position presents information on all of the District’s assets, plus deferred outflows of

resources; and liabilities, plus deferred inflows of resources; with the difference between the two reported as the

net position.

[assets + deferred outflows of resources] – [liabilities + deferred inflows of resources] = [net position]

Certain revenues and expenses are reported in this statement for items that will only result in cash flows in future

fiscal periods such as uncollected taxes and earned but unused vacation paid leave. Over time, increases and

decreases in the net position may serve as a useful indicator of whether the financial position of the District is

improving or deteriorating.

The Statement of Activities presents information showing how the District's net position changed during the most

recent fiscal year. All changes in the net position are reported as soon as the underlying event giving rise to the

change occurs, regardless of the timing of the related cash flows.

The District-wide Financial Statements can be found on pages 4 and 5 of the financial statements.

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 District, like other state and local

governments, uses fund accounting to demonstrate and ensure compliance with finance-related legal requirements.

The District has only one type of fund: governmental funds.

Governmental funds are used to account for essentially the same functions reported as governmental activities in

the District-wide Financial Statements. However, governmental fund financial statements focus on near-term

inflows and outflows of expendable resources, as well as on the balance of expendable resources available at the

end of the fiscal year. This information is useful in evaluating the District’s near-term financial position.


- MD&A 3 -

Because the focus of governmental funds is narrower than that of the District-wide Financial Statements, it is

useful to compare the information presented for governmental funds with similar information presented for

governmental activities in the District-wide Financial Statements. By doing so, readers may better understand the

long-term impact of the District’s near-term financing decisions. Both the governmental fund Balance Sheet and

the governmental fund Statement of Revenue, Expenditures, and Changes in Fund Balances provide a

reconciliation to facilitate this comparison between governmental funds and governmental activities.

The District maintains six individual governmental funds. Information is presented separately in the governmental

fund Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance for the major funds

which include: General Fund, Debt Service Fund, Capital Improvements Fund and the Dedicated Accounts-

Capital Fund. Information for the Insurance Special Revenue Fund and the Natural Resources Special Revenue

Fund are combined and presented under the ‘non-major’ caption within governmental funds financial statements.

The Governmental Fund Financial Statements can be found on pages 6-12 of this report.

Notes to the Financial Statement provide additional information that is essential to a full understanding of the

data provided in the District-wide and Fund Financial Statements.

The Notes to the Financial Statements can be found on pages 13-35 of the financial statements.

Required Supplementary Information is presented concerning the District’s General Fund budgetary schedule, as

well as the funding progress and employer contributions for the Illinois Municipal Retirement Fund (IMRF) and

Other Postemployment Benefits Plan. The District adopts an annual appropriated budget for all of its Funds.

Budgetary comparison schedules have been provided to demonstrate compliance with the formally approved

budget. The IMRF and Other Postemployment Benefits Plan schedules have been provided to present IMRF’s

and the District’s progress in funding its obligation to provide pension and other postemployment benefits to

District employees.

Required supplementary information can be found on pages 36-41 of this report.

DISTRICT-WIDE FINANCIAL ANALYSIS:

The District-wide Financial Statements include all governmental and proprietary activities of a government. The

District has only governmental activities and no proprietary activities, therefore only governmental activities are

reported in the Government-wide Financial Statements.

Statement of Net Position. As noted earlier, the net position may serve over time as a useful indicator

of the District’s financial position. As of March 31, 2017 the District’s [assets plus deferred outflows of

resources] exceeded [liabilities plus deferred inflows of resources] by $132,529,712. This is an increase

of $9,206,926 or 7.5% over the previous year and is explained in detail in the ‘Change in Net Position’

section of this report.


- MD&A 4 -

The table on the next page reflects a condensed comparative Statement of Net Position.

District's Net Position

As of March 31, 2017, 2016 and 2015

2017 2016 2015

Assets

Current assets 30,924,980$ 31,529,995$ 32,058,395$

Capital assets 237,590,479 235,740,853 234,943,747

Total assets 268,515,459 267,270,848 267,002,142

Deferred outflow of resources

Unamortized loss on refunding 6,389,403 7,028,343 7,667,283

Pension Items 894,675 797,584 -

Total deferred outflow of resources 7,284,078 7,825,927 7,667,283$

Liabilities

Current and other liabilities 1,759,903 1,515,522 1,602,250

Long term liabilities 121,927,260 130,601,274 135,085,183

Total liabilities 123,687,163 132,116,796 136,687,433

Defferred inflows of resources

Deferred revenue- property taxes 19,312,796 19,377,077 19,454,487

Pension Items 269,866 280,116 -

Total deferred inflow of resources 19,582,662 19,657,193 19,454,487

Net position

Net investment in capital assets 126,559,305 116,630,062 108,308,339

Restricted 1,320,105 1,714,531 1,750,051

Unrestricted 4,650,302 4,978,193 8,469,115

Total net position 132,529,712$ 123,322,786$ 118,527,505$

Current assets include: cash, short- term investments, prepaid expenses and receivables of the District. The total

current assets decreased by $605,015 or 1.9% during the current fiscal year. The decrease is largely the result of

expending $2,208,618 dollars for capital outlays, which included: land acquisitions, site and trail improvements,

natural restoration initiatives and facility improvements.

Capital assets include: land and land improvements, buildings and building improvements, fixtures, equipment

and vehicles. Capital assets increased by $1,849,626 or 0.8% and will be discussed further in the Capital Asset

section.

Current and other liabilities include: accounts payable, accrued liabilities, interest payable and unearned revenue.

Current liabilities increased by $244,381 or 16.1% from the prior period. The increase is largely the result of the

following:

Unearned revenue increased by $293,068 over the prior period. This is due to the District receiving an

advanced payment of $295,900 under a wetland mitigation agreement for restoration work which had not

been started prior to the fiscal year end.

Interest payable decreased by $52,349 from the prior year as a result of a reduction in outstanding debt.


- MD&A 5 -

Long-term liabilities consist of debt in the form of general obligation bonds and the related unamortized premium

as well as an installment contract for a land acquisition. In December of 2014, the District issued $108,215,000

in General Obligation Refunding Bonds (and additional premium) to retire $116,370,000 of General Obligation

Bonds, reducing the total outstanding bonds by approximately $8 million dollars. The bond refunding yielded a

net present value savings of $12.1 million dollars over the life of the refunded bonds. As of March 31, 2017, the

District’s total General Obligation bonds outstanding were $97,885,000. Additionally, the District owes $4.3

million dollars on an installment loan that was entered into in 2006 to purchase a parcel of land known as the

Harry J. and Helen R. Pichen Trust parcel. The principal is due in full on or before December 31, 2021.

Deferred inflows of resources include property taxes levied in September of 2016, but that were not collected until

after March 31, 2017. Because the District does not receive the property taxes associated with the 2016 levy until

the next fiscal year, the tax revenues cannot be utilized to finance expenditures of the reporting period ending

March 31, 2017. As such, GASB 65 requires that this future revenue be reported as a Deferred Inflow of

Resources. The total deferred property taxes decreased by 64,281 or 0.3% from the prior year. The decrease is

largely the result of a reduction in the tax levy for debt service which was a direct result of the 2014 bond

refunding.

The largest portion of the District’s net position is the $126,559,305 invested in capital assets (net of related debt)

and accounts for 95.5% of total net position. Investments in capital assets (net of related debt) increased $9.9

million dollars or 8.5% over the prior period. The change in capital assets (net of related debt) includes the

following:

The District’s total outstanding General Obligation bonds decreased by $6.7 million dollars as the annual

contractual payments on the bonds reduced the outstanding principal balances.

The balance of the outstanding land acquisition installment loan was reduced by a $500,000 principal

payment; which also extended the due date of the remaining $4.3 million dollar balanced to December

31st, 2021.

$1,348,718 dollars, from non-debt related sources, were invested into land acquisitions and $859,900 was

invested into site, trail and building improvements as well as equipment.

Land improvements, valued at $896,950, were recognized as a donation by the District.

Although the District’s investment in its capital assets is reported net of related debt, it should be noted that the

resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot

be used to liquidate these liabilities.

An additional portion of the District’s net position; $1,320,105 or 1.0% of the total, represents resources that are

subject to restrictions on how they may be used. The portion of the net position that is restricted includes assets

held for the specific purposes of: tort liability, scholarships, contractual obligations related to natural restoration

mitigations, land acquisitions, debt service and the payment of employee related Social Security expenses. The

restricted portion of the net position decreased by $394,426 dollars or 23% from the prior year. This is largely

the result of the following:

Restricted net position related to natural restoration obligations decreased by $129,158; which is due to

expenses exceeding revenues by approximately the same amount within the designated Natural Resources

Special Revenue Fund.

Restricted net position related to debt service decreased by $249,303. This was due to expending $234,000

on the contractual interest payments due on the land acquisition installment loan. Additionally, the

property tax levy collected was not enough to make the full contractual bond payments.


- MD&A 6 -

The remaining balance of $4,650,302 dollars of unrestricted net position represents the portion of net position that

have no restrictions and are available to meet the District’s ongoing obligations to citizens and creditors. This is

a decrease of $327,891 from the prior period and represents the approximate amount by which total revenues

exceed total expenses, less the amount invested in capital (net of related debt), for the reporting period. The District

is able to report positive balances in all three categories of net position which is consistent with the last several

reporting periods.

The Statement of Net Position can be found on page 4 of the audited financial statements.

Change in Net Position. The Following table summarizes the District’s Change in Net Position for the current

reporting and prior reporting periods ended March 31, 2017, 2016 and 2015.

District's Change in Net Position

For the Fiscal Years Ended March 31, 2017, 2016, and 2015

2017 2016 2015

Revenues

Charges for services 1,184,058$ 1,194,249$ 1,286,896$

Grant revenues 1,108,181 51,500 65,835

Tax revenues 19,719,453 19,739,695 19,874,291

Investment earnings 90,132 90,471 55,492

Contributions 1,586,094 1,687,506 2,234,241

Misc & gain on disposal 95,760 78,192 144,155

Total Revenues 23,783,678 22,841,613 23,660,910

Governmental activities

General governmental 1,643,294 1,733,391 2,556,022

Operation and programs 8,507,855 8,796,935 8,825,424

Land develop & acquisition 53,040 118,815 130,800

Interest on debt 4,372,563 4,623,046 3,986,785

Total expenses 14,576,752 15,272,187 15,499,031

Change in net position 9,206,926 7,569,426 8,161,879

Net position, April 1st 123,322,786 118,527,505 110,365,626

Change in accounting principle - (2,774,145) -

Net position, April 1st restated 123,322,786 115,753,360 110,365,626

Net position March 31st 132,529,712$ 123,322,786$ 118,527,505$


- MD&A 7 -

Governmental Activities. The revenues and expenses resulting from the District’s operations are discussed

below. The following table shows a comparative summary of revenues for the District for the fiscal years ended

March 31, 2017, 2016 and 2015.

District's Comparative Statement of Revenues


% Change

2016 vs 2017 2017 2016 2015

Revenues

Tax revenues -0.1% 19,719,453$ 19,739,695$ 19,874,291$

Rental income -2.1% 1,041,031 1,063,143 1,179,749

Programs & services 9.1% 143,027 131,106 107,147

Grants- operating 0.0% 5,000 - -

Grants- capital 2042.1% 1,103,181 51,500 65,835

Contributions- operating 149.2% 16,954 6,803 3,843

Contributions- capital -6.6% 1,569,140 1,680,703 2,230,398

Investment income -0.4% 90,132 90,471 55,492

Miscellaneous 4.4% 70,669 67,711 98,906

Gain (loss) on disposal assets 139.4% 25,091 10,481 45,249

Total Revenues 4.1% 23,783,678$ 22,841,613$ 23,660,910$

Tax Revenues: The District’s General/Corporate, Social Security, and Insurance/Tort property tax levies (which

collectively makeup the ‘aggregate’ levy) are limited by the Illinois Property Tax Extension Limitation Laws

(PTELL). PTELL limits the District’s annual property tax levy increase to the prior year’s aggregate levy;

increased by the percentage of growth in the Consumer Price Index during the previous calendar year. Prior to

the economic downturn of 2008, the limited property tax levy increases allowed under PTELL were significantly

subsidized by additional property taxes generated from new development within McHenry County. The new

development allowed the District’s tax levy and associated property tax revenue to significantly exceed what

would otherwise be available under the PTELL restrictions. However, since 2008, there has been significantly

less new development within the County, resulting in minimal additional property tax revenue.

Total tax revenues were $19,719,453 for the fiscal year and include property taxes revenues of $19,527,420 and

personal property replacement taxes of $192,033. Collectively, tax revenues make up 82.9% of the District’s total

revenue for the fiscal year. When the ‘one-time’ sources of grant revenues, contributions, and gain on disposal of

capital assets are excluded from total revenues, the property tax revenues account for 92.7% of total on-going

revenues.

Total tax revenues decreased $20,242 or 0.1% from the prior period and include the following changes:

The General Fund’s combined Corporate and Social Security property tax revenue increased by $93,677

or 1.3% as the levy was increased from the prior year as allowed under PTELL.

The Debt Service Fund’s property tax revenue decreased by $184,274 or 1.5%, which is simply the result

of a decrease in the contractual debt service payments resulting from the 2014 bond refunding. The Debt

Service levy will begin to increase in levy year 2017 and will continue to increase approximately 2% to

3% annually until the bonds are paid off in full with the 2025 levy.


- MD&A 8 -

The Insurance Fund’s property tax revenues increased by $10,584 or 3.9%, which is the result of an

increase in the Insurance levy to offset anticipated insurance premium increases.

Personal Property Replacement Tax (PPRT) revenue increased by $59,771 or 45.2%. This revenue source

is controlled solely by the State. In the prior FY 2016, the District was required to recognize a $23,375

liability and reduced the PPRT revenue by the same amount due to the State’s erroneous over payment of

personal property replacement taxes in prior years.

Rental Income: The vast majority of the rental income is generated from 5,880 acres of District land that is

leased to farmers and is actively under some type of agricultural production. The District’s farm lease program

works with farmers to incorporate conservation oriented principals into their farming practices. The conservation

oriented farm lease program uses the commodities market value of the corn, along with the actual crop yield of

each individual farm to determine the annual lease value of each property. Therefore, the amount of rental income

the District receives will fluctuate annually with changes in the commodity price of corn. The applicable price of

December 2016 corn futures, which drove the revenue for the Fiscal Year 2017 farm leases, was down 7% from

the previous year. This was partially offset by negotiating higher leases with farmers and adding additional

acreage into production which resulted in only a net 2.1% reduction in revenue from the previous year.

Investment Income: Investment income decreased by just 0.4% percent from the prior year. Investment yields

and balances were actually higher, but the District recognized unrealized losses on its investments of $16,472.

Because the investments include only Bank CD’s which will be held to maturity, it is highly unlikely that any

investment loss will actually be realized and this ‘accounting loss’ will be recaptured as a ‘gain’ in subsequent

years.

Grant Revenues: Grant revenues recognized during the fiscal year were $1,056,681 more than the prior year.

The majority of grant revenue came from a single land acquisition grant in the amount of $1.1 million dollars

from the Illinois Clean Energy Community Foundation. Substantially all grant revenues are related to specific

land acquisitions, site and trail improvements or new natural restoration initiatives. As such, the grant related

revenues fluctuate from year-to-year, depending on the projects identified by the District, the success at attracting

available grant funding, and the ability to make progress on particular projects during the reporting period. The

grant revenues do not significantly impact the financial performance of the District, as the District does not rely

on grant revenues to support its on-going operations.

Contributions: Contributions are a one-time source of funding and as such are not considered as part of the on-

going revenues which support the operations of the District. Total contributions for the reporting period were

$1.58 million dollars. Similar to last year, the contribution revenue is largely the result of a major restoration

project, “Nippersink Creek Aquatic Ecosystem Restoration Project”, for aquatic ecosystem restoration at the

District’s Glacial Park conservation area. The project is being conducted and funded by the U.S. Army Corp

of Engineers under Section 206 of the Water Resources Development Act. The completed project will cost an

estimated $5 million dollars and when finished will represent a major improvement to this invaluable aquatic

ecosystem.

Gain on Disposal of Capital Assets: The District recognized $25,091 of gains on the disposition of capital assets

for the reporting period. Generally, the majority of this revenue is derived from the sale of vehicles that have

reached the end of their useful life. The District has a comprehensive Capital Asset Management Plan (CAMP)

that estimates the timing and costs related to the replacement and large scale repairs of infrastructure and capital

assets. The sale of assets is not a significant source of revenue for the District.


- MD&A 9 -

Expenses: The following table shows a comparative summary of expenses for the District for the fiscal years

ended March 31, 2017, 2016 and 2015.

District's Comparative Statement of Expenses


% Change

2016 vs 2017 2017 2016 2015

General government -5.2% 1,643,294$ 1,733,391$ 2,556,022$

Operations & services -3.3% 8,507,855 8,796,935 8,825,424

Land development & acquisition -55.4% 53,040 118,815 130,800

Deb service Debt service -5.4% 4,372,563 4,623,046 3,986,785

Total Expenses -4.6% 14,576,752$ 15,272,187$ 15,499,031$

Expenses:

The costs of materials, supplies and services utilized by the District in carrying out its daily operations are directly

impacted by inflation. The change in the Consumer Price Index on a national level, which is the most widely

accepted measure of inflation, was 2.1% for the calendar year ended December 31, 2016. While the District does

realize some benefit from this historically low level of inflation, there are numerous other issues that impacted the

operational costs of the District. Some of the more significant issues include:

General Government and Operations & Services

The District distributed a 2% increase to the base wages of all non-bargaining employees and a 2%

increase to its site, fleet, and facilities maintenance employees. The District’s police officers are members

of the Fraternal Order of Police Union and received increases according to the terms of the current contract

which expires March 31, 2017. The average annual total cost of police wage increases is approximately

1.5% a year.

A fulltime customer service position, which became vacant in FY 2016, was eliminated for FY 2017;

yielding a total estimated annual savings of $49,301. Additionally, there were vacancies in several

fulltime positions which generated an estimated $254,675 reduction in annual personnel costs from the

prior year.

The District provides health, dental, vision and life insurance for its employees. Employees are required

to pay a portion of the related premiums and the amount of their cost sharing is dependent on the individual

plan they select. The District increased the employee deductibles and other ‘out-of-pocket’ expenses to

limit the net contractual annual increase to just 3.3% or $28,108 over the previous year. Due to employees

being incentivized to select lower cost plans, as well as position vacancies during the fiscal year, actual

employee health insurance costs were just $6,637 or 0.7% higher than the previous year.

Land Development and Acquisition

The total expense directly related to land development and acquisition was $53,040 for the fiscal year.

Substantially all of this expense is depreciation expense related to land improvements. Similar to the last

several recent years, there is limited funding available for land acquisition and development and as such

there are significantly fewer capital projects and improvements. The more significant capital projects are

highlighted in the Capital Assets and Long-Term Debt Activity section which can be found on pages 15-

16 of this MD&A report.


- MD&A 10 -

Debt Service

The total interest expense to service the District’s outstanding debt was $4,372,563 which was a decrease

of $250,483 or 5.4% from the previous year. This is simply the result of lower outstanding principal

balances and how the contractual payments of the debt were structured at the time that the 2014 refunding

bonds were issued.

The following chart shows the operational expenses by major operating department as a percentage of total

governmental activities. In order to better illustrate the allocation of resources by operational department,

expenses related to land acquisition and development and interest on debt have been intentionally omitted.

General Governmental

17%

Education7%

Police & Safety14%

Sites & Fleet21%

Land Preservation & Natural Resources

20%

Wildlife Resources

2%

Planning14%

Communications3%

Lost Valley Visitor's Center

2%

Expenses by Operational DepartmentFiscal Year Ended March 31, 2017


- MD&A 11 -

GOVERNMENTAL FUND FINANCIAL ANALYSIS:

As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance-related

legal requirements. The focus of the District’s governmental funds is to provide information on near-term inflows,

outflows, and balances of spendable resources. Such information is useful in assessing the District’s financial

condition.

The general government functions are presented in the; General Fund, Debt Service Fund(s), Natural Resources

Management Fund, Dedicated Projects-Capital Fund, Capital Improvement Plan- Capital Fund and the Insurance-

Special Revenue Fund. As of the end of the 2017 fiscal year, the District’s governmental funds reported combined

ending fund balances of $10,714,412 which is a decrease of $837,464 from the prior year’s total of $11,551,876.

Detailed explanations for changes in fund balance are provided in the narratives of the individual funds below.

General Fund

The General Fund is the main operating fund of the District. At the end of the reporting fiscal year, the total fund

balance of the General Fund was $6,275,784. This is an increase of $631,668 or 11.2% from the previous year

and represents the amount by which revenues exceeded total expenses within the General Fund for the reporting

period. The operating surplus was largely the result of several personnel vacancies that existed during the fiscal

year. Additionally, there were several large maintenance projects totaling $163,000 that were not completed

during the year and the projects and funding have been ‘reappropriated’ to FY 2018.

The District has a separate property tax levy for Social Security and Medicare taxes and these tax revenues can

only be used to pay the employer’s portion of the related taxes. This separate property tax levy is received into

the General Fund and any receipts that are not expended for the specific payment of Social Security and Medicare

taxes are held as ‘Restricted’ fund balance within the General Fund. At the end of the FY 2017, $157,250 of the

General Fund’s fund balance was restricted for future Social Security and Medicare expenses. Additionally,

$109,507 of the General Fund’s fund balance consisted of ‘prepaid items’; which means these funds have already

been expended and are not available for the future needs of the District. The remaining balance of $6,009,027 is

‘Unrestricted’ and is available to meet the immediate and future needs of the District. $3,562,729 of this

Unrestricted fund balance has been assigned to provide for the repair and replacement needs of the District’s

existing infrastructure and other capital assets as defined within the 10-year Capital Asset Management Plan.

As a measure of the General Fund’s liquidity, it may be useful to compare the unrestricted fund balance and total

annual fund expenditures. The General Fund’s ‘Unrestricted’ fund balance represents 72.7% of the total annual

fiscal year operating expenditures, including capital outlays, and is considered to be a very strong reserve position

by the District. This represents an increase from the previous year; where the ‘Unrestricted’ fund balance

represented 64.9% of the total annual operating expenses.

Capital Improvements Fund

The Capital Improvements Fund (CIP) is used to account for more significant capital initiatives that fall outside

of the regular repair and replacement needs that are funded within the General Fund. The Fund was established

in 2013 with the permanent transfer of $4.2 million dollars from the District’s Dedicated Projects Fund. The $4.2

million was designated by the Board to provide for major repairs and replacements of existing sites, trails, roads

and other infrastructure. The District has developed a Capital Asset Management Plan (CAMP) which inventories

all of the District’s infrastructure and significant capital assets and schedules an anticipated replacement time and

cost based on the assets expected useful life. The CAMP specifically identifies the costs that will likely be incurred

over the next ten (10) years and the potential available funding. As of March 31, 2017, there was $2.8 million

dollars of ‘committed’ fund balance remaining within the CIP Fund. The FY 2018 Budget includes the

appropriation of $1,050,500 of this amount for capital projects identified in the District’s CAMP.


- MD&A 12 -

Debt Service Fund

Principal and interest payments on the District’s outstanding debt are made from the Debt Service Fund. The debt service payments are made from the receipt of property tax revenues which are legally restricted for the liquidation of the debt in accordance with the contractual obligations of the related bonds. All of the debt service payments made from this fund are for outstanding General Obligation (GO) Bonds of the District. In December of 2015, the District refunded $116 million dollars of its outstanding GO Bonds. The refunding generated a cash-flow savings of $14.2 million dollars and a net present value (NPV) savings of $12.1 million dollars. As of March 31, 2017 the District had $97.9 million dollars of GO Bonds outstanding. All of the outstanding bonds were issued for the purposes of acquiring and preserving open space, improving sites and trails, and providing for the restoration and protection of natural areas. The Debt Service Fund’s fund balance was $294,094 for the reporting period. This represents a decrease of $249,303 from the year and is the result of transferring $234,000 to the Dedicated Accounts – Capital Fund to make the contractual interest payments on the District’s installment loan. Additionally, the District did not receive all of the ‘debt service’ property taxes levied and therefore the contractual bond payments exceeded total revenues by $15,303.

Dedicated Projects Fund

The fund was established to account for the assets generated from grant awards, other unique revenue sources, and the investment income earned on these assets. The majority of the funding in this account is derived from grant recoveries which are largely from reimbursement type grants; where the funding is received after the completion of the project. As such, the District does not recognize the revenue until the projects are completed and/or revenue can be recognized under the modified accrual basis of accounting. Grant related projects include: land acquisitions, large and small-scale natural restoration projects, and the improvement and development of sites, trails and facilities. Generally, the assets in this fund are not restricted externally; as the grant recoveries are not received until all of the grant requirements have been satisfied. The District has formally committed the use of the funds for capital projects which are similar in nature to the project from which the grant recovery originated. The fund balance of the Dedicated Projects Capital Fund decreased by $684,315 or 55.0% from the prior year. The expenditures and related decrease in fund balance was planned and budgeted for accordingly. The decrease in fund balance is the result of the following:

$500,000 was expended to make the contractual principal payment on the land acquisition installment loan.

$1.3 was expended on land acquisitions. This was partially offset by grant revenue in the amount of $1.1 million.

$121,829 expended to make the contractual interest payments on the land acquisition installment loan.

Natural Resources - Special Revenue Fund

The Natural Resources Special Revenue Fund is considered a non-major fund and it is combined with the Insurance Fund for reporting purposes. The fund was established to improve the reporting and accounting of the assets, liabilities and financial activities of specific restoration initiatives, the most significant of which are related to wetland mitigation agreements. The majority of the funding in this account is presently derived from mitigation fees; whereby the District will enter into a contractual agreement with a third party (usually a developer) to ‘mitigate’ developmental impacts that have been made to a wetland area. The agreements require that the third party pay a specified amount to the District and the District is required to use those resources to restore a wetland area on District owned property and then maintain the restoration in perpetuity. Where the impacts affect waters which empty into an interstate waterway, the agreements are overseen by the U.S. Army Corps of Engineers. If the impacted waters are local and/or isolated, than the agreement is administered by McHenry County or other public body that is certified to implement the Storm-water Ordinance of McHenry County. Generally, the District will only enter into a mitigation agreement when the wetland area to be restored has already been identified for restoration by the District. This reduces the costs of both the initial restoration process as well as the long-term management of the site, leaving a substantial portion of the mitigation revenue to provide for the long- term maintenance needs of the restored site.


- MD&A 13 -

The Fund Balance decreased by $121,570 or 17.8% and represents the amount by which total expenses exceeded

revenues within the fund during the reporting period. The decrease is largely due to the onetime initial restoration

costs of several mitigation related projects. Once the initial restoration work is completed, the restored lands

become part of the District’s managed restoration areas and the on-going maintenance costs are somewhat minimal

as the work is done by existing District staff.

Insurance - Special Revenue Fund

The Insurance Special Revenue Fund is considered a non-major fund and it is combined with the Natural

Resources Special Revenue Fund for reporting purposes. The fund provides for the District’s risk management

and loss control needs, including general and commercial liability insurance. The District is a member of the Park

District Risk Management Agency (PDRMA); which is an inter-governmental insurance pool made up of 160

member agencies. Under PDRMA, the District has enjoyed minimal annual premium increases and has improved

its risk management in day-to-day operations. 98% of the total annual fund expenses are related to the cost of the

premiums of the insurance provided by PDRMA. During the current fiscal year, revenues exceeded expenditures

by $25,653 dollars and fund balance increased accordingly to $196,391.

GENERAL FUND BUDGETARY HIGHLIGHTS

In May of each year, after a formal public budget hearing, the Board approves a fiscal year budget for all funds.

(The District’s budget process is explained in greater detail in the ‘Letter of Transmittal’ which is part of this

Comprehensive Annual Financial Report.) The total General Fund actual expenditures for the fiscal year 2017

were $8,263,730; which was $886,307 less than the total $9,150,037 which was budgeted for the period. This

represents a 9.7% favorable variance from the budget total for the fiscal year. A schedule of the General Fund’s

Budget and Actual Expenditures can be found on pages 43-52 of this report. Some of the more significant budget

highlights include the following:

Several full-time and part-time positions remained unfilled for significant portions of the year; this yielded

savings in the cost of wages, related payroll taxes, employee benefits and other employee related costs.

The total favorable budget variance for personnel was $141,418.

In recent prior years, the District had been involved in a frivolous litigation matter which resulted in

extensive legal costs. This matter was resolved in 2014 (with the District receiving a favorable ruling and

exempt from any penalties or liabilities) and the District’s legal budget remained higher than what was

necessary to cover normal operational legal costs. Total FY 2017 legal costs were $44,313 under the

budgeted amounts. The legal budget has been reduced accordingly for the FY 2018 budget.

Maintenance costs were considerably under budget as reduced staffing levels prohibited numerous

projects from being completed. Specific favorable budget variances related to maintenance includes:

o Building maintenance was $53,347 under budget.

o Sites & trail maintenance was $84,186 under budget.

o Road & bridge maintenance was $12,659 under budget.

Utilities were $45,086 less than budgeted due to lower than anticipated costs of electricity and gas.

$45,000 was budgeted for emergency and other unanticipated expenses and was not expended.

The cost of vehicle fuel was considerably less than budgeted and as such actual vehicle fuel expense was

$44,675 less than budgeted.

Computer supplies and IT support were under budget by $17,036, which is due to investments made in

prior years to update the District’s computer network and IT components; requiring less maintenance and

replacement costs.

Specific Education program costs were $24,296 lower than the budgeted amounts.


- MD&A 14 -

Expenses related to promotions and public relations were under budget by $59,405 as several large

initiatives were budgeted for, but not undertaken.

Total capital expenditures were $213,327 less than the budgeted amounts as several large projects were

not undertaken during the fiscal year. $163,000 of the capital projects have been reappropriated for in the

next FY2018 budget.

CAPITAL ASSETS AND LONG-TERM DEBT ACTIVITY

Capital Assets. Below is a comparative summary of the District’s capital assets. The District’s financial

statements present capital assets in two groups: those assets subject to depreciation, such as buildings and

equipment, and those assets not subject to depreciation such as land and construction-in-progress.

District's Capital Assets (Net of Depreciation)


2017 2016 2015

Capital assets, not being depreciated:

Land 205,088,897$ 203,127,079$ 202,984,097$

Construction in progress 4,836,987 3,859,542 2,300,223

Total capital assets not being depreciated 209,925,884 206,986,621 205,284,320

Capital assets being depreciated:

(net of depreciation)

Land improvements and roads 17,469,979 17,924,889 18,520,187

Buildings and improvements 8,667,551 9,114,691 9,270,593

Furniture and equipment 796,715 873,451 926,574

Office equipment 205,256 229,538 234,119

Vehicles 525,094 611,663 707,954

Total capital assets being depreciated 27,664,595 28,754,232 29,659,427

Governmental activities capital assets, net of depr. 237,590,479$ 235,740,853$ 234,943,747$

The District’s investment in capital assets for governmental activities, net of accumulated depreciation at March

31, 2017, was $237,590,479. This is an increase of $1,849,626 or .8 % over the prior year and largely the result

of acquiring 155.67 acres of land at a cost of $1,348,718 dollars. These investments include land, land

improvements (both completed and in progress), roads and improvements, buildings, vehicles, furniture and

equipment. See note 4 in the Notes to the Financial Statements for further information.


- MD&A 15 -

Other major capital asset events during the current fiscal year included the following:

Building Improvements: $76,513 which included the replacement of roofs on (2) buildings.

Site, Trail, Road & Bridge Improvements: $511,577 was expended on site, trail, road and bridge

improvements. The capital outlays include the following highlights:

Improvements to the Harrison Benwell Conservation Site were completed and included: replacement of the

asphalt entrance drive and parking lot, updated the amenities to meet current design standards, resolved

non-compliance issues with the Americans with Disabilities Act and transformed the site infrastructure to

reduce the long-term maintenance costs.

Improvements were completed to the Glacial Park Conservation Site at two (2) trail heads: Keystone Road

Canoe Landing and Pioneer Road Canoe Landing. Both areas received necessary repairs to the asphalt

walkways that connect the parking lots to the amenities and trails.

Construction was completed on multiple asphalt re-surfacing projects throughout the District; sites

included: Exner Marsh – Lakewood Access, The Hollows and the Hickory Grove Highlands. Each existing

asphalt walkway, entrance drive and parking lot received a new layer of asphalt.

Construction was completed on two (2) stages within the regional trail system intended to connect

Woodstock to Crystal Lake, Ridgefield Trace. This section of trail runs from McHenry County College on

US Highway Route 14 to West Lakeshore Drive on the north side of State Highway Route 14.

Natural Restoration Initiatives: $47,231 was expended on a variety of natural restoration projects. Some of

the more significant accomplishments include the following:

Tryon Creek Woods (Breckenridge parcel), was seeded with native prairie species and invasive brush was

cleared to fulfill NAWCA grant obligations.

A small kame was reconstructed in the Glacial Park Conservation Area by building the base with soil from

the Nippersink 206 project and topping it with native kame material. The kame was seeded to native prairie

species. Funding came from the McHenry County Conservation Foundation for this project.

The yearly Big Woods project focused on Marengo Ridge. Approximately 500 native trees and shrubs

were planted at the site.

A (30) acre prairie reconstruction was completed in the Glacial Park Conservation Area at the Agrevo

parcel.

A major project to grade back eroded banks along 4 miles of Nippersink Creek began in November of 2014

and will continue for the next five years. The total cost of the project estimated at $5.6 million dollars is

funded through the United States Army Corps of Engineers (USACOE) 206 program. It includes brush

removal, treatment of exotic species, and installation of seven new rock riffles in the stream as well as

replanting of native species. The riffles, brush removal and rebuilding of a small former kame have been

completed. The project continued in FY 2017 and included more brush removal, control of invasive species

and the replanting of prairie and wetland areas.


- MD&A 16 -

Long-term Debt.

In December of 2014, the District issued $108,215,000 in General Obligation (GO) Refunding Bonds (and additional premium) to refund $116,370,000 of GO Bonds, reducing the total outstanding bonds by approximately $8 million dollars. The bond refunding yielded a net present value savings of $12.1 million dollars over the life of the refunded bonds, which will be a direct savings to taxpayers in the form of lower future debt service levies. As of the end of the FY 2017, the District had total debt outstanding of $102,185,000. This includes $97,885,000 of GO Bonds and $4,300,000 due under a land acquisition installment contract. The balance of the installment loan is due in full on or before December 31st, 2021. All of the debt incurred by the District was for the purposes of acquiring and protecting open spaces, improving sites and trails to allow for public enjoyment and the restoration and protection of natural areas. The debt service payments for all of the District’s bond debt are funded from a separate property tax levy which ensures the continued and timely retirement of the bonds. The District currently holds an “Aa1” rating from Moody’s financial rating service and an AA+ from Standard & Poor’s rating service. Both of these ratings represent the second highest rating available by the rating agencies and reflect the prudent financial management and strong financial position of the District.

As of December 31st, 2016, the Equalized Assessed Valuation (EAV) of the District was certified at $7,536,449,930. This is the EAV applicable to the current reporting period ending March 31, 2017 and limits the District’s maximum statutory debt limit to $130,003,761. With $102,185,000 of debt outstanding as of March 31st, 2017, the District has a maximum statutory debt capacity of $27,818,761 dollars. Based on the continued recovery of residential home values, beginning in 2013 and continuing through 2016, the District is confident that the County’s EAV will continue to grow in calendar years 2017 and 2018; which will generate additional statutory debt capacity for the District. See Note 6 in the Notes to the Financial Statements for further information about the District’s debt.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET

The County continues to realize a significant improvement in its average annual unemployment rate which decreased to 5.4% for 2016. This is well below the State’s average which was 5.9% for the same period. Additionally, as of March 31st, 2017, the County’s unemployment rate had fallen to just 3.9%.

The U.S. Census Bureau estimates the County’s population to be 307,004 as of July 1, 2016; which is down slightly from the previous year’s estimated population of 307,188. While this is a relatively minimal decrease of just 0.1%, it is reflective of a continued declining population trend which has been experienced since 2010. This represents a significant change from a growth rate which had averaged almost 3% during the fifteen years prior to 2010.

After falling 38.6% from the 2007 pre-recession high of $229,500 to the 2012 low of $141,000; median residential property values have been consistently rising since 2013 and have gained almost 35% in value since 2012.

80% of the County’s EAV is made up of residential, single family homes and as such the EAV tracks the

changes in home values over time. As previously mentioned, the Equalized Assessed Valuation (EAV) of the District was $7,536,449,930 as of December 31st, 2016; which represents a 6.5% increase from the December 31, 2015 EAV. The District has developed a very accurate (a correlation coefficient of >.97) forecasting model that projects the future change in the County’s EAV based on recent actual historical changes of residential home values. The model projects continued growth in the EAV of more than 7% for 2017 and more than 6% in 2018.

The District will continue to face challenges providing a consistent level of quality services and programs. As the number of sites, trails, amenities, and natural areas have grown significantly over the last ten years, placing significant pressure on operational costs; tax revenues (which account for more than 80% of the District’s operating revenue) have remained relatively unchanged. As previously mentioned, the District’s ability to increase its General Fund’s levy is limited by the Illinois Property Tax Extension Limitation Laws. Additionally, there continues to be significant local pressure for taxing bodies to not increase, or possibly even decrease, their property tax levies.


- MD&A 17 -

All of these factors, to the extent that they were known, were considered in preparing the District’s budget for the

2018 fiscal year. The District has budgeted to reduce the General Fund’s reserve balance by $208,000 during the

2018 fiscal year. The budgeted reduction in reserves includes $163,000 of expenditures that were budgeted for in

the FY2017 Budget, but the funds were not expended, so the projects and expenses have been ‘reappropriated’.

In addition, $45,000 has been appropriated and budgeted for unanticipated expenditures and should any be

incurred they would be funded from the General Fund’s fund balance.

Requests for Information

This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a

general overview of the District’s finances and to show the District’s accountability for the money it received.

We encourage all citizens to read the audited financial statements and hope that this report helps to inform our

fellow citizens on how their tax dollars have been prudently managed in a continued effort toward “meaningful

open space” in McHenry County. If you have questions about this report or need additional financial information,

contact the McHenry County Conservation District at 18410 U.S. Highway 14, Woodstock, Illinois 60098.

2017 2016

ASSETS

Cash and cash equivalents 11,438,281$ 12,014,572$

Property taxes receivable 19,312,796 19,377,077

Interest receivable 33,437 20,519

Other receivable 8,900 23,650

Prepaid expenses 109,507 94,177

Due from other governments 22,059 -

Capital assets

Nondepreciable 209,925,884 206,986,621

Depreciable, net of accumulated depreciation 27,664,595 28,754,232

Total assets 268,515,459 267,270,848

DEFERRED OUTFLOWS OF RESOURCES

Unamortized loss on refunding 6,389,403 7,028,343

Pension items 894,675 797,584

Total deferred outflows of resources 7,284,078 7,825,927

Total assets and deferred outflows of resources 275,799,537 275,096,775

LIABILITIES

Accounts payable 174,262 175,436

Accrued liabilities 389,084 384,248

Interest payable 862,131 914,480

Unearned revenue 334,426 41,358

Noncurrent liabilities

Due within one year 7,112,885 11,828,630

Due in more than one year 114,814,375 118,772,644

Total liabilities 123,687,163 132,116,796

DEFERRED INFLOWS OF RESOURCES

Deferred revenue - property taxes 19,312,796 19,377,077

Pension items 269,866 280,116

Total deferred inflow of resources 19,582,662 19,657,193

Total liabilities and deferred inflows of resources 143,274,493 151,773,989

NET POSITION

Net investment in capital assets 126,559,305 116,630,062

Restricted for

Social Security 157,250 119,755

Tort liability 196,391 170,738

Scholarships 5,509 5,500

Debt service 294,094 543,397

Land acquisition and site improvement 666,861 875,141

Unrestricted 4,650,302 4,978,193

TOTAL NET POSITION 132,529,712$ 123,322,786$

(with prior year totals for 2016)

March 31, 2017

STATEMENT OF NET POSITION



See accompanying notes to financial statements.- 4 -

2017 2016

Net (Expense) Net (Expense)

Revenue and Revenue and

Change in Change in

Net Position Net Position

Operating Capital

Charges Grants and Grants and Governmental Governmental

FUNCTIONS/PROGRAMS Expenses for Services Contributions Contributions Activities Activities

PRIMARY GOVERNMENT

Governmental Activities

General government 1,643,294$ 1,137,124$ 13,480$ 23,390$ (469,300)$ (564,773)$

Educational services 631,333 44,900 7,723 - (578,710) (605,697)

Police and safety services 1,325,367 - - - (1,325,367) (1,419,352)

Sites and fleet 2,027,596 - - - (2,027,596) (2,566,064)

Land preservation and natural resources 1,992,381 2,034 - 1,547,100 (443,247) (269,413)

Wildlife resource center 227,251 - 751 - (226,500) (243,495)

Planning 1,351,044 - - - (1,351,044) (1,285,857)

Communications 336,496 - - - (336,496) (418,014)

Land development and acquisition 53,040 - - 1,101,831 1,048,791 (79,518)

Lost Valley visitor center 211,582 - - - (211,582) (263,703)

Facility maintenance 404,805 - - - (404,805) -

Interest on long-term debt 4,372,563 - - - (4,372,563) (4,623,046)

TOTAL PRIMARY GOVERNMENT 14,576,752$ 1,184,058$ 21,954$ 2,672,321$ (10,698,419) (12,338,932)

General Revenues

Taxes

Property 19,527,420 19,607,433

Replacement 192,033 132,262

Investment income 90,132 90,471

Miscellaneous 70,669 67,711

Gain on disposal of capital assets 25,091 10,481

Total 19,905,345 19,908,358

CHANGE IN NET POSITION 9,206,926 7,569,426

NET POSITION, APRIL 1 123,322,786 118,527,505

Change in accounting principle - (2,774,145)

NET POSITION, APRIL 1, RESTATED 123,322,786 115,753,360

NET POSITION, MARCH 31 132,529,712$ 123,322,786$

Program Revenues

(with prior year totals for the year ended March 31, 2016)


STATEMENT OF ACTIVITIES

For the Year Ended March 31, 2017




BALANCE SHEET

March 31, 2017

Debt Capital Dedicated

General Service Improvements Projects Nonmajor Total

ASSETS

Cash and cash equivalents 7,261,424$ 57,038$ 2,848,346$ 582,218$ 689,255$ 11,438,281$

Property taxes receivable 7,429,973 11,596,541 - - 286,282 19,312,796

Interest receivable 16,377 - 17,057 3 - 33,437

Other receivables 8,900 - - - - 8,900

Intergovernmental receivables - - - - 22,059 22,059

Prepaid items 109,507 - - - - 109,507

Due from other funds 45,459 237,056 - - 416,209 698,724

Total assets 14,871,640 11,890,635 2,865,403 582,221 1,413,805 31,623,704

None - - - - - -

Total deferred outflows of resources - - - - - -

TOTAL ASSETS AND DEFERRED

OUTFLOWS OF RESOURCES 14,871,640$ 11,890,635$ 2,865,403$ 582,221$ 1,413,805$ 31,623,704$


ASSETS AND DEFERRED

GOVERNMENTAL FUNDS

OUTFLOWS OF RESOURCES


- 6 -



LIABILITIES

Accounts payable 85,008$ -$ 1,045$ 15,190$ 73,019$ 174,262$

Accrued liabilities 389,084 - - - - 389,084

Due to other funds 653,265 - 38,359 7,100 - 698,724

Unearned revenue 38,526 - - - 295,900 334,426

Total liabilities 1,165,883 - 39,404 22,290 368,919 1,596,496


Unavailable revenue - property taxes 7,429,973 11,596,541 - - 286,282 19,312,796

Total deferred inflows of resources 7,429,973 11,596,541 - - 286,282 19,312,796

Total liabilities and deferred

inflows of resources 8,595,856 11,596,541 39,404 22,290 655,201 20,909,292

FUND BALANCES

Nonspendable

Prepaid items 109,507 - - - - 109,507

Restricted

Social Security 157,250 - - - - 157,250

Debt service - 294,094 - - - 294,094

Tort liability - - - - 196,391 196,391

Scholarships - - - 5,509 - 5,509

Land acquisition and site improvements - - - 112,236 554,625 666,861

Unrestricted

Committed

Site and trail improvements - - 2,825,999 165,975 - 2,991,974

Land acquisition - - - 276,211 - 276,211

Assigned

Subsequent year's budget 208,000 - - - - 208,000

Site and trail improvements 3,562,729 - - - 7,588 3,570,317

Unassigned 2,238,298 - - - - 2,238,298

Total fund balances 6,275,784 294,094 2,825,999 559,931 758,604 10,714,412

TOTAL LIABILITIES, DEFERRED INFLOWS

OF RESOURCES, AND FUND BALANCES 14,871,640$ 11,890,635$ 2,865,403$ 582,221$ 1,413,805$ 31,623,704$

LIABILITIES, DEFERRED INFLOWS

OF RESOURCES, AND FUND BALANCES


FUND BALANCES OF GOVERNMENTAL FUNDS 10,714,412$

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 governmental funds 237,590,479

Differences between expected and actual experiences, assumption

changes, net differences between projected and actual earnings

and contributions subsequent to the measurement date for net

pension liabilities are recognized as deferred outflows and

inflows of resources on the statement of net position

Illinois Municipal Retirement Fund 624,809

Long-term liabilities are not due and payable in the current period

and, therefore, are not reported in the governmental funds

Bonds and installment contract payable (102,185,000)

Unamortized premium on bonds issued (15,235,577)

Unamortized loss on refunding 6,389,403

Compensated absences (764,486)

Net other postemployment benefits obligation (57,156)

Interest payable (862,131)

Net pension liability for the Illinois Municipal Retirement Fund (3,685,041)

NET POSITION OF GOVERNMENTAL ACTIVITIES 132,529,712$

March 31, 2017


RECONCILIATION OF FUND BALANCES OF GOVERNMENTAL FUNDS TO THE

GOVERNMENTAL ACTIVITIES IN THE STATEMENT OF NET POSITION




STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS




REVENUES

Taxes

Property 7,388,922$ 11,855,136$ -$ -$ 283,362$ 19,527,420$

Intergovernmental revenue 197,033 - - 1,070,131 33,050 1,300,214

Charges for services 134,882 - - - - 134,882

Rental income 1,041,031 - - - 8,145 1,049,176

Investment income 41,184 13,761 26,693 5,428 3,066 90,132

Donations 16,954 - - 24,200 23,390 64,544

Miscellaneous 47,167 - - 19,176 4,326 70,669

Total revenues 8,867,173 11,868,897 26,693 1,118,935 355,339 22,237,037

EXPENDITURES

Current

General government 1,367,607 1,500 - - 257,714 1,626,821

Educational services 638,391 - - - - 638,391

Police and safety services 1,255,135 - - - - 1,255,135

Sites and fleet 1,659,083 - - - - 1,659,083

Land preservation and natural resources 1,707,881 - - - 146,310 1,854,191

Wildlife resource center 228,370 - - - - 228,370

Planning 211,408 - - - - 211,408

Communications 334,557 - - - - 334,557

Lost Valley visitor center 210,196 - - - - 210,196

Facility maintenance 371,427 - - - - 371,427

Debt service

Principal retirement - 6,695,000 - - - 6,695,000

Interest - 5,187,700 - 121,829 - 5,309,529

Capital outlay 279,675 - 466,291 1,915,421 47,231 2,708,618

Total expenditures 8,263,730 11,884,200 466,291 2,037,250 451,255 23,102,726

EXCESS (DEFICIENCY) OF REVENUES

OVER EXPENDITURES 603,443 (15,303) (439,598) (918,315) (95,916) (865,689)


- 9 -



OTHER FINANCING SOURCES (USES)

Transfers in -$ -$ -$ 234,000$ -$ 234,000$

Transfers (out) - (234,000) - - - (234,000)

Sale of capital assets 28,225 - - - - 28,225

Total other financing sources (uses) 28,225 (234,000) - 234,000 - 28,225

NET CHANGE IN FUND BALANCES 631,668 (249,303) (439,598) (684,315) (95,916) (837,464)

FUND BALANCES, APRIL 1 5,644,116 543,397 3,265,597 1,244,246 854,520 11,551,876

FUND BALANCES, MARCH 31 6,275,784$ 294,094$ 2,825,999$ 559,931$ 758,604$ 10,714,412$


NET CHANGE IN FUND BALANCES -

TOTAL GOVERNMENTAL FUNDS (837,464)$

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 2,198,283

Contributions of capital assets are reported only on the statement of activities 1,521,550

A loss on the sale of capital assets is reported only on the statement

of activities (3,134)

The repayment of long-term debt is reported as an expenditure when due

in governmental funds but as a reduction of principal outstanding in the

statement of activities 7,195,000

Changes in interest payable are reported only in the statement of activities 52,349

The change in the net pension liabilities are only reported only in the

statement of activities

Illinois Municipal Retirement Fund (41,466)

The change in deferred inflows and outflows of resources for net

pension liabilities are reported only in the statement of activities

Illinois Municipal Retirement Fund 107,341

Governmental funds report the effect of premiums, discounts, and similar

items when debt is first issued, whereas these amounts are deferred and

amortized in the statement of activities. This amount is the net effect of

these differences in the treatment of long-term debt and related items

Amortization of premium on bonds 1,523,557

Amortization of loss on refunding (638,940)

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

Change in compensated absences (4,368)

Change in net other postemployment benefits obligation 1,291

Depreciation (1,867,073)

CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 9,206,926$



RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,

GOVERNMENTAL ACTIVITIES IN THE STATEMENT OF ACTIVITIES

EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE



- 9 -



NOTES TO FINANCIAL STATEMENTS

March 31, 2017

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the McHenry County Conservation District (the District) have

been prepared in conformity with accounting principles generally accepted in the United

States of America, as applied to government units (hereinafter referred to as generally

accepted accounting principles (GAAP)). The Governmental Accounting Standards Board

(GASB) is the accepted standard-setting body for establishing governmental accounting and

financial reporting principles. The more significant of the District’s accounting policies are

described below.

a. Reporting Entity

The District was established by the voters of McHenry County in 1971. Its purpose,

as defined, by the state statutes, is to acquire and maintain land as open space for

preservation, education, and recreation. The District is governed by a seven-member

Board of Trustees who are appointed by the Chairman of the McHenry County Board,

with the consent of the McHenry County Board. The District has authority to levy

taxes and receives federal and state grants for land acquisition and development.

In evaluating how to define the reporting entity, management has considered all

potential component units as required by GAAP. The decision to include a potential

component unit in the reporting entity was made based upon the significance of their

operational or financial relationships with the District. The District has determined

there are no component units required to be reported in the District’s financial

statements. The District is considered by McHenry County (the County) to be a

component unit of the County and is included in the financial statements of the County.

b. Fund Accounting

The accounts of the District are organized and operated on the basis of funds. Funds

are independent fiscal and accounting entities with self-balancing sets of accounts.

Fund accounting segregates funds according to their intended purpose and is used to

aid management in demonstrating compliance with finance-related legal and

contractual provisions. A minimum number of funds are maintained for this purpose.

- 12 -



NOTES TO FINANCIAL STATEMENTS (Continued)

- 10 -

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

b. Fund Accounting (Continued)

The following fund categories are used by the District:

Governmental funds are used to account for the District’s general activities. The General

Fund is the primary operating fund; accounting for all financial resources not accounted

for in another fund. Special Revenue Funds account for and report the proceeds of

specific revenue sources that are legally restricted or committed to expenditure for

specific purposes other than debt service or capital projects. The Debt Service Fund

accounts for and reports financial resources that are restricted, committed, or assigned

to expenditure for principal and interest. Capital Projects Funds account for and report

financial resources that are restricted, committed, or assigned to expenditure for capital

outlays, including the acquisition and construction of capital facilities and other capital

assets.

c. Government-Wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and the

statement of activities) report information on all of the activities of the District. The

effect of material interfund activity has been eliminated from these statements.

Governmental activities, which normally are supported by taxes and intergovernmental

revenues, are reported separately from business-type activities, which rely to a

significant extent on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a

given function, segment, or program are offset by program revenues. Direct expenses

are those that are clearly identifiable with a specific function or segment. Program

revenues include (1) charges to customers or applicants who purchase, use, or directly

benefit from goods, services, or privileges provided by a given function or segment and

(2) grants and contributions that are restricted to meeting the operational or capital

requirements of a particular function or segment. Taxes and other items not properly

included among program revenues are reported instead as general revenues. Special

items are significant transactions within the control of management that are either

unusual in nature or infrequent in occurrence.

Separate financial statements are provided for governmental funds. Major individual

governmental funds are reported as separate columns in the fund financial statements.

- 13 -




- 11 -


c. Government-Wide and Fund Financial Statements (Continued)

The District reports the following major governmental funds:

The General Fund is the District’s primary operating fund. It accounts for all financial resources of the general government, except those accounted for in another fund.

The Debt Service Fund is used to account for the payment of principal and interest on the District’s bonds, funded by an annual property tax levy.

The Capital Improvements Fund is used to account for restricted, committed, or assigned financial resources to be used for major capital replacements. The District has elected to present this fund as a major fund.

The Dedicated Projects Fund is used to account for financial resources restricted, committed, or assigned for specific acquisitions or projects.

The District reports the following nonmajor governmental funds:

The Insurance Fund is used to account for the collection and disbursement of restricted monies for third party indemnity insurance coverage.

The Natural Resources Fund is used to account for the collection and disbursement of restricted wetland mitigation monies.

d. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred. Property taxes are recognized as revenues in the year for which they are levied (i.e., intended to finance). Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Property and personal property replacement taxes, grants, and interest associated with the current fiscal period are all considered susceptible to accrual and are recognized as revenues of the current fiscal year. Expenditures generally are recorded when a fund liability is incurred. However, debt service expenditures are recorded only when payment is due.

- 14 -




- 12 -


d. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

(Continued)

The District reports unearned/unavailable/deferred revenue on its financial statements.

Unearned/unavailable/deferred revenues arise when potential revenue does not meet

both the measurable and available criteria for recognition in the current period, under

the modified accrual basis of accounting, or is measurable but not earned under the

accrual basis of accounting. Unearned revenues also arise when resources are received

by the District before it has a legal claim to them or prior to the provision of services, as

when grant monies are received prior to the incurrence of qualifying expenditures. In

subsequent periods, when both revenue recognition criteria are met, or when the District

has a legal claim to the resources, the liability for unearned revenue or deferred inflow

of resources for unavailable/deferred revenue is removed from the financial statements

and revenue is recognized.

e. Cash and Cash Equivalents

The District considers all highly liquid investments with an original maturity of three

months or less when purchased and all certificates of deposit regardless of maturity to

be cash equivalents.

f. Investments

Investments with a maturity of less than one year when purchased, nonnegotiable

certificates of deposit, and Illinois Funds are stated at cost or amortized cost. Investments

with a maturity greater than one year when purchased are stated at fair value. Negotiable

certificates of deposit are carried at cost, which approximates fair value.

The District categorizes its fair value measurements within the fair value hierarchy

established by generally accepted accounting principles. The hierarchy is based on the

valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted

prices in active markets for identical assets; Level 2 inputs are significant other

observable inputs; and Level 3 inputs are significant unobservable inputs. The District

does not have any investments at March 31, 2017 using fair value measurements.

g. Interfund Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangements

outstanding at the end of the fiscal year are referred to as either “due to/from other funds”

(i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the

noncurrent portion of interfund loans). All other outstanding balances between funds are

reported as “due to/from other funds.”

- 15 -




- 13 -

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) h. Prepaid Items/Expenses Payments made to vendors for services that will benefit periods beyond the date of this

report, if any, are recorded as prepaid items/expenses. Prepaid expenditures are recognized on the consumption method in governmental funds.

i. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g.,

bike trails, paths, roads, bridges, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the District as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or

materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are

constructed. Property, plant, and equipment are depreciated using the straight-line method over the following estimated useful lives:

Assets Years

Buildings and improvements 20 Land improvements 15 Roads 40 Furniture and equipment 5-10 Office equipment 5 Vehicles 5

j. Compensated Absences District employees accumulate vacation and sick leave hours for subsequent use or

payment upon termination, death, or retirement. Up to a maximum of 30 working days of earned vacation pay and a percentage (based on length of employment) of sick leave may be paid upon termination of employment.

Vested or accumulated vacation and sick leave are reported as expenditures and a fund

liability of the governmental fund that will pay it once retirement or separation has occurred. Vested or accumulated vacation and sick leave of governmental activities are recorded as an expense and liability as the benefits accrue to employees.

- 16 -




- 14 -

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) k. Long-Term Obligations In the government-wide financial statements and proprietary funds in the fund financial

statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities or proprietary fund financial statements. Bond premiums and discounts and gains/losses on refunding are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as expenses in the period incurred.

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 expenditures in the period incurred.

l. Net Positions/Fund Balances

In the fund financial statements, governmental funds report nonspendable fund balance for amounts that are either not in spendable form or legally or contractually required to be maintained intact. Restrictions of fund balance are reported for amounts constrained by legal restrictions from outside parties for use for a specific purpose, or externally imposed by outside entities. None of the restricted fund balance result from enabling legislation adopted by the District. Committed fund balance is constrained by formal actions of the District’s Board of Trustees, which is considered the District’s highest level of decision-making authority. Formal actions include ordinances approved by the Board of Trustees. Assigned fund balance represents amounts constrained by the District’s intent to use them for a specific purpose. Although there is no formal policy, the authority to assign fund balance has been delegated to the District’s finance director at the direction of the District’s Board of Trustees. Any residual fund balance of the General Fund and any deficit fund balance in any other governmental fund is reported as unassigned.

The District’s flow of funds assumption prescribes that the funds with the highest level

of constraint are expended first. If restricted or unrestricted funds are available for

spending, the restricted funds are spent first. Additionally, if different levels of

unrestricted funds are available for spending the District considers committed funds to

be expended first followed by assigned and then unassigned funds.

In the government-wide financial statements, restricted net positions are legally

restricted by outside parties for a specific purpose. Net investment in capital assets

represents the District’s investment in the book value of capital assets, less any

outstanding debt that was issued to construct or acquire the capital asset.

- 17 -




- 15 -


m. Deferred Outflows/Inflows of Resources

In addition to assets, the statement of net position will sometimes report a separate

section for deferred outflows of resources. This separate financial statement element

represents a consumption of net assets that applies to a future period(s) and so will not

be recognized as an outflow of resources (expense/expenditure) until then. In addition

to liabilities, the statement of net position will sometimes report a separate section for

deferred inflows of resources. This separate financial statement element represents an

acquisition of net assets that applies to a future period(s) and so will not be recognized

as an inflow of resources (revenue) until that time. These amounts are deferred and

recognized as an inflow of resources in the period that the amounts become available.

n. Comparative Data

Comparative total data for the prior year have been presented in selected sections of the

accompanying financial statements in order to provide an understanding of changes on

the District’s financial position and operations. Such information is presented in a

summarized comparative format and should be read in conjunction with the District’s

financial statements for the year ended March 31, 2016, from which the information was

summarized.

o. Accounting Estimates

The preparation of financial statements in conformity with GAAP requires management

to make estimates and assumptions that affect the reported amounts of assets and

liabilities and disclosure of contingent assets and liabilities at the date of the financial

statements and the reported amounts of revenues and expenditures/expenses during the

reporting period. Actual results could differ from those estimates.

p. Inventory

Inventory, if any, is comprised of seed and is valued at cost.

2. DEPOSITS AND INVESTMENTS

The District’s investment policy authorizes the District to invest in obligations issued by the

United States Government, investments constituting direct obligations of any bank, short-term

commercial paper of U.S. corporations with assets exceeding $500 million, short-term

obligations issued by the Federal National Mortgage Association, shares or other securities

issued by savings and loan associations, share accounts of credit unions chartered in the United

States with its principal office located in Illinois, and securities issued by Illinois Funds.

- 18 -




- 16 -

2. DEPOSITS AND INVESTMENTS (Continued)

Illinois Funds is an investment pool managed by the State of Illinois, Office of the Treasurer,

which allows governments within the state to pool their funds for investment purposes.

Investments in Illinois Funds are valued at Illinois Funds’ share price, which is the price for

which the investment could be sold.

It is the policy of the District to invest its funds in a manner which will provide the highest

investment return with the maximum security while meeting the daily cash flow demands of

the District and conforming to all state and local statutes governing the investment of public

funds, using the “prudent person” standard for managing the overall portfolio. The primary

objectives of the policy, in order of priority are; legality, safety (preservation of capital and

protection of investment principal), liquidity, and yield. The Board of Trustee’s policy requires

collateralization at 105% of the aggregate balance of principal and accrued interest on deposits

in financial institutions.

a. Deposits with Financial Institutions

Custodial credit risk for deposits with financial institutions is the risk that in the event of

bank failure, the District’s deposits may not be returned to it. The District’s investment

policy requires pledging of collateral with the collateral held by an agent of the District

in the District’s name.

The following table presents the investments and maturities of the District’s securities

with interest rate risk as of March 31, 2017:

Investment Maturities (in Years)

Investment Type

Fair

Value

Less than

1

1-5

6-10

Greater than

10

Negotiable certificates of

deposits

$ 5,878,445

$ 3,824,287

$ 2,054,158

$ -

$ -

TOTAL $ 5,878,445 $ 3,824,287 $ 2,054,158 $ - $ -

Interest rate risk is the risk that changes in interest rates will adversely affect the fair

value of an investment. In accordance with its investment policy, the District limits its

exposure to interest rate risk by structuring the portfolio to provide liquidity for operating

funds and maximizing yields for funds not needed with a budgetary or economic cycle.

The investment policy does not strictly limit the maximum maturity lengths of

investments.

- 19 -




- 17 -

2. DEPOSITS AND INVESTMENTS (Continued)

b. Investments

Credit risk is the risk that the issuer of a debt security will not pay its par value upon

maturity. The District limits its exposure to credit risk, the risk that the issuer of a debt

security will not pay its par value upon maturity, by primarily investing in Illinois Funds.

Illinois Funds are rated AAA.

Custodial credit risk for investments is the risk that, in the event of the failure of the

counterparty to the investment, the District will not be able to recover the value of its

investments that are in possession of an outside party. The District’s investment policy

does not directly address custodial credit risk for investments. Illinois Funds are not

subject to custodial credit risk.

Concentration of credit risk is the risk that the District has a high percentage of its

investments invested in one type of investment. The District’s investment policy requires

diversification of investments to avoid unreasonable risk. At March 31, 2017, the District

held no investments that were greater than 5% of its overall portfolio.

3. RECEIVABLES

a. Property Taxes

Property taxes for 2016 attach as an enforceable lien on January 1, 2016 on property

values assessed as of the same date. Taxes are levied by December of the subsequent

year (by passage of Tax Levy Ordinance). Tax bills are prepared by the County and

issued on or about May 1, 2017 and August 1, 2017 and are payable in two installments,

on or about June 1, 2017 and September 1, 2017. The County collects such taxes and

remits them periodically. The allowance for uncollectible taxes has been stated at 1% of

the tax levy, to reflect actual collection experience. Since the 2016 levy is intended to

fund the 2018 fiscal year, the levy has been recorded as a receivable and

unavailable/deferred revenue.

The 2017 tax levy, which attached as an enforceable lien on property as of January 1,

2017, has not been recorded as a receivable as of March 31, 2017 as the tax has not yet

been levied by the District and will not be levied until September 2017 and, therefore,

the levy is not measurable at March 31, 2017.

- 20 -




- 18 -

4. CAPITAL ASSETS

Capital asset activity for the year ended March 31, 2017 was as follows:

Balances Balances

April 1 Increases Decreases March 31

GOVERNMENTAL ACTIVITIES

Capital assets not being depreciated

Land $ 203,127,079 $ 1,961,818 $ - $ 205,088,897

Construction in progress 3,859,542 1,506,226 528,781 4,836,987

Total capital assets not being depreciated 206,986,621 3,468,044 528,781 209,925,884

Capital assets being depreciated

Land improvements and roads 31,820,299 493,532 - 32,313,831

Buildings and improvements 15,051,301 70,043 - 15,121,344

Furniture and equipment 2,542,522 56,923 56,614 2,542,831

Office equipment 515,629 - 5,971 509,658

Vehicles 2,252,450 160,072 172,020 2,240,502

Total capital assets being depreciated 52,182,201 780,570 234,605 52,728,166

Less accumulated depreciation for

Land improvements and roads 13,895,410 948,442 - 14,843,852

Buildings and improvements 5,936,610 517,183 - 6,453,793

Furniture and equipment 1,669,071 130,526 53,481 1,746,116

Office equipment 286,091 24,282 5,971 304,402

Vehicles 1,640,787 246,640 172,019 1,715,408

Total accumulated depreciation 23,427,969 1,867,073 231,471 25,063,571

Total capital assets being depreciated, net 28,754,232 (1,086,503) 3,134 27,664,595


CAPITAL ASSETS, NET $ 235,740,853 $ 2,381,541 $ 531,915 $ 237,590,479

- 21 -




- 19 -

4. CAPITAL ASSETS (Continued)

Depreciation expense was charged to functions/programs of the primary government as

follows:


General government $ 26,010

Educational services 1,705

Police and safety services 96,796

Land and facilities management 416,679

Natural resources 116,674

Wildlife resource center 791

Communication 3,333

Planning and development 1,060,535

Land development and acquisition 122,037

Lost Valley visitor center 21,074

Facility maintenance 1,439

TOTAL $ 1,867,073

5. RISK MANAGEMENT

The District is exposed to various risks of loss related torts; theft of, or damage to, and

destruction of assets; errors and omission; injuries to employees; employee health; and natural

disasters.

Park District Risk Management Agency

The District participates in the Park District Risk Management Agency (PDRMA). PDRMA

is a public entity risk pool whose members are Illinois governments. PDRMA manages and

funds first party property losses, third party liability claims, boiler and machinery claims,

workers’ compensation claims, and public officials’ liability claims of its members. The

District’s payments to PDRMA are displayed on the financial statements as expenditures in

the Insurance Fund.

Each member assumes the first $1,000 of property claims each occurrence and has self-

insurance retentions at various amounts. Management consists of a Board of Directors

comprised of one appointed representative from each member. In addition, there are two

officers, a Risk Manager and a Treasurer. The District does not exercise any control over the

activities of PDRMA beyond its representation on the Board of Directors.

- 22 -




- 20 -

5. RISK MANAGEMENT (Continued)

Park District Risk Management Agency (Continued)

Initial contributions are determined in advance of each membership year based on the

individual member’s expenditures as defined in the bylaws of PDRMA, assessment factors

based on past member experience, and the funding needs for the membership year. The Board

of Directors may require that supplemental contributions be made by members to ensure that

adequate funds are available to meet the obligations applicable to the membership year.

Members have a contractual obligation to fund any deficit of PDRMA attributable to a

membership year during which they were a member.

At December 31, 2016, the total equity of PDRMA’s Property/Casualty Program’s balance

sheet was $39,712,139. For the year ended December 31, 2016, the decrease in net position of

PDRMA was $996,072. The District made $240,755 of payments to PDRMA during the year

ended March 31, 2017.

In the event of a liability loss exceeding $21,500,000 per occurrence, self-insured and

reinsurance limit, the members would be responsible for funding the excess amount.

Health Insurance

The District purchases employee health insurance from third party insurance company

providers.

6. LONG-TERM DEBT

a. General Obligation Bonds

The District issues general obligation bonds to provide funds for the acquisition and

construction of major capital facilities. In addition, general obligation bonds have been

issued to refund general obligation bonds.

b. Installment Contract Payable

The District issued an installment contract payable in order to acquire certain land.

- 23 -




- 21 -

6. LONG-TERM DEBT (Continued)

c. Changes in Long-Term Liabilities

The following is a summary of changes in long-term debt for the year ended March 31,

2017:

Debt

Retired

By

Balances

April 1

Additions

Reductions

Balances

March 31

Due Within

One Year


$20,330,000 General Obligation

Bonds, Series 1998A, dated July 1,

1998, due in annual installments

ranging from $115,000 to

$1,785,000, interest is due

semiannually at rates from 4.7% to

5.5%. The final payment is due

February 1, 2018.

Debt

Service

$ 3,480,000

$ -

$ 1,695,000

$ 1,785,000

$ 1,785,000

$108,215,000 General Obligation

Bonds, Series 2014, dated

December 16, 2014, due in

periodic installments ranging from

$2,235,000 to $13,470,000

beginning in 2015, interest is due

semiannually at rates from 3% to

5%, the final payment is due

February 1, 2027.

Debt

Service

101,100,000

-

5,000,000

96,100,000

5,030,000

Total bonds 104,580,000 - 6,695,000 97,885,000 6,815,000

Unamortized bond premium 16,759,134 - 1,523,557 15,235,577 -

Total debt service fund bonds 121,339,134 - 8,218,557 113,120,577 6,815,000

$6,300,000 2006 Installment

Contract, dated November 16,

2006, interest due in semiannual

installments at a rate of 2.5%, with

final payment of principal and

interest due on November 1, 2021.

Dedicated

Projects

4,800,000

-

500,000

4,300,000

-

Compensated absences General 760,118 337,998 333,630 764,486 297,885

Net pension liability - IMRF Various 3,643,575 41,466 - 3,685,041 -

Net postemployment benefits

obligation

General

58,447

-

1,291

57,156

-

TOTAL GOVERNMENTAL

ACTIVITIES

$ 130,601,274

$ 379,464

$ 9,053,478

$ 121,927,260

$ 7,112,885

- 24 -




- 22 -

6. LONG-TERM DEBT (Continued)

d. Debt Service Requirements to Maturity

Debt service requirements to maturity are as follows:

Governmental Activities

Fiscal Year Ending

Total General Obligation Bonds

March 31, Principal Interest Total

2018 $ 6,815,000 $ 4,898,713 $ 11,713,713 2019 7,285,000 4,553,500 11,838,500 2020 7,800,000 4,189,250 11,989,250 2021 8,475,000 3,799,250 12,274,250 2022 9,195,000 3,375,500 12,570,500 2023 9,955,000 2,915,750 12,870,750 2024 10,760,000 2,418,000 13,178,000 2025 11,615,000 1,880,000 13,495,000 2026 12,515,000 1,299,250 13,814,250 2027 13,470,000 673,500 14,143,500

TOTAL $ 97,885,000 $ 30,002,713 $ 127,887,713

Fiscal Year Ending

Total Installment Contract

March 31, Principal Interest Total

2018 $ - $ 107,500 $ 107,500 2019 - 107,500 107,500 2020 - 107,500 107,500 2021 - 107,500 107,500 2022 4,300,000 107,500 4,407,500

TOTAL $ 4,300,000 $ 537,500 $ 4,837,500

e. Legal Debt Margin

The schedule of the District’s legal debt margin as of March 31, 2017 is as follows:

ASSESSED VALUATION - 2016 (Latest information available)

$ 7,536,449,930

Statutory debt limitation (1.725% of assessed valuation) $ 130,003,761 Less general obligation bonds (97,885,000) Less installment contracts (4,300,000)

LEGAL DEBT MARGIN $ 27,818,761

- 25 -




- 23 -

7. OTHER POSTEMPLOYMENT BENEFITS a. Plan Description In addition to providing the pension benefits described, the District provides

postemployment health care benefits (OPEB) for retired employees through a single-employer defined benefit plan (the Plan). The benefits, benefit levels, employee contributions, and employer contributions are governed by the District and can be amended by the District through its personnel manual and union contracts. Certain benefits are controlled by state laws and can only be changed by the Illinois Legislature. 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 District’s governmental activities.

b. Benefits Provided The District provides pre and post-Medicare postretirement health insurance to retirees,

their spouses and dependents (enrolled at time of employee’s retirement). To be eligible for benefits, the employee must qualify for retirement under one of the District’s retirement plans. The retirees pay the blended premium. Upon a retiree becoming eligible for Medicare, the amount payable under the District’s health plan will be reduced by the amount payable under Medicare for those expenses that are covered under both.

c. Membership At March 31, 2015 (the census date), membership consisted of:

Retirees and beneficiaries currently receiving benefits 3 Terminated employees entitled to benefits but not yet receiving them - Active employees 73

TOTAL 76

Participating employers 1

d. Funding Policy The District is not required to and currently does not advance fund the cost of benefits

that will become due and payable in the future. Active employees do not contribute to the Plan until retirement.

- 26 -




- 24 -

7. OTHER POSTEMPLOYMENT BENEFITS (Continued) e. Annual OPEB Costs and Net OPEB Obligation The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the

Plan, and the net OPEB obligations for March 31, 2015 to 2017 were as follows:

Fiscal Year

Ended

Annual OPEB Cost

Employer

Contributions

Percentage of Annual OPEB

Cost Contributed

Net OPEB Obligation

2015 $ 18,064 $ 14,732 81.55% $ 55,092 2016 18,087 14,732 81.45% 58,447 2017 18,109 19,400 93.35% 57,156

The net OPEB obligation as of March 31, 2017 was calculated as follows:

Annual required contribution $ 17,719 Interest on net OPEB obligation 2,338 Adjustment to annual required contribution (1,948)

Annual OPEB cost 18,109 Contributions made 19,400 Decrease in net OPEB obligation (1,291) Net OPEB obligation, beginning of year 58,447 NET OPEB OBLIGATION, END OF YEAR $ 57,156

Funded Status and Funding Progress: The funded status of the Plan as of March 31, 2014

(the measurement date) was as follows:

Actuarial accrued liability (AAL) $ 201,239 Actuarial value of plan assets - Unfunded actuarial accrued liability (UAAL) 201,239 Funded ratio (actuarial value of plan assets/AAL) 0.00% Covered payroll (active plan members) $ 4,138,394 UAAL as a percentage of covered payroll 4.86%

Actuarial valuations of an ongoing plan involve estimates of the value of reported

amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the Plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to financial statements, presents multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

- 27 -




- 25 -

7. OTHER POSTEMPLOYMENT BENEFITS (Continued) e. Annual OPEB Costs and Net OPEB Obligation (Continued) Actuarial methods and assumptions - projections of benefits for financial reporting

purposes are based on the substantive plan (the Plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

In the March 31, 2015 actuarial valuation (measurement date of March 31, 2014), the

entry-age normal actuarial cost method was used. The actuarial assumptions included a

4.0% investment rate of return and initial healthcare cost trend rates between 5.5% to

7.0% with an ultimate healthcare inflation rate of 5.0%. Both rates include a 3.0%

inflation assumption and 4.0% wage inflation assumption. The actuarial value of assets

was not determined as the District has not advance funded its obligation. The Plan’s

unfunded actuarial accrued liability is being amortized as a level percentage of projected

payroll on an open, 30-year basis.

8. EMPLOYEE RETIREMENT SYSTEMS

The District contributes to one defined benefit pension plan: the Illinois Municipal Retirement

Fund (IMRF), an agent multiple-employer public employee retirement system. The benefits,

benefit levels, employee contributions, and employer contributions for all plans are governed

by Illinois Compiled Statutes and can only be amended by the Illinois General Assembly.

IMRF does not issue a separate report. However, IMRF does issue a publicly available report

that includes financial statements and supplementary information for the plan as a whole, but

not for individual employers. That report can be obtained from IMRF, 2211 York Road,

Suite 500, Oak Brook, Illinois 60523.

Illinois Municipal Retirement Fund

Plan Administration

All employees hired in positions that meet or exceed the prescribed annual hourly standard

must be enrolled in IMRF as participating members.

The plan is accounted for on the economic resources measurement focus and the accrual basis

of accounting. Employer and employee contributions are recognized when earned in the year

that the contributions are required, benefits and refunds are recognized as an expense, and

liability when due and payable.

- 28 -




- 26 -

8. EMPLOYEE RETIREMENT SYSTEMS (Continued)

Illinois Municipal Retirement Fund (Continued)

Plan Membership

At December 31, 2016, IMRF membership consisted of:

Inactive employees or their beneficiaries currently receiving benefits 31

Inactive employees entitled to but not yet receiving benefits 41

Active employees 78

TOTAL 150

Benefits Provided

IMRF provides two tiers of pension benefits. Employees hired prior to January 1, 2011, are

eligible for Tier 1 benefits. For Tier 1 employees, pension benefits vest after eight years of

service. Participating members who retire at age 55 (reduced benefits) or after age 60 (full

benefits) with eight years of credited service are entitled to an annual retirement benefit,

payable monthly for life, in an amount equal to 1 2/3% of their final rate of earnings, for each

year of credited service up to 15 years, and 2% for each year thereafter. Employees hired on

or after January 1, 2011, are eligible for Tier 2 benefits. For Tier 2 employees, pension benefits

vest after 10 years of service. Participating members who retire at age 62 (reduced benefits)

or after age 67 (full benefits) with 10 years of credited service are entitled to an annual

retirement benefit, payable monthly for life, in an amount equal to 1 2/3% of their final rate of

earnings, for each year of credited service up to 15 years, and 2% for each year thereafter.

These benefit provisions and all other requirements are established by state statute.

Contributions

These benefit provisions and all other requirements are established by state statute.

Participating members are required to contribute 4.5% of their annual salary to IMRF. The

District is required to contribute the remaining amounts necessary to fund IMRF as specified

by statute. The employer contribution rate for the fiscal year ended 2017 was 11.77% of

covered payroll.

- 29 -




- 27 -



Net Pension Liability

The District’s net pension liability was measured as of December 31, 2016 and the total

pension liability used to calculate the net pension liability was determined by an actuarial

valuation performed as of the same date using the following actuarial methods and

assumptions.

Actuarial valuation date December 31, 2016

Actuarial cost method Entry-age normal

Assumptions

Inflation 2.75%

Salary increases 3.75% to 14.50%

Interest rate 7.50%

Cost of living adjustments 3.00%

Asset valuation method Market value

For nondisabled retirees, an IMRF specific mortality table was used with fully generational

projection scale MP-2014 (base year 2012). IMRF specific rates were developed from the RP-

2014 Blue Collar Health Annuitant Mortality Table with adjustments to match current IMRF

experience. For disabled retirees, an IMRF specific mortality table was used with fully

generational projection scale MP-2014 (base year 2012). IMRF specific rates were developed

from the RP-2014 Disabled Retirees Mortality Table applying the same adjustment that were

applied for nondisabled lives. For active members, an IMRF specific mortality table was used

with fully generational projection scale MP-2014 (base year 2012). IMRF specific rates were

developed from the RP-2014 Employee Mortality Table with adjustments to match current

IMRF experience.

- 30 -




- 28 -



Discount Rate

The discount rate used to measure the total pension liability was 7.50% (7.48% in 2015). The

projection of cash flows used to determine the discount rate assumed that member

contributions will be made at the current contribution rate and that the District contributions

will be made at rates equal to the difference between actuarially determined contribution rates

and the member rate. Based on those assumptions, the IMRF’s fiduciary net position was

projected to be available to make all projected future benefit payments of current plan

members. Therefore, the long-term expected rate of return on pension plan investments of

7.50% was used to determine the total pension liability.

Changes in the Net Pension Liability

(a)

Total Pension

(b)

Plan

Fiduciary

(a) - (b)

Net Pension

Liability Net Position Liability

BALANCES AT

JANUARY 1, 2016

$ 15,849,408

$ 12,205,833

$ 3,643,575

Changes for the period

Service cost 466,255 - 466,255

Interest 1,187,496 - 1,187,496

Difference between expected

and actual experience 212,331 - 212,331

Changes in assumptions (52,119) - (52,119)

Employer contributions - 535,797 (535,797)

Employee contributions - 197,145 (197,145)

Net investment income - 846,673 (846,673)

Benefit payments and refunds (413,846) (413,846) -

Other (net transfer) - 192,882 (192,882)

Net changes 1,400,117 1,358,651 41,466

BALANCES AT

DECEMBER 31, 2016

$ 17,249,525

$ 13,564,484

$ 3,685,041

The discount rate assumption was changed from 7.48% to 7.50% in 2016.

- 31 -




- 29 -



Pension Expense and Deferred Outflows of Resources and Deferred Inflows of

Resources

For the fiscal year ended March 31, 2017, the District recognized pension expense of

$470,513. At March 31, 2017, the District reported deferred outflows of resources and deferred

inflows of resources related to IMRF from the following sources:

Deferred

Outflows of

Deferred

Inflows of

Resources Resources

Difference between expected and actual experience $ 177,337 $ 226,337

Changes in assumption - 43,529

Net difference between projected and actual earnings on

pension plan investments 578,413 -

Contributions made subsequent to the measurement date 138,925 -

TOTAL $ 894,675 $ 269,866

$138,925 reported as deferred outflows of resources related to pensions resulting from District

contributions subsequent to the measurement date will be recognized as a reduction of net

pension liability in the reporting year ending March 31, 2018. Other amounts reported as

deferred outflows of resources and deferred inflows of resources related to IMRF will be

recognized in pension expense as follows:

Year Ending

March 31,

2018 $ 159,566

2019 159,566

2020 159,564

2021 (9,783)

2022 15,183

Thereafter 1,788

TOTAL $ 485,884

- 32 -




- 30 -

8. EMPLOYEE RETIREMENT SYSTEMS (Continued) Illinois Municipal Retirement Fund (Continued) Discount Rate Sensitivity

The following is a sensitivity analysis of the net pension liability to changes in the discount

rate. The table below presents the net pension liability of the District calculated using the

discount rate of 7.5% as well as what the District’s net pension liability would be if it were

calculated using a discount rate that is 1 percentage point lower (6.5%) or 1 percentage point

higher (8.5%) than the current rate:

1.0% Decrease

Current Discount Rate

1% Increase

(6.5%) (7.5%) (8.5%)

Net pension liability $ 6,518,883 $ 3,685,041 $ 1,402,566

9. RESTRICTED FUND BALANCE

The District received a $5,000 donation from Smith Engineering. The donation and the interest

earned from the donation are intended for a scholarship program in which the interest earned

will be distributed to an eligible recipient. The District sets up the criteria for the scholarships,

selects a recipient, and awards the scholarships. The Dedicated Projects Fund balance includes

$5,509 restricted for future scholarships.

10. INTERFUND ACTIVITY

a. Interfund Receivables/Payables

Amounts due to/from other funds at March 31, 2017 consist of the following:

Receivable Fund Payable Fund Amount

Debt Service General $ 237,056

Nonmajor Governmental General 416,209

General Capital Improvements 38,359

General Dedicated Projects 7,100

TOTAL $ 698,724

The District maintains one central operating checking account, within the General Fund,

from which all operating expenses are paid. As such, expenses from other funds flow

through the General Fund’s operating checking account, resulting in temporary interfund

receivable/payable balances.

- 33 -




- 31 -

10. INTERFUND ACTIVITY (Continued) a. Interfund Receivables/Payables (Continued) The purpose of the significant amounts due is as follows:

$237,056 due to the Debt Service Fund from the General Fund represents residual balances from bond issuances and refundings, and the interest earned on the debt service tax levy receipts prior to the debt payments being made.

$416,209 due to the Nonmajor Funds from the General Fund represents the maintenance of fund balance for unforeseen circumstances with the Insurance ($269,240) Fund and the Natural Resources Fund ($146,969).

b. Interfund Transfers Interfund transfers during the year ended March 31, 2017 consisted of the following:

Transfer In Transfer Out

Dedicated Projects Fund $ 234,000 $ -

Debt Service - 234,000

TOTAL $ 234,000 $ 234,000

The purpose of significant transfers is as follows:

The $234,000 transfer from the Debt Service Fund to the Dedicated Projects Fund was to transfer interest to complete special capital projects.

11. CONTINGENT LIABILITIES a. Litigation The District is not currently involved in any lawsuits or significant litigation matters. b. Grants Amounts received or receivable from grantor agencies are subject to audit and

adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the District expects such amounts, if any, to be immaterial.

- 34 -

REQUIRED SUPPLEMENTARY INFORMATION

Original and Variance

Final Budget Actual Over (Under)

REVENUES

Taxes

Property taxes, net 7,391,093$ 7,388,922$ (2,171)$

Intergovernmental

State replacement taxes 211,998 192,033 (19,965)

Grants 10,533 5,000 (5,533)

Charges for services 127,351 134,882 7,531

Receipts from use of facilities

Rental income 1,045,728 1,041,031 (4,697)

Investment income 44,235 41,184 (3,051)

Donations - 16,954 16,954

Miscellaneous 30,500 47,167 16,667

Total revenues 8,861,438 8,867,173 5,735

EXPENDITURES

Current

General government 1,495,224 1,367,607 (127,617)

Educational services 676,751 638,391 (38,360)

Police and safety services 1,288,762 1,255,135 (33,627)

Sites and fleet 1,844,684 1,659,083 (185,601)

Land preservation and natural resources 1,760,583 1,707,881 (52,702)

Wildlife resource center 242,356 228,370 (13,986)

Planning 222,275 211,408 (10,867)

Communications 401,757 334,557 (67,200)

Lost Valley visitor center 214,310 210,196 (4,114)

Facility maintenance 510,335 371,427 (138,908)

Capital outlay 493,000 279,675 (213,325)

Total expenditures 9,150,037 8,263,730 (886,307)


OVER EXPENDITURES (288,599) 603,443 892,042


Sale of capital assets 15,000 28,225 13,225

Total other financing sources (uses) 15,000 28,225 13,225

NET CHANGE IN FUND BALANCE (273,599)$ 631,668 905,267$

FUND BALANCE, APRIL 1 5,644,116

FUND BALANCE, MARCH 31 6,275,784$


SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

GENERAL FUND



(See independent auditor's report.)- 35 -

(6)

(2) UAAL

(1) Actuarial (4) as a

Actuarial Actuarial Accrued (3) Unfunded (5) Percentage

Valuation Value of Liability Percentage AAL Annual of Covered

Date Plan (AAL) Funded (UAAL) Covered Payroll

March 31, Assets Entry-Age (1) / (2) (2) - (1) Payroll (4) / (5)

2012 -$ 145,721$ 0.00% 145,721$ 4,160,902$ 3.50%

2013 N/A N/A N/A N/A N/A N/A

2014 - 201,239 0.00% 201,239 4,138,394 4.86%




N/A - Actuarial valuation not performed for 2013, 2015 and 2016 and not available for 2017.


SCHEDULE OF FUNDING PROGRESS

OTHER POSTEMPLOYMENT BENEFITS PLAN

Last Six Fiscal Years



FISCAL YEAR ENDED MARCH 31, 2016 2017

Actuarially determined contribution 522,614$ 536,388$

Contributions in relation to the actuarially

determined contribution 522,614 536,388

CONTRIBUTION DEFICIENCY (Excess) -$ -$

Covered-employee payroll 4,259,420$ 4,557,874$

Contributions as a percentage of

covered-employee payroll 12.27% 11.77%

Notes to Required Supplementary Information

Ultimately, this schedule should present information for the last ten years. However, until ten years of

information can be compiled, information will be presented for as many years as is available.

The information presented was determined as part of the actuarial valuations as of January 1 of the

prior calendar year. Additional information as of the latest actuarial valuation presented is as follows:

the actuarial cost method was aggregate entry-age normal; the amortization method was level percent

of pay, closed and the amortization period was 27 years; the asset valuation method was five-year

smoothed market; and the significant actuarial assumptions were an investment rate of return at

7.50% annually, projected salary increases assumption of 3.75% to 14.50% compounded annually,

and postretirement benefit increases of 3.50% compounded annually.

Last Two Fiscal Years


SCHEDULE OF EMPLOYER CONTRIBUTIONS

ILLINOIS MUNICIPAL RETIREMENT FUND



Annual

Required

Fiscal Employer Contribution Percentage

Year Contributions (ARC) Contributed

2012 9,346$ 15,005$ 62.29%

2013 9,346 15,005 62.29%

2014 9,346 15,005 62.29%

2015 14,732 17,719 83.14%

2016 14,732 17,719 83.14%

2017 14,732 17,719 83.14%


SCHEDULE OF EMPLOYER CONTRIBUTIONS

OTHER POSTEMPLOYMENT BENEFITS PLAN

Last Six Fiscal Years



MEASUREMENT DATE DECEMBER 31, 2015 2016

TOTAL PENSION LIABILITY

Service cost 479,128$ 466,255$

Interest 1,122,783 1,187,496

Changes of benefit terms - -

Differences between expected and actual experience (333,895) 212,331

Changes of assumptions - (52,119)

Benefit payments, including refunds of member contributions (379,037) (413,846)

Net change in total pension liability 888,979 1,400,117

Total pension liability - beginning 14,960,429 15,849,408

TOTAL PENSION LIABILITY - ENDING 15,849,408$ 17,249,525$

PLAN FIDUCIARY NET POSITION

Contributions - employer 519,108$ 535,797$

Contributions - member 191,946 197,145

Net investment income 61,160 846,673

Benefit payments, including refunds of member contributions (379,037) (413,846)

Other (net transfer) (253,288) 192,882

Net change in plan fiduciary net position 139,889 1,358,651

Plan fiduciary net position - beginning 12,065,944 12,205,833

PLAN FIDUCIARY NET POSITION - ENDING 12,205,833$ 13,564,484$

EMPLOYER'S NET PENSION LIABILITY 3,643,575$ 3,685,041$

Plan fiduciary net position

as a percentage of the total pension liability 77.0% 78.6%

Covered-employee payroll 4,265,465$ 4,381,009$

Employer's net pension liability

as a percentage of covered-employee payroll 85.4% 84.1%

Notes to Required Supplementary Information

Ultimately, this schedule should present information for the last ten years. However, until ten years of information can

be compiled, information will be presented for as many years as is available.


SCHEDULE OF CHANGES IN THE EMPLOYER'S

NET PENSION LIABILITY AND RELATED RATIOS

ILLINOIS MUNICIPAL RETIREMENT FUND

Last Two Fiscal Years


The discount rate assumption was changed from 7.48% to 7.50% in 2016.


- 35 -



NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

March 31, 2017

BUDGETS

Budgets are adopted on a basis consistent with the modified accrual basis of accounting used for

governmental funds. Annual appropriations are adopted within the first quarter of each fiscal year

for the General, Insurance, Natural Resources, Debt Service, Capital Improvement, and Dedicated

Projects Funds. All annual appropriations lapse at fiscal year end.

The appropriated budget is prepared by fund and department. Management may make transfers of

appropriations between departments within the same fund. Transfers of appropriations between

funds require the approval of the governing board. There were no budget amendments during the

fiscal year.

Expenditures may not legally exceed budgeted appropriations at the fund level.

- 40 -

MAJOR GOVERNMENTAL FUNDS


SCHEDULE OF REVENUES - BUDGET AND ACTUAL


Original and

Final Budget Actual

REVENUES

Taxes

Property taxes, net 7,391,093$ 7,388,922$

Intergovernmental

State replacement taxes 211,998 192,033

Grants 10,533 5,000

Charges for services 127,351 134,882

Receipts from use of facilities

Rental income 1,045,728 1,041,031


Donations - 16,954

Miscellaneous 30,500 47,167

TOTAL REVENUES 8,861,438$ 8,867,173$

GENERAL FUND



Original and

Final Budget Actual

GENERAL GOVERNMENT

Personnel

Salaries 727,849$ 727,381$

Health insurance 110,417 109,325

Retirement contribution 88,579 89,342

HSA contribution 8,400 8,325

Social Security contribution 55,680 49,386

Life insurance 1,454 1,074

Employee mileage reimbursement 880 81

Meetings - non-educational 650 445

Employee relations 9,752 8,440

Total personnel 1,003,661 993,799

Contractual services

Printing 3,480 1,265

Postage 6,300 4,288

Dues, subscriptions, and memberships 13,385 13,324

Audits 24,127 18,825

Appraisals and surveys 78 13

Legal services 84,000 39,687

Legal notices 5,297 4,063

Real estate tax 130,000 151,635

Travel/meeting expense 10,430 5,932

Trustee expenses 7,240 4,553

Office equipment, rental, and maintenance 5,190 4,847

IT maintenance service 30,239 27,850

Employee physical exams 1,550 1,437

Waste disposal 350 148

Janitorial 1,448 3,813

Vehicle repair 2,000 978

Unanticipated expenditures 45,000 -

Contractual services 40,238 26,363

Total contractual services 410,352 309,021

Commodities

Office supplies 5,938 2,805

Office furniture and equipment 5,665 297

Computer supplies 32,762 28,989

Uniforms 200 12

Utilities - ISDN line 33,558 30,594

Gas, grease, and oil 3,088 2,090

Total commodities 81,211 64,787

Total general government 1,495,224 1,367,607


SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL

GENERAL FUND



(This schedule is continued on the following pages.)- 42 -

Original and

Final Budget Actual

EDUCATIONAL SERVICES

Personnel

Salaries 414,412$ 413,780$





Employee mileage reimbursement 1,800 904

Life insurance 853 668

Total personnel 553,104 551,798



Postage 1,760 550

Education and training - 80

School services 14,003 7,277

Workshops and programs 26,670 20,074


Waste disposal 300 1,391

Office equipment rental 4,836 4,154

Vehicle maintenance 1,500 242

IT support services 2,383 1,954



Commodities

Materials and displays 5,200 879


Office furniture and equipment 1,275 1,131


A/V supplies 250 310

Library 1,185 484

Uniforms 740 821

Utilities 24,638 20,548



Total educational services 676,751 638,391

POLICE AND SAFETY SERVICES

Personnel

Salaries 753,331 735,153




SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL (Continued)

GENERAL FUND





Original and

Final Budget Actual


GENERAL FUND




POLICE AND SAFETY SERVICES (Continued)

Personnel (Continued)

Social Security contribution 57,630$ 54,156$



Meetings 230 232

Employee relations - 34

Total personnel 1,071,271 1,048,497


Bike patrol expense 2,000 2,205

Employee expense 1,800 3,170

Communication equipment maintenance 16,700 15,725


Safety training 10,250 7,904

Supplies 23,364 31,246


Janitorial 1,071 818

Waste disposal - 37

Building maintenance - 98

Vehicle maintenance 13,000 14,475




Commodities

Supplies 1,000 167

Leased equipment 1,404 1,588

Library 1,420 701


Security and safety equipment 18,363 19,655

Police uniforms and equipment 23,700 18,460

Police vehicle supplies 11,000 12,683

Utilities 17,807 12,847



Total police and safety services 1,288,762 1,255,135

SITES AND FLEET

Personnel

Salaries 943,332 914,362





Original and

Final Budget Actual


GENERAL FUND




SITES AND FLEET (Continued)







Janitorial services 5,500 1,126

Waste disposal 22,000 11,307


Building maintenance - 403




Trail maintenance 17,000 19,688

Road and bridge maintenance 26,000 12,878

Water and sewer maintenance 36,800 27,800

Fence and gate maintenance 14,400 15,423

Maintenance equipment rental 4,000 936

Maintenance equipment repair 22,000 18,498

Vehicle and trailer maintenance 21,200 15,876

License and inspection 3,500 1,904


Commodities

Utilities - all facilities 83,946 59,534


Office equipment rental and maintenance 4,000 1,588

Office furniture and equipment 4,000 -


Site maintenance supplies 95,153 56,659

Shop tools 6,217 6,746

Uniforms 5,560 5,719

Supplies 11,220 11,020

Signs and display materials 32,045 30,973

Tables, grills, and trash cans 8,395 1,981



Total sites and fleet 1,844,684 1,659,083

LAND PRESERVATION AND NATURAL RESOURCES

Personnel

Salaries 1,021,255 1,014,120




Original and

Final Budget Actual


GENERAL FUND




LAND PRESERVATION AND NATURAL RESOURCES (Continued)


HSA contribution 11,850$ 12,038$



Meetings - 602



Resource management supplies and maintenance 76,898 79,852

Wildlife control 4,000 722

Legal notices and publications 1,290 -

Farm lease expense 38,350 39,878

Travel/meeting expense 500 1,248

Waste disposal 1,600 1,605

Vehicle repair 7,500 6,734

Building maintenance 1,200 -




Commodities

NRM safety supplies 10,658 11,080

Animal rearing and reintroduction supplies 5,600 5,530

Nursery plants and seeds 49,600 49,496

Supplies 19,168 14,973


Uniforms 1,670 2,253

Utilities 17,666 14,123


Restoration management equipment - 849

Restoration program 4,000 2,595


Total land preservation and natural resources 1,760,583 1,707,881

WILDLIFE RESOURCE CENTER

Personnel

Salaries 153,709 152,710

Intern salaries 4,080 4,122





Original and

Final Budget Actual


GENERAL FUND




WILDLIFE RESOURCE CENTER (Continued)







Waste disposal 930 908


Building maintenance 5,000 -

Vehicle maintenance 400 50


Commodities

Wildlife resource program supplies 2,195 724

Wildlife care and supplies 12,613 10,572

Uniforms 330 249

Office equipment leases 400 -

Computer supplies 1,335 998

Utilities 10,716 8,935

Gas, grease, and oil 890 664


Total wildlife resource center 242,356 228,370

PLANNING

Personnel

Salaries 153,192 153,756








Dues, subscriptions, and memberships 450 455

Janitorial 645 818

Site and maintenance 875 454

Waste disposal - 41

Vehicle repair 500 43

Contractual services 1,250 -



Original and

Final Budget Actual


GENERAL FUND




PLANNING (Continued)

Commodities

Planning supplies 11,440$ 5,496$

Computer supplies 1,000 -

Office furniture and equipment 961 870


Gas, grease, and oil 1,823 850


Total planning 222,275 211,408

COMMUNICATIONS

Personnel

Salaries 174,975 175,625










Promotions and public relations 7,850 2,903

Advertising 13,900 10,178

Newsletter and postage 52,096 48,564

Travel/meeting expense 945 955

Special events, meetings, and dedications 3,500 3,093

Dues, subscriptions, and memberships 1,125 934

Volunteer and committee expense 10,830 6,238

Waste disposal - 37

Janitorial 600 818




Commodities

A/V supplies 500 -

Office supplies 4,000 310

Computer supplies 1,178 -

Uniforms 150 -



Total communications 401,757 334,557


Original and

Final Budget Actual


GENERAL FUND




LOST VALLEY VISITOR CENTER

Personnel

Salaries 76,033$ 77,478$

Seasonal - 283









Building maintenance 18,500 15,244

Road maintenance 2,600 -


Waste disposal - 261

Equipment maintenance 4,200 3,529


Commodities

Office supplies 150 -

Utilities 46,103 41,136


Food and beverage for conference 500 -

Other conference expenses 2,000 2,466


Materials and displays 2,500 5,221

Site maintenance supplies 500 892


Total Lost Valley visitor center 214,310 210,196

FACILITY MAINTENANCE

Personnel

Salaries 217,089 189,577

Seasonal 6,000 5,989





Employee mileage reimbursement 100 -



Original and

Final Budget Actual


GENERAL FUND




FACILITY MAINTENANCE (Continued)


Education and training 384$ 724$


IT support services 750 346

Building maintenance 112,523 68,253

Water and sewer maintenance 35,550 2,662

Janitorial - 53

Equipment maintenance 5,950 5,414

Vehicle and trailer maintenance 5,300 1,550

McConnell Farm Homstead 3,000 2,878


Commodities

Office supplies 200 -

Utilities - 285


Shop tools 4,280 4,404


Office furniture and equipment 500 197

Uniforms 1,050 676


Total facility maintenance 510,335 371,427

CAPITAL OUTLAY

Administration


Building improvements 40,000 -

Vehicles and trailers 29,000 26,980

Education

Building improvements 30,000 -

Police and safety services


Land and facilities management

Maintenance and equipment purchase 71,000 66,382

Road and bridge infrastructure 19,000 19,000

Land and facilities management

Fuel station 25,000 992


Natural resource management

Equipment 38,000 41,677

(This schedule is continued on the following page.)- 50 -

Original and

Final Budget Actual


GENERAL FUND




CAPITAL OUTLAY (Continued)

Lost Valley visitor center

Building improvements 85,000$ 23,618$

Site improvements 14,000 -

Facility maintenance


Building improvements 11,000 10,000

Water and sewer infrastructure 24,500 -

Total capital outlay 493,000 279,675

TOTAL EXPENDITURES 9,150,037$ 8,263,730$


Original and

Final Budget Actual

REVENUES

Property taxes, net 11,882,700$ 11,855,136$


Total revenues 11,885,562 11,868,897

EXPENDITURES

General government

Administrative fees 1,500 1,500

Debt service

Principal retirement 6,695,000 6,695,000

Interest 5,187,700 5,187,700

Total expenditures 11,884,200 11,884,200


OVER EXPENDITURES 1,362 (15,303)


Transfers (out) (234,000) (234,000)

Total other financing sources (uses) (234,000) (234,000)

NET CHANGE IN FUND BALANCE (232,638)$ (249,303)

FUND BALANCE, APRIL 1 543,397

FUND BALANCE, MARCH 31 294,094$





DEBT SERVICE FUND



Original and

Final Budget Actual

REVENUES

Investment income 10,408$ 26,693$

Total revenues 10,408 26,693

EXPENDITURES

Capital outlay 1,258,438 466,291

Total expenditures 1,258,438 466,291

NET CHANGE IN FUND BALANCE (1,248,030)$ (439,598)


FUND BALANCE, MARCH 31 2,825,999$




CAPITAL IMPROVEMENTS FUND




Original and

Final Budget Actual

REVENUES

Intergovernmental 1,778,000$ 1,070,131$


Donations 780,000 24,200

Miscellaneous - 19,176

Total revenues 2,559,783 1,118,935

EXPENDITURES

Current

General government 500 -

Capital outlay 3,738,320 1,915,421

Debt service

Interest 122,000 121,829

Total expenditures 3,860,820 2,037,250


OVER EXPENDITURES (1,301,037) (918,315)


Transfers in 234,000 234,000

Total other financing sources (uses) 234,000 234,000

NET CHANGE IN FUND BALANCE (1,067,037)$ (684,315)








DEDICATED PROJECTS FUND


NONMAJOR GOVERNMENTAL FUNDS

Natural

Insurance Resources Total

ASSETS

Cash and cash equivalents -$ 689,255$ 689,255$

Receivables

Property taxes 286,282 - 286,282

Other - - -

Intergovernmental - 22,059 22,059

Due from other funds 269,240 146,969 416,209

Total assets 555,522 858,283 1,413,805


None - - -

Total deferred outflows of resources - - -


OUTFLOWS OF RESOURCES 555,522$ 858,283$ 1,413,805$

LIABILITIES

Accounts payable 72,849$ 170$ 73,019$

Unearned revenue - 295,900 295,900

Total liabilities 72,849 296,070 368,919


Unavailable revenue - property taxes 286,282 - 286,282

Total deferred inflows of resources 286,282 - 286,282

Total liabilities and deferred inflows of resources 359,131 296,070 655,201

FUND BALANCES

Restricted

Tort liability 196,391 - 196,391

Land acquisition and site improvements - 554,625 554,625

Unrestricted

Assigned

Site and trail improvements - 7,588 7,588

Total fund balances 196,391 562,213 758,604

TOTAL LIABILITIES, DEFERRED INFLOWS

OF RESOURCES, AND FUND BALANCES 555,522$ 858,283$ 1,413,805$




COMBINING BALANCE SHEET

March 31, 2017

Special Revenue


ASSETS AND DEFERRED




Natural

Insurance Resources Total

REVENUES

Property taxes, net 283,362$ -$ 283,362$

Intergovernmental - 33,050 33,050

Rental income - 8,145 8,145

Donations - 23,390 23,390

Investment income 5 3,061 3,066

Miscellaneous - 4,326 4,326

Total revenues 283,367 71,972 355,339

EXPENDITURES

Current

General government 257,714 - 257,714

Land preservation and natural resources - 146,310 146,310

Capital outlay - 47,231 47,231

Total expenditures 257,714 193,541 451,255

NET CHANGE IN FUND BALANCES 25,653 (121,569) (95,916)

FUND BALANCES, APRIL 1 170,738 683,782 854,520

FUND BALANCES, MARCH 31 196,391$ 562,213$ 758,604$


COMBINING STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES


Special Revenue




Original and

Final Budget Actual

REVENUES

Property taxes, net 280,544$ 283,362$

Investment income 4 5


EXPENDITURES

General government


Liability insurance 44,784 48,145

Commercial insurance 75,163 72,818

Blanket bond policy - -

Workers' compensation insurance 132,351 119,792

Officials surety bond 750 -

Unemployment insurance 21,000 12,886

Training and education 500 1,580

Employment expenses 4,000 2,493


Commodities

Safety equipment 250 -

Total expenditures 280,548 257,714

NET CHANGE IN FUND BALANCE -$ 25,653







INSURANCE FUND



Original and

Final Budget Actual

REVENUES

Mitigation 665,000$ -$

Intergovernmental 40,010 33,050

Rental income 20,000 8,145

Donations 5,000 23,390

Investment income 498 3,061

Miscellaneous - 4,326


EXPENDITURES

Land preservation and natural resources

Personnel

Salaries 136,103 109,246





Unemployment insurance 2,382 -


Commodities 20,000 -

Capital outlay 200,016 47,231

Total expenditures 416,633 193,541

NET CHANGE IN FUND BALANCE 313,875$ (121,569)






NATURAL RESOURCES FUND




STATISTICAL SECTION

STATISTICAL SECTION

This part of the McHenry County Conservation District’s comprehensive annual financial report

presents detailed information as a context for understanding what the information in the financial

statements, note disclosures, and required supplementary information says about the District’s

overall financial health.

Contents Page(s)

Financial Trends

These schedules contain trend information to help the reader understand how

the District’s financial performance and well-being have changed over time.

59-64

Revenue Capacity

These schedules contain information to help the reader assess the District’s

most significant local revenue source, the property tax.

65-68

Debt Capacity

These schedules present information to help the reader assess the affordability

of the District’s current levels of outstanding debt and the District’s ability to

issue additional debt in the future.

69-72

Demographic and Economic Information

These schedules offer demographic and economic indicators to help the reader

understand the environment within which the District’s financial activities take

place.

73-74

Operating Information

These schedules contain service and infrastructure data to help the reader

understand how the information in the District’s financial report relates to the

services the District provides and the activities it performs.

75-77

Sources: Unless otherwise noted, the information in these schedules is derived from the

comprehensive annual financial reports for the relevant year.


NET POSITION BY COMPONENT

Last Ten Fiscal Years

2008 2009 2010 2011 2012 2013 2014 2015 2016* 2017


Net investment in capital assets 64,417,320$ 65,947,405$ 73,422,264$ 78,570,784$ 85,900,708$ 92,933,729$ 99,666,882$ 108,308,339$ 116,630,062$ 126,559,305$

Restricted 1,053,746 1,120,740 1,101,152 1,824,552 2,468,915 2,512,344 2,093,670 1,750,051 1,714,531 1,320,105

Unrestricted 14,586,056 19,844,659 17,565,088 15,144,649 12,708,483 10,609,893 8,605,074 8,469,115 4,978,193 4,650,302

TOTAL GOVERNMENTAL ACTIVITIES 80,057,122$ 86,912,804$ 92,088,504$ 95,539,985$ 101,078,106$ 106,055,966$ 110,365,626$ 118,527,505$ 123,322,786$ 132,529,712$

*GASB Statement No. 68 was implemented for the year ended March 31, 2016.

Data Source

District's audited financial statements


- 59 -


2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

EXPENSES


General government 1,383,916$ 1,639,282$ 1,719,847$ 1,647,747$ 1,664,297$ 1,792,437$ 1,860,727$ 2,556,022$ 1,733,391$ 1,643,294$

Educational services 709,375 758,036 744,573 774,228 782,942 786,522 707,269 640,198 644,426 631,333

Police and safety 933,015 1,116,740 1,213,723 1,310,849 1,259,494 1,380,822 1,342,944 1,401,854 1,419,352 1,325,367

Sites and fleet 1,552,436 1,895,247 1,423,889 2,413,865 2,277,559 2,411,810 2,591,337 2,632,594 2,566,064 2,027,596

Land preservation and natural resources 1,043,166 880,731 660,703 1,443,130 1,618,444 1,520,796 1,778,904 2,009,840 1,955,519 1,992,381

Wildlife resource center 186,923 186,049 187,543 203,880 221,229 217,837 215,822 226,344 244,000 227,251

Planning 827,163 915,461 921,190 969,836 1,046,152 1,388,652 1,772,836 1,241,526 1,285,857 1,351,044

Communications 316,527 377,454 339,682 360,580 358,715 392,676 394,829 401,933 418,014 336,496

Land development and acquisition 616,729 914,440 1,924,634 585,681 287,629 242,379 103,513 130,800 118,815 53,040

Trail of history** 44,988 39,644 45,404 30,841 35,181 31,354 36,283 - - -

Research field station** 275,699 149,918 148,044 148,019 157,683 141,337 137,578 - - -

Lost Valley visitor center 88,889 108,500 73,445 168,825 176,899 231,553 213,208 271,135 263,703 211,582

Facility maintenance*** - - - - - - - - - 404,805

Interest on long-term debt 6,696,018 7,521,339 7,371,376 7,203,457 7,141,600 6,866,214 6,597,602 3,986,785 4,623,046 4,372,563

TOTAL PRIMARY

GOVERNMENT EXPENSES 14,674,844$ 16,502,841$ 16,774,053$ 17,260,938$ 17,027,824$ 17,404,389$ 17,752,852$ 15,499,031$ 15,272,187$ 14,576,752$

PROGRAM REVENUES


Charges for services* 535,640$ 908,508$ 1,085,440$ -$ -$ -$ -$ -$ -$ -$

General government - - - 1,026,971 1,368,102 1,352,001 1,389,354 1,258,440 1,155,203 1,137,124

Educational services - - - 25,806 37,111 46,940 38,142 26,483 36,351 44,900

Natural resource management - - - 471,519 1,082,500 359,920 42,605 1,972 2,694 2,034

Trail of history - - - 52,030 40,714 46,074 68,239 - - -

Research field station - - - 8,470 5,045 7,560 4,481 - - -

Operating grants 3,910 - - 2,123 1,077 2,658 4,916 3,843 6,803 21,954

Capital grants 3,569,118 1,122,990 1,376,805 832,136 867,954 928,411 620,674 2,296,234 1,732,204 2,672,321

TOTAL PRIMARY GOVERNMENT

PROGRAM REVENUES 4,108,668$ 2,031,498$ 2,462,245$ 2,419,055$ 3,402,503$ 2,743,564$ 2,168,411$ 3,586,972$ 2,933,255$ 3,878,333$

NET REVENUE (EXPENSE)

Governmental activities programs (10,566,176)$ (14,471,343)$ (14,311,808)$ (14,841,883)$ (13,625,321)$ (14,660,825)$ (15,584,441)$ (11,912,059)$ (12,338,932)$ (10,698,419)$

CHANGE IN NET POSITION



- 60 -

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

GENERAL REVENUES


Taxes

Property 13,351,739$ 17,536,668$ 18,115,161$ 18,427,173$ 18,920,946$ 19,286,175$ 19,519,137$ 19,683,484$ 19,607,433$ 19,527,420$

Replacement 212,089 194,194 171,891 191,065 172,361 170,886 195,562 190,807 132,262 192,033

Investment income 3,014,368 2,554,548 928,034 181,039 57,707 53,755 50,214 55,492 90,471 90,132

Contributions 596,209 826,930 8,504 - - - - - - -

Miscellaneous 102,485 214,685 231,602 60,530 47,028 34,650 121,056 98,906 67,711 70,669

Gain on disposal of assets 1,581 - 32,316 38,397 35,635 22,984 8,132 45,249 10,481 25,091

TOTAL PRIMARY GOVERNMENT 17,278,471$ 21,327,025$ 19,487,508$ 18,898,204$ 19,233,677$ 19,568,450$ 19,894,101$ 20,073,938$ 19,908,358$ 19,905,345$

CHANGE IN NET POSITION

Governmental activities 6,712,295$ 6,855,682$ 5,175,700$ 4,056,321$ 5,608,356$ 4,907,625$ 4,309,660$ 8,161,879$ 7,569,426$ 9,206,926$

Prior period adjustments/change in

accounting principles -$ -$ -$ -$ -$ -$ -$ -$ 2,774,145$ -$

*Charges for services are presented by function beginning March 31, 2011.

**The District eliminated the Trail of History and Research Field Station functions in Fiscal 2015.

***The District added the Facility maintenance function in Fiscal 2017.

Data Source


- 61 -


FUND BALANCES OF GOVERNMENTAL FUNDS


2008 2009 2010 2011 2012* 2013 2014 2015 2016 2017

GENERAL FUND

Nonspendable -$ -$ -$ -$ -$ -$ 110,714$ 103,049$ 94,177$ 109,507$

Restricted - - - - - - - - 119,755 157,250

Unreserved 3,879,058 4,049,994 4,410,018 4,230,925 - - - - - -

Assigned - - - - - - - - - 3,770,729

Unassigned - - - - 4,455,239 4,389,090 4,916,460 5,268,780 5,430,184 2,238,298

TOTAL GENERAL FUND 3,879,058$ 4,049,994$ 4,410,018$ 4,230,925$ 4,455,239$ 4,389,090$ 5,027,174$ 5,371,829$ 5,644,116$ 6,275,784$

ALL OTHER GOVERNMENTAL FUNDS

Reserved, reported in

Capital Project Funds 54,200,643$ 37,586,259$ 24,144,478$ 2,279,818$ -$ -$ -$ -$ -$ -$

Special Revenue Funds 178,819 190,361 198,200 937,604 - - - - - -

Debt Service Fund 861,791 916,392 887,966 871,862 - - - - - -

Unreserved reported in

Capital Project Funds 11,434,405 12,309,088 8,965,184 12,825,198 - - - - - -

Nonspendable - - - - - - 512 9,108 - -

Restricted - - - - 2,468,915 2,512,344 2,093,670 1,750,051 1,594,776 1,162,855

Committed - - - - 5,394,159 5,218,832 1,664,515 1,232,482 4,308,457 3,268,185

Assigned - - - - 4,800,469 2,866,513 3,775,384 3,592,132 4,527 7,588

TOTAL ALL OTHER

GOVERNMENTAL FUNDS 66,675,658$ 51,002,100$ 34,195,828$ 16,914,482$ 12,663,543$ 10,597,689$ 7,534,081$ 6,583,773$ 5,907,760$ 4,438,628$

* GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions was implemented for the fiscal year ending March 31, 2012.

Data Source



- 62 -


CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS


2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

REVENUES

Property taxes 13,351,739$ 17,536,668$ 18,115,161$ 18,427,173$ 18,920,946$ 19,286,175$ 19,519,137$ 19,683,484$ 19,607,433$ 19,527,420$

Intergovernmental revenue 3,785,117 1,317,184 1,548,696 889,867 438,551 598,313 800,394 256,643 147,262 1,300,214

Rental income 407,721 787,276 945,276 973,113 1,315,966 1,291,378 1,325,074 1,191,239 1,080,804 1,049,176

Investment income 3,014,368 2,554,548 928,034 181,039 57,707 53,755 50,214 55,492 90,471 90,132

Miscellaneous 488,213 335,917 380,270 1,097,826 1,673,433 697,509 343,919 329,384 366,133 270,095

Total revenues 21,047,158 22,531,593 21,917,437 21,569,018 22,406,603 21,927,130 22,038,738 21,516,242 21,292,103 22,237,037

EXPENDITURES

General government

General government 1,393,978 1,591,579 1,640,575 1,591,669 1,690,451 1,767,734 1,809,686 2,539,006 1,619,683 1,626,821

Educational services 664,370 705,416 720,062 718,304 728,911 731,936 699,864 629,667 610,745 638,391

Police and safety 923,822 1,068,904 1,167,216 1,222,285 1,245,762 1,272,910 1,244,492 1,287,000 1,282,597 1,255,135

Sites and fleet 1,714,413 1,949,732 1,945,078 2,288,006 2,282,681 2,203,614 2,090,115 2,147,422 2,027,506 1,659,083

Land preservation and natural resources 986,604 1,041,848 1,120,425 1,753,217 1,736,424 1,504,136 1,555,234 1,847,582 1,713,373 1,854,191

Wildlife resource center 176,036 186,677 202,005 201,092 210,103 212,057 212,755 222,034 230,929 228,370

Planning 223,092 243,036 244,964 2,243,623 1,513,719 1,444,877 263,520 208,802 262,875 211,408

Communications 326,875 373,287 342,280 356,058 355,305 383,854 392,970 408,073 387,395 334,557

Land development and acquisition 23,092,563 18,802,362 14,145,072 14,068,148 1,087,428 822,616 104,011 - - -

Trail of history* 44,988 45,429 45,404 30,841 35,181 31,354 36,283 - - -

Research field station* 120,675 142,491 146,709 145,327 155,179 140,064 133,073 - - -


Facility maintenance** - - - - - - - - - 371,427

Debt Service

Principal 2,935,000 3,285,000 3,655,000 4,045,000 5,975,000 4,915,000 5,415,000 8,175,000 6,640,000 6,695,000

Interest 6,048,062 7,557,842 7,411,204 7,247,554 7,201,627 6,994,625 6,731,379 4,236,883 5,547,128 5,309,529

Capital outlay 3,114,095 946,820 5,541,129 3,016,277 2,082,746 1,478,309 3,588,899 1,186,174 1,187,640 2,708,618

Total expenditures 41,895,462 38,044,650 38,396,001 39,067,854 26,468,863 24,114,096 24,472,314 23,084,107 21,707,165 23,102,726


OVER EXPENDITURES (20,848,304) (15,513,057) (16,478,564) (17,498,836) (4,062,260) (2,186,966) (2,433,576) (1,567,865) (415,062) (865,689)


- 63 -

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017


Bonds issued 73,000,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Issuance of refunding bonds - - - - - - - 108,215,000 - -

Installment contract issued - - - - - - - - - -

Premium on bonds issuance (refunding) 2,754,406 - - - - - - 18,282,692 - -

Payment to escrow agent - - - - - - - (125,582,579) - -

Transfers in - - - 331,696 - - 7,088,264 250,000 116,864 234,000

Transfers (out) - - - (331,696) - - (7,088,264) (250,000) (116,864) (234,000)

Sale of capital assets 1,581 10,435 32,316 38,397 35,635 54,883 8,132 47,099 11,336 28,225

Total other financing sources (uses) 75,755,987 10,435 32,316 38,397 35,635 54,883 8,132 962,212 11,336 28,225

NET CHANGE IN FUND BALANCES 54,907,683$ (15,502,622)$ (16,446,248)$ (17,460,439)$ (4,026,625)$ (2,132,083)$ (2,425,444)$ (605,653)$ (403,726)$ (837,464)$

DEBT SERVICE AS A PERCENTAGE OF

NONCAPITAL EXPENDITURES 35.33% 86.19% 58.51% 57.86% 185.98% 61.84% 58.16% 57.09% 56.55% 57.43%

*The District eliminated the Trail of History and Research Field Station functions in Fiscal 2015.

**The District added the Facility maintenance function in Fiscal 2017.

Data Source


- 64 -


ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY

Last Ten Levy Years

Railroad Total Estimated Total

Levy Real Property Property & Assessed Actual Direct

Year Farm Residential Commercial Industrial Other Other Valuation Value Tax Rate

2007 255,194,149$ 8,360,880,272$ 1,125,071,165$ 395,468,291$ 14,396,994$ 4,909,505$ 10,155,920,376$ 30,467,761,128$ 0.173

2008 270,049,021 8,639,858,959 1,186,655,676 410,478,144 14,245,656 5,356,962 10,526,644,418 31,579,933,254 0.173

2009 276,661,363 8,513,622,624 1,215,583,923 410,116,150 13,427,368 6,172,004 10,435,583,432 31,306,750,296 0.177

2010 275,661,935 7,866,580,876 1,166,707,825 397,434,087 13,403,575 7,692,777 9,727,481,075 29,182,443,225 0.196

2011 263,585,558 7,155,985,786 1,042,866,545 359,374,976 12,328,505 8,207,596 8,842,348,966 26,527,046,898 0.219

2012 246,686,423 6,375,959,804 936,643,061 326,075,383 12,468,064 9,222,423 7,907,055,158 23,721,165,474 0.248

2013 234,798,385 5,775,371,019 860,389,334 295,685,623 11,860,496 11,592,824 7,189,697,681 21,569,093,043 0.275

2014 234,249,603 5,568,261,179 827,332,318 281,474,480 10,455,494 12,346,414 6,934,119,488 20,802,358,464 0.284

2015 239,662,222 5,715,346,078 830,119,932 282,798,978 10,507,731 14,628,720 7,093,063,661 21,279,190,983 0.277

2016 254,781,212 6,112,164,172 871,049,001 295,485,965 10,321,538 14,643,690 7,558,445,578 22,675,336,734 0.259

Data Source

McHenry County Assessor's Office


Note: Property in McHenry County is reassessed annually. The County assesses property at approximately 33.3% of actual value. Estimated actual value is calculated by dividing total

assessed value by that percentage. Tax rates are per $100 of assessed value.

- 65 -


PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS

Last Ten Levy Years

Levy Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

DIRECT RATES - DISTRICT

General 0.0644 0.0657 0.0669 0.0741 0.0829 0.0927 0.1000 0.0990 0.0993 0.0967

Loss prevention 0.0019 0.0019 0.0020 0.0022 0.0026 0.0029 0.0034 0.0039 0.0040 0.0038

Social Security 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0067 0.0054 0.0029

Debt 0.1075 0.1055 0.1086 0.1193 0.1336 0.1525 0.1713 0.1744 0.1679 0.1554

Total Direct Rates - District 0.1738 0.1731 0.1775 0.1956 0.2191 0.2481 0.2747 0.284 0.2766 0.2588

OVERLAPPING RATES

Municipalities 0.180-1.426 0.175-1.409 0.178-1.447 0.180-1.487 0.192-1.707 0.207-1.943 0.232-2.21 0.264-2.356 0.278-2.545 0.829 - 2.553

Unit School Districts 3.446-4.677 3.378-4.609 3.172-4.693 3.274-4.791 3.503-5.226 3.638-5.894 3.593-6.900 4.014-7.742 5.068-8.215 4.749 - 8.174

Elementary School Districts 1.919-3.754 1.869-3.714 1.891-3.794 1.956-3.933 2.154-4.229 2.487-5.250 2.962-5.927 3.311-6.894 3.532-7.659 3.434 - 6.221

High School Districts 1.599-2.154 1.552-2.149 1.559-2.241 1.625-2.279 1.780-2.510 2.093-2.926 2.407-3.123 2.704-3.486 2.887-3.891 2.943 - 3.792

Community College Districts 0.274-0.491 0.263-0.478 0.258-0.436 0.274-0.467 0.278-0.454 0.290-0.465 0.338-0.505 0.359-0.547 0.445-0.668 0.424 - 0.566

County 0.706 0.687 0.701 0.716 0.792 0.888 0.996 1.096 1.141 1.078

Township and Road Districts 0.102-0.644 0.098-0.629 0.099-0.647 0.101-0.658 0.123-0.708 0.123-0.586 0.142-0.819 0.152-0.851 0.157-0.837 0.083 - 0.268

Park Districts 0.031-0.524 0.032-0.508 0.029-0.528 0.032-0.535 0.034-0.575 0.035-0.659 0.038-0.758 0.042-0.836 .052-0.903 0.049 - 0.882

Fire Protection Districts 0.189-0.623 0.184-0.612 0.188-0.638 0.193-0.637 0.213-0.718 0.243-0.722 0.288-0.827 0.325-0.936 0.345-0.999 0.338 - 0.991

Library Districts 0.071-0.395 0.069-0.383 0.071-0.392 0.072-0.391 0.078-0.419 0.089-0.467 0.104-0.532 0.119-0.595 0.127-0.638 0.129 - 0.622

Sanitary Districts 0.044-0.056 0.049-0.054 0.056-0.057 0.057 0.062-0.066 0.070-0.071 0.071-0.083 0.078-0.091 0.071-0.131 0.064 - 0.094

Cemetery Districts 0.001-0.008 0.001-0.008 0.001-0.008 0.001-0.008 0.001-0.009 0.002-0.011 0.002-0.012 0.002-0.013 0.002-0.014 0.002 - 0.014

Rescue Squad District 0.200 0.195 0.199 0.200 0.200 0.200 0.200 0.200 0.200 0.200

Data Sources


Cited from McHenry County of Illinois' 2016 CAFR

District Records


Note: Property in McHenry County is reassessed annually. The County assesses property at approximately 33.3% of actual value. Estimated actual value is calculated by dividing total assessed

value by that percentage. Tax rates are per $100 of assessed value.

- 66 -


PRINCIPAL PROPERTY TAXPAYERS

Current Year and Nine Years Ago

2017 2008

% of Total % of Total

Assessed Assessed Assessed Assessed

Value Rank Value Value Rank Value

Wal Mart Stores, Inc 18,888,534$ 1 0.24 14,190,235$ 3 0.14

Nimed Corp. 18,518,164 2 0.24

DDR McHenry SQ LLC 11,518,495 3 0.15

Skyridge Prtns 7,615,549 4 0.10 9,595,828 8 0.10

Meijer Stores 7,544,826 5 0.10 12,050,783 4 0.12

Federal National Mortgage Assoc 7,182,818 6 0.09

Inland Crystal Point LLC 6,812,945 7 0.09 21,255,498 1 0.21

Rubloff 6,768,083 8 0.09 8,696,613 9 0.09

Menard, Inc. 6,758,902 9 0.09

Terra Cotta Realty Co 6,466,478 10 0.08

Wolf Investments, Inc 15,916,540 2 0.16

Centro Bradley/Centro Saturn LLC 10,220,486 5 0.10

Cunat Bros. Inc. 9,969,637 6 0.10

Target Corp. 9,859,398 7 0.10

Sunrise Senior Living 8,563,433 10 0.09

98,074,794$ 1.27 120,318,451$ 1.21

Data Sources



Taxpayer


- 67 -

PROPERTY TAX LEVIES AND COLLECTIONS

Last Ten Levy Years

Collected

Levy Fiscal Taxes in Subsequent

Year Year Levied Amount % of Levy Years Amount % of Levy

2006 2007/08 13,376,717$ 13,351,738$ 99.81% N/A 13,351,738$ 99.81%

2007 2008/09 17,579,130 17,536,668 99.76% N/A 17,536,668 99.76%

2008 2009/10 18,166,766 18,115,161 99.72% 810$ 18,115,971 99.72%

2009 2010/11 18,462,233 18,426,364 99.81% 2,109 18,428,473 99.82%

2010 2011/12 18,964,957 18,918,837 99.76% 1,010 18,919,847 99.76%

2011 2012/13 19,317,899 19,286,174 99.84% (1,427) 19,284,747 99.83%

2012 2013/14 19,565,165 19,519,300 99.77% 1,264 19,520,564 99.77%

2013 2014/15 19,713,015 19,683,485 99.85% (3,267) 19,680,218 99.83%

2014 2015/16 19,650,997 19,610,700 99.79% 3,569 19,614,269 99.81%

2015 2016/17 19,572,805 19,527,421 99.77% - 19,527,421 99.77%

N/A - not available

Data Sources

McHenry County Treasurer's Office

District Records

Collected within the Fiscal

Year of the Levy

Total Collections

to Date



- 68 -


RATIOS OF OUTSTANDING DEBT BY TYPE


General Total % of

Fiscal Obligation Installment Primary Personal Per

Year Bonds Contract Government Income Capita

2008 153,340,000$ 6,300,000$ 159,640,000$ 1.26% 505.28$

2009 150,055,000 6,300,000 156,355,000 1.20% 490.69

2010 146,400,000 6,300,000 152,700,000 1.22% 475.76

2011 142,355,000 6,300,000 148,655,000 1.18% 481.46

2012 137,880,000 4,800,000 142,680,000 1.08% 463.52

2013 134,830,461 4,800,000 139,630,461 1.01% 454.04

2014 129,255,377 4,800,000 134,055,377 0.96% 436.74

2015 129,502,692 4,800,000 134,302,692 0.94% 437.83

2016 121,339,134 4,800,000 126,139,134 0.83% 410.63

2017 113,120,577 4,300,000 117,420,577 0.75% 382.47

Data Source

District records


Notes: Details regarding the District's outstanding debt can be found in the notes to financial statements.

See the Demographic and Economic Statistics schedule for the personal income and population data.

- 69 -


RATIOS OF GENERAL BONDED DEBT OUTSTANDING


Percentage

Amounts Net of Estimated

General Available General Actual

Fiscal Obligation In Debt Bonded Value of Per

Year Bonds Service Fund Debt Property Capita

2008 153,340,000$ 861,791$ 152,478,209$ 1.50% 482.61$

2009 150,055,000 916,392 149,138,608 1.42% 468.05

2010 146,400,000 887,966 145,512,034 1.39% 453.36

2011 142,355,000 871,862 141,483,138 1.45% 458.23

2012 137,880,000 877,934 137,002,066 1.55% 445.07

2013 134,830,461 859,181 133,971,280 1.69% 435.64

2014 129,255,377 831,535 128,423,842 1.79% 418.40

2015 129,502,692 565,341 128,937,351 1.86% 420.34

2016 121,339,134 543,397 120,795,737 1.60% 393.23

2017 113,120,577 294,094 112,826,483 1.49% 367.51

value of property information.

Data Source


Notes: Details regarding the District's outstanding debt can be found in the notes to financial statements.

See the schedule of Assessed Value and Estimated Actual Value of Taxable Property for actual

- 70 -


DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT

March 31, 2017

Estimated

Share of

Estimated Direct and

Debt Percentage Overlapping

Outstanding Applicable Debt

Direct

McHenry County Conservation District 117,420,577$ 100.0% 117,420,577$

Overlapping

Municipalities 101,154,000 6.6 - 100.0 82,194,000

McHenry County 22,793,000 100.0 22,793,000

Unit School Districts 786,229,000 .1 - 100.0 352,563,000

Elementary School Districts 75,594,000 93.1 - 100.0 73,492,000

High School Districts 55,780,000 98.5 - 100.0 55,302,000

Community College Districts 444,939,000 .1 - 96.1 20,224,000

Township and Road Districts 3,674,000 100.0 3,674,000

Park Districts 22,053,000 31.6 - 100.0 20,389,000

Fire Protection Districts 11,196,000 .7 - 100.0 9,607,000

Library Districts 17,378,000 2.5 - 100.0 3,388,000

Total Estimated Overlapping Debt 643,626,000

Total Direct and Estimate Overlapping Debt 761,046,577$

Data Source


Note: The estimated percentage of overlapping debt applicable was cited from the McHenry County's

2016 CAFR. Applicable percentages were estimated by determining the portion of another district's

assessed value that is within the County's boundaries and dividing it by that district's total assessed value.

Assessed value data used to estimate applicable percentages provided the County Clerk's Office as

reported on the McHenry County's 2016 CAFR. Debt outstanding data obtained from annual reports

submitted to the Illinois Comptroller or Illinois State Board of Education or from individual

comprehensive annual financial reports and was cited from the McHenry County's 2016 CAFR.

- 71 -


LEGAL DEBT MARGIN


2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Debt Limit 175,189,626$ 181,584,616$ 180,013,814$ 167,799,049$ 152,530,520$ 136,396,701$ 124,022,285$ 119,360,729$ 122,059,818$ 130,003,761$

Less: total debt applicable to limit (159,640,000) (156,355,000) (152,700,000) (148,655,000) (142,680,000) (137,765,000) (132,350,000) (116,020,000) (109,380,000) (102,185,000)

Legal debt margin 15,549,626$ 25,229,616$ 27,313,814$ 19,144,049$ 9,850,520$ (1,368,299)$ (8,327,715)$ 3,340,729$ 12,679,818$ 27,818,761$

Total debt applicable to limit

as a percentage to debt limit 91.1% 86.1% 84.8% 88.6% 93.5% 101.0% 106.7% 97.2% 89.6% 78.6%

Legal Debt Margin Calculation as of March 31, 2017

Assessed valuation December 31, 2016 7,536,449,930$

Debt limitation (1.725% of assessed valuation) 130,003,761$

Less debt outstanding applicable to limit

General Obligation Bonds (97,885,000)

Installment contracts (4,300,000)

Legal Debt Margin as of March 31, 2017 27,818,761$

Data Sources


County Clerk's Office


- 72 -


DEMOGRAPHIC AND ECONOMIC STATISTICS


(2) Per Capita (3) (3) (4)

Fiscal (1) Personal Personal School Number of Unemployment

Year Population Income Income Enrollment Teachers Rate

2008 315,943 12,709,394,000$ 40,227$ 54,256 3,523 4.3%

2009 318,641 13,011,546,000 40,835 54,350 3,742 5.8%

2010 320,961 12,508,246,000 38,971 54,080 3,648 9.6%

2011 308,760 12,546,535,000 40,635 53,179 3,456 9.6%

2012 307,820 13,150,557,000 42,722 52,875 3,438 9.4%

2013 307,529 13,768,164,000 44,770 52,209 3,369 8.4%

2014 306,944 13,905,855,000 45,304 51,547 3,634 8.3%

2015 306,749 14,356,414,000 46,802 50,652 3,695 6.4%

2016 307,188 15,200,285,000 49,482 49,973 3,607 5.5%

2017 307,004 15,671,668,000 51,047 49,449 3,634 5.3%

Data Sources

(1) U.S. Census Bureau

(2) Bureau of Economic Analysis, U.S. Dept. of Commerce

(3) Regional Superintendent of Schools

(4) Illinois Dept. of Employment Security


- 73 -


PRINCIPAL EMPLOYERS

Current Year and Nine Years Ago

2017 2008

% of Total % of Total

County County

Employer Employees Rank Employment Employees Rank Employment

Centegra Health System 3,650 1 2.32% 3,254 1 1.90%

District 158 1,500 2 0.95%

County of McHenry 1,400 3 0.89% 1,400 2 0.82%

Follett Library Resources 1,378 4 0.87% 1,378 3 0.81%

Catalent Pharma Solutions Inc 830 5 0.53% 800 4 0.47%

Mercy Health System 732 6 0.46%

Snap-On Tools, Inc. 590 7 0.37%

Sage Products, Inc. 583 8 0.37%

Medela 540 9 0.34%

McHenry County College 500 10 0.32% 642 7 0.38%

Intermatic, Inc. 750 5 0.44%

Brown Printing 727 6 0.43%

Snap-On Tools, Inc. 525 8 0.31%

Knaack LLC 500 9 0.29%

Sage Products, Inc. 494 10 0.29%

11,703 7.42% 10,470 6.14%

Data Sources




- 74 -

FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION


Function and Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Administration N/A 10.4 10.6 10.6 10.6 10.8 10.8 9.0 9.0 9.0

Sites and Fleet, Facilities Maintenance N/A 26.4 26.4 27.4 27.0 27.0 27.0 27.5 27.5 24.3

Land Preservation and Natural Resources N/A 13.6 13.6 13.6 15.0 15.2 14.4 19.3 18.6 18.6

Research Field Station N/A 3.5 3.5 3.5 3.5 3.1 3.1 - - -

Education N/A 11.4 11.3 10.5 10.5 10.6 10.6 9.3 9.5 9.2

Wildlife Resources N/A 3.0 3.0 3.0 3.0 3.0 3.0 2.9 2.9 2.9

Communication N/A 3.0 3.0 3.0 3.0 3.0 3.0 4.0 4.0 3.0

Planning N/A 3.0 3.0 3.0 3.0 3.0 3.0 2.0 2.0 2.0

Police N/A 14.0 14.0 14.0 14.0 14.0 14.0 14.0 13.0 13.0

Lost Valley Visitor's Center N/A 0.5 0.5 0.5 1.1 1.5 1.5 1.4 1.4 2.2

Facilities Maintenance N/A - - - - - - - - 4.3

Total Fulltime Equivalents - 88.8 88.9 89.1 90.7 91.2 90.4 89.4 87.9 88.5

N/A - information not available

Data Source

District's records



- 75 -


OPERATING INDICATORS BY FUNCTION



DISTRICT OPERATIONS

Acreage owned 22,121 23,226 23,876 24,783 24,910 25,022 25,051 25,105 25,125 25,371

RECREATION

Sites open to the public 23 24 26 29 32 33 33 33 33 33

Miles of:

Bike trails 38 42 44 44 45 45 45 45 45 45

Hiking and walking paths N/A N/A N/A N/A N/A 98 102 102 106 106

Snowmobile trails N/A N/A N/A N/A N/A 20 20 20 20 20

Horse trails N/A N/A N/A N/A N/A 35 35 36 36 36

Multi-use trails N/A N/A N/A N/A N/A 26 26 31 35 45

Fishing areas N/A N/A N/A N/A N/A 23 23 24 25 25

Canoe launches N/A N/A N/A N/A N/A 5 5 6 6 6

Indoor education centers N/A N/A N/A N/A N/A 2 2 2 2 2

Shelters for site users N/A N/A N/A N/A N/A 25 25 25 25 25

Campgrounds N/A N/A N/A N/A N/A 7 7 6 6 6

Number of site visitors 885,361 857,810 774,764 672,528 606,706 698,025 698,025 850,501 1,021,858 1,137,606

NATURAL RESTORATIONS

Number of acres managed N/A N/A 8,268 8,868 9,468 10,068 10,320 10,809 11,430 11,902

Number of managed burns 40 49 32 49 37 43 39 37 40 58

Total acres burned 2,194 3,195 1,839 2,339 1,859 2,225 2,989 3,043 2,148 2,801

Number of seeding projects 66 71 24 54 41 35 30 18 29 28

Number of acres seeded 416 452 576 370 382 136 234 206 204 228

WILDLIFE RESOURCES

Number of wildlife programs 151 173 163 137 160 143 135 133 149 121

Total attendance of programs 4,269 5,839 4,561 3,831 5,159 4,072 3,890 3,633 4,008 3,085

EDUCATION

Number of educational programs 577 944 621 577 605 634 565 552 523 629

Total attendance of programs 35,070 36,359 34,187 32,987 32,137 33,240 36,530 21,340 22,225 23,263

POLICE

Public relations programs events N/A N/A 26 31 22 16 24 21 28 22

District ordinance citations issued 71 85 172 208 105 76 78 87 149 160

Illinois citations issued 39 46 79 119 62 50 34 34 26 49

Warnings 335 294 822 1,462 1,169 537 371 424 553 521

Arrests 35 31 21 86 98 29 24 16 16 9

N/A - the District does not have records for this information.

Data Source

District Records


- 76 -


CAPITAL ASSET STATISTICS BY FUNCTION



BUILDINGS

Primary administrative 1 1 1 1 1 1 1 1 1 1

Education centers 3 3 3 2 2 2 2 2 2 2

Police headquarters 1 1 1 1 1 1 1 1 1 1

Wildlife resource centers 1 1 1 1 1 1 1 1 1 1

Research field stations 1 1 1 1 - - - - - -

Natural resource management 1 1 1 1 1 1 1 1 1 1

Maintenance shops 6 6 6 6 6 6 6 6 6 6

Ranger shops 1 1 1 1 1 1 1 1 1 1

RECREATIONAL FACILITIES

Sites open to the public 23 24 26 29 32 33 33 33 33 33

Miles of bike trails 38 42 44 44 45 45 45 45 45 45

Hiking and walking paths (miles) 78 82 82 91 98 98 102 102 106 106

Shelter areas 21 21 21 23 25 25 25 25 25 25

Campgrounds 7 7 7 7 7 7 7 6 6 6

Data Source

District Records


- 77 -

OTHER INFORMATION - UNAUDITED

Nonreferendum

Debt Service

Debt Service Nonreferendum Extension Base

Levy Year Extension Base Debt Service Margin

2016 2,401,243$ 1,878,713$ 522,530$

2017 2,401,243 - 2,401,243

2018 2,401,243 - 2,401,243

2019 2,401,243 - 2,401,243

2020 2,401,243 - 2,401,243

2021 2,401,243 - 2,401,243

2022 2,401,243 - 2,401,243

2023 2,401,243 - 2,401,243

2024 2,401,243 - 2,401,243

2025 2,401,243 - 2,401,243

2026 2,401,243 - 2,401,243

2027 2,401,243 - 2,401,243

2028 2,401,243 - 2,401,243

2029 2,401,243 - 2,401,243

2030 2,401,243 - 2,401,243

1,878,713$

Data Source

McHenry County Conservation District


DEBT SERVICE EXTENSION BASE

UNAUDITED

March 31, 2017


- 78 -

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

ASSETS

Cash and cash equivalents 5,162,971$ 5,405,242$ 5,862,355$ 4,876,085$ 5,769,372$ 5,639,765$ 5,553,410$ 6,234,932$ 6,753,691$ 7,261,424$

Receivables

Property taxes, net of allowance 6,448,648 6,828,295 6,888,651 7,114,699 7,238,254 7,238,290 7,102,006 7,238,336 7,332,034 7,429,973

Due from other governmental units 37,663 37,212 31,839 36,220 38,146 40,386 42,611 48,683 - -

Other receivables 40,186 62,921 26,590 22,239 8,682 9,025 42,758 6,545 23,650 8,900

Interest - - - - - - 6,175 10,892 11,273 16,377

Inventory - - - - - - 27,820 - - -

Prepaid items - - - - - - 82,894 103,049 94,177 109,507

Due from other funds 3,829 3,829 96,815 914,624 259,949 300,549 826,201 222,875 14,276 45,459

TOTAL ASSETS 11,693,297 12,337,499 12,906,250 12,963,867 13,314,403 13,228,015 13,683,875 13,865,312 14,229,101 14,871,640


None - - - - - - - - - -

Total deferred outflows of resources - - - - - - - - - -


OUTFLOWS OF RESOURCES 11,693,297$ 12,337,499$ 12,906,250$ 12,963,867$ 13,314,403$ 13,228,015$ 13,683,875$ 13,865,312$ 14,229,101$ 14,871,640$


ASSETS AND DEFERRED


BALANCE SHEETS - GENERAL FUND

UNAUDITED



- 79 -

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

LIABILITIES

Accounts payable 104,616$ 239,733$ 237,213$ 254,361$ 182,734$ 164,966$ 186,534$ 92,717$ 111,170$ 85,008$

Accrued liabilities 205,653 290,184 247,583 299,025 438,764 418,117 383,723 433,318 384,248 389,084

Due to other funds 1,026,217 929,293 1,122,785 1,064,857 999,412 1,017,632 982,187 705,050 716,175 653,265

Unearned revenue 29,105 - - - - - 2,251 24,062 41,358 38,526

Total liabilities 1,365,591 1,459,210 1,607,581 1,618,243 1,620,910 1,600,715 1,554,695 1,255,147 1,252,951 1,165,883


Unavailable revenue - property taxes 6,448,648 6,828,295 6,888,651 7,114,699 7,238,254 7,238,290 7,102,006 7,238,336 7,332,034 7,429,973

Total liabilities and deferred

inflows of resources 7,814,239 8,287,505 8,496,232 8,732,942 8,859,164 8,839,005 8,656,701 8,493,483 8,584,985 8,595,856

FUND BALANCES

Reserved/restricted - - - - - - - - 119,755 157,250

Assigned - - - - - - - - - 3,770,729

Unreserved/unrestricted 3,879,058 4,049,994 4,410,018 4,230,925 4,455,239 4,389,010 5,027,174 5,371,829 5,524,361 2,347,805

Total fund balances 3,879,058 4,049,994 4,410,018 4,230,925 4,455,239 4,389,010 5,027,174 5,371,829 5,644,116 6,275,784

TOTAL LIABILITIES, DEFERRED

INFLOWS OF RESOURCES, AND

FUND BALANCES 11,693,297$ 12,337,499$ 12,906,250$ 12,963,867$ 13,314,403$ 13,228,015$ 13,683,875$ 13,865,312$ 14,229,101$ 14,871,640$



- 80 -

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

REVENUES

Taxes

Property 6,183,951$ 6,498,054$ 6,877,675$ 6,945,017$ 7,169,884$ 7,299,335$ 7,294,185$ 7,162,997$ 7,295,245$ 7,388,922$

Licenses and permits - - - - - - - - - -

Intergovernmental revenue 215,999 194,194 171,891 191,065 172,361 172,486 227,562 190,807 132,262 197,033

Charges for services - - 140,164 140,164 135,006 161,197 175,142 94,546 113,444 134,882

Rental income 407,721 787,276 945,276 973,113 1,315,966 1,291,378 1,325,074 1,179,749 1,063,143 1,041,031

Investment income 261,462 165,129 117,717 48,628 27,768 34,688 31,565 36,609 56,688 41,184

Donations - - 8,504 2,123 1,077 1,738 4,916 3,844 6,803 16,954

Miscellaneous 223,917 195,235 53,739 51,964 39,787 30,589 78,583 74,099 66,851 47,167

Total revenues 7,293,050 7,839,888 8,314,966 8,352,074 8,861,849 8,991,411 9,137,027 8,742,651 8,734,436 8,867,173

EXPENDITURES

General government 1,134,573 1,305,320 1,317,502 1,375,284 1,444,993 1,531,959 1,567,540 1,366,170 1,377,058 1,367,607

Education services 664,370 705,416 720,062 718,304 728,911 731,936 699,864 629,667 610,745 638,391

Police and safety services 923,822 1,068,904 1,167,216 1,222,285 1,245,762 1,272,910 1,244,492 1,287,000 1,282,597 1,255,135

Land and facilities management 1,714,413 1,949,732 1,945,078 2,057,213 2,173,924 2,186,364 2,090,115 2,147,422 2,027,506 1,659,083

Natural resources management 986,604 1,041,848 1,120,425 1,159,723 1,136,436 1,270,069 1,374,927 1,695,704 1,583,372 1,707,881

Wildlife resources 176,036 186,677 202,005 201,092 210,103 212,057 212,755 222,034 230,929 228,370

Planning and development 223,092 243,036 244,964 265,829 283,929 290,706 231,125 208,802 213,117 211,408

Communications 326,875 373,287 342,280 356,058 355,305 383,854 392,970 408,073 387,395 334,557

Trail of history 44,988 45,429 45,404 30,841 35,181 31,354 36,283 - - -

Boger project - - - - - - - - - -

Research field station 120,675 142,491 146,709 145,327 155,179 140,064 133,073 - - -


Facility maintenance - - - - - - - - - 371,427

Capital outlay 397,308 509,020 666,735 897,155 733,601 850,240 328,818 283,759 458,472 279,675

Total expenditures 6,843,645 7,675,387 7,987,258 8,569,564 8,671,670 9,112,523 8,506,995 8,445,095 8,368,485 8,263,730


SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - GENERAL FUND

UNAUDITED



- 81 -

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017


OVER EXPENDITURES 449,405$ 164,501$ 327,708$ (217,490)$ 190,179$ (121,112)$ 630,032$ 297,556$ 365,951$ 603,443$

OTHER FINANCING SOURCES (USES) 1,581 6,435 32,316 38,397 34,135 54,883 8,132 47,099 (93,664) 28,225

NET CHANGE IN FUND BALANCES 450,986 170,936 360,024 (179,093) 224,314 (66,229) 638,164 344,655 272,287 631,668

FUND BALANCES, APRIL 1 3,428,072 3,879,058 4,049,994 4,410,018 4,230,925 4,455,239 4,389,010 5,027,174 5,371,829 5,644,116

FUND BALANCES, MARCH 31 3,879,058$ 4,049,994$ 4,410,018$ 4,230,925$ 4,455,239$ 4,389,010$ 5,027,174$ 5,371,829$ 5,644,116$ 6,275,784$

- 82 -

Documents

Comprehensive Annual Financial Report · $141,000; an almost 39% decline in median values. However, in 2013, home values in McHenry County began a strong recovery, rising more than