HOMER TOWNSHIP FIRE PROTECTION DISTRICT ... - Speer … FS Final_2016.pdf · Management is responsible for the preparation and fair presentation of these financial statements in accordance

Prepared by:

Mack & Associates, P.C. Certified Public Accountants

116 E. Washington Street, Suite One

Morris, IL 60450 Telephone: (815) 942-3306

CERTIFIED PUBLIC ACCOUNTANTS

HOMER TOWNSHIP

FIRE PROTECTION DISTRICT

HOMER GLEN, ILLINOIS

ANNUAL FINANCIAL REPORT

DECEMBER 31, 2016

HOMER TOWNSHIP FIRE PROTECTION DISTRICT

Table of Contents

PAGE INDEPENDENT AUDITORS' REPORT ................................................................................................ 1-2 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements: Statement of Net Position– Modified Cash Basis (Statement A) .................................................3 Statement of Activities – Modified Cash Basis (Statement B) .................................................... .4 Fund Financial Statements: Statement of Assets, Liabilities, and Fund Balances – Modified Cash Basis- Governmental Funds (Statement C) ......................................................................................... .5 Statement of Revenues Received, Expenditures Disbursed, and Changes in Fund Balances – Governmental Funds (Statement D) .......................................... .6 Statement of Fiduciary Net Position (Statement E)................................................................... .7 Statement of Changes in Fiduciary Net Position (Statement F) ............................................... .8 NOTES TO BASIC FINANCIAL STATEMENTS ................................................................................ 9-28 OTHER INFORMATION General Fund: Statement of Assets, Liabilities, and Fund Balance Arising from Cash Transactions (Schedule A-1) .........................................................................29 Statement of Revenues Received, Expenditures Disbursed, and Changes in Fund Balance – Budget & Actual (Schedule A-2) ......................................... 30-32 Ambulance Fund: Statement of Assets, Liabilities, and Fund Balance Arising from Cash Transactions (Schedule B-1) .........................................................................33 Statement of Revenues Received, Expenditures Disbursed, and Changes in Fund Balance – Budget & Actual (Schedule B-2) ......................................... 34-35

HOMER FIRE PROTECTION DISTRICT

Table of Contents

PAGE

OTHER INFORMATION – (CONTINUED) Tort Fund: Statement of Assets, Liabilities, and Fund Balance Arising from Cash Transactions (Schedule B-3) .........................................................................36 Statement of Revenues Received, Expenditures Disbursed, and Changes in Fund Balance – Budget & Actual (Schedule B-4) ............................................36 Pension Fund: Statement of Assets, Liabilities, and Fund Balance Arising from Cash Transactions (Schedule B-5) .........................................................................37 Statement of Revenues Received, Expenditures Disbursed, and Changes in Fund Balance – Budget & Actual (Schedule B-6) ............................................37 Social Security and Medicare Fund: Statement of Assets, Liabilities, and Fund Balance Arising from Cash Transactions (Schedule B-7) .........................................................................38 Statement of Revenues Received, Expenditures Disbursed, and Changes in Fund Balance – Budget & Actual (Schedule B-8) ............................................38 Audit Fund: Statement of Assets, Liabilities, and Fund Balance Arising from Cash Transactions (Schedule B-9) .........................................................................39 Statement of Revenues Received, Expenditures Disbursed, and Changes in Fund Balance – Budget & Actual (Schedule B-10) ..........................................39 Firefighters’ Pension Fund Schedule of Employer Contributions (Schedule 1) .....................................................................40 Schedule of Changes in the Employer’s Net Pension Liability (Schedule 2) ..............................................................................................41 NOTES TO OTHER INFORMATION .................................................................................................. 42-43

HOMER FIRE PROTECTION DISTRICT

Table of Contents

PAGE

SUPPLEMENTAL INFORMATION Foreign Fire Fund: Statement of Changes in Assets and Liabilities (Schedule 3) .......................................................................................................44 Assessed Valuations, Tax Rates, Tax Extensions and Tax Collections (Schedule 4) ............................................................................ .45

INDEPENDENT AUDITORS’ REPORT

CERTIFIED PUBLIC ACCOUNTANTS

116 E. Washington Street Suite One Morris, Illinois 60450 Phone: (815) 942-3306 Fax: (815) 942-9430 www.mackcpas.com

TAWNYA R. MACK, CPALAURI POPE, CPA

ERICA BLUMBERG, CPATREVOR DEBELAK, CPA

MATT MELVINCHRIS CHRISTENSENSTEPHANIE HEISNER

1

INDEPENDENT AUDITORS’ REPORT

To the Board of Trustees Homer Township Fire Protection District

We have audited the accompanying modified cash basis financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Homer Township Fire Protection District as of and for the year ended December 31, 2016, and the related notes to the 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 the modified cash basis of accounting described in Note 1; this includes determining that the modified cash basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management is also responsible for 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 error or fraud.

Auditors’ 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 from 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 auditors’ 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 entity’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 entity’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 opinion.

2

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective modified cash basis financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Homer Township Fire Protection District as of December 31, 2016, and the respective changes in modified cash basis financial position, thereof for the year then ended in accordance with the modified cash basis of accounting.

Basis of Accounting

We draw attention to Note 1 of the financial statements, which describes the basis of accounting. The financial statements are prepared on the modified cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to that matter.

Other Matters

Other Information

Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Homer Township Fire Protection District, Illinois’ basic financial statements. The budgetary comparison and balance sheet information on pages 29 through 39, the pension data on pages 40 through 41, notes to other information on pages 42 through 43 and the supplemental information on pages 44 through 45 are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The budgetary comparison and balance sheet information, the pension data, notes to other information, and the supplemental 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.

The Firefighters’ Pension Fund information presented was audited by an external third party. The pension information has 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 it.

Comparative Information

We previously audited, in accordance with auditing standards generally accepted in the United States of America, the financial statements of Homer Township Fire Protection District for the year ended December 31, 2015, which are presented for comparison purposes with the accompanying financial statements. In our report dated May 9, 2016, we expressed an unqualified opinion on the respective financial statements.

Mack & Associates, P.C. Certified Public Accountants

Morris, Illinois May 8, 2017

Mack & Associates, P.C.

BASIC FINANCIAL STATEMENTS

STATEMENT A

The Notes to Basic Financial Statements are an integral part of this statement. 3

2016 2015Assets

Cash 1,724,112$ 1,769,751 Capital Assets Land 679,841 679,841 Building and Improvements 4,534,758 4,534,758

Equipment 1,941,044 2,051,884 Vehicles 2,814,339 2,671,680

Accumulated Depreciation (6,325,497) (6,514,344)

Total Assets 5,368,597$ 5,193,570

Liabilities

Current liabilities 1,407$ - Notes payable: Due within one year 133,399 94,586 Due in more than one year 1,178,260 914,640

Total Liabilities 1,313,066 1,009,226

Net Position

Net investment in capital assets 2,332,826 2,414,593 Unrestricted 1,203,127 1,177,479 Restricted 519,578 592,272

Total Net Position 4,055,531$ 4,184,344

December 31,

Primary Government


Government-wide Financial Statement- Statement of Net Position-

December 31, 2016Modified Cash Basis

Total

STATEMENT B


Fees and Operating Charges for Grants and

Program Activities Expenditures Services Contributions 2016 2015

Governmental activities:

Administrative 1,975,831$ - 19,281 (1,956,550) (1,966,222) Fire Protection 2,538,829 36,701 - (2,502,128) (2,683,119) Ambulance Service 2,562,878 524,795 - (2,038,083) (1,761,464) Unallocated Interest 45,763 - - (45,763) (41,451)

Total governmental activities 7,123,301 561,496 19,281 (6,542,524) (6,452,256)

Total government 7,123,301$ 561,496 19,281 (6,542,524) (6,452,256)

General revenues Taxes: Property taxes 6,005,309$ 5,853,725 Replacement taxes 33,336 37,620 Agreements 235,376 218,773 Interest on investments 8,045 2,149 Reimbursements 96,894 101,630 Miscellaneous 5,201 1,675

Total general revenues 6,384,161 6,215,572

Special items Sales of assets 29,550 6,500

Change in net position (128,813) (230,184)

Net position at beginning of year 4,184,344 4,414,528

Net position at end of year 4,055,531$ 4,184,344

December 31,


Government-wide Financial Statement- Statement of Activities- Modified Cash BasisFor the Year Ended December 31, 2016

Program Revenues Net (Expenditures) RevenuesTotal

STATEMENT C


Social SecurityGeneral Ambulance Tort Pension & Medicare Audit

Fund Fund Fund Fund Fund Fund 2016 2015Assets

Cash in Bank 492,047$ 711,080 467,048 1,407 45,407 7,123 1,724,112 1,769,751

Total Assets 492,047$ 711,080 467,048 1,407 45,407 7,123 1,724,112 1,769,751

Liabilities and Fund Balance

Current Liabilities -$ - - 1,407 - - 1,407 -

Total Liabilities - - - 1,407 - - 1,407 -

Fund Balances: Unassigned 492,047 - - - - - 492,047 533,284 Assigned - 711,080 - - - - 711,080 644,195 Restricted - - 467,048 - 45,407 7,123 519,578 592,272

Total Fund Balances 492,047 711,080 467,048 - 45,407 7,123 1,722,705 1,769,751

Total Liabilities and Fund Balances 492,047$ 711,080 467,048 1,407 45,407 7,123

Reconciliation to Statement of Net Position:

Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets used in governmental activities of $9,969,982 (net of accumulated depreciation of $6,325,497) are not financial resources and, therefore, are not reported in the funds. 3,644,485$ 3,423,819

Some liabilities, including capital debt obligations payable, are not due and payable in the current period and, therefore, are not reported in the funds. (1,311,659) (1,009,226)

Net position of governmental activities 4,055,531$ 4,184,344

December 31,Governmental Funds


Statement of Assets, Liabilities, and Changes in Fund Balances- Modified Cash Basis-Governmental FundsDecember 31, 2016

Total

STATEMENT D


Social SecurityGeneral Ambulance Tort Pension & Medicare Audit

Fund Fund Fund Fund Fund Fund 2016 2015Revenues Received:

Property taxes 2,177,217$ 2,040,052 1,144,672 572,608 64,772 5,988 6,005,309 5,853,725 Replacement taxes 16,668 16,668 - - - - 33,336 37,620 Grant income - - 19,281 - - - 19,281 287,561 Interest income 7,344 701 - - - - 8,045 2,149 Fees and charges for services 36,701 524,795 - - - - 561,496 525,170 Reimbursements 47,297 47,147 2,450 - - - 96,894 101,630 Agreements 230,376 5,000 - - - - 235,376 218,773 Miscellaneous 4,903 298 - - - - 5,201 1,675

Total Revenues Received 2,520,506 2,634,661 1,166,403 572,608 64,772 5,988 6,964,938 7,028,303

Expenditures Disbursed:Current: Administrative 83,333 51,534 1,228,954 586,122 74,972 5,931 2,030,846 2,253,783 Fire Protection 2,349,097 - - - - - 2,349,097 2,321,898 Ambulance Service - 2,521,242 - - - - 2,521,242 2,369,874 Capital Outlay 397,019 - - - - - 397,019 303,960 Debt Service:

Principal 594,586 - - - - - 594,586 90,774 Interest 45,763 - - - - - 45,763 41,451

Total Expenditures Disbursed 3,469,798 2,572,776 1,228,954 586,122 74,972 5,931 7,938,553 7,381,740

Excess of revenues received over (under) expenditures disbursed: (949,292) 61,885 (62,551) (13,514) (10,200) 57 (973,615) (353,437)

Other Financing Sources (Uses): Sale of assets Equipment 24,550 5,000 - - - - 29,550 6,500 Loan proceeds 500,000 - - - - - 500,000 - Capital lease proceeds 397,019 - - - - - 397,019 - Transfers (13,514) - - 13,514 - - - -

Net change in fund balance (41,237) 66,885 (62,551) - (10,200) 57 (47,046) (346,937)

Fund balances, beginning of year 533,284 644,195 529,599 - 55,607 7,066 1,769,751 2,116,688

Fund balances, end of year 492,047$ 711,080 467,048 - 45,407 7,123 1,722,705 1,769,751

Reconciliation to the Statement of Activities:

Net Change in Fund Balances - total governmental funds (47,046)$ (346,937)

Amounts reported for governmental activities in the Statement of Activities are different because:

Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position: Principal retired 594,586 90,774 Issuance of long-term debt (897,019) -

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. The change in fund balance must be increased by capital purchases and decreased by deletions and depreciation expenditures: Capital asset purchases 533,674 303,960 Adjustment for disposal of capital assets, net (15,283) - Depreciation (297,725) (277,981)

Change in net position of governmental activities (Statement B) (128,813)$ (230,184)

Statement of Revenues Received, Expenditures Disbursed, and


Changes in Fund Balances - Governmental FundsFor the Year Ended December 31, 2016

TotalGovernmental Funds

December 31,

STATEMENT E


Foreign Fire and Firefighters' Pension Fund

Agency Fund Trust FundForeign Fire Pension

Fund Trust Fund TotalAssets

Cash and cash equivalents 11,009$ 103,354 114,363

Investments, at fair value US government and agency obligations - 621,670 621,670

- 3,254,587 3,254,587 Municipal bonds - 819,915 819,915 Equity mutual funds - 5,788,095 5,788,095

Receivables Taxes - 1,407 1,407 Accrued interest receivable - 26,946 26,946

Total Assets 11,009$ 10,615,974 10,626,983

Liabilities and Net Position

Liabilities: Due to others 11,009$ - 11,009

Net Position: Net Position held in trust for pension benefits - 10,615,974 10,615,974

Total Liabilities and Net Position 11,009$ 10,615,974 10,626,983


Statement of Fiduciary Net Position

December 31, 2016

STATEMENT F


Firefighters' Pension Fund

2016 2015

Additions Contributions Employer 546,303$ 510,201 Plan members 337,477 357,436

Total Contributions 883,780 867,637

Other income - 1,069

Investment income Interest earned 359,026 387,058 Net change in fair value 291,765 (253,076) Total investment income 650,791 133,982

Less investment expenses (38,859) (34,594)

Net investment income 611,932 99,388

Total Additions 1,495,712 968,094

Deductions Administrative expenses 41,894 38,755 Benefits and refunds 134,566 52,037

Total Deductions 176,460 90,792

Change in Net Position 1,319,252 877,302

Net Position Beginning of Year 9,296,722 8,419,420 Net Position End of Year 10,615,974$ 9,296,722

December 31,

PensionTrust Fund


Statement of Changes in Fiduciary Net Position

For the Year Ended December 31, 2016(with comparative figures for December 31, 2015)

NOTES TO BASIC FINANCIAL STATEMENTS

HOMER TOWNSHIP FIRE PROTECTION DISTRICT Notes to Basic Financial Statements For the Year Ended December 31, 2016

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NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These financial statements are presented using the modified cash basis of accounting. This modified basis of accounting differs from accounting principles generally accepted in the United States of America (GAAP). Generally accepted accounting principles include all relevant Governmental Accounting Standards Board (GASB) pronouncements.

A. Nature of Operations

Homer Township Fire Protection District, Illinois, is an Illinois unit of local government. The District provides general governmental services as well as emergency ambulance assistance to individuals.

B. The Reporting Entity

The District Board is the basic level of government which has oversight responsibility and control over all activities related to the operation of the Homer Township Fire Protection District, the primary government unit. The Board receives funding from local, state and federal government sources and must comply with the requirements of these funding sources entities. However, the Board is not included in any other governmental “reporting entity” as defined by the GASB pronouncement, since Board members are elected by the public and have decision making authority, the authority to levy taxes, the power to designate management, the ability to significantly influence operations and primary accountability for fiscal matters. The District follows the provision of Governmental Accounting Standards Board Statement No. 39, “Determining Whether Certain Organizations Are Component Units – an amendment of Statement No. 14.” As defined by generally accepted accounting principles established by GASB, the financial reporting entity consists of the primary government, as well as its component units, which are legally separate, tax-exempt entities and meet all of the following criteria:

1. The economic resources received or held by the separate organization are entirely or

almost entirely for the direct benefit of the primary government, its component units, or its constituents.

2. The primary government, or its component units, is entitled to, or has the ability to

otherwise access, a majority of the economic resources received or held by the separate organization.

3. The economic resources received or held by an individual organization that the specific

primary government, or its component units, is entitled to, or has the ability to otherwise access, are significant to the primary government.


10

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- (Continued)

B. The Reporting Entity (continued) The District, for financial purposes, includes all funds relevant to the operations of the District. The accompanying financial statements present the District’s primary government over which the District exercises significant influence. Significant influence or accountability is based primarily on operational or financial relationships with the District. The District did not omit from the financial statements any agency that met the inclusion criteria. In addition, the District is not aware of any entity which would exercise such oversight as to result in the District being considered a component unit of that entity.

C. Basis of Presentation

The District’s basic financial statements consist of government-wide statements, including a Statement of Net Position and a Statement of Activities, and fund financial statements which provide a more detailed level of financial information.

Government-wide Financial Statements The Statement of Net Position and Statement of Activities display information about the reporting government as a whole. They include all funds of the reporting entity except for fiduciary funds. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange revenues.

The Statement of Net Position presents the financial condition of the governmental activities of the District at year end. The Statement of Activities presents a comparison between direct expenditures and program revenues for each program or function of the District’s governmental activities. Direct expenditures are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function.

Program revenues include charges paid by the recipient of the goods or services offered by the program, grants and contributions that are restricted to meeting the operational or capital requirements of a particular program, and interest earned on grants that is required to be used to support a particular program. Revenues which are not classified as program revenues are presented as general revenues of the District, with certain limited exceptions. The comparison of direct expenditures with program revenues identifies the extent to which each governmental function is self-financing or draws from the general revenues of the District.


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C. Basis of Presentation (continued)

Fund Financial Statements Fund financial statements of the reporting entity are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate schedule of self-balancing accounts that constitutes its assets, liabilities, fund balance, revenues, and expenditures. Funds are organized into one major category: governmental. An emphasis is placed on major funds within the governmental category. A fund is considered major if it is the primary operating fund of the District or meets the following criteria:

b. Total assets, liabilities, revenues, or expenditures of that individual governmental

fund are at least 10 percent of the corresponding total for all funds of that category or type, and

c. Total assets, liabilities, revenues, or expenditures of the individual governmental fund are at least 5 percent of the corresponding total for all governmental funds combined.

There are two categories of funds utilized by the District: governmental and fiduciary.

Governmental Fund Types General Fund - The General (Fire) Fund is the general operating fund of the District. It is used to account for all financial resources except those that are required to be accounted for in another fund. The General Fund’s revenues are mainly derived from property taxes and expenditures are related to the daily operations of the District.

Major Special Revenue Funds:

• Ambulance Fund - accounts for expenditures relating to ambulance services provided by the District. Revenues are mainly derived through property taxes and ambulance fees.

• Tort Fund - restricted fund used to accumulate property tax revenues to be used for tort related expenditures.

• Pension Fund - accounts for the receipt of property taxes which are required to be

remitted to the firefighters’ pension fund.

• Social Security & Medicare Fund - accounts for the receipt of property taxes which are restricted for payroll tax expenditures.

• Audit Fund – accounts for expenditures relating to the annual audit.


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C. Basis of Presentation (continued)

Fiduciary Funds Fiduciary fund reporting focuses on net position and changes in net position. The fiduciary fund category is split into four classifications: pension trust funds, investment trust funds, private-purpose trust funds, and agency funds. Trust funds are used to account for assets held by the District under a trust agreement for individuals, private organizations, or other governments and are therefore not available to support the District’s own programs. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of the results of operations. The District’s fiduciary funds include the District’s Firefighters’ Pension Fund and the Foreign Fire Agency Fund.

D. Measurement Focus and Basis of Accounting

Government-wide Financial Statements The government-wide financial statements are prepared using the economic resources measurement focus and the modified cash basis of accounting. This means that only balances resulting from previous cash transactions are shown on the Statement of Net Position, with two modifications: capital assets net of related depreciation and long-term liabilities resulting from debt issuances are also included. The Statement of Activities presents increases (i.e. revenues) and decreases (i.e. expenditures) in total net position, with three modifications: capital acquisitions are not reported as disbursements but rather capitalized and shown as assets on the Statement of Net Position, depreciation expense is reported in the Statement of Activities and long-term debt principal payments are shown as a reduction of long-term liabilities on the Statement of Net Position rather than an expenditure on the Statement of Activities. Fund Financial Statements All governmental funds are accounted for using the current financial resources measurement focus and the cash basis of accounting. This means that only current assets, liabilities and fund balances resulting from previous cash transactions are shown on the Statement of Assets, Liabilities and Fund Balance Arising from Cash Transactions. The Statement of Revenues Received, Expenditures Disbursed, and Changes in Fund Balances reports on the sources (i.e. revenues) and uses (i.e. expenditures). Revenues are recognized when cash is received. Expenditures are recognized when checks are written. Allocations of cost, such as depreciation, are not recognized in governmental funds. This approach differs from the manner in which the governmental activities of the government-wide financial statements are prepared. Governmental fund financial statements therefore include reconciliations with brief explanations to better identify the relationship between the government-wide statements and the statements for governmental funds.


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E. Assets, Liabilities, and Fund Balance

Cash and Cash Equivalents For the purpose of financial reporting, “cash and cash equivalents” includes all demand and savings accounts and certificates of deposit or short-term investments with an original maturity of three months or less. Trust account investments in open-ended mutual fund shares are also considered cash equivalents. Investments. The District would classify all certificates of deposit whose original maturity term exceeds two years as investments in the financial statements. Investments are carried at cost, which approximates fair value. As of December 31, 2016, the District had no investments. Refer to pages 16-22 for pension fund information.

Capital Assets In the government-wide financial statements, capital assets arising from cash transactions are accounted for as assets in the Statement of Net Position. All capital assets are valued at historical cost or estimated historical cost if actual is unavailable. Estimated historical cost was used to value the majority of the assets acquired prior to May 1, 2004. Assets acquired since May 1, 2004 are recorded at cost. Capital assets are acquired at cost (or estimated historical cost) and updated for additions and retirements during the year. Donated capital assets are recorded at their fair market values as of the date received. The District maintains a capitalization threshold of $5,000. The District does not possess any infrastructure. Improvements are capitalized; the costs of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset’s life are not. Depreciation of all exhaustible capital assets arising from cash transactions is recorded as an allocated expense in the Statement of Activities, with accumulated depreciation reflected in the Statement of Net Position. Depreciation is computed using the straight-line method over the following useful lives:

Buildings 40-50 years Improvements 10-20 years Equipment 5-10 years Vehicles 5-10 years


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E. Assets, Liabilities, and Fund Balance (continued)

Fund Balance Classification Fund balance is classified as net position and displayed in three components:

a. Net investment in capital assets—Consists of capital assets including

restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvements of those assets.

b. Restricted net position—Consists of net position with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws and regulations of other governments; or (2) law through constitutional provisions or enabling legislation.

c. Unrestricted net position—All other net position that do not meet the definitions of “restricted” or net investment in capital assets.

Accrued Liabilities and Long-term Obligations The District prepares its government-wide financial statements using the modified cash basis of accounting. On the modified cash basis, only long-term obligations are reported in the government-wide financial statements. Payables and accrued liabilities are not reflected in the government-wide statements. The District prepares its fund financial statements using the cash basis of accounting. On the cash basis, payables, accrued liabilities and long-term obligations are not reflected in the fund financial statements.

F. Comparative Data

Comparative totals for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the District’s financial position and operations. Some prior year balances have been reclassified to conform to the current year presentation.


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NOTE 2: CASH AND INVESTMENTS

Permitted Deposits and Investments - Statutes authorize the District to make deposits/invest in commercial banks, savings and loan institutions, obligations of the U.S. Treasury and U.S. Agencies, obligations of states and their political subdivisions, credit union shares, repurchase agreements, commercial paper rated within the three highest classifications by at least two rating services, and the Illinois Public Treasurer’s Investment Pool.

Custodial Credit Risk - is the risk that in the event of a bank failure, the District’s deposits may not

be returned to it. The District’s custodial credit risk policy is included in a formal written investment and cash management policy.

The District’s deposits and certificates of deposits are required to be covered by federal depository

insurance (FDIC) or by securities held by the pledging financial institution. The FDIC currently insures the first $250,000 of the District’s deposits at each financial institution. Deposit balances over $250,000 are collateralized with securities held by the pledging financial institution. At December 31, 2016, the carrying amount of the District's deposits was $1,724,112 and the bank balance was $1,741,168. As of December 31, 2016, none of the District’s bank balance was exposed to custodial credit risk as uninsured or uncollateralized deposits.

Investments The District’s investment guidelines are defined by District ordinance and a written investment

policy that is approved by the District board members. The investment policy specifies purpose, scope, and objectives. The investment policy also specifies (a) insurance by the FDIC (b) collateralization (c) and size of the deposits made. The Certificate of Deposits held comply with Section J of the policy.

NOTE 3: PROPERTY TAXES

The District’s property tax levy must be adopted by the Board by the last Tuesday in December. On the modified cash basis of accounting, property taxes are recognized as revenues when they are received. Property taxes are levied and attach as an enforceable lien on property on January 1 and are payable in two installments on June 1 and September 1 subsequent to the year of levy. The 2015 property tax levy in the amount of $6,525,500, reduced by statutory limitations to $6,035,977, was passed on December 7, 2015 and was received by the District in the current fiscal year. The 2016 property tax levy in the amount of $6,756,000 was passed on December 5, 2016 and will be received by the District in the subsequent fiscal year.


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NOTE 4: PENSION FUND

The District’s pension fund, Homer Township Fire Protection District Firefighters’ Pension Fund (Pension Fund), is a pension trust fund and is accounted for using the accrual basis of accounting. Investments are reported at fair value. The pension fund is subject to a separate, independent audit that is available by contacting the District at 16050 S Cedar Rd, Lockport, IL 60491. Deposits: At year end, the carrying amount of the Fund’s deposits totaled $103,354, and the bank balances totaled $103,354. Investments: At year end, the Fund has the following investments and maturities:

The Fund assumes any callable securities will not be called. The Fund has the following recurring fair value measuraments as of December 31, 2016:

Quoted Prices in Active Markets

for Identical Assets

(Level 1)

Significant Other Observable

Inputs (Level 2)

Significant Unobservable

Inputs (Level 3)

December 31, 2016

Investments by Fair ValueDebt Securities

U.S. Treasuries 621,670$ - - 621,670 U.S. Agencies - 3,254,587 - 3,254,587 Municipal Bonds - 819,915 - 819,915

Equity SecuritiesMutual Funds 5,788,095 - - 5,788,095

Total Assets At Fair Value 6,409,765$ 4,074,502 - 10,484,267

Fair Value Measurement Using

Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. In accordance with the Pension Fund’s investment policy, the Pension Fund limits its exposure to interest rate risk by structuring the portfolio to provide liquidity while at the same time matching investment maturities to projected fund liabilities.

Less Than More ThanFair Value 1 1-5 6-10 10

U.S. Treasury Notes 621,670$ 50,047 495,967 75,656 - U.S. Agencies 3,254,587 215,993 579,984 2,354,620 103,990 Municipal Bonds 819,915 25,681 261,775 467,931 64,528

Total 4,696,172$ 291,721 1,337,726 2,898,207 168,518

Investment Maturities - in Years


17

NOTE 4: PENSION FUND – (Continued)

Investments – (Continued) Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Pension Fund helps limit its exposure to credit risk by primarily investing in securities issued by the United States Government and/or its agencies that are implicitly guaranteed by the United States Government. The Pension Fund’s investment policy establishes criteria for allowable investments; those criteria follow the requirements of the Illinois Pension Code. The investments in the securities of U.S. Government Agencies were all rated AA+ and municipal bonds were not rated or rated triple A by Standard & Poor’s. The Fund’s investment policy also prescribes to the “prudent person” rule, which states, “Investments shall be made with judgement and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the primary objective of safety as well as the secondary objective of the attainment of market rates of return.” Custodial Credit Risk – Investments. For an investment, this is the risk that, in the event of the failure of the counterparty, the Pension Fund will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Money market mutual funds and equity mutual funds are not subject to custodial credit risk. At December 31, 2016, the U.S. Government Agencies and the Municipal Bonds are held by the counterparty in the trust department. The Pension Fund limits its exposure to custodial credit risk by utilizing an independent third party institution, selected by the Pension Fund, to act as custodian for its securities and collateral. Concentration of Credit Risk. This is the risk of loss attributed to the magnitude of the Pension Fund’s investment in a single issuer. At December 31, 2016, the Pension Fund has over 5% of net plan position invested (other than U.S. Government guaranteed obligations) as indicated in the table on page 18. Agency investments represent a large portion of the portfolio; however the investments are diversified by maturity date and are backed by the issuing organization. Although unlike treasuries, agency securities do not have the “full faith and credit” backing of the U.S. Government, they are considered to have a moral obligation of implicit backing and are supported by the Treasury lines of credit and increasingly stringent federal regulation. The Fund’s investment policy in accordance with the Illinois Compiled Statutes (ILCS) establishes the following target allocation across asset classes:

Long-TermExpected Real

Asset Class Target Rate of Return

Fixed Income 45.0% 1.1%Domestic Equities 49.5% 14.6%International Equities 5.5% 6.6%Cash and Cash Equivalents 0.0% 0.0%


18


Investments – (Continued) Illinois Compiled Statutes (ILCS) limit the Fund’s investments in equities, mutual funds and variable annuities to 65%. Securities in any one company should not exceed 5% of the total fund. The blended asset class is comprised of all other asset classes to allow for rebalancing the portfolio. The long-term expected rate of return on the Fund’s investments was determined using an asset allocation study conducted by the Fund’s investment consultant in January 2017 in which best-estimate ranges of expected future real rates of return (net of pension plan investment expense and inflation) were developed for each major asset class. These ranges were combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding the expected inflation. Best estimates or arithmetic real rates of return for each major asset class included in the Fund’s target asset allocation as of December 31, 2016 are listed in the table above. The Pension Board has diversified its equity mutual fund holdings as follows:

Rate of Return: For the year ended December 31, 2016, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 6.22%. The money weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

Equity Mutual Funds Fair Value

American Beacon Intl 91,882$ Bridgeway Ultra Small 176,662 Cohen & Steers Realty 146,564 Fidelity Adv Materials 107,514 First Eagle Overseas 94,064 Hennessy (FBR) 176,360 Homestead Small Co Stock 409,124 LSV Value Equity Fund 640,359 *Oppenheimer Developing 95,167 Oppenheimer Intl Growth 188,477 Pioneer Equity Income 659,954 *T.Rowe Price Divers 402,993 T.Rowe Price Growth Stock 1,207,143 *Vanguard Energy Fund 37,350 Vanguard 500 Index 1,354,482 *

5,788,095$

*Represents over 5% of total net position.


19


A. Plan Description: The Firefighters’ Pension Plan is a single-employer defined benefit pension plan that covers all sworn firefighter personnel. The defined benefits and employee and minimum employer contribution levels are governed by Illinois Compiled Statutes (40 ILCS 5/3-1) and may be amended only by the Illinois legislature. The District accounts for the Fund as a pension trust fund. The Fund is governed by a five-member Board of Trustees. Two members of the Board are appointed by the District’s President, one member is elected by pension beneficiaries and two members are elected by active fire employees. At December 31, 2016, the measurement date, the Firefighters’ Pension Plan membership consisted of the following:

Inactive plan members currently receiving benefits 2Inactive plan members entitled to but not receiving benefits 6Active plan members 39

47

The following is a summary of the Firefighters’ Pension Plan as provided for in Illinois State Statutes.

The Firefighters’ Pension Plan provides retirement benefits through two tiers as well as death and disability benefits. Covered employees hired before January 1, 2011 (Tier 1), attaining the age of 50 or more with 20 or more years of creditable service are entitled to receive an annual retirement benefit of ½ of the salary attached to the rank held on the last day of service, or for the one year prior to the last day, whichever is greater. The annual benefit shall be increased by 2.5% of such salary for each additional year of service over 20 years up to 30 years, to a maximum of 75% of such salary. Employees with at least eight years of service but less than 20 years of credited services may retire at or after the age of 60 and receive a reduced benefit. The monthly benefit of a firefighter who retired with 20 or more years of service after January 1, 1977 shall be increased annually, following the first anniversary date of retirement and be paid upon reaching the age of at least 55 years, by 3% of the original pension and 3% compounded annually thereafter.


20


A. Plan Description (Continued) Covered employees hired on or after January 1, 2011 (Tier 2), attaining the age of 55 or older with ten or more years of creditable service are entitled to receive an annual retirement benefit equal to the average monthly salary obtained by dividing the total salary of the firefighter during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period. Firefighters’ salary for the pension purposes is capped at $106,800, plus the lesser of ½ of the annual change in the Consumer Price Index or 3% compounded. The annual benefit shall be increased by 2.5% of such salary for each additional year of service over 20 years up to 30 years to a maximum of 75% of such salary. Employees with at least ten years may retire at or after age 50 and receive a reduced benefit (i.e., ½% for each month under 55). The monthly benefit of a Tier 2 firefighter shall be increased annually at the age of 60 on the January 1st after the firefighter retires, or the first anniversary of the pension starting date, whichever is later. Noncompounding increases occur annually, each January thereafter. The increase is the lesser of 3% of ½ of the change in the Consumer Price Index for the proceeding calendar year. B. Contributions: Covered employees are required to contribute 9.455% of their base salary to the Firefighters’ Pension Plan. If any employee leaves covered employment with less than 20 years of service, accumulated employee contributions may be refunded without accumulated interest. The District is required to contribute the remaining amounts necessary to finance the plan as actuarially determined by an enrolled actuary. However, effective January 1, 2011, ILCS required the District to contribute a minimum amount annually calculated using the projected unit credit actuarial cost method that will result in the funding of 90% of the past service cost by the year 2040. For the year-ended December 31, 2016, the District’s contributions was 15.5% of covered payroll. C. Net Pension Liability The components of the net pension liability of the District as of December 31, 2016 were as follows:

Total Pension liability 14,999,849$ Plan Fiduciary Net Position 10,615,974

District's Net Pension Liability 4,383,875$

Plan Fiduciary Net Position as a Percentageof the Total Pension Liability 70.77%

See the Schedule of Changes in the Employer’s Net Pension Liability and Related Ratios on page 41 of the other information for additional information to the funded status of the Fund.


21


D. Actuarial Assumptions The total pension liability above was determined by an actuarial valuation performed as of December 31, 2016 using the following actuarial methods and assumptions: Actuarial Assumptions (Economic)

Actuarial Assumptions (Demographic)

E. Discount Rate Projected benefit payments are required to be discounted to their actuarial present values using a single discount rate that reflects: (1) a long-term expected rate of return on pension plan investments (to the extent that the plan’s net fiduciary position is projected to be sufficient to pay benefits) and (2) a tax exempt municipal bond rate based on an index of 20-year genral obligation bonds with an average AAcredit rating as of the measurement date (to the extent that the plan’s projected fiduiciary position is insufficient to pay benefits). For the purposes of this valuation, the expected rate of return on pension plan investments is 6.5%; the municipal bond rate is 3.78% (based upon the weekly rate closest to but not later than the measurement date of the 20-Year Bond Buyer GO Index.; and the resulting single discount rate is 6.50%.

Actuarial Valuation Date 12/31/16

Actuarial Cost Method Entry Age Normal

Asset Valuation Method Market Value

Actuarial AssumptionsInterest Rate 6.50%

Salary Increases 4.25% - 11.66%

Projected Increase in Total Payroll 3.25%

Consumer Price Index (Urban) 2.50%

Inflation 2.50%

Mortality Table L&A Illinois Firefighters Mortality Rates

Retirement Rates L&A 2016 Illinois Firefighters Retirement Rates Capped at age 65

Disablity Rates L&A 2016 Illinois Firefighters Disability Rates

Termination Rates L&A 2016 Illinois Firefighters Termination Rates

Percent Married 80.0%


22

NOTE 4: PENSION FUND – (Continued) F. Discount Rate Sensitivity The following is a sensitive analysis of the net pension liability to changes in the discount rate. The table below presents the pension liability of the District calculated using the discount rate of 6.50% as well as what the District’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:

NOTE 5: CHANGES IN LONG-TERM DEBT

The following is a summary of changes in general long-term debt for the year ended December 31, 2016:

CurrentDiscount

1% Decrease Rate 1% Increase(5.50%) (6.50%) (7.50%)

Net Pension Liability 8,138,301$ 4,383,875 1,513,325

Issued Retired

Old Plank Trail Community Bank General Obligation Bond 4.20%; $1,100,000 - issued 1,009,226$ - 94,586 914,640 98,559

Wells FargoE-One Pumper Capital Lease2.87%; $397,019 - issued - 397,019 - 397,019 34,840

Old Plank Trail Community BankTax Anticipation Warrant2.70%; $500,000 - issued - 500,000 500,000 - -

Totals 1,009,226$ 897,019 594,586 1,311,659 133,399

Beginning Balance

Ending Balance

Due Within One Year


23

NOTE 5: CHANGES IN LONG-TERM DEBT – (Continued)

A. General Obligation Bonds On June 2, 2014, the District signed a general obligation bond agreement with Old Plank Trail Community Bank in the amount of $1,100,000 for improving, repairing and equipping existing facilities, the purchase of a new ambulance, and paying off other existing debt obligations. Annual installments are due on June 15 and vary in amount. The bonds have a 4.20% interest rate. Bond payments are made from the Fire Fund.

Year Principal Interest

2017 98,559$ 38,415 2018 102,698 34,275 2019 107,012 29,962 2020 111,506 25,468 2021 116,189 20,784 2022 121,069 15,904 2023 126,154 10,819 2024 131,453 5,521

Totals 914,640$ 181,148

The District paid interest expense of $42,388 for the year ended December 31, 2016 related to the general obligation bond.

B. E-One Pumper Capital Lease

The District entered into a lease agreement with Wells Fargo on September 2, 2016 for lease/purchase of a 2016 E-One Stainless Steel Rescue Pumper. The lease is classified as a capital lease because of a bargain purchase option for the District to purchase the engine for $1 that the District plans to exercise. The lease bears an interest rate of 2.87% and is payable in annual installments of $46,234. Payments will be made from the Fire Fund.

Year Principal Interest2017 34,840$ 11,394 2018 35,840 10,395 2019 36,869 9,366 2020 37,927 8,308 2021 39,015 7,219 2022 40,135 6,100 2023 41,287 4,948 2024 42,472 3,763 2025 43,691 2,544 2026 44,943 1,289

Totals 397,019$ 65,326


24

NOTE 5: CHANGES IN LONG-TERM DEBT – (Continued)

C. Tax Anticipation Warrants The District issued tax anticipation warrant in advance of property tax collections on March 31, 2016, depositing the proceeds in the Fire Fund. This warrant is necessary to cover general operating expenditures of the because Will County made changes to property tax distribution schedule in 2016. The warrant was paid in full from the second property tax distribution that was received on June 23, 2016.

NOTE 6: LEGAL DEBT MARGIN

Legal debt margin is the percent of the District’s assessed valuation which is subject to debt limitation. The statutory debt limitation for the District is 5.75%. The District’s legal debt margin limitation is as follows for the fiscal year ended December 31, 2016:

Assessed valuation (2015) 547,083,936$

Statutory debt limitation (5.75%) 31,457,326$

Amount of debt applicable to debt limitation 1,311,659

Legal Debt Margin 30,145,667$

NOTE 7: FOREIGN FIRE INSURANCE BOARD

The Illinois Fire Protection District Act (70 ILCS 705/11i) provides for the creation of a department foreign fire insurance board in each fire protection district that employs full-time firefighters and is subject to a collective bargaining agreement. The District approved an ordinance on December 9, 2009 to create a department foreign fire insurance board. The secretary of the insurance board shall set aside all money received by the board of trustees, and the board of trustees shall appropriate said money to the FFIB on an annual basis. This fund was created to maintain the balance created by the receipt of annual foreign fire insurance tax payments. At December 31, 2016, the fund had received $11,695 and spent $13,636 resulting in a restricted fund balance of $11,009.


25

NOTE 8: CAPITAL ASSETS

A summary of changes in capital assets follows:

Beginning EndingCapital Assets Balance Additions Deletions Balance

Non-depreciable capital assets: Land 679,841$ - - 679,841

Total non-depreciable capital assets 679,841 - - 679,841

Depreciable capital assets: Building and improvements 4,534,758 - - 4,534,758 Equipment 2,051,884 55,015 (165,855) 1,941,044 Vehicles 2,671,680 478,659 (336,000) 2,814,339

Total depreciable capital assets 9,258,322 533,674 (501,855) 9,290,141

Total capital assets 9,938,163 533,674 (501,855) 9,969,982

Accumulated depreciation: Building and improvements 3,257,294 80,074 3,337,368 Equipment 1,892,686 53,661 (165,855) 1,780,492 Vehicles 1,364,364 163,990 (320,717) 1,207,637

Total accumulated depreciation 6,514,344 297,725 (486,572) 6,325,497

Capital assets, net of accumulated depreciation 3,423,819$ 235,949 (15,283) 3,644,485

Current year depreciation is allocated to expenditures as follows:

Fire Protection $ 188,900 Ambulance Services 108,825 Total depreciation $ 297,725

The District’s significant capital purchases included: E-One Pumper $ 397,019 Ambulance Rechassis 81,640 Defibrillator 31,716


26

NOTE 9: LEASE AGREEMENTS

On October 14, 2015, the District entered into a lease agreement with Lenovo Financial Services for the purchase of computer equipment in the amount of $43,920. Although the District will exercise the purchase option at the end of the lease, the individual equipment is less than the District’s capital threshold of $5,000. Therefore, the lease is an operating lease. Terms are as follows: Lessor: Lenovo Financial ServicesAmount: 43,920$ Term: 4 yearsPay Frequency: AnnuallyLease Payment: 12,441$ Interest: 5,843$ Description: Computers and Docking Stations for Vehicles

NOTE 10: FUND BALANCE – GASB 54 PRESENTATION

According to Government Accounting Standards, fund balances are to be classified into five major classifications: Non-spendable Fund Balance, Restricted Fund Balance, Committed Fund Balance, Assigned Fund Balance, and Unassigned Fund Balance. Below are definitions of the differences of how these balances are reported. A. Non-spendable Fund Balance

The non-spendable fund balance classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, for example inventories and prepaid amounts. Due to the modified cash basis nature of the District, there are no inventories or prepaid amounts reported.

B. Restricted Fund Balance

The restricted fund balance classification refers to amounts that are subject to outside restrictions, not controlled by the entity. Things such as restrictions imposed by creditors, grantors, contributors, or laws and regulations of other governments, or imposed by law through constitutional provisions or enabling legislation. Special Revenue Funds are by definition restricted for these specified purposes. The District has several revenue sources received within different funds that also fall into these categories:

For the Year Ended December 31, Amount

2017 12,441$ 2018 12,441

Total 24,882$

Future Obligations


27

NOTE 10: FUND BALANCE – GASB 54 PRESENTATION- (Continued)

B. Restricted Fund Balance – (Continued)

1. Social Security Cash disbursed and the related cash receipts of this restricted tax levy are accounted for in the Social Security & Medicare Fund. Expenditures disbursed exceeded revenues received for this purpose, resulting in a restricted fund balance of $45,407.

2. Tort Cash disbursed and the related cash receipts of this restricted tax levy are accounted for in the Tort Fund. As of December 31, 2016, the District has $467,048 restricted for the use of tort (insurance) related expenditures.

3. Audit Cash disbursed and the related cash receipts of this restricted tax levy are accounted for in the Audit Fund. As of December 31, 2016, the District has $7,123 restricted for the use of audit/accounting related expenditures.

4. Firefighters’ Pension Cash disbursed and the related cash receipts of this restricted tax levy are accounted for in the Pension Fund. As of December 31, 2016, the District’s Firefighter’s Pension Fund had a zero balance.

C. Committed Fund Balance

The committed fund balance classification refers to amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision making authority (the Board). Those committed amounts cannot be used for any other purpose unless the government removes or changes the specified use by taking the same type of formal action it employed to previously commit those amounts.

The Board commits fund balance by making motions or passing resolutions to adopt policy or to approve contracts. Committed fund balance also incorporates contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.

D. Assigned Fund Balance

The assigned fund balance classification refers to amounts that are constrained by the government’s intent to be used for a specific purpose, but are neither restricted nor committed. Intent may be expressed by (a) the Board itself or (b) the finance committee or by the Fire Chief when the Board has delegated the authority to assign amounts to be used for specific purposes. The District’s Ambulance Fund has a fund balance of $711,080 which is assigned for the purpose of ambulance and emergency response related expenditures.


28

NOTE 10: FUND BALANCE – GASB 54 PRESENTATION- (Continued)

E. Unassigned Fund Balance

The unassigned fund balance classification is the residual classification for amounts in the General Funds for amounts that have not been restricted, committed, or assigned to specific purposes within the General Fund.

F. Expenditures of Fund Balance

Unless specifically identified, expenditures act to reduce restricted balances first, then committed balances, next assigned balances, and finally act to reduce unassigned balances. Expenditures for a specifically identified purpose will act to reduce the specific classification of fund balance that is identified.

NOTE 11: INTERFUND TRANSFERS

During the course of normal operations, the District has transactions between funds including expenditures and transfers of resources primarily to provide services. The governmental fund financial statements generally reflect such transactions as transfers if interfund. The District made one routine transfer during the 2016 fiscal year. A permanent transfer of $13,514 was made from the General Fund to the Pension Fund for the District portion of employee pension benefits not funded by the pension property tax levy.

OTHER INFORMATION

SCHEDULE A-1

29

Cash 492,047$

Total Assets 492,047$

Unassigned Fund Balance 492,047$

Total Fund Balance 492,047$

Fund Balance

December 31, 2016

Assets

HOMER TOWNSHIP FIRE PROTECTION DISTRICTGENERAL FUND

Statement of Assets, Liabilities and Fund BalanceArising from Cash Transactions

SCHEDULE A-2 (CONTINUED)

30

Original & FinalAppropriations 2016 2015

Revenues received: Property taxes 2,365,000$ 2,177,217 2,118,765 Illinois replacement taxes 13,000 16,668 18,810 Interest income 1,200 7,344 1,139 Miscellaneous income 5,000 4,903 1,425 Mokena agreement 5,000 5,000 5,000 Insurance reimbursements 5,000 150 13,113 Inspection/permit fees 8,000 23,951 26,318 Impact fees 5,000 12,750 10,500 Marian Village 200,000 225,376 208,773 Grant income 450,000 - - Salary reimbursements 5,000 47,147 39,841 Plan review fees 3,000 - -

Total revenues received 3,065,200 2,520,506 2,443,684

Expenditures disbursed:Administrative: Trustee salaries 16,200 11,750 12,000 Commissioners salaries 5,400 4,500 4,500 Part time Treasurer 6,300 5,250 5,250 Electric 16,200 14,078 13,688 Cable/internet & station alert 4,080 2,584 2,504 Heat 13,200 3,830 5,142 Telephone 13,800 9,802 11,587 Water/sewer 5,400 4,776 4,530 Legal services 6,000 - - Garbage disposal 2,520 1,917 1,874 Plan Review 3,000 - - Building supplies 5,400 3,413 2,846 Fees, dues & subscriptions 7,800 5,673 5,740 Conferences 7,800 1,256 3,435 Office supplies 2,640 2,259 2,277 Computers and office equipment 30,000 - 1,195 Software support and license fees 9,600 8,284 6,429 Publishing & printing 1,920 1,521 1,016 Communications/computers 9,600 398 4,716 Postage 1,080 734 565 Project Engineer 3,000 - - Miscellaneous 4,800 1,308 8,321 Contingency 12,000 - -

December 31,Year Ended


Statement of Revenues Received, Expenditures Disbursedand Changes in Fund Balance - Budget & ActualFor the Year Ended December 31, 2016(with comparative figures for December, 2015)


31





Expenditures disbursed: (continued)Fire Protection: Full time salaries 1,794,000$ 1,558,024 1,558,303 Part time salaries 6,000 3,249 3,897 Health insurance 474,000 355,291 354,876 Testing 10,200 10,240 804 Overtime pay 306,000 287,985 258,747 Holiday pay 100,800 84,455 85,892 IPPFA 13,200 10,550 9,396 Flex plan - - 529 Equipment maintenance 7,800 2,491 2,728 Training 12,000 12 1,814 Building/grounds 18,000 11,735 11,240 Building repair 60,000 - - Addition & remodel 60,000 - - Station property 1,200 - - Station building 1,200 - - Atmospheric monitoring 1,200 - - Honor guard 1,200 - - Fuel 21,600 10,929 15,129 Fire Prevention Bureau 7,800 1,301 1,468 Portable equipment 1,800 - 28 Hazmat 1,200 - 25 Water rescue 1,200 - - TRT 1,200 - - Uniforms 16,800 12,835 17,022 Capital Outlay 2,300,400 397,019 - Debt Service Tax anticipation warrant - principal - 500,000 - Tax anticipation warrant - interest - 3,375 - General obligation bond - principal - 94,586 90,774 General obligation bond - interest - 42,388 41,451 Total expenditures disbursed 5,406,540 3,469,798 2,551,738


32





Excess of revenues received over(under) expenditures disbursed (2,341,340)$ (949,292) (108,054)

Other Financing Sources (Uses): Sales of assets: Building 200,000 - - Equipment 276,000 24,550 6,500 Loan proceeds - tax anticipation warrant 200,000 500,000 - Capital lease proceeds - 397,019 - Transfer to Pension - (13,514) (39,883) Total Other Financing Sources (Uses) 676,000 908,055 (33,383)

Net Change in Fund Balance (1,665,340)$ (41,237) (141,437)

Fund Balance, beginning of year 533,284 674,721

Fund Balance, end of year 492,047$ 533,284

SCHEDULE B-1

33

Cash in bank 711,080$

Assigned fund balance 711,080$

Total Fund balance 711,080$

Fund balance


Assets

AMBULANCE FUND

December 31, 2016Arising from Cash TransactionsStatement of Assets, Liabilities and Fund Balance

SCHEDULE B-2 (CONTINUED)

34


Revenues received: Property taxes 2,365,000$ 2,040,052 2,118,765 Illinois replacement taxes 13,000 16,668 18,810 Interest income 1,200 701 1,010 Mokena agreement 5,000 5,000 5,000 Reimbursements 4,000 47,147 39,841 Ambulance fees 380,000 524,795 488,352 Miscellaneous income 10,000 298 250


Expenditures disbursed:Administrative Electric 16,200 14,078 13,688 Cable/internet & station alert 4,080 2,585 2,504 Utilities 13,200 3,830 5,142 Telephone 13,800 9,801 11,587 Water & sewer 5,400 4,776 4,530 Software support & license fees 9,600 8,285 6,429 Legal 6,000 - - Garbage disposal 2,520 1,916 1,874 Computers and equipment 9,600 398 4,716 Fees and dues 7,800 5,693 5,740 Contingency 12,000 - - Miscellaneous 3,600 172 1,787 Ambulance Services: Full time salaries 1,794,000 1,558,022 1,559,511 Part time salaries 6,000 3,249 3,897 Health insurance 474,000 355,291 362,078 Overtime pay 306,000 287,985 258,747 Holiday pay 100,800 84,455 85,892 IPPFA 13,200 10,550 9,396 Flex plan - - 529 Equipment maintenance 7,800 2,491 2,728 Building & grounds maintenance 18,000 11,046 11,240 Building & grounds supplies 5,400 3,413 2,846 Ambulance service charge 30,000 30,623 31,082


HOMER TOWNSHIP FIRE PROTECTION DISTRICTAMBULANCE FUND

Statement of Revenues Received, Expenditures Disbursedand Changes in Fund Balance - Budget & ActualFor the Year Ended December 31, 2016(with comparative figures for December 31, 2015)

SCHEDULE B-2 (CONTINUED)

35



HOMER TOWNSHIP FIRE PROTECTION DISTRICTAMBULANCE FUND

Statement of Revenues Received, Expenditures Disbursedand Changes in Fund Balance - Budget & ActualFor the Year Ended December 31, 2016(with comparative figures for December 31, 2015)

Expenditures disbursed: (continued) Testing 10,200$ 10,240 804 Collection fees 2,400 121 367 Public education 7,800 1,301 1,468 Office supplies 2,640 2,259 2,277 Postage 1,080 734 565 Fuel 21,600 10,929 15,129 Uniforms 16,800 12,911 16,933 Ambulance 120,000 81,760 192,911 Equipment 180,000 36,242 32,836 Station property 1,200 - - Station building 1,200 - - Medical supplies & equipment 25,200 17,620 7,548

Total expenditures disbursed 3,249,120 2,572,776 2,656,781

Excess (deficiency) of revenues receivedover (under) expenditures disbursed (470,920) 61,885 15,247

Other Financing Sources (Uses): Sales of assets: Building 100,000 - - Equipment 254,000 5,000 - Total Other Financing Sources (Uses) 354,000 5,000 -

Net Change in Fund Balance (116,920)$ 66,885 15,247



36

HOMER TOWNSHIP FIRE PROTECTION DISTRICT SCHEDULE B-3


Restricted fund balance 467,048$

Statement of Revenues Received, Expenditures Disbursed SCHEDULE B-4


Revenues received: Property taxes 1,150,000$ 1,144,672 1,050,378 Grant income 250,000 19,281 287,561 Workers' compensation reimbursement 1,000 2,450 8,835


Expenditures disbursed: Legal services 36,000 50,709 23,088 EAP program 12,000 3,692 3,631 WC & liability insurance 540,000 256,963 287,224 Risk management salaries 666,000 533,353 498,002 Unemployment insurance 22,200 14,055 3,510 Safety & fitness equipment 180,000 59,637 56,223 Dispatch 138,000 95,161 92,229 Safety & training materials 24,000 4,437 6,035 Protective clothing 78,000 14,132 307,470 Annual exams 36,000 19,542 19,014 Vehicle computers 102,000 38,958 45,191 Apparatus maintenance 120,000 90,153 156,852 Building safety 180,000 34,635 27,036 Opticom 78,000 - 3,461 Safety conference & classes 66,000 13,527 11,811

Total expenditures disbursed 2,278,200 1,228,954 1,540,777

Excess (deficiency) of revenues receivedover (under) expenditures disbursed (877,200)$ (62,551) (194,003)



December 31,

Fund balance

For the Year Ended December 31, 2016

December 31, 2016

Assets

TORT FUND


Year Ended

(with comparative figures for December 31, 2015)

and Changes in Fund Balance - Budget & Actual

SCHEDULE B-5

37

Cash in bank 1,407$

Liabilities: Due to pension plan 1,407$

Fund balance: Restricted fund balance -

Total liabilities and fund balance 1,407$

SCHEDULE B-6


Revenues received: Property taxes 575,000$ 572,608 513,377

Total revenues received 575,000 572,608 513,377

Expenditures disbursed: Pension expenditures 690,000 586,122 553,260

Total expenditures disbursed 690,000 586,122 553,260

Excess (deficiency) of revenues received over (under) expenditures disbursed (115,000)$ (13,514) (39,883)

Other financing sources (uses): Transfer 13,514 39,883

Net change in fund balance - -

Fund Balance, beginning of year - -

Fund Balance, end of year -$ -

Liabilities & Fund Balance

Arising from Cash TransactionsDecember 31, 2016

Assets

(with comparative figures for December 31, 2015)For the Year Ended December 31, 2016


HOMER TOWNSHIP FIRE PROTECTION DISTRICTPENSION FUND

Statement of Revenues Received, Expenditures Disbursedand Changes in Fund Balance - Budget & Actual

Statement of Assets, Liabilities and Fund Balance

SCHEDULE B-7

38



SCHEDULE B-8




Expenditures disbursed: Social security & medicare 97,200 74,972 73,456


Excess (deficiency) of revenues received over (under) expenditures disbursed (32,200)$ (10,200) (28,432)



December 31, 2016

Assets

HOMER TOWNSHIP FIRE PROTECTION DISTRICTSOCIAL SECURITY AND MEDICARE FUND


Year Ended

(with comparative figures for December 31, 2015)

and Changes in Fund Balance - Budget & Actual

December 31,

Fund balance

Statement of Revenues Received, Expenditures Disbursed

For the Year Ended December 31, 2016

SCHEDULE B-9

39

HOMER TOWNSHIP FIRE PROTECTION DISTRICTAUDIT FUND

Statement of Assets, Liabilities and Fund BalanceArising from Cash TransactionsDecember 31, 2016

Cash in bank 7,123$


SCHEDULE B-10Statement of Revenues Received, Expenditures Disbursedand Changes in Fund Balance - Budget & ActualFor the Year Ended December 31, 2016(with comparative figures for December 31, 2015)




Expenditures disbursed: Publishing and filing fees 600 181 178 Audit fees 7,800 5,750 5,550


Excess (deficiency) of revenues received over (under) expenditures disbursed (2,900)$ 57 1,688



Assets

Fund balance

Year EndedDecember 31,

SCHEDULE 1

40

HOMER FIRE PROTECTION DISTRICT PENSION FUND

December 31, 2016

Fiscal Year

Actuarially Determined Contribution

Contributions in Relation to the Actuarially Determined Contribution

Contribution Excess/

(Deficiency)

Covered-Employee

Payroll

Contributions as a

Percentage of Covered-Employee

Payroll2016 $ 526,576 546,303 19,727 3,514,164 15.55%2015 426,540 510,201 83,661 3,504,103 14.56%2014 429,712 490,968 61,256 3,569,494 13.75%

Actuarial Cost Method Entry Age NormalAmortization Method Level % Pay (Closed)Remaining Amortization Period 20 YearsAsset Valuation Method Market ValueInflation 2.50%Salary Increases 3.25% AggregateInvestment Rate of Return 6.50%Retirement Age See the Notes to the Basic Financial StatementsMortality 2016 Illinois Firefighters Mortality Rate

Note:This schedule is intended to show information for ten years and additional year's information will be displayed as it becomes available.

Other InformationSchedule of Employer Contributions

Notes to Schedule of Employer Contributions:

SCHEDULE 2

41

HOMER FIRE PROTECTION DISTRICT PENSION FUND

December 31, 2016

2016 2015 2014

Total Pension LiabilityService Cost 1,074,037$ 1,274,582 1,180,912 Interest 949,769 806,963 626,893 Changed in Benefit Terms - - - Difference between Expected and Actual Experience (282,684) (569,783) 566,204 Change of Assumptions (1,285,815) 778,544 434,936 Benefit Payments, Including Refunds of Member Contributions (134,566) (52,037) (25,237)

Net Change in Total Pension Liability 320,741 2,238,269 2,783,708 Total Pension Liability - Beginning 14,679,108 12,440,839 9,657,131

Total Pension Liability - Ending 14,999,849$ 14,679,108 12,440,839

Plan Fiduciary Net PositionContributions - Employer 546,303$ 510,201 490,968 Contributions - Members 337,477 357,436 327,531 Other Income 611,932 1,069 464,449 Net Investment Income (134,566) 99,388 (25,237) Benefit Payments, Including Refunds of Member Contributions (41,894) (52,037) (19,300) Administrative Expense - (38,755) -

Net Change in Plan Fiduciary Net Position 1,319,252 877,302 1,238,411 Plan Fiduciary Net Position - Beginning 9,296,722 8,419,420 7,181,009

Plan Fiduciary Net Position - Ending 10,615,974$ 9,296,722 8,419,420

Net Pension Liability (Asset) 4,383,875$ 5,382,386 4,021,419

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 70.77% 63.33% 67.68%

Covered-Employee Payroll 3,514,164$ 3,504,103 3,569,494

Employer's Net Pension Liability as a Percentage of the Covered Valuation Payroll 124.75% 153.60% 112.66%

Note:

Other InformationSchedule of Changes in the Employer's Net Pension Liability

This schedule is intended to show information for ten years and additional year's information will be displayed as itbecomes available.

NOTES TO OTHER INFORMATION

HOMER TOWNSHIP FIRE PROTECTION DISTRICT Notes to Other Information For the Year Ended December 31, 2016

42

NOTE 1: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY

A. Budgets and Budgetary Accounting

The District follows these procedures in establishing the budgetary data reflected in the financial statements:

1. During September or October, the District Board prepares a Tentative

Combined Annual Budget and Appropriation Ordinance for the fiscal year commencing January 1. The operating budget includes proposed expenditures and the means of financing them.

2. Public hearings are conducted at a public meeting to obtain taxpayer comments.

3. Prior to December 31, the Annual Budget and Appropriation Ordinance is legally adopted through passage of an Ordinance.

4. District Board may transfer up to 10% of the total Appropriation between various items within any fund.

5. The District Board may amend the budget, (in other ways) by the same

procedures required of its original.

6. The Budget is prepared on the cash basis of accounting. Budgets lapse at year-end.

7. The 2016 Budget and Appropriation Ordinance was adopted by the Board on November 2, 2015 and was not amended.

Budgeted amounts used for comparison in this report are obtained from the Annual Budget and Appropriation Ordinances for the District. The Appropriation amounts included in the financial statements are the final adopted Appropriations, including all amendments.

HOMER TOWNSHIP FIRE PROTECTION DISTRICT Notes to Other Information For the Year Ended December 31, 2016

43

NOTE 1: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY-(Continued)

A. Budgets and Budgetary Accounting-(Continued)

NOTE 2: EXPENDITURES IN EXCESS OF APPROPRIATIONS

The District operated within the confines of the approved budget during the year ended December 31, 2016. On an individual basis, none of the funds over-expended the appropriated amount.

Description Budget Actual VariancePercent Variance

General Fund 5,406,540$ 3,469,798 1,936,742 36%

Ambulance Fund 3,249,120 2,572,776 676,344 21%

Tort Fund 2,278,200 1,228,954 1,049,246 46%

Pension Fund 690,000 586,122 103,878 15%

Social Security and Medicare Fund 97,200 74,972 22,228 23%

Audit Fund 8,400 5,931 2,469 29%

SUPPLEMENTAL INFORMATION

SCHEDULE 3

44

December 31, 2015 Receipts Disbursements

December 31, 2016

Foreign Fire Fund 12,950$ 11,695 13,636 11,009

Total 12,950$ 11,695 13,636 11,009

December 31, 2016

HOMER TOWNSHIP FIRE PROTECTION DISTRICTFOREIGN FIRE FUND

Statement of Changes in Assets & Liabilities

SCHEDULE 4

45


Assessed Valuation, Tax Rates, Tax Extensions and Tax Collections

2011 2012 2013 2014 2015

Assessed valuations 606,005,892$ 561,547,516 537,115,014 529,691,336 547,083,936

Tax rates: General 0.4000 0.3989 0.4000 0.4000 0.4000 Ambulance 0.3000 0.2991 0.4000 0.4000 0.3748 Liability Insurance 0.1313 0.2486 0.2048 0.1983 0.2103 Fire Pension 0.0698 0.0630 0.0894 0.1011 0.1052 Audit 0.0010 0.0011 0.0013 0.0014 0.0011 Social Security 0.0166 0.0178 0.0047 0.0085 0.0119

Totals 0.9187 1.0285 1.1002 1.1093 1.1033

Tax Extensions: General 2,424,024$ 2,240,013 2,148,460 2,118,765 2,188,336 Ambulance 1,818,018 1,679,589 2,148,460 2,118,765 2,050,471 Liability Insurance 795,686 1,396,007 1,100,012 1,050,378 1,150,518 Fire Pension 422,992 353,775 480,181 535,518 575,532 Audit 6,060 6,177 6,982 7,416 6,018 Social Security 100,597 99,955 25,244 45,024 65,103

Totals 5,567,376$ 5,775,516 5,909,339 5,875,866 6,035,977

Tax Collections 5,726,505$ 5,746,619 5,890,810 5,853,725 6,005,309

Tax Levy Year

Documents

HOMER TOWNSHIP FIRE PROTECTION DISTRICT ... - Speer … FS Final_2016.pdf · Management is responsible for the preparation and fair presentation of these financial statements in accordance