CITY OF COUNTRYSIDE, ILLINOIS COMPREHENSIVE ANNUAL

CITY OF COUNTRYSIDE, ILLINOIS

COMPREHENSIVE ANNUALFINANCIAL REPORT

For the Year Ended April 30, 2008

Prepared byThe City of Countryside Finance Department

CITY OF COUNTRYSIDE, ILLINOISTABLE OF CONTENTS

Page(s)

INTRODUCTORY SECTION

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

Organizational Chart ..................................................................................................... ii

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

Letter of Transmittal..................................................................................................... iv-viii

FINANCIAL SECTION

INDEPENDENT AUDITOR’S REPORT..................................................................... 1-2

GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS

Management’s Discussion and Analysis ................................................................ MD&A 1-12

Basic Financial Statements

Government-Wide Financial Statements

Statement of Net Assets.................................................................................. 3Statement of Activities .................................................................................... 4-5

Fund Financial Statements

Governmental Funds

Balance Sheet ............................................................................................ 6Reconciliation of Fund Balances of Governmental Funds to the Governmental Activities in the Statement of Net Assets ........................... 7

Statement of Revenues, Expenditures and Changes in Fund Balance........... 8Reconciliation of the Governmental Funds Statement of Revenues,

Expenditures and Changes in Fund Balance to the GovernmentalActivities in the Statement of Activities .................................................... 9

Proprietary Funds

Statement of Net Assets ............................................................................. 10Statement of Revenues, Expenses and Changes in Net Assets..................... 11Statement of Cash Flows............................................................................ 12-13

CITY OF COUNTRYSIDE, ILLINOISTABLE OF CONTENTS (Continued)

Page(s)

FINANCIAL SECTION (Continued)

GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS (Continued)

Basic Financial Statements (Continued)

Fund Financial Statements (Continued)

Fiduciary Funds

Statement of Fiduciary Net Assets.............................................................. 14Statement of Changes in Fiduciary Net Assets ............................................ 15

Notes to Financial Statements.............................................................................. 16-36

Required Supplementary Information

Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual

General Fund .................................................................................................. 37Hotel/Motel Tax Fund..................................................................................... 38

Notes to Required Supplementary Information..................................................... 39Schedule of Funding Progress

Illinois Municipal Retirement Fund.................................................................. 40Police Pension Fund........................................................................................ 41

Schedule of Employer ContributionsIllinois Municipal Retirement Fund.................................................................. 42Police Pension Fund........................................................................................ 43

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

MAJOR GOVERNMENTAL FUND

Schedule of Revenues - Budget and Actual - General Fund.................................. 44-45Schedule of Expenditures - Budget and Actual - General Fund............................. 46-52


Page(s)

FINANCIAL SECTION (Continued)

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES (Continued)

NONMAJOR GOVERNMENTAL FUNDS

Combining Balance Sheet .................................................................................... 53Combining Statement of Revenues, Expenditures and

Changes in Fund Balances.................................................................................. 54Schedule of Revenues, Expenditures and

Changes in Fund Balances - Budget and ActualEmergency Telephone System Fund ................................................................ 55Motor Fuel Tax Fund...................................................................................... 56Asset Seizure Fund ......................................................................................... 57

PROPRIETARY FUNDS

MAJOR ENTERPRISE FUNDS

Schedule of Revenues, Expenses and Changes in Net Assets - Budget and Actual - Water Fund................................................................... 58

Schedule of Operating Expenses - Budget and Actual - Water Fund................................................................................................... 59-60

Schedule of Revenues, Expenses and Changes in Net Assets - Budget and Actual - Sanitary Sewer Fund ..................................................... 61

Schedule of Operating Expenses - Budget and Actual - Sanitary Sewer Fund ..................................................................................... 62

STATISTICAL SECTION

Financial TrendsNet Assets by Component ................................................................................... 63Changes in Net Assets......................................................................................... 64-65Fund Balances of Governmental Funds................................................................ 66Changes in Fund Balances of Governmental Funds .............................................. 67

Revenue CapacitySales Tax by Category......................................................................................... 68Direct and Overlapping Sales Tax Rates .............................................................. 69


Page(s)

STATISTICAL SECTION (Continued)

Debt CapacityRatios of Outstanding Debt by Type.................................................................... 70Ratios of General Bonded Debt Outstanding ....................................................... 71Direct and Overlapping Bonded Debt .................................................................. 72Schedule of Legal Debt Margin ........................................................................... 73

Demographic and Economic InformationDemographic and Economic Information............................................................. 74Principal Employers............................................................................................. 75

Operating InformationFull-Time Equivalent Employees ......................................................................... 76Operating Indicators............................................................................................ 77Capital Assets Statistics....................................................................................... 78

- i-

CITY OF COUNTRYSIDE

List of Principal Officials

Year Ended April 30, 2008

City Council

Mayor

Robert A. Conrad

Alderman

Sean McDermott Karen Michalczyk

Robert J. Pondelicek Michael R. Smetana

Wayne Straza John Von Drasek

Officials

City Clerk City Treasurer Sharon Sweeney Steven W. Jasinski

City Administrator Director of Finance Edward Bailey Gail Paul

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October 14, 2008 Honorable Mayor, City Council, City Administrator, and The Citizens of City of Countryside, Illinois The Comprehensive Annual Financial Report (CAFR) of the City of Countryside, Illinois for the fiscal year ended April 30, 2008 is hereby submitted. This report fulfills state laws requiring general-purpose local governments to publish a complete set of audited financial statements at the end of each fiscal year. This report provides a wide view of the City’s financial activities for the 2008 fiscal year. Although addressed to the elected officials and citizens of the City, this report has a number of other users. Foremost among these users are bondholders, financial institutions, credit rating agencies, educational institutions, and other governmental agencies. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures rests with the City. To the best of my knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner that presents fairly the financial position and results of operations of the various funds. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities are included. State Statutes require an annual audit by independent certified public accountants. The accounting firm of Sikich LLP was selected by the City. The independent auditors' report is included in the financial section of this report. The financial reporting entity defines what operations are considered to be part of the City for external financial reporting purposes. The Governmental Accounting Standards Council (GASB) Statement No. 14, Defining the Financial Reporting Entity, establishes the criteria used to define the reporting entity and the method of displaying component units if any. The GASB is an organization that establishes accounting and financial reporting standards for state and local governments in the United States. GASB Statement No. 34 significantly changed the required format for governmental statements in a number of ways. The most significant of these changes required that governments prepare entity-wide financial statements in addition to the fund-based financial statements that governments have traditionally prepared. The goal is to present the financial position of a government and results of its operations in a manner similar to that of a business. More information about this new financial reporting model is provided in the Management’s Discussion and Analysis (MD&A), located in the Financial Section of this report.

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Profile of the Government The City of Countryside was incorporated in 1960. It is located in Cook County, approximately 15 miles southwest of Chicago, Illinois. The City is home to a population of 5,818 residents and over 400 businesses. This strong sales tax base has allowed the City to pay for operations without the imposition of a municipal real estate tax. The City of Countryside is a home-rule community as defined by the Illinois Constitution. As a home-rule community the City may exercise any power and perform any function pertaining to its government and affairs. The City operates under a City Administrator form of government. Six Aldermen are elected from three wards for alternating four-year terms, three elected every two years. The Mayor, City Clerk and Treasurer are elected at large for four-year terms. A professional Administrator manages the daily operations and is appointed by the Mayor and approved by the City Council. The City provides many services including police protection, streets and highways, water distribution, public improvements, planning and zoning, recreation, and general administrative services. Fire services are provided by the Pleasantview Fire Protection District, a separate taxing body. The City has 60 full-time employees. The financial reporting entity of the City of Countryside is comprised of all the funds of the primary government (i.e., the City of Countryside as legally defined). It has no component units. The City Council is required to adopt a final budget no later than the close of the fiscal year. Annual appropriated budgets are adopted at the fund level for all funds except the Police Pension Fund. The annual appropriated budget is legally enacted and provides for a legal level of control at the fund level. All annual appropriations lapse at fiscal year end. Local Economy The City has experienced a slow down in the local economy similar to what has been the experience in the State and the Country. The number of permits and permit revenue has declined by 12% and 31% respectively. The construction slowdown in Countryside is similar to the slowdowns being felt across the country. Permit requests for new construction have been minimal. However, the City is still receiving permit requests for remodeling and additions to existing facilities. The City has relied upon the sales tax generated by its 11 car dealerships with 13 brands for many years. During this fiscal year however, the City’s Dodge, Lincoln Mercury, and Pontiac GMC dealerships have closed. This has created vacancies on the City’s major thoroughfare, LaGrange Road. Despite these closings, the City’s share of state sales tax revenue kept pace with the prior year.

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State shared sales tax revenue is the City’s number one revenue source. Over 400 businesses within our community have produced sales of over $600 million in the past calendar year, contributing over $6 million in sales tax revenue. In addition the City Council adopted a .25% home-rule sales tax effective January 1, 2007. This tax contributed over $700,000 of additional revenue to the general fund operations. The City Council strongly supports economic development efforts to preserve its sales tax base. The City currently has four sales tax incentive agreements in place and is contemplating one more. Rebates were only paid out on one of these agreements this year as the others did not meet the rebate criteria. Long-Term Financial Planning The City has enjoyed a favorable tax base over the years. The significant sales tax generated within our community has been adequate to run operations without the need for a property tax. However, with the closing of dealerships and the slowdown in the economy, the City is exploring new revenue options. The City maintains an aggressive economic development strategy to preserve the favorable economic base currently enjoyed by the City. The City hired a new Community Development Director last fiscal year to be proactive and responsive to the needs of our business community. The City Council also created an economic development committee this year to address the issues facing our City. Relevant Financial Policies The City’s investment policy authorizes the City to invest in all investments allowed by Illinois Compiled Statutes. Cash temporarily idle during the year was invested in demand deposits, certificates of deposit, the Illinois State Treasurer’s Investment Pool-Illinois Funds, and the Illinois Metropolitan Investment Fund (“IMET”). The maturities on the investments range from being immediately accessible to 2 to 3 years for IMET. It is the policy of the City to invest its funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash demands. The policy also requires the pledging of collateral for all bank balances in excess of the federal depository insurance in an amount not less than 110% of the fair market value. The City participates in the Intergovernmental Risk Management Agency (“IRMA”). IRMA is a risk sharing pool of over 75 local municipalities and special service districts in northeastern Illinois, which have joined together to manage and fund their property, liability, and workers’ compensation claims. The City is responsible to pay the first $2,500 of each occurrence. IRMA also provides comprehensive safety, loss control, and training services to its members.

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Major Initiatives For the Year. The City made a commitment to improve its water distribution system throughout the City. The improvements to date include a new emergency back-up generator, replacement of the primary water supply line and master meter vault, water main replacements, and pump house improvements. This project will continue through the next fiscal year. Economic development continues to be a top priority of the City Council. Five vacancies on large parcels of property on the City’s major thoroughfare are offering opportunities for future development. The City currently owns and is marketing one of these parcels. In addition, the closing of car dealerships has provided the Honda and Nissan dealerships the ability to expand their operations. The City repurchased the 3.0 acre parcel of property it previously sold to the Autobarn for the construction of a new dealership. The Autobarn group has proposed relocating the current Mazda dealership to the 5 acre site vacated by the Pontiac GMC dealership. In addition, the Autobarn Group will be remodeling their VW dealership including a 19,000 square feet expansion, and will purchase the existing Subaru dealership to keep it in Countryside. The City was negotiating a redevelopment contract with the Autobarn Group at fiscal year end. These projects will continue into next fiscal year. Salem Square shopping center is currently being redeveloped. Phase I includes complete facade renovations to the 110,000 square foot shopping center, which is anchored by one of the City’s top ten sales tax generators, TJ Maxx. Phase II includes the construction of two out buildings, parking, drainage, and landscaping improvements. Phase II is scheduled to be completed in the spring, 2010. For the Future. The City was awarded a grant in the amount of $842,000 from the Illinois Transportation Enhancement Program. The City will provide matching funds of a similar amount. These funds will be used for parkway landscaping, street furniture, signs, decorative paving, and lighting enhancements along LaGrange Road between Joliet Road and 55th Street. This project is scheduled for next fiscal year. The City Council approved a $15 million senior citizen assisted housing facility. This facility will be owned jointly by the Illinois Facilities Fund and Lyons Township. Construction is scheduled to begin in the spring, 2009. The City Council adopted Business District #1 on July 10, 2008. The purpose of the business district is to promote commercial development within the community. In conjunction with the business district, the City Council also authorized the issuance of $19 million of Taxable General Obligation Bonds to finance property assembly, land improvements, public improvements including utility relocation, landscaping, signage, and certain park improvements which are unrelated to the business district. The City has purchased two parcels of property within the district and is in the process of negotiating the purchase of a third. The Economic Development Committee will be making a recommendation to enter into a redevelopment agreement with a developer to achieve the goals of the business district. This project is in its infancy and will continue for several years.

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The City maintains and oversees ten neighborhood parks and tot-lots. The City Council has taken action to review its parks and prepare an improvement plan. First, the City updated its Open Space Master Plan in 2007. Secondly, the City hired an architect to review the parks and make recommendations for safety and aesthetic improvements. The City has included $244,000 of improvements to three of its parks in next year’s budget. These improvements will include new equipment, safety surfacing, and landscaping. The City completed a space needs analysis of its current City Hall/Police Department. The City will be considering options of building a new facility or remodeling the existing facility to meet the needs of the staff as well as our residents. Awards and Acknowledgements The City of Countryside was awarded the Government Finance Officers Association of the United States and Canada (GFOA) Certificate of Achievement for Excellence in Financial Reporting for the first time for the year ended April 30, 2007. In order to be awarded a Certificate of Achievement, the City of Countryside must publish an easily readable and efficiently organized comprehensive annual financial report whose contents conform to program standards. The Certificate of Achievement is the highest form of recognition for excellence in state and local government financial reporting. A Certificate of Achievement is valid for only one year. I believe the City's comprehensive annual financial report for the fiscal year ended April 30, 2008 meets the Certificate of Achievement Program's requirements, and I am submitting it to the GFOA to determine its eligibility for this certificate. In closing, I would like to express my sincere gratitude to the Finance Department staff that directly assisted and contributed to the preparation of the Comprehensive Annual Financial Report. I also wish to express my appreciation to the Mayor, City Council, and the City Administrator for their leadership and continued support which made the preparation of this report possible. Respectfully submitted,

Gail Paul Director of Finance

GENERAL PURPOSE EXTERNAL FINANCIAL STATEMENTS

CITY OF COUNTRYSIDE, ILLINOIS MANAGEMENT’S DISCUSSION & ANALYSIS

April 30, 2008

(See independent auditor’s report)

MD&A - 1

As the financial management of the City of Countryside (“City”), we offer readers a discussion and analysis of the City’s financial performance that provides an overview of the financial activities, and identifies changes in the City’s financial position for the years ended April 30, 2008 and April 30, 2007. Please read in conjunction with the City’s financial statements, which begins on page 3 of the Financial Statements and Independent Auditor’s Report for the fiscal year ended April 30, 2008. FINANCIAL HIGHLIGHTS

• The City’s net assets as a result from operations are $45,736,439 for fiscal year ended April 30, 2008. Governmental net assets are $30,806,421 and business-type activities are $14,930,018.

• During the year, the City had Governmental revenues generated in

tax and other governmental programs, including net transfers, totaling $10,795,321 and expenses totaling $9,588,402, resulting in a decrease in net assets of $1,206,919.

• In the City’s business-type activities, revenues, including net

transfers, were $3,062,524 and the expenses were $2,932,816 resulting in an increase in net assets of $129,708.

• The total costs of all City programs were $12,521,218 or 90% of

revenues. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) City-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements.

USING THE FINANCIAL SECTION OF THIS COMPREHENSIVE ANNUAL REPORT

The financial statement’s focus is on the City as a whole and on the major individual funds. Both perspectives allow the readers to address relevant questions, broaden the basis for comparison and enhance the reader’s understanding of the statements.


April 30, 2008


MD&A - 2

City-wide Financial Statements The City-wide financial statements are designed to be corporate like. Governmental and business type activities are consolidated into columns, which add to a total for the City as a whole. The Statement of Net Assets combines and consolidates governmental funds, current financial resources with capital assets and long term obligations. It uses the accrual basis of accounting and economic resources measurement focus. The Statement of Net Assets can be found on page 3 of this report. The Statement of Activities is focused on both the growth and net costs of various activities. These activities are supported by the government’s general taxes and other resources. This is intended to summarize and simplify the users’ analysis of the costs of various governmental services. The Statement of Activities can be found on pages 4 to 5 of this report. The governmental activities reflect the City’s basic services, which are general government, public safety, highways and streets, and culture and recreation. Shared state sales and income taxes, hotel taxes, and other taxes finance the majority of these services. The City does not levy property taxes. The business type activities reflect private sector type operations where the fee for service covers most of the costs of operation including depreciation. The City’s water and sewer user fees finance the majority of these services. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Traditional users of governmental financial statements will find the fund financial statements presentation more familiar. The focus is on major funds rather than fund types. The governmental fund presentation is presented on a sources and uses of liquid resources (cash & cash equivalents) basis. This is the manner in which the financial plan is usually developed. The flow and availability of liquid resources is a clear and appropriate focus of any analysis of the government. Funds are established for various purposes and the fund financial statements allow the demonstration of sources and uses and/or budgeting compliance associated therewith.


April 30, 2008


MD&A - 3

While the total column of the enterprise funds financial statements is the same as the business type column on the City-wide financial statements, the governmental funds total column requires reconciliation because of the different measurement focus (current financial resources versus total economic resources) which is reflected on the page following each statement. The flow of current financial resources will reflect bond proceeds and interfund transfers as other sources and uses as well as capital expenditures and bond principal payments as expenditures. The reconciliations eliminate these transactions and incorporate the capital assets and long term obligations into the governmental activities column in the City-wide statements. The fund financial statements can be found on pages 6 to 13 of this report. The City as Trustee The City is the trustee, or fiduciary, for its police pension plan. All of the City’s fiduciary activities are reported in a separate Statement of Fiduciary Net Assets and Statement of Changes in Fiduciary Net Assets. The City excludes these activities from the City’s other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that assets reported in this fund are used for their intended purposes. The fiduciary financial statements can be found on pages 14 and 15 of this report. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the information provided in the City-wide and fund financial statements. The notes to the financial statements are located directly after the financial statements. Other Information In addition to the basic financial statements this report also includes certain required supplementary information related to budgetary information and the City’s progress in funding its obligation to provide pension benefits to its employees. Non-major fund information can be found immediately following the required supplementary information.


April 30, 2008


MD&A - 4

CITY-WIDE STATEMENTS & ANALYSIS GOVERNMENTAL ACTIVITIES Statement of Net Assets The following chart reflects the condensed Statement of Net Assets:

CONDENSED STATEMENT OF NET ASSETS AS OF APRIL 30

Governmental Governmental Increase Activities Activities (Decrease)

(in thousands) 2008 2007 Assets:

Current Assets $ 15,291 $ 15,819 $ (528) Non-Current Assets 19,720 17,756 1,964

Total assets 35,011 33,575 1,436 Liabilities:

Current Liabilities 2,592 2,101 491 Non-Current Liabilities 1,612 1,874 (262)

Total liabilities 4,204 3,975 229 Net assets:

Investment in Capital Assets, Net of Related Debt 18,260 15,856 2,404

Restricted Assets 995 690 305 Unrestricted 11,551 13,053 (1,502) Total Net Assets $ 30,806 $ 29,599 $ 1,207

The current year’s governmental activities left the City with $30.8 million in net assets, of which $18.2 million is invested in capital assets (net of related debt), $1 million is restricted for highway and streets and public safety, and $11.6 million is unrestricted. Overall, net assets have increased by $1.2 million since last fiscal year. This increase is due to a number of items. First, intergovernmental receivables increased by $.4 million due to reimbursement of costs associated with the installation of a noise wall. The costs associated with this noise wall were expensed in a previous year. Secondly, cash and investment balances in the hotel/motel tax fund and the emergency telephone system fund have increased by $.4 million. Surpluses were budgeted in each fund to build balances for future projects. Lastly, prepaid expenses increased by $.2 million to recognize the City’s terminal reserve in the Intergovernmental Personnel Benefit Cooperative.


April 30, 2008


MD&A - 5

Statement of Activities Governmental activities are broken out by functional area for program revenues and expenses: General Government, Public Safety, Highway & Streets, Culture and Recreation, and Interest on Debt. General revenues are separated by taxes, intergovernmental revenues, investment earnings, gain/loss on property sale, miscellaneous revenues and transfers.

CONDENSED STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDING APRIL 30

Governmental Governmental Increase (in thousands) Activities Activities (Decrease) Revenues: 2008 2007

Program Revenues: Charges for services $ 955 $ 1,128 $ (173)Operating grants and contributions 292 266 26 Capital grants and contributions 556 8 548

General revenues: Taxes 8,115 7,650 465 Unrestricted Investment Earnings 637 645 (8)Miscellaneous Revenues 240 (49) 289

Total revenues 10,795 9,648 1,147 Expenses:

General Government 2,831 2,498 333 Public Safety 4,511 4,190 321 Highways and Streets 1,741 1,732 9 Culture and Recreation 412 779 (367)Interest on Long-Term Debt 93 116 (23)

Total expenses 9,588 9,315 273 Change in net assets before special item 1,207 333 874

Special Item -

_______(1,247) 1,247 Change in net assets 1,207 (914) 2,121 Net assets beginning of year 29,599 30,513 (914) Net assets end of year $ 30,806 $ 29,599 $ 1,207


April 30, 2008

(See independent auditor’s report) MD&A - 6

Revenues Governmental activity revenues increased by $1.1 million over last fiscal year, a 12% increase. The City Council adopted a .25% home-rule sales tax effective January 1, 2007. This is the first full year of this tax collection which contributed an additional $.5 million towards this increase. Secondly, the City was awarded a $.8 million federal grant through the Illinois Transportation Enhancement Program for enhancing LaGrange Road. Only a portion of the grant proceeds were received during the fiscal year. The City also recorded a receivable in the amount of $.4 million from the State of Illinois to reimburse the City for costs associated with the installation of a noise wall. Finally the increase is partially due to a special item which resulted from the sale of property. This was an unusual one-time event. Expenses Expenses increased by $0.3 million when compared to 2007. Salary increases averaging 4% and benefit increases averaging 6% across department lines contributed to the increase in general government and public safety. The community development department only had a director for a portion of the previous year and added a code enforcement position effective the beginning of this fiscal year. In addition, the City hired an outside contractor to perform elevator inspections throughout the city. This new initiative cost $.03 million this fiscal year. The City also increased spending on building maintenance and equipment maintenance. An increase in the required police pension contribution of $.2 million and expenses related to an operating grant also contributed to the increase in public safety expenses. These increases were offset by a decrease in culture and recreation. The City Council closed the playschool effective January 1, 2008. In addition, the City eliminated Country Fest and advertising costs during this fiscal year.


April 30, 2008


ENTERPRISE FUNDS Statement of Net Assets The following chart reflects the condensed Statement of Net assets:

CONDENSED STATEMENT OF NET ASSETS AS OF APRIL 30

Business-type Business-type Increase Activities Activities (Decrease)

(in thousands) 2008 2007 Assets: Current Assets $ 3,197 $ 5,334 $ (2,137)

Non-Current Assets 17,119 15,260 1,859 Total assets 20,316 20,594 (278) Liabilities:

Current Liabilities 771 1,073 (302) Non-Current Liabilities 4,615 4,823 (208)

Total liabilities 5,386 5,896 (510) Net assets:

Investment in Capital Assets, Net of Related Debt 12,309 12,520 (211)

Restricted Assets - - - Unrestricted 2,621 2,178 443 Total Net Assets $ 14,930 $ 14,698 $ 232

The current year’s business-type activities left the City with $14.9 million in net assets, of which $12.3 million is invested in capital assets (net of related debt), and $2.6 million is unrestricted. Overall, net assets have increased by $.2 million since last fiscal year. Statement of Activities Business-type activities are broken out by functional area for Water & Sewer. Water & Sewer revenues are, for the most part, fees charged for water and sewage consumption, as well as limited revenues from connection fees and investment income.


April 30, 2008


CONDENSED STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDING APRIL 30

Business-type Business-type Increase (in thousands) Activities Activities (Decrease) Revenues: 2008 2007 Program revenues: Charges for services $ 2,890 $ 2,792 $ 98 Operating grants and contributions - - - Capital grants and contributions - - - General revenues: Unrestricted Investment Earnings 172 286 (114) Total revenues 3,062 3,078 (16) Expenses: Water 2,814 2,709 105 Sewer 118 79 39 Total expenses 2,932 2,788 144 Change in net assets 130 290 (160) Net assets beginning of year 14,698 14,408 290 Prior period adjustment 102 - 102 Net assets end of year $ 14,930 $ 14,698 $ 232

Overall net assets increased by $.13 million. Total revenues decreased by $.02 million over the prior fiscal year. Investment earnings decreased by $.1 million. This is due in part to the decline in interest rates and the reduction of cash available for investment due to the draw down of bond proceeds. Water expenses increased this year due primarily to a 12.5% rate increase in the cost of water. This increase was passed along to the residential and commercial customers effective February 1, 2008. The rates to the City’s two municipal customers, Indian Head Park and LaGrange Highlands, were increased 8.8%, the contractual limit. The prior period adjustment was made to properly account for engineering costs incurred which were expensed in the prior year but related to a capital project completed and capitalized in the current fiscal year.


April 30, 2008


FINANCIAL ANALYSIS OF THE CITY’S FUNDS The Governmental Funds reported a combined fund balance of $13.2 million which is a $1 million decrease from the prior fiscal year. Of the total fund balance, $.13 million is reserved for inventories and prepaid items, $.64 for public safety equipment, $.35 for street improvements, the remaining balance of $12.1 is unreserved and available for the City’s operations. The General Fund is the City’s primary operating fund. The majority of day to day operations including public safety, streets and highways, recreation and administration are accounted for in this fund. The total fund balance in the General Fund decreased by $1.5 million from the last fiscal year. This decrease is the result of the purchase property in the amount of $1.5 million. The City paid for this property from cash reserves. The Hotel/Motel Fund is considered a major fund of the City. This fund accumulates hotel/motel tax for tourism, development and promotion of the City of Countryside. During this fiscal year, the fund balance increased by $.2 million. This increase is due to revenues exceeding expenditures. A surplus was budgeted in an effort to reserve cash for future capital improvements.

BUDGETARY HIGHLIGHTS The City adopts a modified accrual basis budget on an annual basis. All departments submit funding requests to the Finance Director and City Administrator so that a budget may be prepared. The budget is prepared by fund, function and activity, and includes information on the past year, current year, and requests for the next fiscal year. The proposed budget is presented to the City Board for review, at which time public hearings are held and the budget is then adopted. Provided below is a condensed budget and actual comparison provided for the general fund. The detailed Schedules of Revenues, Expenditures and Changes in Fund Balance, Budget and Actual can be found in the exhibits of this report.


April 30, 2008


CONDENSED SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL (CASH BASIS), YEAR ENDED APRIL 30, 2008

(in thousands)

Fund Budget Actual

Positive/ (Negative) Variance

General Fund Revenues $ 8,992 $ 9,417 $ 425 Expenditures 9,690 9,412 278 Purchase of Capital Assets 1,500 1,500 - Net Transfers - - - Net Change in Fund Balance $ (2,198) $ (1,495) $ 703

Revenues exceeded budget by $.4 million. Home rule sales tax revenue exceeded projections by $.2 million. In addition, a new standard requires the City to record its terminal reserve in the Intergovernmental Personnel Benefit Cooperative. The City’s reserve was $.24 million at fiscal year end. The expenditures were below budget by $.28 million. The City has four active tax sharing agreements with local businesses. Incentives were paid to only one of these businesses as the others did not meet the criteria required in their respective agreement. This accounted for a $.21 million favorable variance to the budget. Salaries across all departments account for the remaining difference. In particular the police department had two officers on military leave during the year, and the community development and the public works departments each had an employee off due to on-the-job injuries. These decreases in expenses were partially offset by an increase in police pension contributions in the amount of $.2 million.

CAPITAL ASSETS

The City’s investment in capital assets for its governmental and business-type activities as of April 30 is shown below (net of accumulated depreciation). See the notes to the financial statements for more detailed information on pages 27 to 28.


April 30, 2008


CAPITAL ASSETS, NET OF ACCUMULATED DEPRECIATION

YEAR ENDED APRIL 30 Governmental Activities Increase

2008 2007 (Decrease) (in thousands) Land (not depreciated) $ 9,152 $ 7,540 $ 1,612 CIP (not depreciated) 188 - 188 Buildings 2,115 2,115 - Improvements 1,635 1,534 101 Equipment 934 866 68 Vehicles 842 833 9 Furniture & Fixtures 274 275 (1) Infrastructure 16,339 15,821 518 Depreciation (11,759) (11,228) (531) Total Capital Assets, Net $ 19,720 $ 17,756 $ 1,964 Business-Type Activities Land (not depreciated) $ 43 $ 43 $ - CIP (not depreciated) 84 784 (700)Buildings 214 214 - Land Improvements 1,572 696 876 Equipment 1,277 1,186 91 Furniture & Fixtures 103 103 - Vehicles 44 29 15 Infrastructure 23,704 21,469 2,235 Depreciation (9,922) (9,264) (658) Total Capital Assets, Net $ 17,119 $ 15,260 $ 1,859 Grand Total $ 36,839 $ 33,016 $ 3,823

In total, the City’s capital assets increased by $3.8 million this fiscal year. Government activities capital assets net of depreciation increased by $2 million. This is due primarily to the purchase of land for $1.5 million. In addition, infrastructure increased by $.5 million for street and alley improvements.


April 30, 2008


Business-type activities capital assets net of depreciation increased $1.8 million. This increase is due to the final phase of the water system improvements. During the fiscal year additional water mains were replaced and improvements to the pump stations were substantially completed. These improvements added $2.2 million and $.9 million to infrastructure and land improvements. These increases were offset by increases in depreciation for both the governmental and business-type activities totaling $1.2 million.

DEBT ADMINISTRATION The City did not issue any new bonds during the fiscal year. Outstanding debt as of April 30, 2008 is as follows:

Series 2000 General Obligation Bonds $ 1,460,000 Series 2006 General Obligation Bonds 4,810,000 Compensated Absences 864,475 $ 7,134,475

Further explanations of the City’s long term debt are presented in the notes to financial statements on pages 30 to 31.

FUTURE EVENTS The City Council adopted Business District #1 on July 10, 2008. The purpose of the business district is to promote commercial development within the community. In conjunction with the business district, the City Council also authorized the issuance of $19 million of Taxable General Obligation Bonds to finance property assembly, land improvements, public improvements including utility relocation, landscaping, signage, and certain park improvements which are unrelated to the business district.

CONTACTING THE CITY’S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, customers, investors, and creditors with a general knowledge of the City’s finances and to demonstrate the City’s accountability for the money it receives. Questions concerning this report or requests for additional financial information should be directed to the Director of Finance, Gail Paul the City of Countryside, 5550 East Avenue, Countryside, Illinois 60525.

Governmental Business-TypeActivities Activities Total

ASSETSCash and investments 12,377,299$ 2,864,999$ 15,242,298$ Receivables

Accounts 149,315 269,770 419,085 Intergovernmental 2,399,974 - 2,399,974

Prepaid expense 123,589 - 123,589 Inventory 6,608 - 6,608 Deferred charges - 61,604 61,604 Net pension asset 233,910 - 233,910 Capital assets not being depreciated 9,340,141 126,463 9,466,604 Capital assets being depreciated, net 10,379,915 16,993,022 27,372,937

Total assets 35,010,751 20,315,858 55,326,609

LIABILITIESAccounts payable 482,545 347,488 830,033 Accrued payroll 186,737 12,330 199,067 Accrued interest 32,966 79,389 112,355 Other accrued liabilities 522,316 - 522,316 Deposits payable 397,000 18,757 415,757 Retainage payable - 83,963 83,963 Unearned revenue 264,395 27,809 292,204 Long-term liabilities

Due within one year 705,794 201,104 906,898 Due in more than one year 1,612,577 4,615,000 6,227,577

Total liabilities 4,204,330 5,385,840 9,590,170

NET ASSETSInvested in capital assets, net of related debt 18,260,056 12,309,485 30,569,541 Restricted for

Public safety 641,455 - 641,455 Highways and streets 354,207 - 354,207

Unrestricted 11,550,703 2,620,533 14,171,236

TOTAL NET ASSETS 30,806,421$ 14,930,018$ 45,736,439$


STATEMENT OF NET ASSETS

April 30, 2008

See accompanying notes to financial statements.- 3 -

Operating CapitalCharges Grants and Grants and

FUNCTIONS/PROGRAMS Expenses for Services Contributions ContributionsPRIMARY GOVERNMENT

Governmental ActivitiesGeneral government 2,830,611$ 441,486$ -$ -$ Public safety 4,511,179 408,644 121,922 179,525 Highways and streets 1,741,276 - 170,045 376,800 Culture and recreation 412,421 105,061 - - Interest 92,915 - - -

Total governmental activities 9,588,402 955,191 291,967 556,325

Business-Type ActivitiesWater 2,814,239 2,864,217 - - Sanitary sewer 118,577 25,914 - -

Total business-type activities 2,932,816 2,890,131 - -

TOTAL PRIMARY GOVERNMENT 12,521,218$ 3,845,322$ 291,967$ 556,325$

Program Revenues


STATEMENT OF ACTIVITIES


- 4 -

Governmental Business-TypeActivities Activities Total

(2,389,125)$ -$ (2,389,125)$ (3,801,088) - (3,801,088) (1,194,431) - (1,194,431)

(307,360) - (307,360) (92,915) - (92,915)

(7,784,919) - (7,784,919)

- 49,978 49,978 - (92,663) (92,663)

- (42,685) (42,685)

(7,784,919) (42,685) (7,827,604)

General RevenuesTaxes

Property 54,587 - 54,587 Personal property replacement 5,590 - 5,590 Income 551,611 - 551,611 Sales 6,028,855 - 6,028,855 Home rule sales tax 718,179 - 718,179 Hotel/motel 425,857 - 425,857 Telecommunications 65,854 - 65,854 Other tax 264,132 - 264,132

Investment income 636,866 172,393 809,259 Miscellaneous 240,307 - 240,307

Total 8,991,838 172,393 9,164,231

CHANGE IN NET ASSETS 1,206,919 129,708 1,336,627

NET ASSETS, MAY 1 29,599,502 14,698,574 44,298,076

Prior period adjustment - 101,736 101,736

NET ASSETS, MAY 1, RESTATED 29,599,502 14,800,310 44,399,812

NET ASSETS, APRIL 30 30,806,421$ 14,930,018$ 45,736,439$

Net (Expense) Revenue and Change in Net AssetsPrimary Government


Hotel/Motel Nonmajor TotalGeneral Tax Governmental Governmental

ASSETS

Cash and investments 9,985,076$ 1,780,301$ 611,922$ 12,377,299$ Receivables

Accounts 109,531 34,784 5,000 149,315 Intergovernmental 1,977,253 - 422,721 2,399,974

Prepaid items 123,589 - - 123,589 Inventory 6,608 - - 6,608

TOTAL ASSETS 12,202,057$ 1,815,085$ 1,039,643$ 15,056,785$

LIABILITIESAccounts payable 426,972$ 11,592$ 43,981$ 482,545$ Accrued payroll 186,737 - - 186,737 Deposits payable 397,000 - - 397,000 Other accrued liabilities 522,316 - - 522,316 Deferred revenue 240,895 23,500 - 264,395

Total liabilities 1,773,920 35,092 43,981 1,852,993

FUND BALANCESReserved for inventories 6,608 - - 6,608 Reserved for prepaid items 123,589 - - 123,589 Reserved for public safety - - 641,455 641,455 Reserved for highways and streets - - 354,207 354,207 Unreserved

Undesignated - general fund 10,297,940 - - 10,297,940 Undesignated - special revenue funds - 1,779,993 - 1,779,993

Total fund balances 10,428,137 1,779,993 995,662 13,203,792

TOTAL LIABILITIES AND

FUND BALANCES 12,202,057$ 1,815,085$ 1,039,643$ 15,056,785$

LIABILITIES AND FUND BALANCES


GOVERNMENTAL FUNDSBALANCE SHEET

April 30, 2008


FUND BALANCES OF GOVERNMENTAL FUNDS 13,203,792$

Amounts reported for governmental activities in thestatement of net assets are different because:

Capital assets used in governmental activities arenot financial resources and, therefore, are notreported in the governmental funds 19,720,056

Interest payable is not due and payable in the current periodand, therefore, is not reported in the governmental funds (32,966)

Long-term liabilities are not due and payable in the currentperiod and, therefore, are not reported in thegovernmental funds:

General obligation bonds (1,460,000)

Compensated absences payable (858,371)

Net pension asset (obligation) 233,910

NET ASSETS OF GOVERNMENTAL ACTIVITIES 30,806,421$

April 30, 2008


RECONCILIATION OF FUND BALANCES OF GOVERNMENTAL FUNDS TO THEGOVERNMENTAL ACTIVITIES IN THE STATEMENT OF NET ASSETS


CHANGES IN FUND BALANCES

Hotel/Motel Nonmajor TotalGeneral Tax Governmental Governmental

REVENUESProperty taxes 54,587$ -$ -$ 54,587$ Sales taxes 6,747,034 - - 6,747,034 Other local taxes 161,134 425,857 - 586,991 Intergovernmental taxes 726,253 - 815,642 1,541,895 Licenses and permits 358,803 - - 358,803 Charges for services 123,411 - - 123,411 Fines and penalties 239,779 - - 239,779 Investment income 527,733 85,023 24,110 636,866 Reimbursements 17,246 - - 17,246 Miscellaneous 461,209 27,500 - 488,709

Total revenues 9,417,189 538,380 839,752 10,795,321

EXPENDITURESCurrent

General government 4,200,179 332,121 - 4,532,300 Public safety 4,268,536 - 87,672 4,356,208 Highways and streets 1,382,316 - 446,823 1,829,139 Culture and recreation 518,204 - - 518,204

Debt servicePrincipal 440,000 - - 440,000 Interest and fees 102,769 - - 102,769

Total expenditures 10,912,004 332,121 534,495 11,778,620

NET CHANGE IN FUND BALANCES (1,494,815) 206,259 305,257 (983,299)

FUND BALANCES, MAY 1 11,922,952 1,573,734 690,405 14,187,091

FUND BALANCES, APRIL 30 10,428,137$ 1,779,993$ 995,662$ 13,203,792$



GOVERNMENTAL FUNDSSTATEMENT OF REVENUES, EXPENDITURES AND


NET CHANGE IN FUND BALANCES -TOTAL GOVERNMENTAL FUNDS (983,299)$

Amounts reported for governmental activities in the statement ofactivities are different because:

Governmental funds report capital outlays as expenditures;however, they are capitalized and depreciated in thestatement of activities 2,662,217

The repayment of long-term debt is reported as anexpenditure when due in governmental funds but asa reduction of principal outstanding in the statementof activities 440,000

Some expenses in the statement of activities do not require theuse of current financial resources and, therefore, are notreported as expenditures in governmental funds:

Depreciation (655,550) Loss on disposal of capital assets (26,723) Increase (decrease) in joint venture (16,159) Change in compensated absences (217,619) Change in net pension asset (5,802) Change in interest payable 9,854

CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES 1,206,919$



RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,

GOVERNMENTAL ACTIVITIES IN THE STATEMENT OF ACTIVITIESEXPENDITURES AND CHANGES IN FUND BALANCES TO THE


Sanitary Water Sewer Total

CURRENT ASSETS

Cash and investments 2,456,408$ 408,591$ 2,864,999$ Receivables

Accounts 266,688 3,082 269,770

Total current assets 2,723,096 411,673 3,134,769

NONCURRENT ASSETSDeferred charges 61,604 - 61,604

Capital assetsNon-depreciable 126,463 - 126,463 Depreciable, net of

accumulated depreciation 15,748,183 1,244,839 16,993,022

Total capital assets 15,874,646 1,244,839 17,119,485

Total noncurrent assets 15,936,250 1,244,839 17,181,089

Total assets 18,659,346 1,656,512 20,315,858

CURRENT LIABILITIESAccounts payable 344,976 2,512 347,488 Accrued payroll 12,330 - 12,330 Accrued interest 79,389 - 79,389 Unearned revenue 27,809 - 27,809 Deposits payable 18,757 - 18,757 Retainage payable 83,963 - 83,963 Compensated absences 6,104 - 6,104 Current portion of bonds payable 195,000 - 195,000

Total current liabilities 768,328 2,512 770,840

LONG-TERM LIABILITIES

Bonds payable 4,615,000 - 4,615,000

Total long-term liabilities 4,615,000 - 4,615,000

Total liabilities 5,383,328 2,512 5,385,840

NET ASSETSInvested in capital assets, net of related debt 11,064,646 1,244,839 12,309,485 Unrestricted 2,211,372 409,161 2,620,533

TOTAL NET ASSETS 13,276,018$ 1,654,000$ 14,930,018$

Business-Type Activities


PROPRIETARY FUNDSSTATEMENT OF NET ASSETS

April 30, 2008


CITY OF COUNTRYSIDE ILLINOIS

PROPRIETARY FUNDSSTATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS


Sanitary Water Sewer Total

OPERATING REVENUESCharges for services 2,748,621$ 24,895$ 2,773,516$ Fines and forfeitures 55,518 1,019 56,537 Other revenue 60,078 - 60,078

Total operating revenues 2,864,217 25,914 2,890,131

OPERATING EXPENSESCost of sales and services 1,765,377 60,428 1,825,805 Administration 171,447 - 171,447 Benefits 67,423 - 67,423 Depreciation 612,697 58,149 670,846

Total operating expenses 2,616,944 118,577 2,735,521

OPERATING INCOME (LOSS) 247,273 (92,663) 154,610

NONOPERATING REVENUES (EXPENSES)Investment income 149,442 22,951 172,393 Interest expense (194,829) - (194,829) Bond amortization expense (3,466) - (3,466) Gain on sale of capital assets 1,000 - 1,000

Total nonoperating revenues (expenses) (47,853) 22,951 (24,902)

CHANGE IN NET ASSETS 199,420 (69,712) 129,708

NET ASSETS, MAY 1 12,974,862 1,723,712 14,698,574

Prior period adjustment 101,736 - 101,736

NET ASSETS, MAY 1, RESTATED 13,076,598 1,723,712 14,800,310

NET ASSETS, APRIL 30 13,276,018$ 1,654,000$ 14,930,018$




PROPRIETARY FUNDSSTATEMENT OF CASH FLOWS


SanitaryWater Sewer Total

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers and users 2,791,477$ 25,521$ 2,816,998$ Receipts from miscellaneous revenue 60,848 - 60,848 Payments to suppliers (2,093,836) (59,857) (2,153,693) Payments to employees (231,172) - (231,172)

Net cash from operating activities 527,317 (34,336) 492,981

CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIESNone - - -

Net cash from noncapital financing activities - - -

CASH FLOWS FROM CAPITAL ANDRELATED FINANCING ACTIVITIESPurchase of capital assets (2,428,894) - (2,428,894) Sale of capital assets 1,000 - 1,000 Principal paid (190,000) - (190,000) Interest paid (197,897) - (197,897)

Net cash from capital and related financing activities (2,815,791) - (2,815,791)

CASH FLOWS FROM INVESTING ACTIVITIESInterest received 149,442 22,951 172,393

Net cash from investing activities 149,442 22,951 172,393

NET INCREASE (DECREASE) IN CASH ANDCASH EQUIVALENTS (2,139,032) (11,385) (2,150,417)

CASH AND CASH EQUIVALENTS, MAY 1 4,595,440 419,976 5,015,416

CASH AND CASH EQUIVALENTS, APRIL 30 2,456,408$ 408,591$ 2,864,999$


(This statement is continued on the following page.)- 12 -


PROPRIETARY FUNDSSTATEMENT OF CASH FLOWS (Continued)


SanitaryWater Sewer Total

RECONCILIATION OF OPERATING INCOME(LOSS) TO NET CASH FLOWS FROMOPERATING ACTIVITIES

Operating income (loss) 247,273$ (92,663)$ 154,610$ Depreciation 612,697 58,149 670,846 Adjustments to reconcile operating income

(loss) to net cash from operating activitiesChanges in assets and liabilities

Accounts receivable (15,444) (393) (15,837) Accounts payable (322,434) 571 (321,863) Accrued payroll and compensated absences 1,673 - 1,673 Deposits payable 2,782 - 2,782 Unearned revenue 770 - 770

NET CASH FROM OPERATING ACTIVITIES 527,317$ (34,336)$ 492,981$



PENSION TRUST FUND

ASSETSCash and short-term investments -$ Investments

Certificates of deposit 269,561 U.S. government and agency securities 6,129,695 Insurance company contracts 4,944,726 Equity mutual funds 1,334,619 Money market mutual funds 1,161,279

Accrued interest receivable 22,004

Total assets 13,861,884

LIABILITIESNone -

Total liabilities -

NET ASSETS HELD IN TRUST FOR

PENSION BENEFITS 13,861,884$


STATEMENT OF FIDUCIARY NET ASSETS

April 30, 2008



PENSION TRUST FUND

STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS


ADDITIONSContributions

Employer 625,914$ Plan members 184,411

Total contributions 810,325

Investment incomeInterest 465,653 Net depreciation in fair value

of investments (199,400)

Total investment income 266,253

Less investment expense -

Net investment income 266,253

Total additions 1,076,578

DEDUCTIONSBenefits and refunds 854,374 Administrative 24,152

Total deductions 878,526

NET INCREASE 198,052

NET ASSETS HELD IN TRUSTFOR PENSION BENEFITS

May 1 13,663,832

April 30 13,861,884$


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NOTES TO FINANCIAL STATEMENTS

April 30, 2008

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the City of Countryside, Illinois (the City) 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 City’s accounting policies are described below.

a. Reporting Entity

The City has defined its reporting entity in accordance with GASB Statement No. 14. Financial accountability is defined as the appointment of a voting majority of the component unit’s board, and either (1) the City’s ability to impose its will over the component unit, or (2) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the City. The Police Pension Fund is a legally separate organization from the City and has its own governing board. However, although legally separate, the Police Pension Fund is reported as if it is partof the City, because it is fiscally dependent on the City and administered exclusively for the benefit of the City’s police personnel.

b. Fund Accounting

The accounts of the City are organized and operated on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set 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. The minimum number of funds is maintained consistent with legal and managerial requirements.

Funds are classified into the following categories: governmental, proprietary and fiduciary.

Governmental funds are used to account for all or most of a City’s general activities, including the collection and disbursement of earmarked monies (special revenue funds) the acquisition or construction of general capital assets (capital projects funds) and the servicing of general long-term debt (debt service fund). The General Fund is used to account for all activities of the general government not accounted for in some other fund.

CITY OF COUNTRYSIDE, ILLINOISNOTES TO FINANCIAL STATEMENTS (Continued)

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

b. Fund Accounting (Continued)

Proprietary funds are used to account for activities similar to those found in the private sector, where the determination of net income is necessary or useful to sound financial administration. Goods or services from such activities can be provided either to outside parties (enterprise funds) or to other departments or agencies primarily within the City(internal service funds). Pursuant to GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds, the City has chosen to apply all GASB pronouncements as well as those pronouncements of the Financial Accounting Standards Board (FASB) issued on or before November 30, 1989 to account for enterprise funds.

Fiduciary funds are used to account for assets held on behalf of outside parties, including other governments or on behalf of other funds within the City. When these assets are held under the terms of a formal trust agreement a pension fund is used.

c. Government-Wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the City. The effect of material interfund activity has been eliminated from these statements. Interfund services provided and used are not eliminated on 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 and 2) grants and shared revenues that are restricted to meeting the operational or capital requirements of aparticular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.


- 18 -


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

The City reports the following major governmental fund:

The General Fund is the general operating fund of the City. It is used to account for all financial resources of the general government, except those required to be accounted for in another fund.

The Hotel/Motel Tax Fund is used to account for the disbursements of the City’s hotel/motel tax revenues.

The City reports the following major proprietary fund:

The Water Fund accounts for the operating activities of the City’s water utilities services.

The Sanitary Sewer Fund accounts for the operating activities of the City’s sanitary sewer services.

Additionally, the City reports the following funds:

A pension fund is used to account for the Police Pension activities.

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, as are the proprietary fund and fiduciary fund financial statements. Revenues and additions are recorded when earned and expenses and deductions 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. Operating revenues/expenses include all revenues/expenses directly related to providing water, sewer and parking services. Incidental revenues/expenses related to these services are reported as non-operating.

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.


- 19 -


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

The City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period, except for sales tax revenues which are collected within 90 days of the end of the current fiscal period. Expenditures generally are recorded when a fund liability is incurred. However, debt service expenditures are recorded only when payment is due.

Property taxes, sales taxes (owed to the state at year end), franchise taxes, licenses, charges for services and interest associated with the current fiscal period are all considered to be susceptible to accrual and are recognized as revenues of the current fiscal period. All other revenue items are considered to be “measurable” and “available” only when cash is received by the City.

The City reports deferred and/or unearned revenue on its financial statements. Deferred/unearned revenues arise when a potential revenue does not meet both the “measurable” and “available” or “earned” criteria for recognition in the current period. Deferred/unearned revenues also arise when resources are received by the City before it has a legal claim to them, 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 City has a legal claim to the resources, the liability for deferred/unearnedrevenue is removed and revenue is recognized.

e. Cash and Investments

Cash and Cash Equivalents

For purposes of the statement of cash flows, the City’s proprietary funds consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Investments

Investments with a maturity of less than one year when purchased and non-negotiable certificates of deposit are stated at cost or amortized cost. All other investments, including all investments of the Police Pension Trust Fund, are reported at fair value at April 30. Fair value is based on quoted market prices at April 30 for debt securities, equity securities and mutual funds and contract values for insurance contracts.


- 20 -


f. Short-Term Interfund Receivables/Payables

During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as “due from other funds” or “due to other funds” on the financial statements. Short-term interfund loans, if any, are classified as “interfund receivables/payables.”

g. Prepaid Items/Expenses

Payments made to vendors for services that will benefit periods beyond the date of this report are recorded as prepaid items/expenses.

h. Inventories

The cost of governmental funds inventories are recorded as expenditures when consumed.

i. Capital Assets

Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, storm sewers 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 City as assets with an initial, individual cost of more than the following and an estimated useful life in excess of one year.

Asset ClassCapitalization

Threshold

Land $ 25,000Site improvements 20,000Buildings 50,000Building improvements 25,000Equipment 5,000Software 25,000Streets and storm sewer networks 50,000Water and sanitary sewer networks 75,000

Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs, including street overlays, that do not add to the value or service capacity of the asset or materially extend asset lives are not capitalized.


- 21 -


i. Capital Assets (Continued)

Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Property, plant and equipment is depreciated using the straight-line method over the following estimated useful lives:

Assets Years

Buildings 10-50Improvements 10-50Equipment, vehicles and furniture and fixtures 3-10Infrastructure - roads 30-40Infrastructure - other 20-75

j. Compensated Absences

Vested or accumulated vacation and sick leave that is owed to retirees or terminated employees is reported as an expenditure and a fund liability of the governmental fund that will pay it in the fund financial statements. Vested or accumulated vacation and sick leave of proprietary funds at both levels and governmental activities at the government-wide level is recorded as an expense and liability as the benefits accrue to employees.

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, as well as issuance costs, are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.

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.


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l. Fund Balance/Net Assets

In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. In the government-wide financial statements, restricted net assets are legally restricted by outside parties for a specific purpose. None of the City’s net assets are restricted due to enabling legislation adopted by the City. Invested in capital assets, net of related debt, represents the City’s investment in the book value of capital assets, less any outstanding debt that was issued to construct or acquire the capital asset.

m. Property Taxes

Property taxes for 2007 attach as an enforceable lien on January 1, 2007, on property values assessed as of the same date. Taxes are levied by December 31 of the fiscal year by passage of a Tax Levy Ordinance. Tax bills are prepared by the County and issued on or about February 1, 2008 and August 1, 2008 and are payable in two installments, on or about March 1, 2008 and September 1, 2008. The County collects such taxes and remits them periodically. The City does not have a tax levy but does receive a share of road and bridge taxes from local Townships.

2. DEPOSITS AND INVESTMENTS

a. City Investments

The City’s investment policy authorizes the City to invest in all investments allowed by Illinois Compiled Statutes (ILCS). These include deposits/investments in insured commercial banks, savings and loan institutions, obligations of the U.S. Treasury and U.S. Agencies, insured credit union shares, money market mutual funds with portfolios of securities issued or guaranteed by the United States or agreements to repurchase these same obligations, repurchase agreements, short-term commercial paper rated within the three highest classifications by at least two standard rating services, Illinois Funds and the Illinois Metropolitan Investment Fund.

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. Illinois Funds is not registered with the SEC as an investment company, but does operate in a manner consistent with Rule 2a7 of the Investment Company Act of 1940. Investments in Illinois Funds are valued at Illinois Funds’share price, the price for which the investment could be sold.


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2. DEPOSITS AND INVESTMENTS (Continued)

a. City Investments (Continued)

Illinois Metropolitan Investment Fund (IMET) is a non-for-profit investment trust formed pursuant to the Illinois Municipal Code and managed by a Board of Trustees elected from the participating members. IMET is not registered with the SEC as an investment company. Investments in IMET are valued at IMET’s share price, the price for which the investment could be sold.

It is the policy of the City 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 City 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 are, in order of priority, legality, safety, liquidity and yield.

The City maintains a cash and investment pool that is available for use by all funds, except the pension trust fund. Each fund’s portion of this pool is displayed on the financial statements as “cash and investments.” In addition, investments are separately held by several of the City’s funds. The deposits and investments of the pension trust fund are held separately from those of other funds.

Deposits with Financial Institutions

Custodial credit risk for deposits with financial institutions is the risk that in the event of bank failure, the City’s deposits may not be returned to it. The City’s investment policy requires pledging of collateral for all bank balances in excess of federal depository insurance, at an amount not less than 110% of the fair market value of the funds secured, with the collateral held by an independent third party.

Investments

The following table presents the investments and maturities of the City’s debt securities as of April 30, 2008:

Investment Maturities in YearsInvestment Type Fair Value Less than 1 1-5 6-10

Illinois Funds $ 3,781,999 $ 3,781,999 $ - $ -IMET 5,960,049 5,960,049 - -Repurchase agreement 3,450,508 3,450,508 - -

TOTAL INVESTMENTS $ 13,192,556 $ 13,192,556 $ - $ -


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a. City Investments (Continued)

Investments (Continued)

The City 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 U.S. government and agency securities. Illinois Funds and IMET are both rated AAA.

Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to the investment, the City will not be able to recover the value of its investments that are in possession of an outside party. To limit its exposure, the City’s investment policy requires all security transactions that are exposed to custodial credit risk to be processed on a delivery versus payment (DVP) basis with the underlying investments held in a custodial account with the trust department of an approved financial institution. Illinois Funds and IMET are not subject to custodial credit risk.

Concentration of credit risk is the risk that the City has a high percentage of their investments invested in one type of investment. At April 30, 2008, the repurchase agreement represented 26% of the City’s investment portfolio. The City’s investment policy requires diversification of investments to the best of its abilities based on the type of funds invested and the cash flow needs of those funds.

b. Police Pension Investments

The Police Pension’s investment policy authorizes the Police Pension Fund to invest in all investments allowed by ILCS. These include deposits/investments in insured commercial banks, savings and loan institutions, interest bearing obligations of the U.S. Treasury and U.S. Agencies, interest bearing bonds of the State of Illinois or any county, township or municipal corporation of the State of Illinois, direct obligations of the State of Israel, money market mutual funds whose investments consist of obligations of the U.S. Treasury or U.S. Agencies, separate accounts managed by life insurance companies, Mutual Funds, common and preferred stock and Illinois Funds (created by the Illinois State Legislature under the control of the State Comptroller that maintains a $1 per share value which is equal to the participants fair value).

The Police Pension Fund’s investment policy prescribes to the “prudent person” rule, which states, “Investments shall be made with judgment 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.”


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b. Police Pension Investments (Continued)

Deposits with Financial Institutions

Custodial credit risk for deposits with financial institutions is the risk that in the event of bank failure, the Police Pension Fund’s deposits may not be returned to it. The Police Pension Fund’s investment policy requires pledging of collateral for bank balances in excess of federal depository insurance.

Investments

The following table presents the investments and maturities of the Police Pension Fund’s debt securities as of April 30, 2008:

Investment Maturities in Years

Investment TypeFair

ValueLess than

1 1-5 6-10Greater than

10

Negotiable certificate of deposit $ 269,561 $ 269,561 $ - $ - $ -

U.S. Treasury obligations 354,306 - 113,590 - 240,716U.S. Agency obligations 5,775,389 - 606,186 1,594,397 3,574,806Money market mutual funds 1,161,279 1,161,279 - - -

TOTAL INVESTMENTS $ 7,560,535 $ 1,430,840 $ 719,776 $ 1,594,397 $ 3,815,522

The Police Pension Fund assumes any callable securities will not be called.

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 Police 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 liabilities.

Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Police Pension Fund limits 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 investments in securities of United States Government agencies were all rated AAA by Standard & Poor’s or by Moody’s Investor Services.


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Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to the investment, the Police Pension Fund will not be able to recover the value of its investments that are in possession of an outside party. The Police Pension Fund’s investment policy does not specifically address custodial credit risk for investments. The money market mutual funds and equity mutual funds are not subject to custodial credit risk.

Concentration of credit risk is the risk that the Police Pension Fund has a high percentage of their investments invested in one type of investment. The Police Pension Fund’s investment policy provides that “assets invested shall be diversified to reduce the risk of loss resulting from over-concentration of assets in a specific maturity, a specific issuer or a specific class of securities.” At April 30, 2008, the Police Pension Fund had over 5% of net plan assets invested in various United States Government agencies as indicated in the table above. Agency investments represent a large portion of the portfolio; however, the investments are diversified by maturity date and as mentioned above are implicitly backed by the United States Government.

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 Treasury lines of credit and increasingly stringent federal regulation. The Fund’s investment policy provides “assets invested shall be diversified to reduce the risk of loss resulting from over-concentration of assets in a specific maturity, a specific issuer or specific class of securities.”

The Pension Board has diversified its insurance contract holdings as follows:

Travelers Life Insurance Contracts $ 1,400,545Hartford Variable Annuity Contract 828,715Trans America Variable Annuity Contract 739,296Pacific Life Insurance Contract 619,346Bank of America Contract 402,881Allstate Putnam Life Insurance Contract 516,707Met Life Insurance Contract 437,236


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The Pension Board has diversified its equity mutual fund holdings as follows:

Euro Pacific Growth Fund $ 297,319Fundamental Investors Fund 277,433Investment Company of America 253,709Growth Fund of America 261,613American Capital Fund 244,545

3. CAPITAL ASSETS

Capital asset activity for the year ended April 30, 2008 was as follows:

BalancesMay 1 Increases Decreases

BalancesApril 30

GOVERNMENTAL ACTIVITIESCapital assets not being depreciatedLand $ 7,540,379 $ 1,627,586 $ 16,159 $ 9,151,806Construction in progress - 188,335 - 188,335Total capital assets not being depreciated 7,540,379 1,815,921 16,159 9,340,141

Capital assets being depreciatedBuildings 2,115,399 - - 2,115,399Improvements 1,534,041 100,809 - 1,634,850Equipment 866,193 67,499 - 933,692Vehicles 832,770 160,197 151,282 841,685Furniture and fixtures 274,403 - - 274,403Infrastructure 15,821,274 517,791 - 16,339,065Total capital assets being depreciated 21,444,080 846,296 151,282 22,139,094

Less accumulated depreciation forBuildings 1,432,225 37,860 - 1,470,085Improvements 78,141 41,253 - 119,394Equipment 517,634 65,113 - 582,747Vehicles 527,197 130,380 124,559 533,018Furniture and fixtures 225,463 14,378 - 239,841Infrastructure 8,447,528 366,566 - 8,814,094Total accumulated depreciation 11,228,188 655,550 124,559 11,759,179

Total capital assets being depreciated, net 10,215,892 190,746 26,723 10,379,915

GOVERNMENTAL ACTIVITIES CAPITAL ASSETS, NET $ 17,756,271 $ 2,006,667 $ 42,882 $ 19,720,056


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3. CAPITAL ASSETS (Continued)

BalancesMay 1,

Restated Increases DecreasesBalancesApril 30

BUSINESS-TYPE ACTIVITIESCapital assets not being depreciated

Land $ 42,500 $ - $ - $ 42,500Construction in progress 784,121 83,963 784,121 83,963Total capital assets not being depreciated 826,621 83,963 784,121 126,463

Capital assets being depreciatedBuildings 214,243 - - 214,243Improvements 714,904 857,206 - 1,572,110Equipment 1,185,647 91,099 - 1,276,746Vehicles 29,158 28,101 12,858 44,401Furniture and fixtures 103,389 - - 103,389Infrastructure 21,551,545 2,152,646 - 23,704,191Total capital assets being depreciated 23,798,886 3,129,052 12,858 26,915,080

Less accumulated depreciation forBuildings 103,492 5,356 - 108,848Improvements 82,498 19,827 - 102,325Equipment 344,859 105,997 - 450,856Vehicles 19,378 4,665 12,858 11,185Furniture and fixtures 101,157 892 - 102,049Infrastructure 8,612,686 534,109 - 9,146,795Total accumulated depreciation 9,264,070 670,846 12,858 9,922,058

Total capital assets being depreciated, net 14,534,816 2,458,206 - 16,993,022

BUSINESS-TYPE ACTIVITIES CAPITAL ASSETS, NET $ 15,361,437 $ 2,542,169 $ 784,121 $ 17,119,485

Depreciation expense was charged to functions/programs of the governmental activities as follows:

GOVERNMENTAL ACTIVITIESGeneral government $ 37,264Public safety 138,140Highways and streets, including depreciation of general infrastructure assets 460,199

Culture and recreation 19,947

TOTAL DEPRECIATION EXPENSE - GOVERNMENTAL ACTIVITIES $ 655,550


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4. RISK MANAGEMENT

Intergovernmental Risk Management Agency

The City participates in the Intergovernmental Risk Management Agency (IRMA). IRMA is a public entity risk pool whose members are Illinois municipalities. IRMA manages and funds first party property losses, third party liability claims, workers’ compensation claims and public officials’ liability claims of its member municipalities. The City’s payments to IRMA are displayed on the financial statements as expenditures/expenses in the appropriate funds.

Risk of loss is transferred, except that each member assumes the first $2,500 of each occurrence, and IRMA has self-insurance retentions at various amounts above that level.

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 City does not exercise any control over the activities of IRMA beyond its representation on the Board of Directors.

Initial contributions are determined in advance of each membership year based on the individual member’s eligible revenue as defined in the bylaws of IRMA and assessment factors based on past member experience and the funding need for the membership year. The Board of Directors may require that supplemental contributions be made by members to ensure adequate funds are available to meet the obligations applicable to the membership year. Members have a contractual obligation to fund any deficit of IRMA attributable to a membership year during which they were a member. The City is not aware of any additional amounts owed to IRMA for the current period or prior policy year at April 30, 2008.

Intergovernmental Personnel Benefit Cooperative

The City participates in the Intergovernmental Personnel Benefit Cooperative (IPBC). IPBC is a public entity risk pool established by certain units of local government in Illinois to administer some or all of the personnel benefit programs (primarily medical, dental and life insurance coverage) offered by these members to their officers and employees and to the officers and employees of certain other governmental, quasi governmental and nonprofit public service entities.

The IPBC receives, processes and pays such claims as may come within the benefit program of each member. Management consists of a Board of Directors comprised of one appointed representative from each member. In addition, there are two officers: a Benefit Administrator and a Treasurer. The City does not exercise any control over the activities of the IPBC beyond its representation on the Board of Directors.


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5. LONG-TERM DEBT

a. The following is a summary of changes in long-term debt for the year ended April 30, 2008:

DebtRetired by

InterestRate

BalancesMay 1 Additions Reductions

BalancesApril 30

CurrentPortion

GOVERNMENTAL ACTIVITIES

General Obligation Bonds Series 2000

GeneralFund

5.000-5.500% $ 1,900,000 $ - $ 440,000 $ 1,460,000 $ 460,000

Compensated absencesGeneral

Fund N/A 640,752 444,286 226,667 858,371 245,794

Total governmentalactivities 2,540,752 444,286 666,667 2,318,371 705,794

BUSINESS-TYPEACTIVITIES

General Obligation BondsSeries 2006

WaterFund

3.875-4.200% 5,000,000 - 190,000 4,810,000 195,000

Compensated absencesWaterFund N/A 12,560 6,104 12,560 6,104 6,104

Total business-typeactivities 5,012,560 6,104 202,560 4,816,104 201,104

TOTAL $ 7,553,312 $ 450,390 $ 869,227 $ 7,134,475 $ 906,898

b. Debt Service Requirements to Maturity

Annual debt service requirements to maturity are as follows:

Fiscal Year Governmental ActivitiesEnding General Obligation Bonds

April 30, Principal Interest

2009 $ 460,000 $ 79,1192010 485,000 54,3932011 515,000 28,325

TOTAL $ 1,460,000 $ 161,837


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5. LONG-TERM DEBT (Continued)

b. Debt Service Requirements to Maturity (Continued)

Fiscal Year Business-Type ActivitiesEnding General Obligation Bonds

April 30, Principal Interest

2009 $ 195,000 $ 190,5342010 200,000 182,9782011 205,000 175,2282012 215,000 167,2842013 220,000 158,9532014 230,000 150,4272015 240,000 141,5152016 245,000 132,2152017 255,000 122,7212018 265,000 112,8402019 275,000 102,5712020 285,000 91,9152021 300,000 80,8002022 310,000 68,9502023 320,000 56,5502024 335,000 43,5902025 350,000 29,8552026 365,000 15,330

TOTAL $ 4,810,000 $ 2,024,256

c. Legal Debt Margin

The City is a home rule municipality.

Chapter 65, Section 5/8-5-1 of the ILCS governs computation of the legal debt margin.

“The General Assembly may limit by law the amount and require referendum approval of debt to be incurred by home rule municipalities, payable from ad valorem property tax receipts, only in excess of the following percentages of the assessed value of its taxable property…(2) if its population is more than 25,000 and less than 500,000 an aggregate of one percent:…indebtedness which is outstanding on the effective date (July 1,1971) of this constitution or which is thereafter approved by referendum…shall not be included in the foregoing percentage amounts.”

To date, the Illinois General Assembly has set no limits for home rule municipalities.


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6. CONTINGENT LIABILITIES

a. Litigation

The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the City’s attorney, the resolution of these matters will not have a material adverse effect on the financial condition of the City.

b. Economic Incentive

The City has entered into economic development agreements with companies in the City to provide sales tax rebates. The agreements require the City to rebate to the companies different levels of additional sales tax generated by the facilities through the year 2025, with potential rebates totaling $5,200,000. The total expenditures incurred to date in rebates as of April 30, 2008 is $845,758.

7. DEFINED BENEFIT PENSION PLANS

The City contributes to two defined benefit pension plans, the Illinois Municipal Retirement Fund (IMRF), an agent-multiple-employer public employee retirement system and the Police Pension Plan which is a single-employer pension plan. The benefits, benefit levels, employee contributions and employer contributions for plans are governed by ILCS and can only be amended by the Illinois General Assembly. A publicly available financial report that includes financial statements and required supplementary information for the Police Pension Fund may be obtained by writing to the City of Countryside, 5550 East Avenue, Countryside, Illinois 60525. IMRF issues 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.

a. Plan Descriptions

Illinois Municipal Retirement Fund (IMRF)

All employees (other than those covered by the Police Pension Plan) hired in positions that meet or exceed the prescribed annual hourly standard must be enrolled in IMRF as participating members. Pension benefits vest after eight years of service. Participating members who retire at or after age 60 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. IMRF also provides death and disability benefits. 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 City is required to contribute the remaining amounts necessary to fund the IMRF as specified by statute. The employer contribution for the calendar year ended December 31, 2007 was 10.84% of covered payroll.


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7. DEFINED BENEFIT PENSION PLANS (Continued)

a. Plan Descriptions (Continued)

Police Pension Plan

Police sworn personnel are covered by the Police Pension Plan. Although this is a single-employer pension plan, the defined benefits and employee and employer contribution levels are governed by Illinois Compiled Statutes (40 ILCS 5/3-1) and may be amended only by the Illinois legislature. The City accounts for the Police Pension Plan as a pension trust fund. At April 30, 2007, the Police Pension Plan membership consisted of:

Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but notyet receiving them 15

Current employeesVested 14Nonvested 12

TOTAL 41

The Police Pension Plan provides retirement benefits as well as death and disability benefits. Covered employees attaining the age of 50 or more with 20 or more years of creditable service are entitled to receive an annual retirement benefit equal to one-half of the salary attached to the rank held on the last day of service, or for one year prior to the last day, whichever is greater. The annual benefit shall be increased by 2.50% of such salary for each additional year of service over 20 years up to 30 years, to a maximum of 75.00% of such salary. Employees with at least eight years but less than 20 years of credited service may retire at or after age 60 and receive a reduced benefit. The monthly benefit of a police officer 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 3.00% of the original pension and 3.00% compounded annually thereafter.

Employees are required by ILCS to contribute 9.91% of their base salary to the Police Pension Plan. If an employee leaves covered employment with less than 20 years of service, accumulated employee contributions may be refunded without accumulated interest. The City is required to contribute the remaining amounts necessary to finance the plan, including the costs of administering the plan, as actuarially determined by an enrolled actuary. Effective July 1, 1993, the City has until the year 2033 to fully fund the past service cost for the Police Pension Plan. For the year ended April 30, 2007, the City’s contribution was 22.96% of covered payroll.


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b. Significant Investments

Significant investments are defined as investments in any one organization that represent 5.00% or more of plan net assets for the Police Pension Plan (other than U.S. Government guaranteed obligations). The Police Pension Plan had greater then 5.00% invested in U.S. Government agency securities as described in footnote 2.b. Information for the IMRF is not available.

c. Annual Pension Costs

Employer contributions have been determined as follows:

IllinoisMunicipalRetirement

PolicePension

Actuarial valuation date December 31, 2005

May 1,2006

Actuarial cost method Entry-age Normal Entry-age Normal

Asset valuation method 5 Year Smoothed Market Market

Amortization method Level Percentageof Payroll

Level Percentage of Payroll

Amortization period 27 Years, Closed 27 Years, Closed

Significant actuarial assumptionsa) Rate of return on 7.50% 7.00%

present and future assets Compounded CompoundedAnnually Annually

b) Projected salary increase - 4.00% 5.00% attributable to inflation Compounded Compounded

Annually Annually

c) Additional projected .40% to 10.00% Not Available salary increases -seniority/merit

d) Post retirement benefit increases 3.00% Not Available


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c. Annual Pension Costs (Continued)

Employer annual pension cost (APC), actual contributions and the net pension obligation (asset) (NPO) are as follows. The NPO (asset) is the cumulative difference between the APC and the contributions actually made.

CalendarYear

IllinoisMunicipalRetirement

FiscalYear

PolicePension

Annual pension cost 2005 $ 170,487 2006 $ 363,152 (APC) 2006 214,192 2007 406,884

2007 221,547 2008 N/A

Actual contribution 2005 $ 170,487 2006 $ 720,3802006 214,192 2007 401,0822007 221,547 2008 625,914

Percentage of APC contributed 2005 100.00% 2006 198.37%2006 100.00 2007 98.572007 100.00 2008 N/A

NPO (asset) 2005 $ - 2006 $ (239,712)2006 - 2007 (233,910)2007 - 2008 N/A

The net pension obligation (asset) has been calculated as follows as of April 30, 2007(most recent available):

PolicePension

Annual required contributions $ 412,226Interest on net pension obligation (16,780)Adjustment to annual required contribution 11,438Annual pension cost 406,884Contributions made 401,082Increase (decrease) in net pension obligation 5,802Net pension obligation (asset), May 1 (239,712)117,516

NET PENSION OBLIGATION (ASSET), APRIL 30 $ (233,910)

8. PRIOR PERIOD ADJUSTMENT

The City has restated Water Fund net assets as of May 1, 2007 to properly capitalize assets expenses in the amount of $101,736.


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9. SUBSEQUENT EVENT

On July 10, 2008, the City issued $19,160,000 Taxable General Obligation Bonds, Series 2008 to finance certain park improvements, public improvements (including utility relocation, landscaping, signage, and other public improvements), acquire and improve certain property located within the City, capitalize a portion of the interest on the bonds and pay certain expenditures related to the issuance of the bonds. The bonds are payable through January 1, 2022 with interest at 5.625% to 6.00%.

REQUIRED SUPPLEMENTARY INFORMATION

VarianceOriginal Final OverBudget Budget Actual (Under)

REVENUESProperty taxes 50,000$ 50,000$ 54,587$ 4,587$ Sales taxes 6,520,000 6,520,000 6,747,034 227,034 Other local taxes 134,000 134,000 161,134 27,134 Intergovernmental taxes 680,500 680,500 726,253 45,753 Licenses and permits 392,620 392,620 358,803 (33,817) Charges for services 204,200 204,200 123,411 (80,789) Fines and forfeitures 196,500 196,500 239,779 43,279 Investment income 500,000 500,000 527,733 27,733 Reimbursements 60,000 60,000 17,246 (42,754) Other revenue 254,000 254,000 461,209 207,209

Total revenues 8,991,820 8,991,820 9,417,189 425,369

EXPENDITURESCurrent

General government 2,878,173 4,378,173 4,200,179 (177,994) Public safety 4,339,236 4,339,236 4,268,536 (70,700) Highways and streets 1,439,412 1,439,412 1,382,316 (57,096) Culture and recreation 490,310 490,310 518,204 27,894

Debt servicePrincipal 440,000 440,000 440,000 - Interest and fees 102,770 102,770 102,769 (1)

Total expenditures 9,689,901 11,189,901 10,912,004 (277,897)

NET CHANGE IN FUND BALANCE (698,081)$ (2,198,081)$ (1,494,815) 703,266$ FUND BALANCE, MAY 1 11,922,952

FUND BALANCE, APRIL 30 10,428,137$



GENERAL FUNDSCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

(See independent auditor's report.)- 37 -


REVENUES Hotel/motel taxes 425,000$ 425,000$ 425,857$ 857$ Investment income 60,000 60,000 85,023 25,023 Miscellaneous 22,000 22,000 27,500 5,500

Total revenues 507,000 507,000 538,380 31,380

EXPENDITURESCurrent

General governmentTravel 2,500 2,500 - (2,500) Meetings 2,500 2,500 - (2,500) Regular contractual services 120,000 120,000 130,160 10,160 Advertising 120,000 120,000 113,792 (6,208) Festival expenditures 120,000 120,000 65,510 (54,490) Other community relations 30,000 30,000 22,659 (7,341)

Total expenditures 395,000 395,000 332,121 (62,879)

NET CHANGE IN FUND BALANCE 112,000$ 112,000$ 206,259 94,259$

FUND BALANCE, MAY 1 1,573,734

FUND BALANCE, APRIL 30 1,779,993$

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL



HOTEL/MOTEL TAX FUNDSCHEDULE OF REVENUES, EXPENDITURES AND


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NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

April 30, 2008

1. BUDGETS

Budgets are adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets are adopted (at the fund level) for all funds except the Police Pension Fund. The annual appropriated budget is legally enacted and provides for a legal level of control at the fund level. All annual appropriations lapse at fiscal year end.

All departments of the City submit requests for appropriations to the City Administrator so that a budget may be prepared. The budget is prepared by fund, function and activity, and includes information on the past year, current year estimates and requested appropriations for the next fiscal year.

The proposed budget is presented to the governing body for review. The governing body holds public hearings and may add to, subtract from or change appropriations, but may not change the form of the budget. Management may transfer budget amounts between functions and activities. However, transfers between funds and increases in total funds must be approved by the governing board. Expenditures may not legally exceed budgeted appropriations at the fund level. During the year, the budget was amended twice.

(4)Unfunded

(2) (Overfunded) UAALActuarial Actuarial (OAAL)Accrued Accrued As a

Actuarial (1) Liability (3) Liability PercentageValuation Actuarial (AAL) Funded (UAAL) (5) of Covered

Date Value of Entry-Age Ratio (OAAL) Covered PayrollDecember 31 Assets Normal (1) / (2) (2) - (1) Payroll (4) / (5)

2002 3,402,255$ 3,271,732$ 103.99% (130,523)$ 1,330,873$ (9.81%)

2003 3,643,941 3,940,498 92.47% 296,557 1,521,475 19.49%

2004 3,892,435 4,588,460 84.83% 696,025 1,700,845 40.92%

2005 3,585,955 4,313,274 83.14% 727,319 1,743,223 41.72%

2006 3,721,870 4,714,157 78.95% 992,287 1,905,625 52.07%

2007 4,231,829 4,834,150 87.54% 602,321 2,043,789 29.47%

April 30, 2008


SCHEDULE OF FUNDING PROGRESSILLINOIS MUNICIPAL RETIREMENT FUND


(2) UAALActuarial (4) As a

Actuarial (1) Accrued (3) Unfunded PercentageValuation Actuarial Liability Funded AAL (5) of Covered

Date Value of (AAL) Ratio (UAAL) Covered PayrollApril 30 Assets Entry-Age (1) / (2) (2) - (1) Payroll (4) / (5)

2002 10,709,458$ 12,187,910$ 87.87% 1,478,452$ 1,336,217$ 110.64%

2003 10,344,912 14,147,702 73.12% 3,802,790 1,198,070 317.41%

2004 10,986,671 14,819,806 74.14% 3,833,135 1,482,013 258.64%

2005 11,528,483 16,246,617 70.96% 4,718,134 1,537,046 306.96%

2006 12,804,770 17,026,379 75.21% 4,221,609 1,619,088 260.74%

2007 13,663,833 20,415,882 66.93% 6,752,049 1,747,045 386.48%

April 30, 2008


SCHEDULE OF FUNDING PROGRESSPOLICE PENSION FUND


AnnualCalendar Required

Year Employer Contribution PercentageDecember 31 Contributions (ARC) Contributed

2002 83,446$ 83,446$ 100.00%

2003 89,311 89,311 100.00%

2004 140,660 140,660 100.00%

2005 170,487 170,487 100.00%

2006 214,192 214,192 100.00%

2007 221,547 221,547 100.00%

April 30, 2008


SCHEDULE OF EMPLOYER CONTRIBUTIONSILLINOIS MUNICIPAL RETIREMENT FUND


AnnualFiscal RequiredYear Employer Contribution Percentage

April 30 Contributions (ARC) Contributed

2003 150,000$ 164,418$ 91.23%

2004 - 197,367 -

2005 588,924 319,302 184.44%

2006 720,380 360,380 199.89%

2007 401,082 412,226 97.30%

2008 625,914 N/A N/A

April 30, 2008


SCHEDULE OF EMPLOYER CONTRIBUTIONSPOLICE PENSION FUND


MAJOR GOVERNMENTAL FUND


REVENUESProperty taxes

Road and bridge 50,000$ 50,000$ 54,587$ 4,587$

Sales taxesState sales 6,000,000 6,000,000 6,028,855 28,855 Home rule sales 520,000 520,000 718,179 198,179

Total sales taxes 6,520,000 6,520,000 6,747,034 227,034

Other local taxesReal estate transfer 6,000 6,000 4,950 (1,050) Franchise 47,000 47,000 54,387 7,387 Self-storage 58,000 58,000 69,086 11,086 Revenue sharing - - 200 200 Rental 23,000 23,000 32,511 9,511

Total other local taxes 134,000 134,000 161,134 27,134

Intergovernmental taxesState income 515,000 515,000 551,611 36,611 State local use 78,000 78,000 82,550 4,550 State replacement 3,500 3,500 5,590 2,090 State auto rental 19,000 19,000 20,648 1,648 Municipal telecommunications 65,000 65,000 65,854 854

Total intergovernmental taxes 680,500 680,500 726,253 45,753

Licenses and permitsBusiness license 90,000 90,000 91,334 1,334 Home occupation fee 120 120 100 (20) Contractor license 17,100 17,100 14,350 (2,750) Elevator certificates - - 330 330 Liquor license 33,000 33,000 32,340 (660) License application fee 2,400 2,400 - (2,400) Vehicle stickers - - 40 40 Building permits 250,000 250,000 208,377 (41,623) Building permit administrative fee - - 11,932 11,932

Total licenses and permits 392,620 392,620 358,803 (33,817)

Charges for servicesPlanning and zoning application 6,000 6,000 10,290 4,290 Plan/ZBA publication services 5,000 5,000 4,098 (902) Duplicating services 200 200 308 108 Engineering services 14,000 14,000 14,543 543 Police special services 1,200 1,200 6,625 5,425 Inspection services 5,000 5,000 5,275 275

GENERAL FUNDSCHEDULE OF REVENUES - BUDGET AND ACTUAL



(This schedule is continued on the following page.)- 44 -


REVENUES (Continued)Charges for services (Continued)

Criminal background checks 300$ 300$ 800$ 500$ Elevator inspections - - 3,910 3,910 Flagg creek operations 100,000 100,000 21,136 (78,864) Playschool-residents 25,000 25,000 12,764 (12,236) Playschool-nonresidents 11,000 11,000 8,704 (2,296) Programs-residents 12,500 12,500 15,368 2,868 Programs-nonresidents 17,000 17,000 16,053 (947) Fieldtrips 7,000 7,000 3,537 (3,463)

Total charges for services 204,200 204,200 123,411 (80,789)

Fines and forfeituresCourt fines 39,000 39,000 69,267 30,267 Local ordinance fines 30,000 30,000 54,462 24,462 Police-duplicating services 2,500 2,500 2,050 (450) Police-impound fees 125,000 125,000 114,000 (11,000)

Total fines and forfeitures 196,500 196,500 239,779 43,279

Investment income 500,000 500,000 527,733 27,733

Reimbursements 60,000 60,000 17,246 (42,754)

Other revenuesGrant revenue 220,000 220,000 179,525 (40,475) DUI agency - - 1,335 1,335 DEA miscellaneous payments 10,000 10,000 13,232 3,232 Tower rental 24,000 24,000 25,452 1,452 Advertisement - - 1,562 1,562 IPBC Terminal Reserve - - 240,103 240,103

Total other revenues 254,000 254,000 461,209 207,209

TOTAL REVENUES 8,991,820$ 8,991,820$ 9,417,189$ 425,369$


GENERAL FUNDSCHEDULE OF REVENUES - BUDGET AND ACTUAL (Continued)




GENERAL GOVERNMENTLegislative

Salaries part-time 53,800$ 53,800$ 51,299$ (2,501)$ Social security 3,333 3,333 3,181 (152) Medicare tax 780 780 744 (36) IMRF 4,360 4,360 4,111 (249) Data processing - - 655 655 Cellular/pages 700 700 532 (168) Travel 750 750 1,141 391 Training 1,000 1,000 2,513 1,513 Subscriptions 250 250 280 30 Memberships 15,000 15,000 13,132 (1,868) Office supplies 500 500 502 2 Operating supplies - - 1,965 1,965 Christmas party 9,000 9,000 8,210 (790) Library reimbursement 6,000 6,000 9,348 3,348 Pool reimbursement 8,000 8,000 7,868 (132) Senior citizens 6,000 6,000 4,263 (1,737) Newsletters 13,000 13,000 14,727 1,727 Donations 15,000 15,000 3,500 (11,500) Other community relations 25,000 25,000 32,968 7,968

Total legislative 162,473 162,473 160,939 (1,534)

City clerkSalaries full-time 150,606 150,606 142,723 (7,883) Salaries part-time 8,400 8,400 8,400 - Overtime 3,200 3,200 4,067 867 Social security tax 10,858 10,858 9,499 (1,359) Medicare tax 3,306 3,306 2,221 (1,085) Health insurance 30,996 30,996 30,858 (138) Employee assistance program 75 75 54 (21) IMRF 16,667 16,667 17,229 562 Gift certificates 425 425 412 (13) Maintenance-equipment 6,370 6,370 4,247 (2,123) Business fee refunding 100 100 - (100) Data processing 10,000 10,000 10,710 710 Travel 3,000 3,000 2,383 (617) Training 7,550 7,550 3,975 (3,575) Subscriptions 150 150 45 (105) Tuition reimbursements 1,300 1,300 - (1,300) Memberships 500 500 377 (123) Legal notices/news publication 10,800 10,800 9,992 (808) License application fee - - - - Regular contractual services 14,606 14,606 22,648 8,042 Office supplies 2,000 2,000 3,578 1,578 Operating supplies 11,000 11,000 8,156 (2,844) Operating capital 6,000 6,000 3,916 (2,084)

Total city clerk 297,909 297,909 285,490 (12,419)


GENERAL FUNDSCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL


(This schedule is continued on the following pages.)- 46 -


GENERAL GOVERNMENT (Continued)City treasurer

Salaries full-time 164,057$ 164,057$ 143,491$ (20,566)$ Salaries part-time 8,400 8,400 8,400 - Overtime 2,000 2,000 7,768 5,768 Social security tax 10,705 10,705 9,773 (932) Medicare tax 2,504 2,504 2,286 (218) Health insurance 40,515 40,515 27,879 (12,636) Employee assistance program 60 60 54 (6) IMRF 19,107 19,107 17,669 (1,438) Gift certificates 350 350 340 (10) Equipment maintenance 450 450 841 391 Auditing 22,300 22,300 16,260 (6,040) Data processing 10,000 10,000 12,907 2,907 Travel 1,000 1,000 473 (527) Training 3,450 3,450 2,562 (888) Subscriptions 300 300 294 (6) Memberships 760 760 1,303 543 Postage 250 250 41 (209) Legal notices/news publications 3,000 3,000 993 (2,007) Regular contractual services 12,500 12,500 10,785 (1,715) Office supplies 2,000 2,000 2,187 187 Bank fees 6,000 6,000 4,364 (1,636) Operating supplies 4,500 4,500 4,507 7 Operating capital 12,000 12,000 11,009 (991)

Total city treasurer 326,208 326,208 286,186 (40,022)

Police and fire boardSalaries part-time 4,500 4,500 3,302 (1,198) Social security tax 280 280 205 (75) Medicare tax 65 65 48 (17) IMRF 106 106 79 (27) Legal 1,000 1,000 1,463 463 Travel 300 300 346 46 Training 1,000 1,000 1,216 216 Memberships 400 400 375 (25) Legal notices/news publication 1,000 1,000 2,729 1,729 Regular contractual services 10,000 10,000 5,681 (4,319) Office supplies 300 300 65 (235)

Total police and fire board 18,951 18,951 15,509 (3,442)

Planning and zoningSalaries part-time 5,520 5,520 5,638 118 Social security tax 342 342 349 7 Medicare tax 80 80 82 2 Legal 10,000 10,000 15,900 5,900


GENERAL FUNDSCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL (Continued)







GENERAL GOVERNMENT (Continued)Planning and zoning (Continued)

Travel 500$ 500$ 27$ (473)$ Training 1,000 1,000 700 (300) Memberships and licenses - - 150 150 Office supplies - - 51 51

Total planning and zoning 17,442 17,442 22,897 5,455

Community developmentSalaries full-time 369,300 369,300 294,280 (75,020) Salaries part- time 41,050 41,050 31,041 (10,009) Overtime 1,000 1,000 6,033 5,033 Social security 25,447 25,447 20,591 (4,856) Medicare tax 5,951 5,951 4,816 (1,135) Health insurance 59,490 59,490 61,572 2,082 Employee assistance program 100 100 109 9 IMRF 44,492 44,492 36,771 (7,721) Gift certificates - - 849 849 Uniform allowance 200 200 808 608 Maintenance-equipment 200 200 831 631 Maintenance-motor vehicles 1,500 1,500 649 (851) Engineering 18,000 18,000 14,604 (3,396) Inspection fees 25,600 25,600 17,550 (8,050) Data processing 39,750 39,750 28,940 (10,810) Cellular/pagers 2,100 2,100 889 (1,211) Travel 3,000 3,000 2,537 (463) Training 3,250 3,250 4,247 997 Subscriptions 750 750 487 (263) Tuition reimbursement 400 400 - (400) Memberships 2,150 2,150 3,664 1,514 Legal notices 3,500 3,500 6,567 3,067 Reimbursable expenses - - 349 349 Regular contractual services 19,500 19,500 25,570 6,070 Office supplies 2,750 2,750 3,368 618 Operating supplies 3,000 3,000 2,968 (32) Fuel/oil 1,500 1,500 2,306 806 Property acquisition - - 125,000 125,000 Operating capital 22,200 22,200 10,598 (11,602)

Total community development 696,180 696,180 707,994 11,814

General administrationSalaries full-time 99,863 99,863 102,913 3,050 Social security tax 5,840 5,840 6,255 415 Medicare tax 1,448 1,448 1,477 29 Health insurance 5,278 5,278 5,106 (172) Retiree insurance allowance 20,600 20,600 18,607 (1,993) Unemployment 500 500 10,899 10,399 Employee assistance program 20 20 18 (2) IMRF 11,051 11,051 11,346 295






GENERAL GOVERNMENT (Continued)General administration (Continued)

Employee physicals 500$ 500$ 183$ (317)$ Employee background checks - - 500 500 Gift certificates 150 150 146 (4) Maintenance-equipment 100 100 43 (57) Maintenance-motor vehicle 500 500 (680) (1,180) Engineering 74,000 74,000 84,760 10,760 Legal 160,000 160,000 169,756 9,756 Labor negotiations 35,000 35,000 44,763 9,763 Data processing 9,000 9,000 11,621 2,621 Cellular/pagers 600 600 601 1 Travel 150 150 573 423 Training 2,500 2,500 4,941 2,441 Subscriptions 160 160 7 (153) Memberships 1,200 1,200 3,045 1,845 Telephone 35,000 35,000 19,756 (15,244) Postage 14,000 14,000 12,215 (1,785) Natural gas 100 100 3,182 3,082 Electricity 100,000 100,000 121,995 21,995 Water 4,000 4,000 3,034 (966) Risk management 140,000 140,000 200,902 60,902 Regular contractual services 32,000 32,000 51,675 19,675 Office supplies 200 200 362 162 Fuel/oil 250 250 277 27 Operating capital 20,000 1,520,000 1,511,018 (8,982) Infrastructure improvements 225,000 225,000 167,938 (57,062) Tax sharing 360,000 360,000 151,930 (208,070)

Total general administration 1,359,010 2,859,010 2,721,164 (137,846)

Total general government 2,878,173 4,378,173 4,200,179 (177,994)

PUBLIC SAFETYPolice management

Salaries full-time 2,374,768 2,374,768 2,110,035 (264,733) Salaries part-time 32,000 32,000 19,517 (12,483) Overtime 169,000 169,000 252,714 83,714 Social security tax 147,236 147,236 145,099 (2,137) Medicare tax 34,434 34,434 34,354 (80) Health insurance 369,570 369,570 334,560 (35,010) Employee assistance program 650 650 598 (52) IMRF 34,056 34,056 37,989 3,933 Police pension 400,000 400,000 625,914 225,914 Employee physicals 3,000 3,000 419 (2,581) Gift certificates 3,575 3,575 3,541 (34) Uniform allowance 40,000 40,000 40,207 207 Maintenance-building 3,500 3,500 1,432 (2,068) Maintenance-equipment 20,000 20,000 26,552 6,552 Maintenance-motor vehicle 30,000 30,000 37,202 7,202






PUBLIC SAFETY (Continued)Police management (Continued)

Labor negotiation 50,000$ 50,000$ 35,140$ (14,860)$ Data processing 70,000 70,000 54,952 (15,048) Cellular/pagers 12,000 12,000 9,616 (2,384) Travel 10,350 10,350 740 (9,610) Training 25,215 25,215 19,299 (5,916) Subscriptions 1,000 1,000 1,100 100 Tuition reimbursement 8,000 8,000 414 (7,586) Memberships 9,380 9,380 15,850 6,470 Legal notice/news publication 2,000 2,000 2,636 636 Regular contractual services 38,500 38,500 36,798 (1,702) Office supplies 11,500 11,500 11,640 140 Operating supplies 62,325 62,325 61,257 (1,068) Fuel/oil 65,000 65,000 82,452 17,452 DUI Equipment 5,600 5,600 - (5,600) Operating capital 158,500 158,500 97,602 (60,898) Grant expenditures 5,500 5,500 54,514 49,014 Adjudication costs 11,000 11,000 9,858 (1,142)

Total police management 4,207,659 4,207,659 4,164,001 (43,658)

E.S.D.A administration Salaries part-time 67,660 67,660 58,604 (9,056) Social security 4,195 4,195 3,625 (570) Health Insurance - - 123 123 Medicare tax 981 981 848 (133) IMRF 4,510 4,510 4,313 (197) Employee physicals 275 275 45 (230) Gift certificates 1,125 1,125 873 (252) Uniform allowance 1,500 1,500 268 (1,232) Maintenance-building 450 450 623 173 Maintenance-equipment 300 300 549 249 Maintenance-motor vehicles 7,500 7,500 3,664 (3,836) Data processing 1,250 1,250 985 (265) Cellular/pagers 4,500 4,500 5,049 549 Travel 400 400 - (400) Training 750 750 - (750) Subscriptions 125 125 - (125) Membership 340 340 35 (305) Telephone - - 489 489 Regular contractual services 1,550 1,550 1,097 (453) Office supplies 1,071 1,071 - (1,071) Operating supplies 595 595 1,068 473 Fuel/oil 4,500 4,500 3,705 (795) Operating capital 28,000 28,000 18,572 (9,428)

Total E.S.D.A 131,577 131,577 104,535 (27,042)

Total public safety 4,339,236 4,339,236 4,268,536 (70,700)






HIGHWAYS AND STREETSPublic works management

Salaries full-time 583,807$ 583,807$ 546,421$ (37,386)$ Salaries part-time 18,000 18,000 17,597 (403) Overtime 37,000 37,000 41,886 4,886 Pager allowance 33,360 33,360 29,854 (3,506) Social security 41,674 41,674 38,705 (2,969) Medicare tax 9,746 9,746 9,052 (694) Health insurance 144,306 144,306 148,706 4,400 Employee assistance program 250 250 217 (33) IMRF 72,394 72,394 68,704 (3,690) Employee physicals 2,050 2,050 613 (1,437) Gift certificates 1,250 1,250 1,019 (231) Uniform allowance 8,790 8,790 6,879 (1,911) Maintenance-building 35,000 35,000 43,697 8,697 Maintenance-equipment 16,500 16,500 13,418 (3,082) Maintenance-infrastructurer 70,740 70,740 60,657 (10,083) Maintenance-motor vehicles 15,000 15,000 9,809 (5,191) Data processing 3,800 3,800 4,510 710 Cellular/pagers 2,665 2,665 1,712 (953) Training 200 200 - (200) Membership 500 500 280 (220) Regular contractual services 167,250 167,250 153,740 (13,510) Office supplies 1,000 1,000 936 (64) Operating supplies 67,930 67,930 75,369 7,439 Fuel/oil 22,200 22,200 21,225 (975) Safety equipment - - 11,720 11,720 Operating capital 84,000 84,000 75,590 (8,410)

Total public works management 1,439,412 1,439,412 1,382,316 (57,096)

Total highways and streets 1,439,412 1,439,412 1,382,316 (57,096)

CULTURE AND RECREATIONRecreation administration

Salaries full-time 75,705 75,705 74,124 (1,581) Salaries part-time 113,295 113,295 102,896 (10,399) Overtime 1,000 1,000 - (1,000) Social security 11,718 11,718 10,952 (766) Medicare tax 2,740 2,740 2,561 (179) Health insurance 16,975 16,975 10,633 (6,342) Employee assistance program 200 200 18 (182) IMRF 13,377 13,377 13,932 555 Employee physicals 1,300 1,300 2,894 1,594 Gift certificates 850 850 776 (74) Uniform allowance 400 400 44 (356) Maintenance-building 3,000 3,000 18,059 15,059 Maintenance-equipment 1,470 1,470 731 (739) Data processing 3,000 3,000 2,260 (740) Cellular/pagers 800 800 509 (291)






CULTURE AND RECREATION (Continued)Recreation administration (Continued)

Travel 100$ 100$ 619$ 519$ Training 1,050 1,050 3,110 2,060 Memberships 14,500 14,500 14,577 77 Postage 30 30 2,201 2,171 Legal notice/news publication 15,000 15,000 22,498 7,498 Transportation 4,000 4,000 2,917 (1,083) Regular contractual services 12,000 12,000 51,544 39,544 Office supplies 1,000 1,000 220 (780) Operating supplies 16,000 16,000 10,650 (5,350) Field trips 10,000 10,000 4,715 (5,285) Operating capital 170,800 170,800 164,764 (6,036)

Total recreation administration 490,310 490,310 518,204 27,894

Total culture and recreation 490,310 490,310 518,204 27,894

Debt ServicePrincipal 440,000 440,000 440,000 - Interest and fees 102,770 102,770 102,769 (1)

TOTAL EXPENDITURES 9,689,901$ 11,189,901$ 10,912,004$ (277,897)$


NONMAJOR GOVERNMENTAL FUNDS

Emergency TotalTelephone Motor Fuel Asset Nonmajor

System Tax Seizure Governmental

ASSETS

Cash and investments 321,919$ 3,167$ 286,836$ 611,922$ Receivables

Accounts - - 5,000 5,000 Intergovernmental 32,510 390,211 - 422,721

TOTAL ASSETS 354,429$ 393,378$ 291,836$ 1,039,643$

LIABILITIESAccounts payable 1,707$ 39,171$ 3,103$ 43,981$

Total liabilities 1,707 39,171 3,103 43,981

FUND BALANCESReserved

Public safety 352,722 - 288,733 641,455 Highways and streets - 354,207 - 354,207

Total fund balances 352,722 354,207 288,733 995,662

TOTAL LIABILITIES AND

FUND BALANCES 354,429$ 393,378$ 291,836$ 1,039,643$

FUND BALANCES


NONMAJOR GOVERNMENTAL FUNDSCOMBINING BALANCE SHEET

April 30, 2008

Special Revenue Funds

LIABILITIES AND


Emergency TotalTelephone Motor Fuel Asset Nonmajor

System Tax Seizure Governmental

REVENUESIntergovernmental 146,874$ 546,846$ 121,922$ 815,642$ Investment income 12,451 4,131 7,528 24,110

Total revenues 159,325 550,977 129,450 839,752

EXPENDITURESCurrent

Public safety 25,145 - 62,527 87,672 Highways and streets - 446,823 - 446,823

Total expenditures 25,145 446,823 62,527 534,495

NET CHANGE IN FUND BALANCES 134,180 104,154 66,923 305,257

FUND BALANCES, MAY 1 218,542 250,053 221,810 690,405

FUND BALANCES, APRIL 30 352,722$ 354,207$ 288,733$ 995,662$

Special Revenue Funds

AND CHANGES IN FUND BALANCES



NONMAJOR GOVERNMENTAL FUNDSCOMBINING STATEMENT OF REVENUES, EXPENDITURES



REVENUES Surcharge - 911 80,000$ 80,000$ 146,874$ 66,874$ Investment income 5,200 5,200 12,451 7,251

Total revenues 85,200 85,200 159,325 74,125

EXPENDITURESCurrent

Public safetyTelephone 18,000 25,150 25,145 (5)

Total expenditures 18,000 25,150 25,145 (5)


FUND BALANCE, MAY 1 218,542

FUND BALANCE, APRIL 30 352,722$




EMERGENCY TELEPHONE SYSTEM FUNDSCHEDULE OF REVENUES, EXPENDITURES AND



REVENUES Intergovernmental 175,000$ 175,000$ 546,846$ 371,846$ Investment income 6,000 6,000 4,131 (1,869)

Total revenues 181,000 181,000 550,977 369,977

EXPENDITURESCurrent

Highways and streets 420,000 446,825 446,823 (2)

Total expenditures 420,000 446,825 446,823 (2)

NET CHANGE IN FUND BALANCE (239,000)$ (265,825)$ 104,154 369,979$






MOTOR FUEL TAX FUNDSCHEDULE OF REVENUES, EXPENDITURES AND



REVENUES Investment income 4,000$ 4,000$ 7,528$ 3,528$ Intergovernmental 80,500 80,500 121,922 41,422

Total revenues 84,500 84,500 129,450 44,950

EXPENDITURESCurrent

Public safety 65,500 65,500 62,527 (2,973)

Total expenditures 65,500 65,500 62,527 (2,973)







ASSET SEIZURE FUNDSCHEDULE OF REVENUES, EXPENDITURES AND


MAJOR ENTERPRISE FUNDS


OPERATING REVENUES Charges for services

Water charges 2,660,000$ 2,660,000$ 2,736,943$ 76,943$ Inspection fees 2,000 2,000 670 (1,330) Connection fees 9,000 9,000 6,350 (2,650) Sale of meters 9,000 9,000 4,315 (4,685) Water deposit - - 343 343

Total charges for services 2,680,000 2,680,000 2,748,621 68,621

Fines and forfeituresPenalties 75,000 75,000 55,518 (19,482)

Other revenueMiscellaneous revenue 60,000 60,000 60,078 78

Total operating revenues 2,815,000 2,815,000 2,864,217 49,217

OPERATING EXPENSESCost of sales and services 5,783,420 5,783,420 4,194,272 (1,589,148) Administration 177,736 177,736 171,447 (6,289) Benefits 48,736 48,736 67,423 18,687

Total operating expenses 6,009,892 6,009,892 4,433,142 (1,576,750)

OPERATING INCOME (LOSS) (3,194,892) (3,194,892) (1,568,925) 1,625,967

NONOPERATING REVENUES (EXPENSES)Investment income 110,000 110,000 149,442 39,442 Interest expense (197,897) (197,897) (194,829) 3,068 Bond amortization expense - - (3,466) (3,466) Gain on sale of capital assets - - 1,000 1,000

Total nonoperating revenues(expenses) (87,897) (87,897) (47,853) 40,044

CHANGE IN NET ASSETS - BUDGETARY BASIS (3,282,789)$ (3,282,789)$ (1,616,778) 1,666,011$

ADJUSTMENTS TO GAAP BASISCapitalize assets 2,428,895 Depreciation expense (612,697)

Total adjustments to GAAP basis 1,816,198

CHANGE IN NET ASSETS -GAAP BASIS 199,420$

CHANGES IN NET ASSETS - BUDGET AND ACTUAL



WATER FUNDSCHEDULE OF REVENUES, EXPENSES AND



OPERATING EXPENSES EXCLUDING DEPRECIATIONCost of sales and service

Gift certificates 200$ 200$ 194$ (6)$ Uniform allowance 1,500 1,500 1,560 60 Maintenance-building 17,000 17,000 7,367 (9,633) Maintenance-equipment 175,000 175,000 10,334 (164,666) Maintenance-motor vehicles 1,500 1,500 1,291 (209) Maintenance-infrastructure 80,000 80,000 68,840 (11,160) Auditing 6,500 6,500 6,000 (500) Engineering 75,000 75,000 26,206 (48,794) Legal - - 1,975 1,975 Cellular/pagers 800 800 2,293 1,493 Travel 200 200 22 (178) Training 1,000 1,000 350 (650) Telephone 275 275 1,026 751 Postage 4,500 4,500 4,675 175 Natural gas 6,900 6,900 9,645 2,745 Electricity 50,000 50,000 70,420 20,420 Purchase water 25,000 25,000 20,068 (4,932) Risk management 60,000 60,000 67,608 7,608 Water purchase 1,400,000 1,400,000 1,366,983 (33,017) Regular contractual services 85,000 85,000 43,070 (41,930) Office supplies 1,800 1,800 1,344 (456) Operating supplies 18,000 18,000 33,467 15,467 Fuel/oil 2,500 2,500 2,501 1 Pager allowance 6,745 6,745 7,849 1,104 Infrastructure improvements 3,725,000 3,725,000 2,430,899 (1,294,101) Operating capital 39,000 39,000 8,285 (30,715)

Total cost of sales and service 5,783,420 5,783,420 4,194,272 (1,589,148)

AdministrationSalaries full-time 156,796 156,796 132,361 (24,435) Overtime 17,500 17,500 32,912 15,412 Employee assistance program 40 40 54 14 Employee physicals - - 95 95 Data processing 3,000 3,000 5,292 2,292 Subscriptions - - 21 21 Memberships 400 400 712 312

Total administration 177,736 177,736 171,447 (6,289)


WATER FUNDSCHEDULE OF OPERATING EXPENSES - BUDGET AND ACTUAL




OPERATING EXPENSES EXCLUDING DEPRECIATION (Continued)Benefits

Social security 10,806$ 10,806$ 10,968$ 162$ Medicare tax 2,527 2,527 2,565 38 Health insurance 18,105 18,105 33,912 15,807 IMRF 17,298 17,298 19,978 2,680

Total benefits 48,736 48,736 67,423 18,687

TOTAL OPERATING EXPENSES EXCLUDING DEPRECIATION - BUDGETARY BASIS 6,009,892$ 6,009,892$ 4,433,142 (1,576,750)$

ADJUSTMENTS TO GAAP BASISCapitalize assets (2,428,895) Depreciation expense 612,697

Total adjustments to GAAP basis (1,816,198)

TOTAL OPERATING EXPENSES 2,616,944$


WATER FUNDSCHEDULE OF OPERATING EXPENSES - BUDGET AND ACTUAL (Continued)




OPERATING REVENUES Charges for services 24,000$ 24,000$ 24,895$ 895$ Fines and forfeitures 1,000 1,000 1,019 19

Total operating revenues 25,000 25,000 25,914 914

OPERATING EXPENSESCapital outlay 150,000 150,000 47,487 (102,513) Cost of sales and service 12,000 12,000 12,941 941 Administration 700 700 - (700) Benefits 85 85 - (85)

Total operating expenses 162,785 162,785 60,428 (102,357)

OPERATING INCOME (LOSS) (137,785) (137,785) (34,514) 103,271

NONOPERATING REVENUES (EXPENSES)

Investment income 17,000 17,000 22,951 5,951

Total nonoperating revenues (expenses) 17,000 17,000 22,951 5,951

CHANGE IN NET ASSETS -BUDGETARY BASIS (120,785)$ (120,785)$ (11,563) 109,222$

ADJUSTMENTS TO GAAP BASISCapitalize assets - Depreciation expense (58,149)

Total adjustments to GAAP basis (58,149)

CHANGE IN NET ASSETS -GAAP BASIS (69,712)$

CHANGES IN NET ASSETS - BUDGET AND ACTUAL



SANITARY SEWER FUNDSCHEDULE OF REVENUES, EXPENSES AND



OPERATING EXPENSES EXCLUDING DEPRECIATION

Capital outlayInfrastructure improvements 150,000$ 150,000$ 47,487$ (102,513)$

Total capital outlay 150,000 150,000 47,487 (102,513)

Cost of sales and serviceMaintenance-equipment 500 500 - (500) Auditing 500 500 - (500) Engineering 5,000 5,000 12,938 7,938 Regular contractual service 5,000 5,000 3 (4,997) Operating supplies 1,000 1,000 - (1,000)

Total cost of sales and service 12,000 12,000 12,941 941

AdministrationSalaries full-time 500 500 - (500) Overtime 200 200 - (200)

Total administration 700 700 - (700)

BenefitsSocial security 20 20 - (20) Medicare tax 5 5 - (5) Health insurance 30 30 - (30) IMRF 30 30 - (30)

Total benefits 85 85 - (85)

TOTAL OPERATING EXPENSESEXCLUDING DEPRECIATION -BUDGETARY BASIS 162,785$ 162,785$ 60,428 (102,357)$

ADJUSTMENTS TO GAAP BASISCapitalize assets - Depreciation expense 58,149

Total adjustments to GAAP basis 58,149

TOTAL OPERATING EXPENSES 118,577$


SANITARY SEWER FUNDSCHEDULE OF OPERATING EXPENSES - BUDGET AND ACTUAL



STATISTICAL SECTION

This part of the City’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 displays about the City’s overall financial health.

Contents Page(s)

Financial TrendsThese schedules contain trend information to help the reader understand how the City’s financial performance and well-being have been changed over time. 63-67

Revenue CapacityThese schedules contain information to help the reader assess the City’s most significant local revenue source, the sales tax. 68-69

Debt CapacityThe schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. 70-73

Demographic and Economic InformationThese schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. 74-75

Operating InformationThese schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. 76-78

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented GASB Statement No. 34 in 2004; schedules presenting government-wide information include information beginning in that year.


NET ASSETS BY COMPONENT

Last Five Fiscal Years

Fiscal Year 2004 2005 2006 2007 2008

GOVERNMENTAL ACTIVITIESInvested in capital assets

net of related debt 9,131,009$ 13,679,632$ 18,834,329$ 15,856,271$ 18,260,056$ Restricted 1,184,292 389,245 346,338 690,405 995,662 Unrestricted 16,284,119 13,178,150 11,332,521 13,052,826 11,550,703

TOTAL GOVERNMENTAL ACTIVITIES 26,599,420$ 27,247,027$ 30,513,188$ 29,599,502$ 30,806,421$

BUSINESS-TYPE ACTIVITIESInvested in capital assets

net of related debt 18,348,631$ 18,348,631$ 13,510,844$ 12,520,109$ 12,309,485$ Restricted - - - - - Unrestricted 1,668,155 286,168 896,980 2,178,465 2,620,533

TOTAL BUSINESS-TYPE ACTIVITIES 20,016,786$ 18,634,799$ 14,407,824$ 14,698,574$ 14,930,018$

PRIMARY GOVERNMENTInvested in capital assets

net of related debt 27,479,640$ 32,028,263$ 32,345,173$ 28,376,380$ 30,569,541$ Restricted 1,184,292 389,245 346,338 690,405 995,662 Unrestricted 17,952,274 13,464,318 12,229,501 15,231,291 14,171,236

TOTAL PRIMARY GOVERNMENT 46,616,206$ 45,881,826$ 44,921,012$ 44,298,076$ 45,736,439$

The implementation of GASB Statement No. 34 was completed for fiscal year ending April 30, 2004. Therefore, information prior to fiscal year 2004 is unavailable.

Data Source

Audited Financial Statements

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CHANGES IN NET ASSETS


Fiscal Year 2004 2005 2006 2007 2008

EXPENSESGovernmental activities

General government 2,620,802$ 2,562,355$ 3,178,186$ 3,047,993$ 2,923,526$ Public safety 3,395,830 3,642,778 3,947,316 4,189,973 4,511,179 Highways and streets 1,545,861 1,791,704 2,030,597 1,732,256 1,741,276 Culture and recreation 266,606 298,628 287,302 344,551 412,421

Total governmental activities expenses 7,829,099 8,295,465 9,443,401 9,314,773 9,588,402

Business-type activitiesWater 2,849,303 3,369,547 2,380,134 2,708,610 2,814,239 Sewer 190,931 190,182 68,035 78,975 118,577

Total business-type activities expenses 3,040,234 3,559,729 2,448,169 2,787,585 2,932,816

TOTAL PRIMARY GOVERNMENT EXPENSES 10,869,333$ 11,855,194$ 11,891,570$ 12,102,358$ 12,521,218$

PROGRAM REVENUESGovernmental activities

Charges for servicesGeneral government 412,507$ 445,334$ 508,851$ 582,359$ 441,486$ Public safety 67,184 66,959 188,814 346,400 408,644 Culture and recreation 189,305 222,009 286,035 199,134 105,061

Operating grants and contributions 175,583 200,190 280,814 266,371 291,967 Capital grants and contributions 2,914 383,377 40,395 7,725 556,325

Total governmental activities program revenues 847,493 1,317,869 1,304,909 1,401,989 1,803,483

Business-type activitiesCharges for services

Water 2,093,470 2,127,991 2,581,977 2,766,833 2,864,217 Sewer 25,282 25,185 25,598 25,792 25,914

Operating grants and contributions - - - - - Capital grants and contributions - - - - -

Total business-type activities program revenues 2,118,752 2,153,176 2,607,575 2,792,625 2,890,131

TOTAL PRIMARY GOVERNMENT PROGRAM REVENUES 2,966,245$ 3,471,045$ 3,912,484$ 4,194,614$ 4,693,614$

NET (EXPENSE) REVENUEGovernmental activities (6,981,606)$ (6,977,596)$ (8,138,492)$ (7,912,784)$ (7,784,919)$ Business-type activities (921,482) (1,406,553) 159,406 5,040 (42,685)

TOTAL PRIMARY GOVERNMENT NET (EXPENSE) REVENUE (7,903,088)$ (8,384,149)$ (7,979,086)$ (7,907,744)$ (7,827,604)$

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CHANGES IN NET ASSETS (Continued)


Fiscal Year 2004 2005 2006 2007 2008

GENERAL REVENUES AND OTHERCHANGES IN NET ASSETSGovernmental activities

TaxesProperty 43,597$ 47,669$ 54,206$ 58,242$ 54,587$ Sales 5,547,836 6,113,779 6,045,621 6,348,503 6,747,034 Utility - - - - - Income 361,404 417,458 457,785 504,942 551,611 Hotel/Motel 333,712 303,224 338,024 427,298 425,857 Other 204,726 91,968 269,514 310,706 335,576

Investment income 204,333 290,239 379,896 596,849 636,866 Miscellaneous 367,105 357,844 80,559 299 240,307 Special item (662,625) (1,247,741) - Transfers - - - - -

Total governmental activities 7,062,713 7,622,181 6,962,980 6,999,098 8,991,838

Business-type activitiesInvestment income 16,850 24,566 55,292 285,710 172,393 Miscellaneous - - - - - Transfers - - - - -

Total business-type activities 16,850 24,566 55,292 285,710 172,393

TOTAL PRIMARY GOVERNMENT 7,079,563$ 7,646,747$ 7,018,272$ 7,284,808$ 9,164,231$

CHANGE IN NET ASSETSGovernmental Activities 81,107$ 644,585$ (1,175,512)$ (913,686)$ 1,206,919$ Business-type Activities (904,632) (1,381,987) 214,698 290,750 129,708

TOTAL PRIMARY GOVERNMENT CHANGE IN NET ASSETS (823,525)$ (737,402)$ (960,814)$ (622,936)$ 1,336,627$

The implementation of GASB Statement No. 34 was completed for fiscal year ending April 30, 2004. Therefore, information prior to fiscal year 2004 is unavailable.

Data Source


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FUND BALANCES OF GOVERNMENTAL FUNDS

Last Ten Fiscal Years

Fiscal Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

GENERAL FUNDReserved -$ -$ 591,035$ 327,358$ 305,032$ 307,868$ 368,023$ 2,758$ 2,373$ 130,197$ Unreserved 9,558,550 10,743,903 14,202,064 14,345,353 14,574,250 14,415,324 10,820,933 10,354,169 11,920,579 10,297,940

TOTAL GENERAL FUND 9,558,550$ 10,743,903$ 14,793,099$ 14,672,711$ 14,879,282$ 14,723,192$ 11,188,956$ 10,356,927$ 11,922,952$ 10,428,137$

ALL OTHER GOVERNMENTAL FUNDSReserved -$ -$ -$ -$ -$ -$ -$ 368,813$ 707,505$ 995,662$ Unreserved, reported in

Special Revenue Funds 615,516 834,888 1,069,297 1,743,479 2,344,449 2,686,286 1,877,107 1,440,394 1,556,634 1,779,993 Debt Service Funds - - - - - - - - - - Capital Project Funds - - - - - - - - - - Permanent Funds - - - - - - - - - -

TOTAL ALL OTHER GOVERNMENTAL FUNDS 615,516$ 834,888$ 1,069,297$ 1,743,479$ 2,344,449$ 2,686,286$ 1,877,107$ 1,809,207$ 2,264,139$ 2,775,655$

Data Source


- 66 -


CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS


Fiscal Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

REVENUESTaxes 5,396,709$ 5,696,668$ 6,329,825$ 6,871,294$ 6,419,402$ 5,969,812$ 6,471,657$ 6,548,671$ 6,978,497$ 7,388,612$ Licenses and permits 212,514 211,760 435,065 225,804 282,627 393,539 416,750 392,708 458,130 358,803 Intergovernmental 693,960 751,240 811,377 671,743 641,001 755,134 817,949 993,486 1,056,133 1,541,895 Fines and forfeitures 47,723 38,319 50,430 60,397 45,200 63,417 55,961 99,724 211,798 239,779 Charges for services 154,731 148,594 149,292 227,303 135,921 209,053 251,785 213,187 170,187 123,411 Investment income 546,960 504,646 738,676 398,334 315,191 204,333 290,239 378,004 644,998 636,866 Miscellaneous 85,336 238,537 63,870 149,924 307,162 312,665 624,097 291,221 177,234 505,955

Total revenues 7,137,933 7,589,764 8,578,535 8,604,799 8,146,504 7,907,953 8,928,438 8,917,001 9,696,977 10,795,321

EXPENDITURESGeneral government 2,212,655 2,628,311 3,340,634 1,472,333 1,446,121 2,318,262 2,210,158 2,895,754 2,821,033 4,532,300 Public safety 1,999,958 1,712,089 2,433,997 2,534,602 2,860,068 3,287,606 4,088,455 4,119,717 4,079,939 4,356,208 Highways and streets 717,927 800,410 769,667 893,125 930,891 1,241,226 1,202,427 1,417,907 1,240,634 1,829,139 Culture and recreation 201,464 272,537 213,089 250,154 272,064 266,606 298,628 287,302 371,534 518,204 Capital outlay 647,137 335,682 1,103,763 2,364,132 1,289,713 55,400 4,932,184 567,370 125,375 - Debt service

Principal 370,000 390,000 410,000 220,000 340,000 355,000 375,000 395,000 415,000 440,000 Interest 66,360 46,010 23,780 316,659 200,106 198,106 165,001 145,501 124,764 102,769

Total expenditures 6,215,501 6,185,039 8,294,930 8,051,005 7,338,963 7,722,206 13,271,853 9,828,551 9,178,279 11,778,620

EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES 922,432 1,404,725 283,605 553,794 807,541 185,747 (4,343,415) (911,550) 518,698 (983,299)

OTHER FINANCING SOURCES (USES)Transfers in 542,009 199,221 290,298 - - - - - - - Transfers (out) (542,009) (199,221) (290,298) - - - - - - - Bonds issued - - 4,000,000 - - - - - - - Sale of capital assets - - - - - - - 11,621 1,502,259 -

Total other financing sources (uses) - - 4,000,000 - - - - 11,621 1,502,259 -

NET CHANGE IN FUND BALANCES 922,432$ 1,404,725$ 4,283,605$ 553,794$ 807,541$ 185,747$ (4,343,415)$ (899,929)$ 2,020,957$ (983,299)$

DEBT SERVICE AS A PERCENTAGE OF NONCAPITAL EXPENDITURES 7.84% 7.45% 6.03% 9.44% 8.93% 7.21% 6.48% 5.84% 5.96% 4.61%

Data Source


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SALES TAX BY CATEGORY

Last Ten Calendar Years

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

General merchandise 284,705$ 337,057$ 352,058$ 364,005$ 286,197$ 243,719$ 266,711$ 258,539$ 260,943$ 339,904$

Food 459,060 484,396 500,170 565,398 598,506 575,135 575,797 576,724 575,910 642,644

Drinking and eating places 290,090 295,725 311,775 316,519 323,754 305,880 324,574 333,740 361,008 462,060

Apparel 65,061 52,559 63,929 73,518 81,373 77,973 81,648 20,195 9,752 13,083

Furniture & H.H. & radio 347,600 380,671 408,755 409,886 411,064 400,089 411,437 414,753 448,306 570,174

Lumber, building hardware 174,385 121,157 54,798 66,862 56,435 35,721 417,030 431,502 421,579 443,783

Automobile and filling stations 2,598,715 2,928,575 3,277,827 3,768,058 3,390,995 3,128,706 3,056,034 3,197,210 3,287,976 3,083,268

Drugs and miscellaneous retail 308,426 305,435 252,196 261,730 280,959 260,468 236,996 273,102 393,092 484,752

Agriculture and all others 313,246 295,189 276,305 241,881 271,988 224,540 284,229 323,236 356,914 592,313

Manufacturers 320,204 365,386 337,025 320,044 189,480 47,160 239,031 163,329 158,058 149,284

TOTAL 5,161,492$ 5,566,150$ 5,834,838$ 6,387,901$ 5,890,751$ 5,299,391$ 5,893,487$ 5,992,330$ 6,273,538$ 6,781,265$

City direct state sales tax rate 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%

Home rule sales tax rate - - - - - - - - - 0.25%

Data Source

Illinois Department of Revenue

- 68 -

HomeCity Rule

Calendar Direct Sales Tax State County TotalYear Rate Rate Rate Rate Rate

1998 1.00% - 6.00% 0.75% 7.75%

1999 1.00% - 6.00% 0.75% 7.75%

2000 1.00% - 6.00% 0.75% 7.75%

2001 1.00% - 6.00% 0.75% 7.75%

2002 1.00% - 6.00% 0.75% 7.75%

2003 1.00% - 6.00% 0.75% 7.75%

2004 1.00% - 6.00% 0.75% 7.75%

2005 1.00% - 6.00% 0.75% 7.75%

2006 1.00% - 6.00% 0.75% 7.75%

2007 1.00% 0.25% 6.00% 0.75% 8.00%

Data Source

City and Illinois Department of Revenue Records


DIRECT AND OVERLAPPING SALES TAX RATES


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RATIOS OF OUTSTANDING DEBT BY TYPE


Governmental Activities Business-Type Activities PercentageFiscal General Installment Special General Installment Total of Year Obligation Notes Assessment Obligation Notes Capital Primary Personal Per

Ended Bonds Payable Payable Bonds Payable Leases Government Income* Capita*

1999 - - - - - - - 0.00% - 2000 - - - - - - - 0.00% - 2001 4,000,000 - - - - - 4,000,000 2.59% 664.01 2002 3,780,000 - - - - - 3,780,000 2.47% 632.85 2003 3,440,000 - - - - - 3,440,000 2.26% 580.88 2004 3,085,000 - - - - - 3,085,000 2.05% 524.75 2005 2,710,000 - - - - - 2,710,000 1.81% 464.36 2006 2,315,000 - - 5,000,000 - - 7,315,000 4.93% 1,253.432007 1,900,000 - - 5,000,000 - - 6,900,000 4.65% 1,182.322008 1,460,000 - - 4,810,000 - - 6,270,000 4.23% 1,077.69

Note: Details of the City's outstanding debt can be found in the notes to the financial statements.

* See the Schedule of Demographic and Economic Statistics population data.


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RATIOS OF GENERAL BONDED DEBT OUTSTANDING


Percentage ofLess: Amounts Estimated

General Available Actual TaxableFiscal Obligation For the Payment Value of PerYear Bonds of Debt Service Total Property Capita

1999 - - - - - 2000 - - - - - 2001 4,000,000 - 4,000,000 1.90% 659.52 2002 3,780,000 - 3,780,000 1.74% 627.49 2003 3,440,000 - 3,440,000 1.33% 575.92 2004 3,085,000 - 3,085,000 1.20% 520.94 2005 2,710,000 - 2,710,000 1.00% 460.96 2006 7,315,000 - 7,315,000 2.23% 1,253.43 2007 6,900,000 - 6,900,000 2.14% 1,182.32 2008 6,270,000 - 6,270,000 1.95% 1,077.69

Note: Details of the City's outstanding debt can be found in the notes to the financial statements.

- 71 -


DIRECT AND OVERLAPPING BONDED DEBT

April 30, 2008

Percentage City ofDebt Applicable Countryside's

Outstanding to the City of ShareGovernmental unit Debt Countryside (1) of Debt

City of Countryside 6,270,000$ 100.00% 6,270,000$

Schools:School District No. 105 945,000 40.98% 387,261 School District No. 106 7,795,000 6.32% 492,644 School District No. 107 13,806,518 7.60% 1,049,295 High School District No. 204 12,530,000 11.01% 1,379,553 Community College District No. 502 150,655,000 0.78% 1,175,109

Total Schools 184,786,518 4,483,862

Other:Cook County 3,074,880,000 0.22% 6,764,736 Cook Country Forest Preserve District - 0.22% - Metropolitan Water Reclamation District 1,453,547,772 0.23% 3,343,160 LaGrange Highlands Sanitary District - 20.53% - Pleasantdale Park District 680,000 10.25% 69,700 LaGrange Park District 6,592,000 0.22% 14,502

Total Other 4,535,699,772 10,192,098

4,726,756,290$ 20,945,960$

(1) Determined by ratio of assessed valuation of property subject to taxation in the City of Countrysideto valuation of property subject to taxation in overlapping unit.

- 72 -


SCHEDULE OF LEGAL DEBT MARGIN

April 30, 2008

Under the 1970 Illinois Constitution, there is no legal limit for home rule municipalities except as set by the General Assembly.

- 73 -

PerCapita

Calendar Personal Personal UnemploymentYear Population Income Income Rate

1998 n/a n/a n/a n/a1999 n/a n/a 25,449$ n/a2000 6,067 154,399,083$ 25,449 3.80%2001 6,065 154,348,185 25,449 4.20%2002 6,024 153,304,776 25,449 5.10%2003 5,973 152,006,877 25,449 5.20%2004 5,922 150,708,978 25,449 4.80%2005 5,879 149,614,671 25,449 4.60%2006 5,836 148,520,364 25,449 3.40%2007 5,818 148,062,282 25,449 3.60%

n/a - not available


DEMOGRAPHIC AND ECONOMIC INFORMATION


- 74 -

Approximate % of Approximate % ofNo. of Total City No. of Total City

Employer Rank Employees Population Employer Rank Employees Population

Jewel-Osco 1 240 4.13% Gallagher & Henry 1 200 3.30%Helping Hnads Rehabcenter 2 200 3.44% Air Liquide American L.P. 2 120 1.98%William Tell/Holiday Inn 3 175 3.01% I.U.O.E., Local 150 3 100 1.65%AutoBarn of Countryside 4 170 2.92% Scheck Mechanical Corp. 4 100 1.65%Home Depot 5 162 2.78% Vee Pak, Inc. 5 80 1.32%Dominicks Finer Foods 6 150 2.58% Waddell & Reed Inc. 6 75 1.24%Best Buy 7 113 1.94% Dodge City of Countryside 7 65 1.07%State Bank of Countryside 8 106 1.82% Currie Motor Inc. 8 60 0.99%I.U.O.E., Local 150 9 100 1.72% Thermatool Lemont 9 60 0.99%T&H Lemont 10 85 1.46% Continental Nissan 10 60 0.99%

Source: (a) The Illinois Manufacturers Directory, the Illinois Service Directory, City records and telephone surveySource: (b) The Illinois Manufacturers Directory and the Illinois Service Directory.


PRINCIPAL EMPLOYERS

CURRENT YEAR AND SEVEN YEARS AGO

2007 (a) 2000 (b)

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Function/Program 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

GENERAL GOVERNMENTAdministration 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 City Clerk 2.50 2.50 2.50 2.50 2.50 3.00 3.00 3.00 3.00 3.00 Financial Management 2.00 2.00 2.00 2.00 2.00 2.00 2.00 3.00 3.00 3.00 Community Development 4.00 4.00 4.00 4.00 5.00 5.00 5.00 6.00 6.00 6.00 Municipal Building 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00

11.50 11.50 11.50 11.50 12.50 13.00 13.00 15.00 15.00 15.00 PUBLIC SAFETY

PoliceOfficers 22.00 22.00 22.00 22.00 25.00 25.00 26.00 26.00 26.00 26.00 Civilians 10.00 10.00 10.00 10.00 10.00 10.00 13.00 13.50 13.50 14.00

32.00 32.00 32.00 32.00 35.00 35.00 39.00 39.50 39.50 40.00

PUBLIC WORKSStreets 9.00 9.00 9.00 9.00 9.00 9.00 10.00 10.00 10.00 10.00

9.00 9.00 9.00 9.00 9.00 9.00 10.00 10.00 10.00 10.00

CULTURE AND RECREATIONPark and Recreation 4.50 4.50 4.50 5.00 5.00 5.00 5.50 6.00 6.00 6.00

4.50 4.50 4.50 5.00 5.00 5.00 5.50 6.00 6.00 6.00 BUSINESS-TYPE

Water and Sewer 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00

TOTAL FULL-TIMEEQUIVALENT EMPLOYEES 59.00 59.00 59.00 59.50 63.50 64.00 69.50 72.50 72.50 73.00

Data Source

City payroll records


FULL-TIME EQUIVALENT EMPLOYEES


- 76 -


GENERAL GOVERNMENTClerk's office

Real estate transfers n/a n/a n/a n/a 111 240 216 202 205 190 Business licenses issued n/a n/a n/a n/a 435 452 466 463 489 455 New business licenses n/a n/a n/a n/a 46 46 77 62 43 75

Community developmentPermits fees $104,610 $65,131 $306,876 $112,984 $69,334 $195,687 $233,283 $260,796 $276,493 $205,165Value of construction n/a n/a n/a n/a 4,528,478 16,856,657 12,970,421 14,152,211 10,556,919 $9,109,781

PUBLIC SAFETYPolice

Total station complaints 6,864 6,788 6,656 6,654 6,583 6,674 7,639 6,889 6,773 7,253 Accidents 475 472 554 458 405 383 460 757 723 449 Traffic arrests 128 150 228 141 115 190 206 297 402 404 Thefts 278 284 246 230 213 132 255 243 241 204 Alarms 850 765 737 696 651 559 706 709 581 495 Burglaries 31 31 25 29 39 32 26 36 18 20 Stonen vehicles 32 25 34 30 25 20 23 14 21 18 Accidents 475 472 554 458 405 283 460 435 411 449

PUBLIC WORKSSnow plowing (# of events) 15 19 15 18 11 21 17 20 15 31 Mowing (# of acres/week) 28 28 30 30 33 35 35 35 35 35 Brush pickup (Cu. Yds.) 756 710 820 740 768 804 984 600 656 760 Leaf pickup (Tons) - 153 198 197 279 243 212 191 181 202 Street sweeping (Miles) n/a n/a n/a n/a n/a 600 600 600 600 600 Sidewalks (# of sq. replaced) - 144 - - - 432 - - - 353

WATERNew connections n/a n/a n/a n/a 9 1 3 2 3 3 Water main repairs 11 24 20 29 20 12 13 5 12 34 Average daily consumption

(in million gallons per day) 0.90 0.95 0.95 0.93 0.94 0.89 0.90 0.98 0.89 0.90

n/a - not available

Data Source

Various City departments' records


OPERATING INDICATORS


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PUBLIC SAFETYPolice

Stations 1 1 1 1 1 1 1 1 1 1 Patrol vehicles 10 10 10 10 10 12 12 12 12 12

PUBLIC WORKSStreets (miles) 16.7 16.7 16.7 16.7 16.7 16.7 16.7 16.7 16.8 16.8 Streetlights 520 520 520 520 520 520 520 520 520 520 Sidewalks (miles) 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.8 7.8 Traffic signals 1 1 1 1 1 1 1 1 1 1

WATERWater mains (miles) 33.4 33.4 33.4 33.4 33.4 33.4 33.4 33.4 34.0 34.0 Fire hydrants 451 451 451 451 451 451 451 451 458 458 Storage capacity (MG) 2 2 2 2 2 2 2 2 2 2

WASTEWATERSanitary lift stations 1 1 1 1 1 1 1 1 1 1 Sanitary sewers (miles) 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.4 Storm sewers (miles) 15.6 15.6 16.1 16.1 16.7 16.7 16.7 16.7 16.7 16.7

Data Source

City's capital asset records; various City departments and the City engineer's records.


CAPITAL ASSET STATISTICS


- 78 -

Documents

CITY OF COUNTRYSIDE, ILLINOIS COMPREHENSIVE ANNUAL