Naperville Park District 3-Year Financial Plan

Transcription

1 Naperville Park District 3-Year Financial Plan /10/2014 Includes all District Functions Except Debt

2 Naperville Park District 3-Year Financial Plan The National Advisory Council on State and Local Budgeting (NACSLB) recommends that governments establish a financial planning process that assesses the long-term financial implications of current and proposed policies, programs and assumptions, as well as develops appropriate strategies to achieve its goals. The Naperville Park District is pleased to present our 3-Year Financial Plan. The Financial Plan is intended to serve as a tool, providing the Park Board of Commissioners and staff with the insight required to address issues impacting the District s financial condition. The plan consists of the following sections: Introduction Baseline Budget Forecast Summary Major Revenue Source Property Tax General Fund Operating Forecast Recreation Fund Forecast Golf Services Fund Forecast Capital Improvement Plan Other District Funds Summary Addendums Financial planning expands our awareness of potential problems and opportunities and of options for addressing them. The longterm revenue, expenditure and service implications of continuing or ending existing programs or adding new programs or facilities can be identified. The financial planning process helps shape decisions and permits necessary actions to take place in a timely and efficient manner. A financial plan does not state what is certain to happen. Rather it highlights significant issues or opportunities that must be addressed if the mission and goals are to be achieved and provides forecasts of expected results if certain actions are taken. 2 Naperville Park District

3 Naperville Park District 3-Year Financial Plan Introduction The Naperville Park District s Year Financial Plan is one part of the District s Master Plan that illustrates the organization s good stewardship of community resources while supporting continuing efforts to provide beautiful parks and facilities, affordable and engaging programs for all ages and abilities and host unique seasonal events. The District s perpetual focus to identify efficiencies coupled with continuous improvement has been the key to its success, particularly during the last several years of economic challenge. Additionally, sound financial practices, a continued competitive bidding climate and the pursuit of alternative revenue opportunities have kept the District in a financially healthy state. In 2008, the District s financial rating was upgraded by Moody s Investors Service to an Aaa the highest rating available. Since then, the District s exceptional financial status has been renewed at this level. These advantages have made it possible for the District to continue to renovate its facilities and further develop its programs and services for the community s benefit. All that said, the Naperville Park District s future is bright. However, our continued success is dependent upon our ability to do the following consistently and well: The Future of the Naperville Park District Our success hinges on our ability to do the following consistently and well: Maintain our relevance as a key provider of recreation and health and wellness solutions Remain reasonably priced and deliver an excellent value to residents Provide consistently great experiences to grow the District s long-term customer base Expand our focus and increase our reach in the community 3 Naperville Park District

4 Baseline Budget Naperville Park District 3-Year Financial Plan The first year of the plan is based on the District s 2014 Budget approved on December 16, The District s annual budget includes all operating and capital needs for the District. The philosophy of the District s 2014 budget was based on the following objectives: Realize continuous improvement in efficiencies, practice conservative spending, perform a thorough review of line items and maintain program fee rates at an affordable level. Maintain a strong financial position to ensure the District s Aaa rating. Departmental budget requests were based on specific needs, thereby allowing the District to deliver the level of excellence expected by the community. Utilization of the District s tax levy to adequately fund operations, capital and special recreation needs. Hold recreation program and beach fees steady. For golf operations, a $1.50 rate increase has been included for the majority of rate categories. Maintain a motivated and loyal workforce. Provide competitive salary and benefit package. This plan includes annual funding for a 2% compensation allocation pool. It also includes comprehensive health insurance coverage with affordable employee contributions. Continue to produce balanced budgets for the General, Recreation and Golf Funds. Forecast Summary Financial forecasts are the foundation for a long-term financial plan. These forecasts provide the Board and staff with information they need to more efficiently determine future levels of service and methods of funding. This forecast of District revenues and expenditures includes Fiscal Years The forecast assumptions are based on recent trends and specific expectations. The following steps/philosophies were taken to develop the forecast percentages: Utilize a conservative (worst case) approach for revenue and expense forecasting. Utilize independent industry data to develop assumptions whenever possible. 4 Naperville Park District

5 Naperville Park District 3-Year Financial Plan Review departmental budgets to determine if the 2014 budget line items will change significantly. The golf operations 3-Year Plan was prepared on a line item basis. Consider past history (3-5 year average) when forecasting percentage increases/decreases in future plan years. Incorporate capital projects for years 2015 and 2016 driven by the Naperville Park District s Capital Projects Prioritization Policy. Impacts relative to the new Activity Center have not been included in this plan. Once the design/ amenities are determined for the Center, a financial pro-forma will be developed Impacts relative to any renovation to the Eatery have not been included in this plan. With the evaluation of the Eatery just underway, impacts from any upgrades will be included in a future plan. Incorporate the related maintenance and operating costs for any new facilities and parks in the capital plan that will be coming on line in 2015 and Assumption Highlights (see Addendum A for the Detailed Plan Assumption Analysis) Revenues Property tax projections are based on CPI increases (excluding new growth) and continued utilization of the District s Debt Service Extension Base. Charges for services for recreation programs were based on a 3-year average plus additional funds for new facilities in 2015 and A gradual increase in golf green fees has been proposed in 2014 and 2015 to offset rising operational expenses. The proposed 2014 rates are still below 2011 rates. The number of rounds are projected to remain at the current level of 75,000. Expenditures Expenditures that trend consistently were assigned a 1.0% increase for 2015 and Expenditures for golf operations were evaluated and forecasted on a line item basis. Compensation allocation pool of 3% for regular employees and 2% for short term employees was included for 2015 and New full-time Network Engineer position requested for IT Department in Naperville Park District

6 Naperville Park District 3-Year Financial Plan Medical insurance premium increases of 10% were included for 2014 and For modeling purposes the PPO employee contribution was increased from 12% to 15%. The HMO contribution remains at 10%. Expenditure line items for operating departments expected to vary based on new facilities/parks and or price fluctuations (fertilizer) were adjusted accordingly. A weighted average percentage increase was calculated for major expense categories that included wages, supplies, contractual services and utilities. This calculation included additional funds to maintain and operate new facilities and parks. Capital projects included in the plan were identified as a result of implementing the Naperville Park District s Capital Projects Prioritization Policy. 6 Naperville Park District

7 Major Revenue Source Property Tax: Naperville Park District 3-Year Financial Plan Taxes overall comprise about 50% of the District s revenues and are one of the most important funding sources for the District. For 2015 and 2016 property taxes are projected to increase 1.5% and 2.0% based on the projected Consumer Price Index. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Community College #502 Naperville Park District City of Naperville County School District The District receives about 5% or 5-cents on every dollar in property taxes paid The Average Home Value in 2009 was $352K. If the home value in this example increased or decreased by the same percentage as the actual EAV change for Naperville, the taxes paid to the District are estimated to have been paid as noted in the chart to the right: The proposed taxes for 2014 have only increased $21 since 2010 $320 $310 $300 $290 Taxes Paid Average Home Value $ Series1 $294 $303 $307 $306 $315 7 Naperville Park District

8 General Fund Operating Forecast Naperville Park District 3-Year Financial Plan The general fund houses the support functions in the District that includes the Park Board, Administration, Finance, Human Resources, Information Technology, Planning, Fleet, Trades and Police. On an operational basis, General Fund revenues and expenditures are projected to remain fairly consistent. Property tax is the largest revenue source that supports the general/administrative functions of the District. The District can expect to maintain healthy fund balance reserves in the General Fund, which is vital General Fund Revenues & Expenses to maintaining our Aaa Bond Rating. Barring any legislative changes to the District s taxing authority, $6,500,000 General Fund revenues should remain stable and fairly predictable. Expenditures also trend fairly consistent; $6,000,000 exceptions may include fuel and operating costs for $5,500,000 technology. By design, the General Fund (operating budget) has been forecasted to break even in 2015 and $5,000, $4,500,000 $4,000, Revenues Expenses There are additional costs built into the plan for new dollars allocated in Trades for parks and maintenance initiatives. 8 Naperville Park District

9 Naperville Park District 3-Year Financial Plan The General Fund s Operating Reserve Target is equivalent to 6 months of operating expenses. Based on the adequacy of current reserve amounts any excess surplus in general operations will be transferred to the District s capital program. The operating fund is forecasted to break even in 2015 and A fund balance amounts in excess of the reserve target provide flexibility and supports the District s Aaa bond rating. General Fund - Fund Balance 5,250,000 4,250,000 3,250,000 2,250,000 1,250, , Fund Balance Reserve Target Fund Balance 4,663,446 4,715,256 4,715,256 4,775,635 4,775,635 4,775,635 Reserve Target 2,884,950 2,881,461 3,042,097 2,987,084 3,061,643 3,121,438 9 Naperville Park District

10 Naperville Park District 3-Year Financial Plan Naperville Park District General Fund Forecast Actual Actual Actual Budget Forecast Forecast Beginning Fund Balance 4,613,175 4,663,446 4,715,256 4,715,256 4,775,635 4,775,635 Taxes 5,427,882 5,524,198 5,671,003 5,793,000 5,879,895 5,997,493 Rentals 9,000 10,282 14,209 7,500 7,613 7,727 Investment Income 42,406 25,181 20,255 19,100 19,291 19,484 Alternative Revenue 3,720 2,047 4,904 2,070 2,070 2,110 Miscellaneous Revenue 235, , , , , ,250 WDSRA Reimbursement 24,501 12,985 11,346 14,473 14,690 14,984 Other Financing Sources 77,384 79,755 67,664 66,154 67,477 68,827 Total Revenues $5,820,171 $5,814,731 $6,084,194 $6,034,547 $6,123,286 $6,242,875 Wages and Benefits 2,604,033 2,635,680 2,804,167 3,072,218 3,215,383 3,344,496 Supplies 462, , , , , ,744 Contractual Services 628, , , , , ,351 Utilities 76,807 80,566 80,844 83,899 86,584 88,229 Capital 1, ,300 1,320 1,346 Miscellaneous Expense 49,742 9,650 12,172 14,000 14,210 14,494 Transfers Out 1,946,000 1,950,000 1,950,925 1,587,000 1,559,462 1,518,215 Total Expenditures $5,769,900 $5,762,921 $6,084,194 $5,974,168 $6,123,286 $6,242,875 Surplus (Deficit) $50,271 $51,810 $0 $60,379 $0 $0 Ending Fund Balance $4,663,446 $4,715,256 $4,715,256 $4,775,635 $4,775,635 $4,775,635 Fund Balance Target $2,884,950 $2,881,461 $3,042,097 $2,987,084 $3,061,643 $3,121, Naperville Park District

11 Recreation Fund Forecast Naperville Park District 3-Year Financial Plan The Recreation Fund primarily accounts for recreation programs, park maintenance, marketing/sponsorship, community relations, recreation support, Carillon, Centennial Beach and Grill. Recreation program revenue (charges for services) accounts for approximately 50% of fund revenues. Over 50,000 participants register for Naperville Park District programs each year. The recreation fund is managed so that revenues exceed expenditures by a small margin. The net revenues from programs are designated to fund portions of the community relations and marketing budgets. The parks division operations are funded primarily through property taxes and a transfer from the General Fund. By design, the Recreation Fund has been forecasted to break even in 2015 and $12,000,000 Recreation Fund Revenues & Expenses The increase in revenue and expenses in 2015 reflects a full year of operations at the new Knoch Knolls Nature Center and Sportsman s Park. $11,000,000 $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000, Revenues Expenditures 11 Naperville Park District

12 Naperville Park District 3-Year Financial Plan Charges for services (recreation program fees and Centennial Beach) represent 50% of the funding for the recreation fund. As noted earlier, the increase in 2015 represents the new funds that will be generated from a full year of operations at the Knoch Knolls Nature Center and Sportsman s Park. In addition the actual revenues at Centennial Beach in 2013 were low based on poor weather throughout the season. The 2014 budgeted revenues for Centennial Beach represent an average year. 5,700,000 5,600,000 5,500,000 5,400,000 5,300,000 5,200,000 5,100,000 5,000,000 4,900,000 4,800,000 Charges for Services This funding source is tied to the type of program and the number of participants. For beach operations fees include memberships and daily admissions The decrease in 2012 is due primarily to the loss of high school summer athletic camps. The decrease in 2013 was based on poor weather that significantly impacted attendance at Centennial Beach. Individual budgets by are prepared on an annual basis for the core programs listed below. Sports Youth Camps Knoch Knolls Nature Center Sports Adult Fitness/Indoor Aquatics Arts Active Adults/Seniors Youth, Teen & Family Special Events Early Childhood Trips 12 Naperville Park District

13 Naperville Park District 3-Year Financial Plan Recreation Fund reserves are forecasted to remain stable and exceed the established targets. As noted earlier, maintaining healthy reserves is vital to maintaining flexibility in operations and supports the District s Aaa bond rating. The Recreation Fund s Reserve Target is 50 percent of the annual tax levy. Recreation-Fund Balance 2,650,000 2,050,000 1,450, , , Fund Balance Reserve Target Fund Balance 2,474,987 2,518,308 2,518,308 2,541,080 2,541,080 2,541,080 Reserve Target 1,476,983 1,494,807 1,540,274 1,637,650 1,662,215 1,695, Naperville Park District

14 Naperville Park District 3-Year Financial Plan Naperville Park District Recreation Fund Forecast Actual Actual Actual Budget Forecast Forecast Beginning Fund Balance 2,425,380 2,474,987 2,518,308 2,518,308 2,541,080 2,541,080 Taxes 2,953,965 2,989,614 3,080,548 3,275,300 3,324,430 3,390,918 Investment Income 24,497 19,327 12,676 14,300 14,443 14,587 Charges for Services 5,461,625 5,271,049 5,116,570 5,357,217 5,571,505 5,655,078 Sales 274, , , , , ,639 Rentals 252, , , , , ,469 Alternative Revenue 77,997 70,796 55,312 45,786 45,786 45,786 Miscellaneous Revenue 684, , , , , ,000 WDSRA Reimbursement 14,694 23,170 34,681 35,007 36,057 37,139 Other Financing Sources 380, , ,774 1,215,900 1,265,812 1,435,667 Total Revenues $10,123,827 $10,212,750 $10,591,454 $11,408,116 $11,773,657 $12,106,283 Wages and Benefits 6,261,982 6,320,234 6,463,567 6,928,155 7,167,983 7,426,509 Supplies 926, , ,551 1,015,986 1,110,473 1,131,017 Contractual Services 2,338,373 2,318,364 2,610,627 2,753,146 2,776,548 2,812,643 Utilities 411, , , , , ,745 Capital 32,800 9,754 13,966 21,235 21,235 21,235 Miscellaneous Expense 103, , , , , ,134 Transfers Out - Total Expenditures $10,074,220 $10,169,429 $10,591,454 $11,385,344 $11,773,657 $12,106,283 Surplus (Deficit) $49,607 $43,321 $0 $22,772 $0 $0 Ending Fund Balance $2,474,987 $2,518,308 $2,518,308 $2,541,080 $2,541,080 $2,541,080 Fund Balance Target $1,476,983 $1,494,807 $1,540,274 $1,637,650 $1,662,215 $1,695, Naperville Park District

15 Naperville Park District 3-Year Financial Plan Golf Fund Forecast The Naperville Park District currently operates two, 18-hole municipal golf facilities: Springbrook and Naperbrook. Each facility offers a different golfing experience for players of all ages and abilities. One of the goals of the Golf Department is to provide challenging, yet accessible and enjoyable golfing experiences to the residents of Naperville as well as to our nonresident guests at an affordable price. Our guiding principles drive everything that we do and assist in making decisions related to golf. On January 16, 2014 the Board approved the reclassification of golf from an Enterprise Fund to a Special Revenue Fund. Given the challenges of the golf industry in recent years and future trends, this change will provide the flexibility and funding to maintain the high quality of the courses and the overall golf experience. The commitment to offering golf as a recreational opportunity and recognition of the value golf brings to the Community provided the foundation for the Board to make the change. While golf should continue to produce an operating surplus, the capital investment necessary to keep the courses/facilities at a quality level will be funded from the District s capital program. Combined for both courses, operating surpluses of $69,000 and $43,000 have been projected for years 2015 and 2016 respectively. Golf Services Revenues & Expenses The four main principles- customer service, financial stability, public access and effective operations allow staff to focus its efforts and resources in the areas that are most important to golfers. $4,100,000 $4,000,000 $3,900,000 $3,800,000 $3,700,000 $3,600,000 $3,500,000 $3,400,000 $3,300,000 $3,200, Revenues Expenditures 15 Naperville Park District

16 Naperville Park District 3-Year Financial Plan Golf fund reserves are forecasted to grow to the target amount of $1,000,000 (with funding for golf capital projects coming from the capital fund). The $1,000,000 target will cover golf s debt service payment in the event of a catastrophic event. As noted earlier, maintaining healthy reserves is vital to maintaining the District s Aaa bond rating. If golf produces an operating surplus and the $1,000,000 target is met, the surplus will be transferred to the capital fund. Golf- Fund Balance 1,050,000 1,000, , , ,000 Fund Balance Reserve Target Fund Balance 910,548 1,000,000 1,000,000 1,000,000 Reserve Target 1,000,000 1,000,000 1,000,000 1,000, Naperville Park District

17 Naperville Park District 3-Year Financial Plan Naperville Park District Golf Services Forecast Golf Services Actual Actual Actual Budget Forecast Forecast Beg Fund Balance $751,276 $910,548 $1,000,000 $1,000,000 Investment Income 4,358 4,558 5,304 4,200 4,800 5,472 Charges for Services 2,769,799 2,897,691 2,705,936 2,906,600 2,943,600 2,993,850 Sales 695, , , , , ,500 Rental Income 91, , ,465 97, , ,600 Alternative Revenue 13,700 14,701 15,769 16,400 16,800 17,200 Miscellaneous 119, , ,359 98,217 96,199 98,858 Total Revenue $3,694,064 $3,929,678 $3,683,367 $3,888,095 $3,951,999 $4,025,480 Wages & Benefits 1,726,768 1,629,800 1,600,917 1,756,093 1,788,693 1,849,638 Supplies 375, , , , , ,600 Contractual Services 713, , , , , ,946 Utilities 88,503 63,804 69,167 86,280 71,789 74,644 Capital Projects 6, ,232 13,321 5,500 5,500 5,000 Miscellaneous 70,700 75,940 77,445 77,212 78,756 80,332 Debt Service 707, , , , , ,918 Total Expenditures $3,689,163 $3,782,920 $3,524,095 $3,789,705 $3,870,816 $3,971,078 Surplus/(Deficit) $4,902 $146,758 $159,272 $98,390 $81,183 $54,402 Ending Fund Balance $910,548 $1,008,938 $1,081,184 $1,054,402 Transfer to Capital $8,938 $81,184 $54,402 Revised Fund Balance $1,000,000 $1,000,000 $1,000,000 Fund Balance Target $1,000,000 $1,000,000 $1,000,000 $1,000, Naperville Park District

18 Naperville Park District 3-Year Financial Plan Springbrook Located in west central Naperville and adjacent to the DuPage County Forest Preserve s Dragon Lake, the Springbrook golf facility commands some of the finest views of Naperville s open space and trails. The facility built in 1974, features a challenging 18-hole championship golf course, a 28-stall natural turf driving range, two practice putting greens and a short game practice green with bunkers. Its beautiful, mature and lush foliage and trees complement the manicured greens, tees and fairways. Combined with its exceptional course design, golfers of all skill levels return time and again to play. Springbrook Golf Course has been recognized by Golf Digest as one of the Top Places to Play and hole #10 made West Suburban Living Magazine s Dream 19. Deficits of $59,600 and $79,800 have been projected for years 2015 and 2016 respectively. The deficits projected for Springbrook are a result of large debt service payments that will continue until ,400,000 2,300,000 Springbrook Revenues & Expenses The annual number of golf rounds is projected to remain at approximately 38,000 through Modest fee increases are planned for 2015 and ,200,000 2,100,000 2,000,000 1,900, Revenues Expenditures 18 Naperville Park District

19 Naperville Park District 3-Year Financial Plan Naperville Park District Golf Services Springbrook Forecast Springbrook Actual Actual Actual Budget Forecast Forecast Investment Income 2,179 2,279 2,652 2,100 2,400 2,736 Charges for Services 1,552,819 1,628,955 1,527,841 1,626,000 1,645,000 1,672,750 Sales 407, , , , , ,750 Rental Income 58,288 65,169 85,097 67,400 78,400 83,400 Alternative Revenue 6,800 7,351 9,422 9,000 9,200 9,400 Miscellaneous 72,620 78,117 66,020 55,898 52,987 53,813 Other Financing Sources Total Revenue 2,100,682 2,263,691 2,132,376 2,219,148 2,254,737 2,296,849 Wages & Benefits 938, , , , , ,651 Supplies 199, , , , , ,550 Contractual Services 410, , , , , ,216 Utilities 33,618 30,093 32,690 35,140 33,959 35,412 Capital 6,629 18,000 8,497 4,000 2,500 3,000 Miscellaneous 35,350 37,970 38,723 38,606 39,378 40,166 Debt Service 587, , , , , ,652 Other Financing Uses Total Expenditures 2,210,536 2,148,659 2,155,963 2,254,630 2,314,332 2,376,647 Surplus/(Deficit) $ (109,853) $ 115,032 $ (23,587) $ (35,482) $ (59,595) $ (79,798) 19 Naperville Park District

20 Naperville Park District 3-Year Financial Plan Naperbrook Located in northwest unincorporated Plainfield, scenic Naperbrook Golf Course is a links-style course, carved out of good Illinois farmland and opened for play in It features rolling hills, native prairie grasses and ten ponds throughout the 6,755 yard, par 72 challenge with four sets of tees, large greens, one double green, hidden bunkers and wide fairways. Additional amenities include a ten-acre driving range. Naperbrook Golf Course has been recognized by Golf Digest as one of the Top Places to Play. Naperbrook Revenues & Expenses 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , , Revenues Expenditures Surpluses of $140,800 and $134,200 have been projected for years 2015 and 2016 respectively. The annual number of golf rounds is projected to remain at approximately 37,000 through 2016 Modest fee increases are planned for 2015 and Naperville Park District

21 Naperville Park District 3-Year Financial Plan Naperville Park District Golf Services Naperbrook Forecast Naperbrook Actual Actual Actual Budget Forecast Forecast Investment Income 2,179 2,279 2,652 2,100 2,400 2,736 Charges for Services 1,216,981 1,268,736 1,178,095 1,280,600 1,298,600 1,321,100 Sales 287, , , , , ,750 Rental Income 32,905 34,925 31,368 30,200 32,700 35,200 Alternative Revenue 6,900 7,350 6,347 7,400 7,600 7,800 Miscellaneous 47,038 53,201 44,339 42,319 43,212 45,045 Other Financing Sources Total Revenue 1,593,382 1,665,987 1,550,991 1,668,947 1,697,262 1,728,631 Wages & Benefits 788, , , , , ,987 Supplies 176, , , , , ,050 Contractual Services 302, , , , , ,730 Utilities 54,885 33,711 36,476 51,140 37,830 39,232 Capital - 153,232 4,824 1,500 3,000 2,000 Miscellaneous 35,350 37,970 38,723 38,606 39,378 40,166 Debt Service 120, , , , , ,266 Other Financing Uses Total Expenditures 1,478,627 1,634,261 1,368,131 1,535,075 1,556,484 1,594,431 Surplus/(Deficit) $ 114,755 $ 31,726 $ 182,859 $ 133,872 $ 140,778 $ 134, Naperville Park District

22 Capital Improvements Plan Naperville Park District 3-Year Financial Plan The District has a long-term capital spending plan that spans a 10-year period. Projects slated are driven by the Naperville Park District Capital Projects Prioritization Policy approved by the Board on May 12, The purpose of the Capital Projects Prioritization Policy is to establish an evaluation process for capital projects that is linked to the Park District s core values. Capital projects include: 1) repair/replacement of existing facilities; and 2) acquisition/construction of new facilities, either to extend existing services or develop new services. Below is an excerpt of the policy that directly relates to the creation of the 3-Year Financial Plan document as follows: During the annual Budget Development Process, a 3-Year Budget will be formulated to serve as a financial analysis highlighting the relationship between planned capital improvements and related operations/maintenance costs and recreation programming revenue/expenses. There are several new parks/amenities that have associated operational and maintenance costs that have been built into this plan and impact the General and Recreation Funds: 2015 Description 2016 Description Knoch Knolls Nature Center and Site Improvements Country Lakes Park New Baseball and Soccer Field (Summer 2014) Knoch Knolls New Disk Golf Course 22 Naperville Park District

23 Naperville Park District 3-Year Financial Plan The reduction in fund balance coincides with the District s capital plan. Fund balance for capital can fluctuate significantly based on the projects programmed in any given year. The fund balance 2011 reflects the $10 million bond issue for capital improvements, specifically for indoor space. The facility that was originally planned for by the District did not materialize. The drawdown in 2014 will be for a new Activity Center located at Quincy Ave. and Fort Hill Dr. At the time of this plan, the District is still receiving feedback on what amenities will be offered at the Center. As a result, the financial plan for the Activity Center will be updated at a later date. The capital funds noted below for 2015 and 2016 provides will continue to provide the District with the flexibility to act quickly and react to new opportunities as they arise. 30,000,000 Capital - Fund Balance 25,000,000 20,000,000 15,000,000 10,000,000 5,000, Fund Balance 24,629,432 25,651,465 23,337,797 12,776,400 10,101,970 9,416, Naperville Park District

24 Naperville Park District 3-Year Financial Plan With a 10-year capital outlook, the District has time to plan for funding while also maintaining flexibility to take advantage of unique opportunities as they may arise. This can be accomplished through the variety of funding sources the District has designated for Capital Spending that mainly include: Property Taxes, Bond Proceeds and Transfers from the General Operating Fund, Grants, Special Recreation Funding, Cash-In-Lieu funds and Investment Income. In 2011 the District issued $10M in bond proceeds for capital improvements. In 2016 the District anticipates issuing bonds (estimate of $9.9M) to fund the capital plan. $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Capital Funding Sources $20,000,000 $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Capital Project Uses Major initiatives in 2014 include the completion of the Knoch Knolls Nature Center and remediation of Sportsman s Park. Design for the District s new Activity Center will begin in 2014 with completion in 2016 See Addendum B for a detailed list of capital projects slated for years Naperville Park District

25 Naperville Park District 3-Year Financial Plan Naperville Park District Capital Funding Forecast Actual Actual Actual Budget Forecast Forecast Beginning Fund Balance 10,967,795 24,629,432 25,651,465 23,337,797 12,776,400 10,101,970 Taxes 4,832,164 4,915,994 5,015,750 5,164,200 5,229,280 5,307,720 Rentals 2,566 2,566 6,600 2,500 2,500 2,500 Investment Income 82, ,846 90,178 95,800 65,000 50,000 Alternative Revenue 1,086, , , ,000 50,000 50,000 Miscellaneous Revenue 169,375 12, WDSRA Reimbursement 2,055, , ,214 1,084,400 1,142,549 1,124,140 Other Financing Sources 24,862,665 1,626,899 3,612, ,000 5,659,950 10,132,850 Total Revenues $33,091,578 $7,710,679 $9,915,343 $7,218,900 $12,149,279 $16,667,210 Capital 12,475,653 5,497,304 11,025,892 16,600,000 13,892,346 16,422,226 Debt Service 1,359,288 1,191,342 1,193,692 1,180, , ,619 Other Financing Uses 5,595,000-9,427 Total Expenditures $19,429,941 $6,688,646 $12,229,011 $17,780,297 $14,823,709 $17,352,845 Surplus (Deficit) $13,661,637 $1,022,033 ($2,313,668) ($10,561,397) ($2,674,430) ($685,635) Ending Fund Balance $24,629,432 $25,651,465 $23,337,797 $12,776,400 $10,101,970 $9,416, Naperville Park District

26 Naperville Park District 3-Year Financial Plan Other District Funds FICA IMRF Audit Liability Special Recreation Cash-In-Lieu 26 Naperville Park District

27 Naperville Park District 3-Year Financial Plan Naperville Park District FICA Fund Forecast Actual Actual Actual Budget Forecast Forecast Beginning Fund Balance 334, , , , , ,543 Taxes 499, , , , , ,000 Investment Income 2,210 1,693 1,219 1,400 1,414 1,442 Miscellaneous Revenue 9,554 9,652 8,569 4,800 4,896 4,994 Other Financing Sources 30,700 37,800 37,800 37,600 38,352 39,119 Total Revenues $541,778 $599,086 $594,164 $563,800 $594,662 $606,555 Wages and Benefits 565, , , , , ,836 Total Expenditures $565,172 $568,438 $584,141 $590,000 $601,800 $613,836 Surplus (Deficit) ($23,394) $30,648 $10,023 ($26,200) ($7,138) ($7,281) Ending Fund Balance $311,210 $341,858 $351,881 $325,681 $318,543 $311,262 Fund Balance Target $282,586 $284,219 $292,071 $295,000 $300,900 $306,918 This fund is established to account for revenues that are from a specific property tax levy and expenditures for the employer s portion of social security tax currently at 7.65%. 27 Naperville Park District

28 Naperville Park District 3-Year Financial Plan Naperville Park District IMRF Fund Forecast Actual Actual Actual Budget Forecast Forecast Beginning Fund Balance 380, , , , , ,912 Taxes 603, , , , , ,000 Investment Income 2,775 2,290 1,395 1,600 1,616 1,648 Miscellaneous Revenue 7,761 7,725 7,934 5,600 5,712 5,826 Total Revenues $613,867 $619,590 $624,241 $697,200 $692,328 $692,474 Wages and Benefits 597, , , , , ,900 Total Expenditures $597,959 $623,928 $672,204 $680,000 $685,900 $685,900 Surplus (Deficit) $15,908 ($4,338) ($47,963) $17,200 $6,428 $6,574 Ending Fund Balance $396,585 $392,247 $344,284 $361,484 $367,912 $374,486 Fund Balance Target $298,980 $311,964 $336,102 $340,000 $342,950 $342,950 This fund is established to account for revenues that are from a specific property tax levy and expenditures for employer pension contributions. These contributions are subsequently paid to the state-sponsored Illinois Municipal Retirement Fund, a multipleemployer, public employee retirement system that acts as a common investment and administrative agent for over 2,800 local governments and school districts in Illinois. The District s projected employer rates for 2015 and 2016 of 10.92% and 10.62% respectively, remain under the current statewide average of 12.7%. 28 Naperville Park District

29 Naperville Park District 3-Year Financial Plan Naperville Park District Audit Fund Forecast Actual Actual Actual Budget Forecast Forecast Beginning Fund Balance 32,760 24,796 20,922 15,857 12,857 12,996 Taxes 6,928 13,258 12,416 15,000 18,500 18,800 Investment Income Miscellaneous Revenue Other Financing Sources 3,000 1,400 1,500 1,500 1,530 1,561 Total Revenues $10,082 $14,749 $13,965 $16,600 $20,131 $20,463 Contractual Services 18,046 18,623 19,030 19,600 19,992 20,392 Total Expenditures $18,046 $18,623 $19,030 $19,600 $19,992 $20,392 Surplus (Deficit) ($7,964) ($3,874) ($5,065) ($3,000) $139 $71 Ending Fund Balance $24,796 $20,922 $15,857 $12,857 $12,996 $13,067 Fund Balance Target $9,023 $9,312 $9,515 $9,800 $9,996 $10,196 This fund is established to account for revenues from a specific property tax levy and expenditures for the District s annual financial audit. The contract with the District s current auditors, Lauterbach & Amen, LLP extends through Naperville Park District

30 Naperville Park District 3-Year Financial Plan Naperville Park District Liability Fund Forecast Actual Actual Actual Budget Forecast Forecast Beginning Fund Balance 308, , , , , ,462 Taxes 353, , , , , ,000 Investment Income 2,851 2,011 1,415 1,600 1,616 1,632 Miscellaneous Revenue 4,093 4,089 4,090 3,000 4,000 4,000 Other Financing Sources 4,800 5,500 5,700 6,300 6,426 6,555 Total Revenues $365,418 $369,393 $464,607 $480,900 $482,042 $487,187 Wages and Benefits 202, , , , , ,587 Supplies ,500 1,515 1,530 Contractual Services 172, , , , , ,671 Total Expenditures $374,879 $413,971 $472,092 $473,242 $481,864 $491,788 Surplus (Deficit) ($9,461) ($44,578) ($7,485) $7,658 $178 ($4,601) Ending Fund Balance $298,689 $254,111 $246,626 $254,284 $254,462 $249,861 Fund Balance Target $187,440 $206,986 $236,046 $236,621 $240,932 $245,894 This fund is established to account for revenues that are from a specific property tax levy and expenditures for liability/property insurance for the District. The District has been a member of the Park District Risk Management Agency (PDRMA) since PDRMA has over 140 members who have formed an insurance pool in order to obtain better control of the insurance market and risk management. PDRMA provides comprehensive coverage to all members for property, boiler and machinery, crime and lost revenues; for general liability, auto liability and public officials errors and omissions; workers compensation and employer s liability, as well as volunteer medical accident coverage. 30 Naperville Park District

31 Naperville Park District 3-Year Financial Plan Naperville Park District WDSRA Fund Forecast Actual Actual Actual Budget Forecast Forecast Beginning Fund Balance 70,316 70,316 70,316 70,316 70,316 70,316 Taxes 2,773,897 2,650,328 2,068,339 2,450,600 2,389,100 2,353,300 Total Revenues $2,773,897 $2,650,328 $2,068,339 $2,450,600 $2,389,100 $2,353,300 Contractual Services 1,471,676 1,217,923 1,331,490 1,225,301 1,246,500 1,229,160 Capital 1,302,221 1,432, ,849 1,225,299 1,142,600 1,124,140 Total Expenditures $2,773,897 $2,650,328 $2,068,339 $2,450,600 $2,389,100 $2,353,300 Surplus (Deficit) $0 $0 $0 $0 $0 $0 Ending Fund Balance $70,316 $70,316 $70,316 $70,316 $70,316 $70,316 Fund Balance Target $0 $0 $0 $0 $0 $0 The District is a member of the Western DuPage Special Recreation Association (WDSRA). WDSRA provides inclusion services for those in the community with special needs. The District also has ADA related capital improvements that are paid for through this fund. As part of the 3-Year Capital Plan, ADA qualified capital improvements are determined. 31 Naperville Park District

32 Naperville Park District 3-Year Financial Plan Naperville Park District Cash-in-Lieu Fund Forecast Actual Actual Actual Budget Forecast Forecast Beginning Fund Balance 8,901,205 2,814,094 3,207,384 5,174,708 5,189,208 - Investment Income 59,892 19,865 14,505 14,500 14,500 - Alternative Revenue 226, ,425 1,952, Total Revenues $286,889 $393,290 $1,967,324 $14,500 $14,500 $0 Transfers Out 6,374, ,203,708 - Total Expenditures $6,374,000 $0 $0 $0 $5,203,708 $0 Surplus (Deficit) ($6,087,111) $393,290 $1,967,324 $14,500 ($5,189,208) $0 Ending Fund Balance $2,814,094 $3,207,384 $5,174,708 $5,189,208 $0 $0 Fund Balance Target $0 $0 $0 $0 $0 $0 The Naperville Municipal Ordinance 7-3-5, the Dedication of Park Lands and School Sites or for Payments or Fees in Lieu of, requires developers to provide land for park and recreational purposes and land for school sites, to serve the immediate and future needs of the residents of the development, or cash contribution in lieu of actual land dedication, or a combination of both, based on the recommendation of the public body which will be the recipient of the contribution, but subject to final determination of the City Council. The ordinance is based on a standard of 8.6 acres of park land per 1,000 population. In August 2007, the City increased the Fair Market Value referenced in the ordinance to $323,600 per acre. Based on the economic slowdown, the District took the most conservative approach and assumed zero Cash-In-Lieu receipts for Naperville Park District

33 Naperville Park District 3-Year Financial Plan Summary The District remains in a strong financial position with stable revenue sources to fund operations and capital. This includes operating and maintenance costs for the new facilities and amenities included in plan years See Addendum D for a Summary Fund Balance Rollfoward. In 2013, the District s Aaa Bond Rating was reconfirmed for the District s entire outstanding debt. The District is prepared to maintain its Aaa Bond Rating for the foreseeable future. For operational purposes, except for impacts of the Affordable Care Act, revenue and expenditure trends are fairly predictable. Major programs/initiatives are supported by stable revenue sources. The District can continue to provide recreational opportunities at affordable rates. Program fees will continue to be evaluated. Reclassifying golf to a Special Revenue Fund from an Enterprise Fund has positioned golf well as we face the challenge of the downward trends in the golf industry. It will also allow golf to remain competitive by improving the golf experience, supporting the District s Aaa bond rating and providing flexibility for current and future boards to prioritize the capital needs of the District. Funding for the District s Capital Plan continues to remain strong with a diversity of funding sources. There are long-term challenges to capital funding as noted below. Alternative revenue will continue to be a focus within the framework of the District s Non-Tax Revenue Plan that includes seeking donations through the Naperville Parks Foundation. The District places an emphasis on maintaining a qualified, loyal and motivated workforce through compensation packages, educational opportunities and recognition initiatives. Future Challenges/Risks include: Several of our major facilities including Centennial Beach and Springbrook/Naperbrook Golf Courses can be significantly impacted by weather and affect projected revenues. Economic condition of State of Illinois and the legislator s ability to impact the District s financial condition. Impacts of the Affordable Care Act to the District and employees. Availability of grants through the State of Illinois and at the Federal level are on the decline. Capital Funding Cash-In-Lieu (Land Cash Donation Ordinance) funding will be depleted by the time the City approaches buildout. Currently there is no substitute for this revenue source. 33 Naperville Park District

34 Naperville Park District 3-Year Financial Plan Funding for capital through the general tax levy will need to be reduced as operating costs increase. Increased utility costs electric and water DuPage County Stormwater Utility Fees Pro-forma for planned facilities Revenues could come in lower than projected and or operating expenditures could come in higher. Competition for patrons of recreation services. 34 Naperville Park District

35 Naperville Park District 3-Year Financial Plan Addendums Addendum A District 3-Year Plan Assumption Detail Addendum B Golf 3-Year Plan Assumption Detail Addendum C 3-Year Capital Plan Addendum D Fund Balance Rollforward 35 Naperville Park District

36 Addendum A 3-YEAR PLAN ASSUMPTIONS General and Recreation Funds (Excludes Golf Operations)

37 We are pleased to present this overview of the assumptions used to create the District s 3-Year Financial Plan The 2014 approved budget will serve as the basis for year one of the plan. The following is an overview of the methodologies and direction taken to create assumptions for years 2015 & 2016: Utilize a conservative (worst case approach) for revenue and expense forecasting Utilize independent industry data to develop assumptions whenever possible Review departmental budgets to determine if the 2014 budget line items will significantly change Use past history (3-5 year average) to forecast percentage increases/decreases for some projections Incorporate capital projects for years 2015 and 2016 driven by the Naperville Park District s Capital Projects Prioritization Policy Incorporate the related maintenance and operating costs for any new facilities and parks in the capital plan that would be coming on line in 2015 and 2016 (See Attachment A - page 5) Based on the timing of design and construction of the new Activity Center, all financial impacts have been excluded from this plan. Once the amenities are known a plan will be developed. What did we do? Revenues Built assumptions for each major category in plan (see assumption table on page 2) Expenditures - Expenditures that trend consistently, were assigned a 1.0% inflationary increase for 2015 and 1.0% for 2016 Compensation allocation pool of 3% was included for 2015 and 2016 for regular employees and 2% for short term employees Expenditure line items for operating departments expected to vary based on new facilities/parks and/or price fluctuations were adjusted accordingly A weighted average percentage increase was calculated for major expense categories that included wages, supplies, contractual services and utilities. This calculation included additional funds to maintain and operate new facilities (see Attachment B pages 6-22 for weighted average worksheets) Capital projects included in the plan were identified as a result of implementing the Naperville Park District s Capital Projects Prioritization Policy

38 Revenues Description 1 Taxes 3.8% 1.5% 2.0% Property & Personnel Replacement 2 Charges for Service -0.1% 4.0% 1.5% Program Revenue, Beach Admissions 3 Misc- Revenue 0.8% 0.0% 0.0% Variety - See below 4 Sales -3.0% 1.5% 1.5% Concession, Merchandise, Event Ticket Sales 5 Rentals 17.7% 1.5% 1.5% Facility Rentals, Tournament Income, Athletic Fields Rental 6 Investment Income 7.0% 1.0% 1.0% CD s money market and fixed income securities ASSUMPTION TABLE: REVENUES: See Attachment B page 7 for Revenue Worksheet Note : 2014 Percent changes based on comparison of 2013 budgeted amounts 1. Taxes Budget $21.0M The Consumer Price Index (CPI) used to project the 2014 tax levy budget was 1.7% (December 2012 CPI). The final CPI that will be used for the 2015 fiscal year tax levy was 1.5%. * Industry Source Bureau of Labor Statistics (See Attachment C page 23). The CPI impacts the District s tax levy and has varied over the past several years but has remained under 5%. For 2016, 2.0% is a reasonable estimate. To remain conservative new construction amounts were not included in the projections. * Industry Source Eric Anderson, Managing Director BMO Capital Markets GKST Inc. 2. Charges for Services: Recreation 2014 Budget $5.4M Includes revenues from all of the District s recreation programs and Centennial Beach. In 2014 the slight decrease relates to Sportsman s being open for half a year to complete the remediation project. The 4.0% increase in year 2015 reflects revenues generated from the Knoch Knolls Nature Center and Sportsman s being open an entire year. 3. Miscellaneous Revenue 2014 Budget $1.9k Contains a variety of revenues sources that mainly include; employee insurance contributions,, bid package revenue, reimbursement income (affiliate lights, Riverwalk, Carillon) sales tax revenue, commission revenue, cell tower revenue, parking permit revenue, and ticket revenues. While some smaller sources within this category are stable such as employee insurance contributions, cell tower and ticket revenues are unpredictable. After review of the 2014 budget, miscellaneous revenues will be held flat for forecasting purposes. 4. Sales 2014 Budget $293k Includes merchandise sales, concessions, brochure advertising and event ticket sales. The trend of sales revenues has varied based on the facilities on-line throughout the year. The increase for years 2014 and 2015 corresponds to an increase in operating costs. 5. Rental Income 2014 Budget $472k - A fairly stable revenue source with a core base of tournaments and field rentals that occur each year. Large increases will be realized in the year a new facility is brought on board. The 17.7% increase in 2014 reflects rental income for an entire year of the synthetic turf field at Commissioners Park. 6. Investment Income 2014 Budget $154k The primary objective of the District s investment activities in priority order are safety, liquidity and yield. Based on the District s Investment Policy and allowable investments outlined in the Illinois Public Funds Investment Act, interest earnings are expected to remain low for several years. The District primarily invests in cds, money market

39 accounts and a small portfolio in fixed income securities. The 7% increase in 2014 is the result of earnings from increased investible funds on hand. 7. OTHER REVENUE SOURCES - WDSRA Reimbursement, Alternative revenue, Transfers and Other Financing Sources will be based on dollar projections WDSRA Reimbursement Budget $1.1M The special recreation reimbursement will be calculated on a dollar basis based driven by the qualified capital projects that are planned for development in years Transfers In Capital 2014 Budget $447k - If the general fund has favorable operating results at the end of the calendar year, excess funds are designated for capital improvements. Transfer in Recreation 2014 Budget $1.1M The general fund transfers monies to cover a portion of park maintenance costs. Alternative Revenues 2014 Budget $473k This revenue source is comprised of grants, donations, cash-in-lieu funds and sponsorships. Based on the volatile nature of grant income that comprises the majority of alternative revenues, an estimated dollar amount versus a percentage change will be used to forecast years Other Financing Sources Bond Proceeds 2014 Budget $0 The District will evaluate the amount and timing of debt to be issued in late 2015 or For modeling purposes $9.9M of new G.O. debt has been included in ASSUMPTION TABLE: EXPENDITURES: Expenditures Description 1 Wages Regular 5.4% 3.4% 3.0% Full & part time employees benefit eligible 2 Wages Short Term 1.9% 2.8% 2.0% Seasonal employees 3 Employee Insurance 11.3% 10.0% 10.0% PDRMA Insurance pool 4 Other Benefits 6.7% 1.5% 2.0% Payroll Taxes, Uniforms, Training, Conferences 5 Retirement 4.4% 1.3% 0% IMRF Pension Plan 6 Supplies.67% 7.5 % 1.4% Variety of supplies ranging from program supplies to fuel 7 Contractual Services -0.1%.90% 1.8% Variety 8 Utilities 6.1% 5.0% 2.5% Electric, Water and Gas 9 Misc. Expense -1.1% 1.5% 2.0% Admin Overhead, Contingency, Investment Fees 1. Wages Regular 2014 Budget$ 5.2M Includes full and part time employees that are group plan benefit eligible. Years 2015 and 2016 include a 3% compensation allocation pool. Additional dollars in 2014 include funds for wages for the Nature Center Environmental Program Manager and the HR Analyst Position. In 2015 a new full-time Network Engineer position has been included for the IT Department. (See pages 8-10).