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ILLINOIS MUNICIPAL LEAGUE
Financial Statements
and
Independent Auditor's Report
Years Ended December 31, 1990 and 1989
INDEPENDENT AUDITOR'S REPORT
Illinois Municipal League:
We have audited the accompanying consolidated balance sheets of the Illinois
Municipal League as of December 31, 1990 and 1989, and the related consolidated statements of revenues, expenses and changes in fund balance and
cash flows for the years then ended. These financial statements are the
responsibility of the League's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of the Illinois
Municipal League and subsidiary as of December 31, 1990 and 1989, and the
results of their consolidated operations and cash flows for the years then
ended in conformity with generally accepted accounting principles.
April 25, 1991
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1990 AND 1989
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1990
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1989
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ASSETS
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CURRENT ASSETS
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$1, 065, 825
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$ 637, 363
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Short-term investment- U.S. Treasury
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578, 295
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673,861
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Accrued interest
Accounts receivable:
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3, 784
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45
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Insurance service charges
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18,371
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Other
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14, 342
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9,298
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Prepaid pension expense
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10,000
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10,000
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Prepaid insurance
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6,040
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6, 641
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Total current assets
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1, 678, 286
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1, 355, 579
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FIXED ASSETS
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1, 693, 190
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1, 715, 132
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DEFERRED COMPENSATION ACCOUNT
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397, 591
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370, 369
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PREPAID PENSION EXPENSE
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40, 000
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50, 000
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TOTAL ASSETS
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$3, 809, 067
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$3,491, 080
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LIABILITIES AND FUND BALANCE
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CURRENT LIABILITIES
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Accounts payable Unearned income:
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$ 29, 147
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$ 22, 558
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Dues
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167, 179
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186, 752
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Advertising
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7,669
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5, 735
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Other
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1, 684
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3, 253
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Total current liabilities
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205, 679
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218,298
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DEFERRED COMPENSATION
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397, 591
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370, 369
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FUND BALANCE
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3, 205, 797
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2, 902,413
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TOTAL LIABILITIES AND FUND BALANCE
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$3, 809, 067
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$3, 491, 080
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See the accompanying notes.
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CONSOLIDATED STATEMENTS OF REVENUES,
EXPENSES AND CHANGES IN FUND BALANCE
YEARS ENDED DECEMBER 31, 1990 AND 1989
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1990
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1989
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REVENUE
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Membership dues
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$ 338, 072
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$
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331, 565
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Foreign fire insurance service charges
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278, 835
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280, 841
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Services and facilities fee
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484, 597
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428, 371
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Conferences
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197, 316
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215, 902
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Interest
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188, 034
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175, 862
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Illinois Municipal Review
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43, 684
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41, 459
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Other publications
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25, 797
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35, 093
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Gain on fixed assets sold
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856
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107, 386
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Other
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18, 891
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2, 375
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Total revenue
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1, 576,082
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1, 618, 854
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EXPENSES
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Salaries, excluding legal
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320, 324
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324, 918
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Payroll taxes and retirement
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69, 633
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78, 922
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Postage
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30, 149
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24, 827
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Office supplies
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25, 672
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23, 693
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Equipment leasing and maintenance
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34, 921
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40, 318
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Building repairs and maintenance
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24, 785
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22, 359
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Utilities and other office expense
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59, 815
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75, 301
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Travel and automobiles
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44, 802
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55, 692
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Memberships
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28, 625
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27, 824
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Insurance
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50, 501
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47, 119
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Illinois Municipal Review
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93, 350
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90, 065
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Other publications
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8, 765
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22, 545
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Conference expense
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186, 649
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205,989
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Legal and related services, including salaries
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123, 593
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138, 773
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Accounting and auditing
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33, 102
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24, 005
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Depreciation
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74, 332
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63,562
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Meetings and committees
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60, 133
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59, 410
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Library
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3, 547
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3,022
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Other
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14,368
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Total expenses
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1,272, 698
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1, 342, 712
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EXCESS OF REVENUE OVER EXPENSES
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303, 384
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276, 142
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FUND BALANCE - BEGINNING OF YEAR
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2, 902, 413
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2, 626, 271
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FUND BALANCE - END OF YEAR
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$3, 205, 797
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$2, 902,413
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See the accompanying notes.
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CONSOLIDATED STATEMENTS
OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1990 AND 1989
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1990
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1989
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CASH FLOWS FROM OPERATING ACTIVITIES
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Excess of revenue over expenses
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$ 303, 384
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$ 276, 142
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Adjustments to reconcile to net cash
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provided by operating activities: Gain on fixed assets sold
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( 856)
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( 107, 386)
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Depreciation
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74, 332
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63, 562
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Amortization
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6, 705
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( 262)
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(Increase) decrease in:
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Accounts receivable
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13, 327
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74, 857
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Accrued interest receivable
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( 3, 739)
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10, 704
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Prepaid insurance
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601
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( 616)
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Increase (decrease) in:
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Accounts payable
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6, 589
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5, 020
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Unearned income
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( 17, 639)
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5, 915
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Other current liabilities
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( 1, 569)
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2, 840
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Net cash provided by operations
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381, 135
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330, 776
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CASH FLOWS FROM INVESTING ACTIVITIES
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Additions to fixed assets
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( 52, 514)
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( 309, 028)
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Proceeds from sales and maturities of short-term investments
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673, 861
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900.000
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Purchase of short-term investments
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( 575, 000)
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(1, 112.605)
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Sale of fixed assets
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980
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252, 485
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Net cash provided (used) by investing activities
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47, 327
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( 269, 148)
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NET INCREASE IN CASH
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428, 462
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61, 628
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CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR
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637, 363
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575, 735
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CASH AND CASH EQUIVALENTS - END OF YEAR
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$1, 065, 825
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$637,363
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NON-CASH. FINANCING AND INVESTING TRANSACTIONS
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Deferred compensation - net increase
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$ 27,222
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$ 76, 623
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Fixed asset trade-in allowance
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$ 10,300
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$ 27,093
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See the accompanying notes.
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August 1991 / Illinois Municipal Review / Page 21
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
DECEMBER 31, 1990 AND 1989
1. SIGNIFICANT ACCOUNTING POLICIES
a. Principles of consolidation. The financial statements include the accounts
of the Illinois Municipal League (League) and its wholly-owned subsidiary,
the Illinois Municipal League Building Corporation.
b. Cash equivalents and short-term investments. Cash equivalents are investments with original maturities of three months or less. Cash equivalents
and short-term investments are carried at amortized cost, which approximates
market value.
c. Income recognition. Dues are considered earned pro rata over the dues year
for each member-municipality, or one-twelfth each month.
d. Property and depreciation. Property is carried at cost. Depreciation is
provided on the straight-line method over the estimated useful lives of the
assets.
2. FIXED ASSETS
Fixed assets at December 31 are as follows:
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1990
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1989
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Land
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$ 195.574
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$ 195,574
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Building
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1,355,240
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1,351,610
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Furniture and equipment
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236,386
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227,412
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Automobiles
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94,022
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68,706
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Total
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1,881,222
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1,843,302
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Accumulated depreciation
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188,032
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128,170
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Fixed assets - net
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$1,693,190
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$1,715,132
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3. POOLED MUNICIPAL LOAN PROGRAM
The League has been a sponsor of the Illinois Municipal League Pooled Municipal
Loan Program to provide low cost financing to the League's member-municipalities.
The League, acting as the program administrator, has represented the Village of
Woodridge by coordinating the process of making loans and managing the Program.
No such loans have been made and the program was discontinued in 1989.
4. PENSION PLAN
The League is a member of the Illinois Municipal Retirement Fund (IMRF), an
agent-multiple-employer public employee retirement system. Substantially all
employees are covered by the defined benefit plan with benefits based upon years
of service and final compensation. Employees contribute 4.5% of their annual
salary to IMRF and the League is required to contribute the remaining amounts
necessary to fund the system using the actuarial basis specified by state
statute.
At December 31, 1990, the actuaries for IMRF determined that the present value
of the total pension benefit obligation applicable to the League's employees,
including vested benefits of $930,395, was $942,092. Net assets available for
benefits at cost total $1,053,804 (market value is $1,074,855). The assumed
rate of return used to compute the benefit obligation is 7%. The assumed rate
of compensation increase is 4.25%. Certain changes in actuarial assumptions,
benefit provisions and methodology were made in 1990 in determining the pension
benefit obligation. Separate dollar effects of each change were not economically determinable.
The League's total contribution to IMRF for 1990 was $37,332 which consisted of
$30,302 normal cost, $4,497 amortization of the unfunded accrued liability, and
$2,532 death and disability costs. The total contribution for 1989 was $48,688.
The unfunded liability is being amortized over a 10-year period. In a prior
year, the League made a prepayment to reduce future contribution rates. The
prepayment is being amortized over the periods expected to be benefited.
5. DEFERRED COMPENSATION PLAN
The League offers its employees a deferred compensation plan which permits them
to defer a portion of their salary until termination, retirement, death, or
emergency. The Plan is administered by an independent party. In order to
qualify for income tax deferral status, all amounts of compensation deferred
under the Plan are considered to be the property of the League, subject to the
claims of the League's general creditors. Participants' rights under the Plan
are equal to those of general creditors of the League in an amount equal to the
fair market value of the deferred account for each participant. Contributions
and earnings, less participants' withdrawals, caused the aggregate deferred
amounts to increase $27,222 in 1990 and $76.623 in 1989.
6. RELATED PARTY TRANSACTIONS
The League provides services and facilities to a related organization, the
Illinois Municipal League Risk Management Association. The Association, which
has a common board of directors with the League, is an unincorporated not-for-
profit Association that provides a cooperative program of self-insurance for
participating Illinois municipalities. The League's fee is based on contributions and interest earned by the Association.
7. INCOME TAXES
The League is exempt from income taxes and therefore no provision for income
taxes is required.
Page 22 / Illinois Municipal Review / August 1991
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