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Administration Packet 2008 02-14-08 clry� United City of Yorkville 800 Game Farm Road EST. ,.: 1836 Yorkville, Illinois 60560 Telephone: 630-553-4350 LT � a� Fax: 630-553-7575 .� <LE ��'�• AGENDA ADMINISTRATION COMMITTEE MEETING Thursday, February 14, 2008 7:00 p.m. City Hall Conference Room Presentation: None Minutes for Correction/Approval: January 10, 2008 New Business: 1 . ADM 2008-07 Monthly Budget Report for December 2007 2. ADM 2008-08 Monthly Treasurer' s Report for December 2007 3 . ADM 2008-09 Monthly Vehicle Report for December 2007 4. ADM 2008- 10 Monthly FOIA Report for January 2008 5 . ADM 2008- 11 FY 08/09 Budget 6. ADM 2008- 12 Draft Ordinance Amending City Code regarding Participation of Aldermen by Video or Audio Conference 7. ADM 2008- 13 Indemnification Ordinance 8. ADM 2008- 14 Northern Illinois Municipal Electric Cooperative Old Business: 1 . ADM 2007-86 Plan Commission Roster Composition 2. ADM 2008-06 Foundation for Senior Community Center Discussion Additional Business: UNITED CITY OF YORKVILLE WORKSHEET ADMINISTRATION COMMITTEE Thursday, February 14, 2008 7:00 PM CITY CONFERENCE ROOM --------------------------------------------------------------------------------------------------------------------------------------- MINUTES FOR CORRECTION APPROVAL: 1 . January 10, 2008 ❑ Approved ❑ As presented ❑ With changes --------------------------------------------------------------------------------------------------------------------------------------- NEW BUSINESS: --------------------------------------------------------------------------------------------------------------------------------------- 1 . ADM 2008-07 Monthly Budget Report for December 2007 ❑ Moved forward to CC consent agenda? Y N ❑ Approved by Committee ❑ Bring back to Committee ❑ Informational Item ❑ Notes --------------------------------------------------------------------------------------------------------------------------------------- 2. ADM 2008-08 Monthly Treasurer's Report for December 2007 ❑ Moved forward to CC consent agenda? Y N ❑ Approved by Committee ❑ Bring back to Committee ❑ Informational Item ❑ Notes --------------------------------------------------------------------------------------------------------------------------------------- 3 . ADM 2008-09 Monthly Vehicle Report for December 2007 ❑ Moved forward to CC consent agenda? Y N ❑ Approved by Committee ❑ Bring back to Committee ❑ Informational Item ❑ Notes --------------------------------------------------------------------------------------------------------------------------------------- 4. ADM 2008- 10 Monthly FOIA Report for January 2008 ❑ Moved forward to CC consent agenda? Y N ❑ Approved by Committee ❑ Bring back to Committee ❑ Informational Item ❑ Notes --------------------------------------------------------------------------------------------------------------------------------------- 5. ADM 2008- 11 FY 08/09 Budget ❑ Moved forward to CC consent agenda? Y N ❑ Approved by Committee ❑ Bring back to Committee ❑ Informational Item ❑ Notes --------------------------------------------------------------------------------------------------------------------------------------- 6. ADM 2008- 12 Ordinance Amending City Code Regarding Participation of Aldermen by Video or Audio Conference ❑ Moved forward to CC consent agenda? Y N ❑ Approved by Committee ❑ Bring back to Committee ❑ Informational Item ❑ Notes --------------------------------------------------------------------------------------------------------------------------------------- 7. ADM 2008-13 Indemnification Ordinance ❑ Moved forward to CC consent agenda? Y N ❑ Approved by Committee ❑ Bring back to Committee ❑ Informational Item ❑ Notes --------------------------------------------------------------------------------------------------------------------------------------- 8. ADM 2008- 14 Northern Illinois Municipal Electric Cooperative ❑ Moved forward to CC consent agenda? Y N ❑ Approved by Committee ❑ Bring back to Committee ❑ Informational Item ❑ Notes --------------------------------------------------------------------------------------------------------------------------------------- OLD BUSINESS: --------------------------------------------------------------------------------------------------------------------------------------- 1 . ADM 2007-86 Plan Commission Roster Composition ❑ Moved forward to CC consent agenda? Y N ❑ Approved by Committee ❑ Bring back to Committee ❑ Informational Item ❑ Notes -------------------------------------------------------------------------------------------------------------------------------------- 2. ADM 2008-06 Foundation for Senior Community Center Discussion ❑ Moved forward to CC consent agenda? Y N ❑ Approved by Committee ❑ Bring back to Committee ❑ Informational Item ❑ Notes --------------------------------------------------------------------------------------------------------------------------------------- ADDITIONAL BUSINESS: --------------------------------------------------------------------------------------------------------------------------------------- 1 UNITED CITY OF YORKVILLE DRAFT 800 Game Farm Road Yorkville, IL 60560 ADNENISTRATION COMMITTEE MEETING City Hall, Conference Room Thursday, January 10, 2008 — 7:00 P.M. PRESENT: Chairperson Munns, Committeemen Spears and Werderich ABSENT: Committeeman Golinski ALSO PRESENT: City Administrator Brendan McLaughlin, Assistant City Administrator Bart Olson, Finance Director Susan Mika, Treasurer William Powell, Human Resources Manager Denise Kasper GUESTS: Tony Scott of The Record Chairperson Munns called the meeting to order at 7:00 p.m. in the Conference Room of City Hall. MINUTES FOR CORRECTION/APPROVAL: Committeeman Spears noted that on page 3; paragraph 2 the words `City Directors' should be replaced with `Department Heads' . PRESENTATION: None NEW BUSINESS: 11 ADM 2008-01 — Monthly Budget Report for November, 2007 Committeeman Spears stated that she likes the format with explanations. This item is informational only. 2. ADM 2008-02 — Monthly Treasurer's Report for November, 2007 With no discussion, this item was moved to the consent agenda. 3. ADM 2008-03 — Monthly Vehicle Report for November, 2007 City Administrator McLaughlin stated that the Administration vehicle was loaned to the Police Department in order to delay making one vehicle purchase this fiscal year. It was determined that the Police Department would get more use of the vehicle. This item is informational only. 4. ADM 2008-04 — Monthly FOIA Report for December, 2007 This item is informational only. 1 2 5, ADM 2008-05 — Resolution Relating to Elected Officials IMRF Participation Chairperson Munns stated that the City previously passed an ordinance in which Council members can purchase insurance and make contributions to the IMRF. However, with regards to IMRF contributions, Council members were not given the opportunity to buy back time from when they were first elected into office. This resolution will give them that option. By law, Council members can purchase 4 years of time back. There is no cost to the taxpayers. Committeeman Werderich stated that he feels those Councilmen that are eligible for the buy back have worked hard and deserve it. With no further discussion, this item was moved to the consent agenda. 6. ADM 2008-06 — Foundation for Senior Community Center Discussion Committeeman Spears stated that this issue was discussed in previous years and it had been determined that a foundation was the route to take. At this time, the seniors are interested in their own center as they are not comfortable with the Beecher Center. Committeeman Spears feels that there is public interest in contributing to a Senior Community Center. She would like the City to establish the foundation and maintain the funds. Kathleen Orr is going to do more research on this matter. Additional discussion took place regarding the following: • City Administrator McLaughlin feels that the City Council should be considered the Board of Directors in that they would make the decisions regarding the building size, locations, how it is set up, etc. • Committeeman Spears stated that discussion took place recently regarding the new Police Department including a community center. If the Senior Community Center were located there, it would save the City funding from the Police Department Project. Those funds could be utilized elsewhere in the project. • Committeeman Spears suggests that the Senior Provider Organization handle the maintenance of the building. • Treasurer Powell suggested looking into the Beecher Center becoming the Senior Community Center, however, it was determined that many renovations would need to take place. • Assistant City Administrator Olson stated that in 2005, the Senior Ad-Hoc Committee had a study completed regarding a community center. At that time, it was projected that they would need a 22,000 sq. ft. building, which would cost $4.8 million. When you take inflation into account, that figure is probably between $5-6 million. • Treasurer Powell suggested using some of the open space in the Kendall Point Center. • City Administrator McLaughlin stated that if tax money was used on this project, he feels that it would be upsetting to residents if 2 3 non-residents were to use the center. Committeeman Spears stated that Yorkville residents are currently utilizing senior services through the Fox Valley Older Adults and Oswego Food Pantries. It was determined that this item would be tabled for the next meeting in order to obtain further information. OLD BUSINESS: 11 ADM 2007-74 — Overtime Policy Update City Administrator McLaughlin stated that he conducted a salary and overtime study for a 12-month period. While there were a few salt and snow events recently, they are not yet included in this report. He stated that overtime is down during the summer months and in October. Additionally, Well #7 has been offline and the department is not comfortable yet with the SCADA system therefore, that has resulted in additional overtime. His intention is to have more rotation in the overtime by having the senior employees train the less senior employees so that they can be included in the overtime rotation. He also plans to have Well #7 back online, which will result in less overtime. It was suggested that the City offer an incentive for reducing overtime. Chairperson Munns suggested waiting until overtime is at a normal level, then offering an incentive for dropping below that. City Administrator McLaughlin will be checking with other communities on the SCADA system to find out where there overtime figures stand. Treasurer Powell reminded the group that, in his experience with SCADA, there are many different types of alarms. It is unknown how the City' s SCADA system is set up. This item is informational only. 2. ADM 2007-94 — Review of Governing Ordinance, Item a. Revisions to Reflect New Meeting Structure Assistant City Administrator stated that Meghan made the changes to the policy to reflect the new meeting schedule. She also includes changes from the general review at last months meeting. Chairperson Munns stated that under Section IV, Item D should read the `majority of those present' . Discussion took place regarding the previous revisions to the ordinance and where it is reflected. That information is included in the ordinance. With no further discussion, this item was moved to the Consent Agenda. 3, ADM 2007-96 — Discussion of Legislative Attorney City Administrator McLaughlin prepared a budget analysis of legal fees since Fiscal Year 04 and a Procedural Outline. The Committeeman were comfortable with the outline and instructed City Administrator 3 4 McLaughlin to move forward with the ordinance. He will also seek input from local communities regarding attorneys available for this work. Committeeman Spears asked about the legal billings for John White and Dan Cramer. Chairperson Munns stated those fees are for the fiscal year beginning 5/1 /07 and ending 4/30/08. With no further discussion, the ordinance will be moved to the non- consent agenda. Discussion regarding how to pick the attorney will occur at a later date. 4. ADM 2007-976 — Number of Alderman and Redistricting of Wards This item was previously discussed as the City of Batavia had 22 Alderman at one time. When the population of Yorkville hits 15000, the City will be required to add alderman under current state statute. City Administrator McLaughlin stated that it will be required if it is determined through a decennial census, not a special census. However, he will get an opinion regarding requesting a law change to allow the special census to count as well. Committeeman Munns, Spears, Werderich are all comfortable with limiting the number of Alderman to 8. With regards to redistricting the wards, it is done when there is more than a 100-person difference between wards. City Administrator McLaughlin stated that the City's technology is advanced enough that this could be done in-house. Chairperson Munns feels that the boundaries should remain as close to the current boundaries and that there should not be little slivers of property included in 1 district when it logically belongs in another. With no further discussion, this item was moved to the Council Meeting in order for the other council members to be informed. City Administrator McLaughlin will seek an opinion from Springfield regarding changing the law to include the special census. 5. ADM 2007-86 — Plan Commission Roster Composition As Committeeman Golinski was not in attendance, this item was tabled for the next meeting. ADDITIONAL BUSINESS: Committeeman Werderich - None Committeeman Spears — Discussed the following: • She would like a breakdown as to the reason for legal fees. City Admuustrator McLaughlin will include this information in the Administrator' s Weekly. • She would like Yorkville Big Band not to be allowed to rent the Beecher Center until they reimburse the city. At the present time they owe $2535 .00 if they are considered private citizens, but if they are considered a Yorkville business, they owe $3315.00, plus $400.00 for security, plus 4 5 maintenance and custodial costs. Committeeman Werderich likes the idea of them offering a free concert in order to make it even. City Administrator McLaughlin will try to work it out with them. Additionally, she stated that the standards should be checked for Park View, as she believes they allow 1 non-for-profit agency to use the facility per week. Chairperson Munns — Discussed the following: o Would like to see the Committee Liaisons to appear on the list. City Administrator McLaughlin stated that he is awaiting information from the EDC and then will update the list. o He will look into why the Council does not receive YEDC reports anymore. o The School Board meeting is Monday. Discussion will take place regarding why the school district will not allow others to use their fields. ADJOURNMENT OF THE ADMINISTRATION COMMITTEE MEETING: With no further business to discuss, the meeting adjourned at 8:05 p.m. Minutes respectfully submitted by Margaret M. Hartigan. 5 `A� C/py Reviewed By: Agenda Item Number a O Legal ❑ ��jt:�� i '��1 �(1��r , � r' � Finance ❑ EST. � _ � 1836 Engineer ❑ Tracking Number 4 L W City Administrator ❑ `20 Consultant ❑ ILE ��'�' ❑ Agenda Item Summary Memo Title: December Budget Report Meeting and Date: Administration Committee 2/14/08 Synopsis: Council Action Previously Taken: Date of Action: Action Taken: Item Number: Type of Vote Required: Council Action Requested: Submitted by: Jennifer Milewski Finance Name Department Agenda Item Notes: 1 ' . • 1 ' 1 - • • 1 11 1 ' 1 ' . 1 �. RAM United City of Yorkville Kendall Couty, IL 2007-2008 Budget General Fund Summary Period Ending December 31 , 2007 66.4% of Fiscal Year REVENUE/EXPE NSE PERCENT THRU 2007-2008 VS. BUDGET December 30, 2007 BUDGET AMOUNT �4 t S QP e � k 1 [ � ., e � � � TU5 � TOTAI. GENERAI F>UN©,REVENUE ; , $,795;321 fk. , $" ; . 17,5 ,0,9;'107,,, , , ' ' , 50:23% „ GENERAL FUND EXPENSES Admin. 11676,493 21628,227 63.79% Finance 2,531 ,024 492395997 59.69% Eng. 2669170 455,939 58.38% Police 13981 ,426 3,2279352 61 .39% Planning & Dev. 3499464 524,771 66.59% Streets 2,751 ,247 51423,725 50.73% Health & Sanitation 5939767 11006,000 59.02% TO AL GENERAL FUND>EXPENSES ° 70, 149;'590" "` 17,50,6",011 „ r' " . �a7:981 Note: Budgeted surplus to contribute to fund equity United City of Yorkville Kendall County, IL Monthly Budget Report Period 8 (66.64%) a„ s < , ISCA41"`I'D � VEARx FISCAL YTDa ; y DEPARTMENT.�� PAGE. A'IGOUN7 NUM8ER �; �eUESCRIPTION;� „ ACTUAL` t ,eUDGET', ' t/1GTUAL'y , nr - 'P�(PLANATI051;OF° OVL'RAGE , ' Portion of City Attorney stipend paid before stipend was ADMIN 3 01-110-50-00-5105 SALARIES- CITY ATTORNEY 309.58 310.00 99.8 repealed. ADMIN 3 01-110-50-00-5136 SALARIES- PART TIME 5,602.50 7,500.00 7417 Public Relations Intern ADMIN 4 01-110-62-00-5401 CONTRACTUAL SERVICES ' 44,496.55 : 50,000.00 ': 88.9 Administrators recruitment ADMIN =4 01-110-62-00-5404 CABLE CONSORTIUM FEE 48,856-19 38,000.00 `: 1285 2nd Payment submitted to SWFVCTC Expenditures authorized by Facade Committee, which are grants awarded as requests come in. No request for ADMIN 4 01-110-62-00-5427 [FACADE PROGRAM 1 16,100.001 17,500.00 92 ladditional funding from Facade Committee atthis time. Cost of phone service only. Monthly bills for phone service often exceed $1000 (for all departments), and depending on the timing of the payment of the bill, may cause the monthly ADMIN 4 01-110-62-00-5436 TELEPHONE 10,802.77 15,000.00 72 overage. Not expected to exceed FY budget amount. ADMIN 4 01-110-62-005438 . :CELLULAR TELEPHONE 2,036.11 `- 2,50000 :+. 81.4 ;: Blackberry Purchase ADMIN :4 01-110-62-00-5440 BEAVER STREET GRANT 216,396.43 ': 0.00 100 Per audit, expense must be recognized ADMIN 4 01-110-64-00-5600 DUES 5,949.05 5,900 00 100.8 Dues are tied to the FY calendar, and come up in May -July.: ADMIN ;:4 01-110-64-00-5601 ILLINOIS MUNICIPAL LEAGUE DUES 918.00 '- 80000 :` 114.7 1. .Increase in dues Large expenditures of IML and ICMA national conference, and Deputy Clerk records retention class already paid. No ADMIN 4 01-110-64-00-5604 TRAINING & CONFERENCES 4,513.29 6,000.00 75.2 large expenses forthcoming. Tied to Asst Aomm's ICMA conference Deputy Clerk's ADMIN 4 01-110-64=00-5605 TRAVELMtEALS/LODGING 2313692 24000.001 964 r Records class and moving expenses forAdmintstrator. ADMIN ?4 01-110=84-00-5609 IYMCA PARTNERSHIP 1 1,500.00 1500.00 100 - One time donation ADMIN <5 01-110-65-00-5802 OFFICE SUPPLIES 7,935.49 10,000.00 '` 79.3 Paper ordered`for copiers Copying Charges for May-July ($1,003) miscoded, needs to ADMIN 5 01,110-65-00-5804 OPERATING SUPPLIES 5,266.11 : 6,250.00 ' 84.2 ` be moved to Printing & Copying line item ADMIN 5 01-110-65-005809 '. PRINTING &:COPYING 11,476;34 ' 11,000.00 104.3 8 $1,964.59 for Annual Dues Cash shortage in cash drawer. Coded to Miscellaneous because recovery was taken from petty cash and for tracking ADMIN 5 01-110-78-00-9004 MISCELLANEOUS 4.00 0.00 100 purposes. ADMIN "-5 01-110-78-009011 TENNIS'CRT REFURBISHING. 45,823.00 ':: 46,000:00 ' 99.6 ": Per City'Council Agreement Funds in community events budget. Currently:separate ADMIN '5 01-110-78-00-9013 HOLIDAY UNDER THE STARS 10,037.33 000 , 100 : revenue and expense line item per Glory. FINANCE' ',:6 01-120-50-00-5205 - BENEFITS-. DENTAWISION ASST. 57,467.55 75,000.00 i 76.6 IMom employees selected then anticipated FINANCE ` 6 01-120-61-00-5304 : ` AUDIT FEES &:EXPENSES " 32,000.00 32,000:00 100 = .One time e expense up to the contracted/budgeted amount Projected increase greater than anticipated`due to Library FINANCE :6 01-120-64-00-5400 INSURANCE- LIABILITY & PROP 188,753.66 163,422.00 115.5 ! addition FINANCE 6 01-120-62-00-5437 ACCTG SYSTEM SERVICE FEE 12,972.16 12,200.00 106.3 Greater then anticipated FINANCE 6 01-120-64-00-5603 SUBSCRIPTIONS/BOOKS 78.31 100.00 78.3 1 subscription renewed FINANCE 7 01-120-65-00-5804 OPERATING SUPPLIES 7,421:61 8,000.00 ` 92.7 = Due 1, the urchase of the folding/stuffing machine ENGINEERING - 8 01-150-50-005137 :. SALARIES- OVERTIME 1,068.45 1,000:00 106.8 '- Overtime'needs vary over me course of the year. Department-wide purchase for winter apparel; also outfitting ENGINEERING 8 01-150-62-00-5421 WEARINGAPPAREL 1,021 .41 1 ,400.00 72.9 new employee Page 1 of 3 FISCAL.YTD F o YEAR FISCAI-YTD: - 4, DEPAR-fMENT. � PAGE. A.GCOUNT NUMEER ,<`'. . ,. ,-.DESCRIRTION-'t. <;,ACTUAL -, + BUDGET ., ,,?ACTUAL °k< rEXPl.4NATYdN OF.°Te OVElYA6E,.. ENGINEERING ?8 01150-62-005438 +:CELLULAR TELEPHONE 1 ,899.77 = 2,52000 75.3 s Additional employee hired in September 2007: ENGINEERING i9 01-150-75-00-7003 I OFFICE EQUIPMENT 2,521.25 r> 2,500 00 f. 100.8 i. Furniture for additional employee POLICE ':10 01-210-62-00-5408 MAINTENANCE- EQUIPMENT: 10,941.85 :: 1100000 99.4 E .Repairs to.Equipment / Radar Certifications Due POLICE 10 01-210-62-00-5409 MAINTENANCE- VEHICLES 25,182.68 35,000.00 71 .9 Necessary maintenance to fleet POLICE '10 01210-62-00-5414 : WEATHER WARNING SIREN:MAINT 5,197.94 660000 78.7 Annual.Repairs/Maintenance rto Several Sirens POLICE 10 01-210-62-00-5422 COPS GRANT IV- VESTS 5,143.54 6,000.00 85.7 Vests purchased for officers :Completed.Previous BFPC List 12 Cadets Tests POLICE 10 01210-62-00-5430 I HEALTH SERVICES 1 2,889.00 : 4,00000 72.2 - ((Medical/DrugNision Screenings for 4 Applicants POLICE 11 01-210-72-00-6502 :' POLICE PENSION 263,697.621 275,000.00 ':. 95.8 ': Correlated to revenues received from property fazes ::. $50,161.02 was paid to CEC:for services onldowntown Brownfield and will be refunded to the City by [EPA through PLANNING 12 01-220-62110-5401 CONTRACTUAL SERVICES 54,315.29 54,31500 100 Ithe Bromfield.Municipal Grant Program PLANNING 12 01-220-62-00-5432 ECONOMIC DEVELOPMENT 45,000.00 45,000.00 100 lAnnual dues - onetime payment PLANNING 13 01-220-75-00-7002 COMPUTER EQUIP & SOFTWARE 7,204.50 10,000.00 72 1 Will not exceed $8,755.50 invoice was held from FY 06-07 and released for ;< PLANNING. 13 01-220-75-00-7003 OFFICE EQUIPMENT 10,972.28 ! 5,000.00 219.4 payment FY 07.-08 due to delay in furniture delivery STREETS 14 01-410-50-00-5136 SALARIES- PART TIME - 4,475.25 5,500.00 81 .3 No part time needed for rest of FY STREETS 14 01-410-62-00-5408 MAINTENANCE-EQUIPMENT 9,861 .71 8,000.00 123.2 Unexpected backhoe repairs STREETS': 14 01-410-62-00-5424 RAYMOND STORM SW. TBIR 3 413,391 60 0.00 100 ' A"ifing Oman Atlantic Payment STREETS+ 14 01-410-62-00-5435 ELECTRICITY 56,89211 :. 74,400.00 764 : Market Prices higher STREETS : 15 , 01-410-65-00-5812 GASOLINE 22,588 53 `: 30,250.00 ;: 74.6 Market Prices higher STREETS'i 15 01-410-75-00-4404 HANGING BASKETS 1 ,800.00 i 200000 ' 90 '" Done buying baskets STREETS.; 15 01-410-75-00-5418 : MOSQUITO CONTROL 28,414 00 1 30 000.00 !+ 94 7 Contracted amount Will not exceed STREETS 15 01-410-75-00-7104 SSA EXPENSE- FOX HILL SUNFLOWER 21 ,946.50 18.000.001 121.9 Repaid through SSA taxes MOTOR.FUEL 17 15-000-75-007008 : CRACK FILLING 2,084132 ': 2,065.00 99.9 Final Paymentfor last ear's: roect MOTOR FUEL 17 15-000-75-00-7106 ? ' GAME FARM SURVEYING 93,91296 68000.006 138.1 1 Project on schedule MOTOR FUEL 18 15-000-75-00-7118 RT 34 & SYCAMORE TRAFFIC SGNL 22,901-91 i 0.00 100 " Council approved project to be paid out of MFT MUNICIPAL BLDG. 19 16-000-62-00-5416 MAINT- GENERAL BLDG & GROUNDS 2,440.35 2,441.00 99.9 General maintenance to City Hall alarms, AlC, etc. MUNICIPAL BLDG. 19 16-000-75-00-7200 BLDG IMPROV- BEECHER/RIVERFRONT 4,210.72 2,721.00 154.7 Had to repair an unexpected leaking roof at Riverfront Park MUNICIPAL BLDG. 19 16-000-75-00-7203 IBLDG IMPROVEMENTS- PUBLIC WORKS 3,270.00 2,000.00 163.5 Unex ect repairs to Material Storage Building MUNICIPAL BLDG 19 16-000-75-00-7204 iBLDG MAINT-.CITY HALL 1 13047.76 ! 12,76000 ::: 102.2 :-. Service A/C and Handicap Door entrance MUNICIPAL BLDG. 19 16-000-75-00-7206 LANDSCAPING-PUBLIC BUILDINGS 1 1 ,289.30 860.00 149.9 TruGreen Chem Lawn forvarious City buildings. POLICE CAPITAL r21 20-000.75-00-7001 : ' EQUIPMENT 1 26972.001 20,00000 : 134.8 ' : Per Audit Equipment umbased in FY08 not FY07 POLICE CAPITAL 122 20-000-75-00-7005 i ' VEHICLES 1 58,624.08 80,000.00 73.2 -`- Approved by City PARKS CAPITAL 125 22-610-75-00-7016 > ' COMPUTER SERVER 4,728.71 :. 6,000.0 ? 94.5 One timep purchase planned and in budget PARKS 25 22-610-75-00-7018 PARK RE-DEVELOPMENT 52,518.71 65,500.00 80.1 One time event SEWER IMPROV. 27 37-000-62-00540211 ENG/LEGAUCONTG COUNTRYSIDE 1,336.61. 000 100 Wra ulp expenses from last ear's project SEWER IMPROV. 28 37-000-75-00-7503 COUNTRYSIDE INTERCEPTOR 20,840.43 20,232.00 103 Wmp-up expenses from last years project SEWER IMPROV -28 37-000-75-00-7505 0 ROB ROY CREEK SANITARY 8,187188 '. 8,188.00 - 99.9 Wrap-up expenses from last€ ear's project ". WATER'IMPROV >29 41-000-61-00 5400 .:: . RADIUM COMPLIANCE- CONT B2 & 3 708.50 709100 : 99.9 `- Final Payments of completed project WATERIMPROV. 29 41000-61-00-5401 ". ENGINEERING-RADIUM B2'&'3 38073.00 40,000:00 - 95.1 Final Paments of completed project WATER IMPROV. -<30 41-000-61-00-5416 USGS GROUNDWATER COUNTRYWIDE 13 128.00 + 13 128.00 100 ' Final Payments of completed project WATER IMPROV. "30 41-000-61-00-5417 USGS GROUNDWATER SHALLOW WATE : 8,328 00. 1,173.00 709.9 =' Wrap-up expenses from:last!year's project WATER IMPROV. 30 41-000-61-00-5418 ENG-TOWER LANE REHAB HA 9,045.04 1 400.00 2261.2 Project approved by city council WATER ]MPROV. 30 41-000-61-00-5419 ENG- WELL 4 REHAB H.1 6,500.00 0.00 100 Project approved by city council WATER'.IMPROV :1:30 41-000-75-00-7509 SCADA SYSTEM 19,754140 22,313.00 $8.5 Final Payments of completed project DEBT SERVICES 32 42-000-66-00-6001 CITY HALL BONDS PRINCIPAL PMT 50,000.00 50,000.00 100 Bond payment DEBT SERVICES 32 42-000-66-00-6002 CITY HALL BONDS INTEREST PMT 6,400.00 6,400.00 100 Bond payment DEBT SERVICES 32 42-000-66-00-6007 $4.8M DEBT CERT INTEREST PMT 168,021 .20 160,630.00 104.6 Bond payment DEBT SERVICES 32 42-000-66-00-6008 COUNTRYSIDE ALT REV PRINC. PMT 135,000.00 135,000.00 100 Bond payment DEBT SERVICES 32 42-000-66-00-6009 COUNTRYSIDE ALT REV INT. PMT 114,512.50 114,513.001 99.9 Bond payment Page 2 of 3 FISCAL FISCAL YTD t YEAR FISCALYT4 ��DEPARTMENT PAGE ACCOUIVTNUMSER'. . .. .,. >OHSCRIPTION :,: ,i." ,.. ; „ACTUAL - .,` BUDGET% FACTUAL °Io` . m EXPLANATION OF% OYERgGE , ` r DEBT SERVICES 32 42-000-66-00-6010 COMED/HYDRAULIC INTEREST PMT 38,947.00 38,947.00 100 Bond payment DEBT SERVICES 32 42-000-66-00-6011 COMED/HYDRAULIC PRINCIPAL PMT 145,000.00 145,000.00 100 Bond payment DEBT SERVICES 32 42-000-66-00-6013 LIBRARY BOND 2005B INT PMT 321 ,125.02 321 ,125.00 100 Bond payment DEBT SERVICES -T 32 42000-66-00-6015 - LIBRARY BOND(2006INT PMT 100,810.34 '+ 13032200 :: 773 `: Bond payment 5 DEBT SERVICES 32 42-000-66-00-6016 ROB ROY CREEK BOND 468,950.00 468,950.00 100 Bond payment DEBT.SERVICES -033 42-000;66-00.6055 '. LOAN PAYMENT SSES EPA L171153 108,142.24 109,234.00 - 99 r Bond payment DEBT SERVICES 33 42-000-66-00-6056 REFUNDING 2006 INTEREST PMT 95,026.79 95,027.00 99.9 Bond payment DEBT SERVICES 33 42-000-66-00-5057 1 REFUNDING 2006A PRINCIPAL PMT 5,100.001 5,100.00 100 1 Bond payment DEBT SERVICES 33 42-000-66-00-5070 $650k ROAD IMPROV FROG INT 22,820.00 22,820.00 100 Bond payment DEBT SERVICES 33 42-000-66-00-6071 $650K ROAD IMPROV PROG PRINC 75,000.00 75,000.00 100 Bond payment DEBT SERVICES 33 42-000-66-00-6072 $2M ALT REV B.2 0 INT PMT 88,925.00 88,925.00 100 Bond payment DEBT SERVICES 33 42-000-66-00-6073 $2M ALT REV B.2&3 PRINC PMT 75,000.00 75,000.00 100 Bond payment DEBT SERVICES 33 42-000-66-00-6074 $3.825M IN TOWN ROAD INT PMT 156,778.76 156,779.00 99.9 Bond payment DEBT SERVICES 33 42-000-66-00-6075 $3.825M IN TOWN ROAD PRINC 160,000.00 150,000.00 100 Bond payment WATER OP. 535 51-000-62-00-5401 CONTRACTUAL SERVICES 8,37144 9,000.00 93 Will not exceed WATER OP. :'.35 51-000-62-00-5407 TREATMENT'FACILITIES O&M !' 120,29894 ? 157000.00 ' 76.6 :! Market prices ihigher for salt and chemicals WATER OP. 35 51-000-62-00-5435 ::ELECTRICITY 182,96077 250000.00 ':: 73.1 Market Prices::higher WATER OP. 35 51-000-62-00-5438 CELLULAR TELEPHONE 2,441.54 3,300.00 73.9 Unexpected phone purchase WATER OP. 35 51-000-64-00-5600 DUES 755.83 1,000.00 75.5 Will not exceed WATER OP. 36 51-000-65-00-5815 HAND TOOLS 1,230.59 1,300.00 94.6 Will not exceed WATER OP- 36 51000-75-00-7002 :.COMPUTER:EQUIP & SOFTWARE 1,096.22f 1,500.00 73 Will not exceed: WATER OP- 136 51.000-75-00-7506 METER READERS 11,04094.'- 12000100 92 Will not exceed: SEWER'.MAINT -39 52-00055-005812 GASOLINE 20,00237 25,000.00 80 : Rising Fuel Prices LAND CASH 1:42 72-000-75.00-7327 GRANDE RESERVE PARK 19,114.95 0.00 100 `. Design fees:for Parks A,B Developer to reimburse LAND CASH 42 72-000-75-00-7328 PRAIRIE MEADOWS MENARDS RES 165,849.09 150,000.00 110.5 Construction is further along than anti ated from weather LAND CASH 42 72-000-75-00-7333 RAINTREE VILLAGE 1,800.00 0.00 100 Title insurance required by rant agency LAND ACQUISITION 44 73-000-65-00-5800 CONTINGENCY 1,000.00 0.00 100 Property urchase LAND ACQUISITION 44 73-000-75-00-7501 LANDACQUISITION 49,000.001 49,000.00 100 Property urchase PARKS:&;REC k46 79-610-62-00-6405 1 PARK CONTRACTUAL 17,596.59 ' 21,500.00 81.8 lWeed and feed:control for p arks and'p public buildings PARKS & REC 46 79-610-62-00-5440 LAND DEVELOPER - 7,555.92 8,550.00 883 Consultant fees for potential property purchase PARKS & REC 48 79-650-50-00-5108 CONCESSION STAFF 6,237.87 6,750.00 92.4 Seasonal, most budget expended in summer PARKS:&REC I48 79550;50-00-5137 , S SALARIES-:OVERTIME 15.00 -15.00 100 ?. Unexpected OT situation arose. Had to put Rfiere. PARKS &s REC 48 79=650-50-00-5150 SALARIES-INSTRUCTOR CONTRACTUAL ' 59;102.27 : 57400.00 ' 102.9 ! Will fofoilowseasonal programming. Higher in summer. PARKS&REC 148 74-650-62.00-5435 ELECTRICITY 7574.27 : 8;820.00 858 New park and:rec account for Ball field lights. PARKS:&'REC 48 79-650-62-00-5445 'PORTABLE TOILETS 8,163.03 ? 7,000.00 ' 116.6 Added additional toilets to cover new events!:' PARKS:&'-REC "48 79.650-62-00-5603 PUBLISHING/ADVERTISING 20,790.59 ' 27,920.00 " 74A S Covers printing and mailing 4.brochures. I more in Spring PARKS & REC 48 79-650-65-00-5802 OFFICE SUPPLIES 4,528.65 6,000.00 75.4 increase in paper, binder needs, new staff, will monitor PARKS:&:REC -'48 79-650-65-00-5803 '- . PROGRAM:EXPENSES 40,912.79 ' 50,100.00 81.6 Is determined by seasonal ?orams PARKS:& REC ' '49 79-65M5-00-5808 POSTAGE &-SHIPPING 5,626.86 : 7,600.001 74 ? no of catalogs out / postage for packets, etc up PARKS&.REC 49 79-650-65-00-5827 : : 'GOLF OUTING:EXPENSES 18779.08. 18,780.00 99.9 z Event held once in early May and is over PARKS &:REC -49 79-650-85-00-5828 CONCESSIONS 16,675.71 ' -17,650.00 ' 944 Concession is seasonal. All purchases early in FY PARKS&:.REC °'49 79-650-65-00-5833 ': HOMETOWN DAYS EXPENSES 96783.09 95,686.00 ' 101.1 One 9me activity - should correspond to revenue line " PARKS:&:REC -"'49 79550-65-00-5841 ' ! PROGRAM REFUNDS 6,033.50 : .8,000.00 ` 754 -: There's no real[control fiedin:to Program Fees line PARKS & REC 49 79-650-75-00-7002 COMPUTER EQUIP & SOFTWARE 1 1 ,568.13 2,025.00 77.4 Ink cartrid a order. Will last several months, into next FY. FOX INDUSTRIAL . - 54 85-000-66-00-6021 FOX IND BOND:.PRINCIPAL PMT 60,000.00 : 60,000.00 100 . Bond payment? FOX.INDUSTRIAL ' 54 85-000-66-00-6022 FOX IND BOND'.INTEREST FIAT 16015.00 " 1,801.00 100 Bond e2ment COUNTRYSIDETIF 57 87-00056-00-6002=: COUNTRYSIDE TIF- INTEREST PMT 1 71,433.75 0.00 100 " Bond payment- Page 3 of 3 United City Of Yorkville Kendall County, IL Budget Index General Fund Revenue 1 Parks & Recreation Equipment Capital 25 Administration 3 Sanitary Sewer Improvement & Expansion 27 Finance 6 Water Improvement & Expansion 29 Engineering 8 Debt Service Fund 32 Police 10 Water Operations 34 Planning and Development 12 Sewer Maintenance 38 Streets 14 Land Cash 41 Health and Sanitation 16 Land Acquisition 44 Motor Fuel Tax Fund 17 Parks & Recreation 45 Municipal Building 19 Library 50 Police Equipment Capital 21 Fox Industrial 54 Public Works Equipment Capital 23 Countryside TIF 57 Downtown TIF 58 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 1 TIME : 15 : 59 : 40 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ___-- _ _____ ___ ____ _ _____ ________ _ _______________ _ __ ____ _ ____ ____________________ __ ___ __ GENERAL REVENUES TAXES 01- 000- 40- 00- 3991 CARRY OVER FY 05/ 06 0 . 00 0 . 00 833 , 117 . 00 0 . 0 01 - 000- 40-00- 3992 LIBRARY BOND PAYBACK 0 . 00 160 , 562 . 00 1600000 . 00 100 . 3 01 - 000- 40- 00- 3993 EMPLOY CONTRIB HEALTH REIMB 8 , 120 . 27 70 , 132 . 89 100 , 000 . 00 70 . 1 01-000- 40-00- 3994 AMUSEMENT TAX 0 . 00 0 . 00 0 . 00 0 . 0 01-000- 40-00- 3995 RESTRICTED FUND BALANCE CD ' S 0 . 00 0 . 00 104 , 000 . 00 0 . 0 01-000 - 40- 00- 3996 ROAD CONTRIBUTION FEE 10 , 000 . 00 532 , 000 . 00 800 , 000 . 00 66 . 5 01 -000 - 40- 00-3997 IN TOWN ROAD PROGRAM FUNDING 0 . 00 0 . 00 21575 , 000 . 00 0 . 0 01 -000 - 40-00- 3998 MPI BRISTOL RIDGE RD FUNDING 0 . 00 0 . 00 1 , 000 , 000 . 00 0 . 0 01 -000- 40- 00- 3999 RESERVE FUND BALANCE 0 . 00 62 , 500 . 00 125 , 000 . 00 50 . 0 01-000- 40-00- 4000 REAL ESTATE TAXES 94 , 702 . 48 1 , 832 , 436 . 15 1 , 860 , 387 . 00 98 . 4 01- 000- 40-00- 4001 TOWN ROAD/BRIDGE TAX 5 , 384 . 72 128 , 425 . 34 125 , 000 . 00 102 . 7 01- 000- 40-00-4002 SSA LEVY- FOX HILL , SUNFLOWER 719 . 17 17 , 837 . 60 18 , 000 . 00 99 . 0 01- 000- 40- 00- 4010 PERSONAL PROPERTY TAX 11602 . 66 81885 . 60 10 , 000 . 00 88 . 8 01- 000- 40- 00-4020 STATE INCOME TAX 1591564 . 36 364 , 753 . 11 974 , 748 . 00 37 . 4 01 -000- 40-00- 4030 MUNICIPAL SALES TAX 207 , 577 . 86 1 , 336 , 107 . 17 2 , 775 , 000 . 00 48 . 1 01 -000- 40-00-4032 STATE USE TAX 12 , 644 . 90 75 , 007 . 74 144 , 532 . 00 51 . 8 01 -000- 40-00- 4040 MUNICIPAL UTILITY TAX 145 , 722 . 44 279 , 282 . 67 425 , 000 . 00 65 . 7 01 -000- 40-00-4041 UTILITY TAX - NICOR 34 , 092 . 11 210 , 449 . 87 350 , 000 . 00 60 . 1 01 -000- 40-00- 4042 UTILITY TAX - CABLE TV 0 . 00 83 , 448 . 76 150 , 000 . 00 55 . 6 01 -000- 40-00- 4043 UTILITY TAX - TELEPHONE 47 , 198 . 92 255 , 531 . 66 425 , 000 . 00 60 . 1 01 - 000- 40-00- 4050 HOTEL TAX 1 , 681 . 43 13 , 764 . 29 20 , 000 . 00 68 . 8 01 -000- 40- 00- 4060 TRAFFIC SIGNAL REVENUE 0 . 00 81778 . 52 81775 . 00 100 . 0 _ ________ _________ _ ____ _ __-_ __ ___-_____ __ TOTAL TAXES 729 , 011 . 32 5 , 439 , 903 . 37 12 , 983 , 559 . 00 41 . 8 LICENSES & PERMITS 01 -000- 41 - 00- 4100 LIQUOR LICENSE 136 . 05 29 , 273 . 78 27 , 316 . 00 107 . 1 01- 000- 41- 00- 4101 OTHER LICENSES 50 . 00 31722 . 86 31400 . 00 109 . 4 01- 000- 41 -00- 4110 BUILDING PERMITS 27 , 501 . 00 706 , 750 . 15 1 , 200 , 000 . 00 58 . 8 TOTAL LICENSES & PERMITS 27 , 687 . 05 739 , 746 . 79 1 , 230 , 716 00 60 . 1 CHARGES FOR SERVICES 01- 000- 42 -00- 4205 FILING FEES 0 . 00 1 , 526 . 50 10 , 000 . 00 15 . 2 01 - 000- 42 -00- 4206 GARBAGE SURCHARGE 95 , 210 . 73 379 , 924 . 66 540 , 756 . 00 70 . 2 P1 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 2 TIME : 15 : 59 : 40 DETAILED REVENUE & EXPENSE REPORT F-YR : OB ID : GL4S3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED _____ _ ____ _ _ _ _ _ ___ - _---_ _______ _ _ __ _ _ _ ___ ___ _ ___________ _ _____ _ _ ________ _ ___ ______________ _______ _ __ GENERAL REVENUES CHARGES FOR SERVICES 01- 000- 42 - 00- 4208 COLLECTION FEE - YBSD 0 . 00 55 , 916 . 00 55 , 916 . 00 100 . 0 01 - 000- 42- 00- 4210 DEVELOPMENT FEES 120 , 207 . 53 1 , 266 , 256 . 35 11475 , 000 . 00 85 . 8 01 - 000- 42-00- 4211 ENGINEERING CAPITAL FEE 1 , 200 . 00 27 , 500 . 00 48 , 000 . 00 57 . 2 01 -000- 42 - 00 - 4281 BEECHER DEPOSITS 0 . 00 ( 600 . 00 ) 0 . 00 100 . 0 01 - 000- 42 - 00-4286 BEECHER RENTALS 245 . 00 21010 . 00 0 . 00 100 . 0 ___ ___ ______ _ ____-_ --___-_ ______ _______- ___ _______ TOTAL CHARGES FOR SERVICES 216 , 863 . 26 1 , 732 , 535 . 51 21129 , 672 . 00 81 . 3 FINES & FORFEITS 01- 000- 43- 00- 4310 TRAFFIC FINES 91885 . 25 74 , 922 . 70 80 , 000 . 00 93 . 6 O1- 000- 43- 00- 4315 REIMBURSE POLICE TRAINING 0 . 00 15 , 106 . 25 21 , 000 . 00 71 . 9 01 - 000- 43 - 00 - 4320 ORDINANCE FEES 200 . 00 2 , 605 . 00 21500 . 00 104 . 2 TOTAL FINES & FORFEITS 101085 . 25 92 , 633 . 95 103 , 500 . 00 89 . 5 MISCELLANEOUS 01 -000- 44 -00- 4401 DARE DONATIONS 0 . 00 0 . 00 1 , 250 . 00 0 . 0 01 -000 - 44 -00- 4402 ROB ROY CREEK HYDRAULIC STUDY 0 . 00 0 . 00 10 , 000 . 00 0 . 0 01 - 000-44 -00- 4403 WEARING APPAREL DONATIONS 0 . 00 0 . 00 0 . 00 0 . 0 01- 000-44 -00- 4404 HANGING BASKET DONATIONS 0 . 00 450 . 00 450 . 00 100 . 0 01 - 000- 44 -00- 4405 RAYMOND SEWER OUTFALL 0 . 00 0 . 00 0 . 00 0 . 0 01- 000- 44 -00- 4406 COMMUNITY RELATION DONATIONS 0 . 00 0 . 00 0 . 00 0 . 0 O1 -000- 44 -00- 4407 HOLIDAY UNDER THE STARS 422 . 00 9 , 000 . 48 0 . 00 100 . 0 01 -000- 44 -00- 4411 REIMBURSEMENTS-POLICE PROTECTN 200 . 00 3 , 217 . 75 31300 . 00 97 . 5 01 -000- 44 -00- 4490 MISCELLANEOUS INCOME 263 . 89 4 , 009 . 84 3 , 500 . 00 114 . 5 01 - 000- 44 -00- 4499 BAD DEBT RECOVERY 0 . 00 0 . 00 0 . 00 0 . 0 __________ _____ _____ _____ _______________ ____ _____ ___ ________ TOTAL MISCELLANEOUS 885 . 89 1616-78 . 07 18 , 500 . 00 90 . 1 INTERGOVERNMENTAL 01 -000- 45-00- 4505 COPS GRANT - VESTS 0 . 00 0 . 00 3 , 000 . 00 0 . 0 01- 000- 45- 00- 4511 POLICE-STATE TOBACCO GRANT 1 , B70 . 00 1 , 870 . 00 1 , 500 . 00 124 . 6 01- 000- 45- 00- 4525 GRANTS 1 0 . 00 0 . 00 55 , 160 . 00 0 . 0 01- 000- 45-00- 4540 BEAVER ST DEVELOPMENT GRANT 0 . 00 216 , 396 . 43 0 . 00 100 . 0 ________ _ _______ _____ ___ ___ ____________ __________ ______ __________________ ________ TOTAL INTERGOVERNMENTAL 1 , 870 . 00 218 , 266 . 43 59 , 660 . 00 365 . 8 P2 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 3 TIME : 15 : 59 : 40 DETAILED REVENUE & EXPENSE REPORT F-YR : 06 ID : GL4B300D . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL $ ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ------- - - - - - - - ------- --------- -- ------ - - - - - - ------ - - ----- ---- ---- - -------- ----------------- - ---- -------- - ----------- - ------- - --- ---- GENERAL INTEREST 01 - 000 - 46- 00- 4600 INVESTMENT INCOME 11 , 736 . 44 121 , 017 . 05 100 , 000 . 00 121 . 0 ----- - --- - ---- ------ - - -- --- - - --------- -- ----------- - - ------- - ------------ --- ----- TOTAL INTEREST 11 , 736 . 44 121 , 017 . 05 100 , 000 . 00 121 . 0 TRANSFERS 01-000- 49- 00- 4915 TRANSFER FROM WATER OPERATIONS 0 . 00 125 , 000 . 00 265 , 000 . 00 47 . 1 01- 000- 49- 00- 4920 TRANSFER FROM SEWER MAINT . 0 . 00 35 , 290 . 00 70 , 000 . 00 50 . 4 01- 000- 49-00- 4925 TRANSFER FROM SAN . SEWER IMPR 0 . 00 75 , 000 . 00 150 , 000 . 00 50 . 0 01- 000- 49-00- 4930 TRANSFER FROM WATER IMPROVE . 0 . 00 100 , 000 . 00 200 , 000 . 00 50 . 0 01 -000- 49- 00-4935 TRANSFER FROM LAND CASH 0 . 00 8 , 000 . 00 16 , 000 . 00 50 . 0 O1 -000- 49- 00- 4940 TRANSFER FROM MUNICIPAL BLDG 0 . 00 91 , 250 . 00 182 , 500 . 00 50 . 0 ------ - -- - ---- --- ------- --------------- -- ---- - _ _--- - --- ---- TOTAL TRANSFERS 0 . 00 434 , 540 . 00 883 , 500 . 00 49 . 1 TOTAL REVENUES : GENERAL 998 , 139 . 21 8 , 7951321 . 17 17 , 509 , 107 . 00 50 . 2 EXPENSES RETIREMENT 01 - 000- 72 - 00- 6500 IMRF PARTICIPANT 0 . 00 0 . 00 0 . 00 0 . 0 01- 000- 72 - 00- 6501 SOC . SECURITY/MEDICARE 0 . 00 0 . 00 0 . 00 0 . 0 ---- ----- ----- -- ------ ----- - -- ----- --- --- ---- --------------- - ----------------- --- TOTAL RETIREMENT 0 . 00 0 . 00 0 . 00 0 . 0 ADMINISTRATION EXPENSES PERSONNEL SERVICES 01- 110- 50- 00-5100 SALARIES- MAYOR ( 250 . 00 ) 5 , 075 . 00 11 , 310 . 00 44 . 8 01 - 110- 50-00- 5101 SALARIES- CITY CLERK 0 . 00 41240 . 00 8 , 600 . 00 49 . 3 01- 110- 50-00- 5102 SALARIES- CITY TREASURER 0 . 00 2 , 970 . 00 61410 . 00 46 . 3 01- 110- 50- 00- 5103 SALARIES- ALDERMAN 0 . 00 20 , 300 . 00 40 , 880 . 00 49 . 6 01- 110- 50-00- 5104 SALARIES- LIQUOR COMMISSIONER 250 . 00 500 . 00 1 , 000 . 00 50 . 0 01- 110- 50-00- 5105 SALARIES- CITY ATTORNEY 0 . 00 309 . 68 310 . 00 99 . 8 01 - 110- 50-00- 5106 SALARIES- ADMINISTRATIVE 40 , 865 . 24 325 , 804 . 41 522 , 421 . 00 62 . 3 01 -110- 50-00- 5136 SALARIES - PART TIME 865 . 00 51602 . 50 7 , 500 . 00 74 . 7 P3 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 4 TIME : 15 : 59 : 40 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL $ ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ------ ------------ --- ----- - ---- - - - - ------- ---- --- - ----- --- - - - ------------------ --- - ---------------- ------- --------- ---- -- ADMINISTRATION EXPENSES PERSONNEL SERVICES 01- 110-50- 00- 5137 SALARIES- OVERTIME 172 . 20 388 . 17 750 . 00 51 . 7 01- 110- 50-00- 5203 BENEFITS- HEALTH INSURANCE 0 . 00 0 . 00 0 . 00 0 . 0 -------- - ---------- _-_----- ------_ _- TOTAL PERSONNEL SERVICES 41 , 902 . 44 365 , 189 . 76 599 , 181 . 00 60 . 9 PROFESSIONAL SERVICES 01- 110- 61-00- 5300 LEGAL SERVICES 207 . 50 114 , 976 . 38 180 , 000 . 00 63 . 8 01 - 110- 61-00- 5311 CODIFICATION 0 . 00 2 , 129 . 05 5 , 000 . 00 42 . 5 01 - 110 - 61- 00-5314 BUILDING INSPECTIONS 52 , 955 . 85 565 , 673 . 78 9500000 . 00 59 . 5 TOTAL PROFESSIONAL SERVICES 53 , 163 . 35 682 , 779 . 21 1 , 135 , 000 . 00 60 . 1 CONTRACTUAL SERVICES 01 - 110- 62 - 00- 5401 CONTRACTUAL SERVICES 21929 . 63 44 , 496 . 55 50 , 000 . 00 88 . 9 01 - 110- 62 - 00-5403 SPECIAL CENSUS 0 . 00 0 . 00 300 , 000 . 00 0 . 0 01- 110- 62 - 00- 5404 CABLE CONSORTIUM FEE 17 , 030 . 32 48 , 856 . 19 38 , 000 . 00 128 . 5 01- 110- 62 -00- 5406 OFFICE CLEANING 625 . 00 4 , 375 . 00 71500 . 00 58 . 3 01 - 110- 62 -00- 5410 MAINTENANCE - OFFICE EQUIPMENT 0 . 00 0 . 00 500 . 00 0 . 0 01- 110- 62 -00-5421 WEARING APPAREL 0 . 00 0 . 00 0 . 00 0 . 0 01- 110- 62 - 00-5427 FACADE PROGRAM 11 , 575 . 50 16 , 100 . 00 17 , 500 . 00 92 . 0 01- 110- 62 - 00- 5436 TELEPHONE 1 , 558 . 62 10 , 802 . 77 15 , 000 . 00 72 . 0 01 - 110- 62 -00-5438 CELLULAR TELEPHONE 295 . 38 21036 . 11 2 , 500 . 00 81 . 4 01 - 110- 62 -00- 5439 TELEPHONE SYSTEMS MAINTENANCE 0 . 00 51726 . 89 101000 . 00 57 . 2 01-110- 62 -00-5440 BEAVER ST GRANT EXPENSE 0 . 00 216 , 396 . 43 0 . 00 ( 100 . 0 ) __ - -- -------- ---------- ------------------------ TOTAL CONTRACTUAL SERVICES 34 , 014 . 45 348 , 789 . 94 441 , 000 . 00 79 . 0 PROFESSIONAL DEVELOPMENT 01- 110- 64 - 00- 5600 DUES 0 . 00 51949 . 05 5 , 900 . 00 100 . 8 01 - 110- 64 -00- 5601 ILLINOIS MUNICIPAL LEAGUE DUES 0 . 00 918 . 00 800 . 00 114 . 7 01 - 110- 64 -00- 5603 SUBSCRIPTIONS 0 . 00 0 . 00 500 . 00 0 . 0 01 - 110- 64 -00- 5604 TRAINING & CONFERENCES 0 . 00 4 , 513 . 29 6 , 000 . 00 75 . 2 01 - 110- 64 -00- 5605 TRAVEL/MEALS /LODGING 24 . 75 23 , 136 . 92 24 , 000 . 00 96 . 4 01 - 110- 64 -00- 5606 PROMOTIONAL/MARKETING EXPENSES 47 . 00 4 , 449 . 76 12 , 000 . 00 37 . 0 01 - 110- 64 -00- 5608 SPONSORSHIPS 0 . 00 0 . 00 1 , 500 . 00 0 . 0 P4 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 5 TIME : 15 : 59 : 40 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED --- -- - - - - ---- -- - --- - - --- - ---------- - - ------ - - ---- -------------' ADMINISTRATION EXPENSES PROFESSIONAL DEVELOPMENT 01 - 110- 64 - 00-5609 YMCA PARTNERSHIP 0 . 00 1 , 500 . 00 1 , 500 . 00 100 . 0 TOTAL PROFESSIONAL DEVELOPMENT 71 . 75 40r467 . 02 52 , 200 . 00 77 . 5 OPERATIONS 01- 110- 65-00- 5800 CONTINGENCIES 61 , 000 . 00 61 , 000 . 00 146 , 500 . 00 41 . 6 01- 110 - 65-00-5802 OFFICE SUPPLIES 550 . 87 71935 . 49 10 , 000 . 00 79 . 3 01 - 110- 65-00-5804 OPERATING SUPPLIES 423 . 17 51266 . 11 6 , 250 . 00 84 . 2 01 - 110- 65 - 00- 5808 POSTAGE & SHIPPING 357 . 86 11 , 331 . 40 21 , 925 . 00 51 . 6 01 - 110- 65 -00- 5809 PRINTING & COPYING 5 . 00 11 , 476 . 34 11 , 000 . 00 104 . 3 01- 110 - 65-00- 5810 PUBLISHING & ADVERTISING 984 . 52 1 , 722 . 95 5 , 000 . 00 34 . 4 ------- ------- - -------- ---- --- - -- ----- - - ---- -- -_ TOTAL OPERATIONS 63 , 321 . 42 98 , 732 . 29 200 , 675 . 00 49 . 2 RETIREMENT 01- 110-72 -00- 6500 IMRF PARTICIPANTS 31087 . 85 25 , 194 . 66 39 , 756 . 00 63 . 3 01- 110 -72 -00- 6501 SOCIAL SECURITY & MEDICARE 3 , 192 . 01 27 , 933 . 49 39 , 965 . 00 69 . 8 ---------------------- ------------ ----- ---------- -- ----------- --------------- - --- TOTAL RETIREMENT 6 , 279 . 86 53 , 128 . 15 79 , 721 . 00 66 . 6 CAPITAL OUTLAY 01- 110-75- 00-7002 COMPUTER EQUIP & SOFTWARE 0 . 00 21019 . 79 31500 . 00 57 . 7 01- 110-75-00-7003 OFFICE EQUIPMENT 0 . 00 250 . 50 2 , 500 . 00 10 . 0 - --------------- ------------ -------- ----- --- -------- - - ----- ----------- ----- ------ TOTAL CAPITAL OUTLAY 0 . 00 2 , 270 . 29 6 , 000 . 00 37 . 8 OTHER OPERATING EXPENSES 01 - 110-78 -00- 9002 NICOR GAS 11206 . 12 10 , 008 . 03 30 , 000 . 00 33 . 3 01 - 110-78 - 00- 9004 MISCELLANEOUS 4 . 00 4 . 00 0 . 00 ( 100 . 0 ) 01- 110-78 - 00- 9005 MERIT / PAY INCREASE 0 . 00 0 . 00 0 . 00 0 . 0 01- 110-78 - 00- 9007 APPRECIATION DINNER 0 . 00 0 . 00 0 . 00 0 . 0 01- 110-78 - 00- 9008 VOLUNTEER APPRECIATION DAY 0 . 00 11105 . 95 2 , 000 . 00 55 . 2 01- 110 - 78 -00- 9009 WEBSITE 29 . 97 172 . 19 11250 . 00 13 . 7 01 - 110 - 78 -00- 9010 COMMUNITY EVENTS 0 . 00 17 , 985 . 38 35 , 200 . 00 51 . 0 01 - 110-78 - 00- 9011 TENNIS CRT REFURBISHING 0 . 00 451823 . 00 46 , 000 . 00 99 . 6 P5 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 6 TIME : 15 : 59 : 40 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED _-_ - _ _ _ ____ _____ ___ _ __ _______ _ _ _______ _ _ _ _ _ _ _____ __ _ ______ _ _ _ _____ ___ ____ ADMINISTRATION EXPENSES OTHER OPERATING EXPENSES 01- 110-78 - 00- 9012 SALARY SURVEY 0 . 00 0 . 00 0 . 00 0 . 0 01 - 110- 78 - 00- 9013 HOLIDAY UNDER THE STARS 5 , 269 . 97 10 , 037 . 33 0 . 00 ( 100 . 0 ) TOTAL OTHER OPERATING EXPENSES 61510 . 06 85 , 135 . 88 114 , 950 00 74 . 3 TOTAL EXPENSES : ADMINISTRATION 205 , 263 . 33 11676 , 992 . 54 2 , 628 , 227 . 00 63 . 7 FINANCE EXPENSES PERSONNEL SERVICES 01 - 120 - 50-00- 5106 SALARIES- FINANCE 25 , 092 . 77 209 , 122 . 20 3281883 . 00 63 . 5 01 - 120- 50-00- 5136 SALARIES- PART TIME 786 . 50 1 , 862 . 50 5 , 000 . 00 37 . 2 01 - 120 - 50-00-5137 SALARIES- OVERTIME 0 . 00 0 . 00 750 . 00 0 . 0 01 - 120 - 50-00-5202 BENEFITS- UNEMPLOY . COMP . TAS 0 . 00 11 , 708 . 00 24 , 000 . 00 48 . 7 01- 120- 50-00- 5203 BENEFITS- HEALTH INSURANCE ( 1 , 509 . 03 ) 552 , 812 . 97 850 , 000 . 00 65 . 0 01 - 120-50-00- 5204 BENEFITS- GROUP LIFE INSURANCE 1 , 982 . 19 15 , 371 . 94 32 , 000 . 00 48 . 0 01 - 120- 50-00- 5205 BENEFITS- DENTAL/ VISION ASST 71678 . 84 57 , 467 . 55 75 , 000 . 00 76 . 6 TOTAL PERSONNEL SERVICES 34 , 031 . 27 848 , 345 . 16 1 , 315 , 633 . 00 64 . 4 PROFESSIONAL SERVICES 01 - 120- 61 - 00- 5304 AUDIT FEES & EXPENSES 1 , 000 . 00 32 , 000 . 00 32 , 000 . 00 100 . 0 01 - 120- 61 -00- 5310 EMPLOYEE ASSISTANCE 0 . 00 1 , 500 . 00 41500 . 00 33 . 3 _____ ________ __ _ _ ___ _ _ ______ _____ ___--____________--__ _______________ TOTAL PROFESSIONAL SERVICES 11000 . 00 33 , 500 . 00 36 , 500 . 00 91 . 7 CONTRACTUAL SERVICES 01- 120- 62- 00- 5400 INSURANCE- LIABILITY & PROP . 6 , 646 . 00 188 , 753 . 66 163 , 922 . 00 115 . 5 01 - 120- 62 - 00- 5401 CONTRACTUAL SERVICES 0 . 00 2 , 151 . 50 10 , 000 . 00 21 . 5 01 - 120- 62- 00- 5410 MAINTENANCE- OFFICE EQUIPMENT 0 . 00 0 . 00 500 . 00 0 . 0 01 - 120- 62 -00- 5411 MAINTENANCE- COMPUTERS 0 . 00 125 . 00 2 , 000 . 00 6 . 2 01 - 120- 62- 00- 5412 MAITENANCE - PHOTOCOPIERS 0 . 00 111788 . 14 24 , 000 . 00 49 . 1 01 - 120- 62 - 00- 5437 ACCTG SYSTEM SERVICE FEE 11 , 072 . 16 12 , 972 . 16 12 , 200 . 00 106 . 3 P6 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 7 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL $ ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ------- ----- - __-____-_-__ ----- - - -- ----______ _ _ ____---_-_ _______ ____ ______ ____ FINANCE EXPENSES CONTRACTUAL SERVICES 01 - 120- 62 - 00-5438 CELLULAR TELEPHONE 82 . 16 570 . 19 800 . 00 71 . 2 TOTAL CONTRACTUAL SERVICES 17 , 800 . 32 216 , 360 . 65 212 , 922 . 00 101 . 6 PROFESSIONAL DEVELOPMENT 01 - 120- 64 -00-5603 SUBSCRIPTIONS / BOOKS 78 . 31 76 . 31 100 . 00 78 . 3 01 - 120- 64 -00-5604 TRAINING & CONFERENCES 210 . 00 1 , 281 . 61 41500 . 00 28 . 4 01- 120- 64 - 00-5605 TRAVEL/ MEALS / LODGING 187 . 93 21459 . 69 41000 . 00 61 . 4 ------------ ---- ---- -------------------------------- ---- - --------------- - --- ---- - TOTAL PROFESSIONAL DEVELOPMENT 476 . 24 31819 . 61 8 , 600 . 00 44 . 4 OPERATIONS 01- 120 - 65-00- 5800 CONTINGENCIES 0 . 00 0 . 00 0 . 00 0 . 0 01 - 120- 65-00- 5801 FUND BALANCE RESERVE 0 . 00 0 . 00 0 . 00 0 . 0 01 - 120- 65-00- 5802 OFFICE SUPPLIES 58 . 29 2 , 211 . 98 71500 . 00 29 . 4 01 - 120- 65-00- 5804 OPERATING SUPPLIES 291 . 82 7 , 421 . 61 8 , 000 . 00 92 . 7 01 - 120- 65-00-5844 MARKETING - HOTEL TAX 34 . 32 10 , 894 . 58 20 , 000 . 00 54 . 4 _____________ _________ ____ ______ _______________________________ _____ _____________ TOTAL OPERATIONS 384 . 43 20 , 528 . 17 35 , 500 . 00 57 . 8 RETIREMENT 01- 120- 72 - 00- 6500 IMRF PARTICIPANTS 1 , 909 . 58 15 , 914 . 35 28 , 642 . 00 55 . 5 01 - 120- 72 -00- 6501 SOCIAL SECURITY & MEDICARE 21052 . 28 16 , 573 . 99 28 , 793 . 00 57 . 5 TOTAL RETIREMENT 31961 . 86 32 , 488 . 34 57 , 435 . 00 56 . 5 CAPITAL OUTLAY 01 - 120-75-00-7002 COMPUTER EQUIP & SOFTWARE 59 . 85 2 , 580 . 99 30 , 000 . 00 8 . 6 01 - 120- 75-00-7003 OFFICE EQUIPMENT 0 . 00 250 . 49 750 . 00 33 . 3 --- - -------- ------------- --------------------- ------ ----- ----------- -- ----------- TOTAL CAPITAL OUTLAY 59 . 85 21831 . 48 30 , 750 . 00 9 . 2 OTHER OPERATING EXPENSES 01- 120-78 - 00- 9001 CITY TAX REBATE 0 . 00 0 . 00 750 . 00 0 . 0 01 - 120-78 - 00- 9003 SALES TAX REBATE 0 . 00 192 , 907 . 64 625 , 000 . 00 30 . 8 P7 DATE : 01 / 29/2008 UNITED CITY OF YORKVILLE PAGE : 8 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL $ ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED - - --- - - - - -------- - - - - - ---- - ----- _-_-____ --_- - -_____- ---_- ----- ------- ------ ---_-__ ____ _ ----- -------- - ---- ---------_- FINANCE EXPENSES OTHER OPERATING EXPENSES 01- 120- 78 -00- 9005 MERIT/COLA 0 . 00 0 . 00 0 . 00 0 . 0 01 - 120- 78 -00- 9012 SALARY SURVEY 0 . 00 0 . 00 0 . 00 0 . 0 01 - 120-78 -00- 9013 AMUSEMNT TAX REBATE 0 . 00 0 . 00 0 . 00 0 . 0 01 - 120- 78 -00- 9099 BAD DEBT 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL OTHER OPERATING EXPENSES 0 . 00 192 , 907 . 64 625 , 750 . 00 30 . 8 TRANSFERS 01- 120- 99- 00- 9925 TRANSFER TO SAN SEWER 0 . 00 75 , 000 . 00 150 , 000 . 00 50 . 0 01 - 120- 99- 00- 9930 TRANSFER TO WATER IMPROVEMENT 0 . 00 100 , 000 . 00 200 , 000 . 00 50 . 0 01 - 120- 99- 00- 9935 TRANSFER TO LAND CASH 0 . 00 24 , 122 . 00 48 , 245 . 00 49 . 9 01 - 120- 99-00- 9940 TRANSFER TO PARK & RECREATION 96 , 814 . 83 776 , 518 . 64 1 , 161 , 778 . 00 66 . 8 01 - 120- 99-00- 9945 TRANSFER TO GF FOR PD 0 . 00 62 , 500 . 00 125 , 000 . 00 50 . 0 01 - 120- 99-00- 9965 TRANSFER TO DEBT SERVICE 0 . 00 142 , 102 . 00 231 , 884 . 00 61 . 2 TOTAL TRANSFERS 96 , 814 . 83 11180 , 242 . 64 1 , 9161907 . 00 61 . 5 TOTAL EXPENSES : FINANCE 154 , 528 . 80 2 , 5311023 . 69 4 , 239 , 997 . 00 59 . 6 ENGINEERING EXPENSES PERSONNEL SERVICES 01- 150- 50- 00- 5107 SALARIES- ENGINEERING 28 , 257 . 64 221 , 702 . 40 359 , 959 . 00 61 . 5 01 - 150- 50-00- 5137 SALARIES- OVERTIME 0 . 00 1 , 068 . 45 1 , 000 . 00 106 . 8 -------------- - ---- -- ---------------------- ---- ---- TOTAL PERSONNEL SERVICES 28 , 257 . 64 222 , 770 . 85 360 , 959 . 00 61 . 7 CONTRACTUAL SERVICES 01- 150- 62-00- 5401 CONTRACTUAL SERVICES 69 . 00 ( 4 , 586 . 24 ) 0 . 00 ( 100 . 0 ) 01- 150- 62-00- 5402 GIS SYSTEM 0 . 00 0 . 00 0 . 00 0 . 0 01- 150- 62-00- 5403 FEES 0 . 00 11061 . 50 21000 . 00 53 . 0 01 - 150- 62-00- 5409 MAINTENANCE-VEHICLES 0 . 00 394 . 84 21000 . 00 19 . 7 01-150- 62-00- 5410 MAINTENANCE-OFFICE EQUIP 0 . 00 240 . 00 11000 . 00 24 . 0 P8 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 9 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B300O . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ------ - --- - --- ---- -- -- - -- ---- - ---- -- ----- ----------- ---- - ----- ----- ------------ --------- -- ---- - -------- ------------ ----------------- ENGINEERING EXPENSES CONTRACTUAL SERVICES 01- 150- 62 - 00 - 5411 MAINTENANCE-COMPUTERS 0 . 00 0 . 00 2 , 000 . 00 0 . 0 01- 150- 62 - 00- 5421 WEARING APPAREL 699 . 90 1 , 021. 40 11400 . 00 72 . 9 01 - 150- 62 - 00 - 5438 CELLULAR TELEPHONE 287 . 56 1 , 899 . 77 2 , 520 . 00 75 . 3 TOTAL CONTRACTUAL SERVICES 11056 . 46 31 . 27 10 , 920 . 00 0 . 2 PROFESSIONAL DEVELOPMENT 01- 150- 64 - 00- 5600 DUES 0 . 00 235 . 00 600 . 00 39 . 1 01- 150- 64 - 00-5604 TRAINING & CONFERENCES 0 . 00 17 . 47 41000 . 00 0 . 4 01 - 150- 64 - 00-5605 TRAVEL EXPENSE 0 . 00 0 . 00 11000 . 00 0 . 0 01- 150- 64 -00- 5608 TUITION REIMBURSEMENT 0 . 00 0 . 00 21580 . 00 0 . 0 01- 150- 64 -00- 5616 BOOKS & PUBLICATIONS 0 . 00 0 . 00 200 . 00 0 . 0 ---- -- -- - --- ----- ------- - - ---- - - --------- ---- ___---______--_______---_ TOTAL PROFESSIONAL DEVELOPMENT 0 . 00 252 . 47 8 , 380 . 00 3 . 0 OPERATIONS 01 - 150- 65- 00- 5801 ENGINEERING SUPPLIES 261 . 07 885 . 80 31000 . 00 29 . 5 01 - 150- 65 - 00- 5802 OFFICE SUPPLIES 80 . 84 754 . 07 21500 . 00 30 . 1 01- 150- 65- 00- 5809 PRINTING & COPYING 0 . 00 674 . 50 21250 . 00 29 . 9 01- 150- 65 - 00- 5820 ENGINEERING CAPITAL RESERVE 0 . 00 0 . 00 0 . 00 0 . 0 ----- ---------- --- --------------- - ----- ---- - _-_- -- --_-_____--_------__- TOTAL OPERATIONS 341 . 91 21314 . 37 7 , 750 . 00 29 . 8 RETIREMENT 01- 150-72 -00- 6500 IMRF PARTICIPANTS 2 , 150 . 40 16 , 952 . 88 27 , 393 . 00 61 . 8 01- 150- 72 -00- 6501 SOCIAL SECURITY & MEDICARE 2 , 133 . 14 16 , 769 . 48 27 , 537 . 00 60 . 8 TOTAL RETIREMENT 4 , 283 . 54 33 , 722 . 36 54 , 930 . 00 61 . 3 CAPITAL OUTLAY 01 - 150- 75-00-7002 COMPUTER EQUIPMENT & SOFTWARE 0 . 00 41557 . 23 10 , 500 . 00 43 . 4 01- 150 - 75- 00-7003 OFFICE EQUIPMENT 0 . 00 21521 . 25 21500 . 00 100 . 8 -------- - ----- ---- ---- _---- ---___-__ _ ___-----_----_--___---- -__--- TOTAL CAPITAL OUTLAY 0 . 00 7 , 078 . 48 13 , 000 . 00 54 . 4 P9 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 10 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4S3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL $ ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ---- ---- ---- --- - - ___-____ ___----__-- - -_ ---------_ ENGINEERING OTHER OPERATING EXPENSE 01 - 150- 78 - 00- 9005 MERIT/COLA 0 . 00 0 . 00 0 . 00 0 . 0 01 - 150-78 - 00- 9012 SALARY SURVEY 0 . 00 0 . 00 0 . 00 0 . 0 ---- - --- -- ---- - - ------- ----- ---- ---- - ---- --- ------- ------ ------- ---- --- ------ ---- TOTAL OTHER OPERATING EXPENSE 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL EXPENSES : ENGINEERING 33 , 939 . 55 266 , 169 . 80 455 , 939 . 00 58 . 3 PUBLIC SAFETY/ POLICE DEPT . EXPENSES PERSONNEL SERVICES 01- 210-50-00- 5107 SALARIES- POLICE 88 , 133 . 49 786 , 013 . 30 11315 , 000 . 00 59 . 7 01 - 210-50-00- 5131 SALARIES- CHIEF/LT . /SERGT . 52 , 101 . 77 419 , 088 . 98 660 , 000 . 00 63 . 4 01 - 210- 50- 00- 5133 SALARIES- COPS 0 . 00 0 . 00 0 . 00 0 . 0 01 - 210- 50- 00- 5134 SALARIES- CROSSING GUARD 2 , 110 . 00 12 , 089 . 50 22 , 425 . 00 53 . 9 01- 210- 50- 00- 5135 SALARIES - POLICE CLERKS 12 , 833 . 38 107 , 624 . 12 180 , 000 . 00 59 . 7 01 -210- 50- 00- 5136 SALARIES - PART TIME 1 , 190 . 19 12 , 369 . 57 361750 . 00 33 . 6 01 -210- 50- 00-5137 SALARIES - OVERTIME 6 , 977 . 45 42 , 532 . 39 80 , 000 . 00 53 . 1 01 - 210- 50- 00- 5200 CADET PROGRAM 2 , 777 . 91 19 , 146 . 45 33 , 000 . 00 58 . 0 ------------------- - - -------- ----- ---- ------- ------------- ------------------ ----- TOTAL PERSONNEL SERVICES 166 , 124 . 19 1 , 398 , 864 . 31 2 , 3271175 . 00 60 . 1 PROFESSIONAL SERVICES 01 - 210- 61 -00- 5300 LEGAL SERVICES 0 . 00 11858 . 89 10 , 000 . 00 18 . 5 ------ ------------- - --------- -------- -------------------- - - ------------ - -- TOTAL PROFESSIONAL SERVICES 0 . 00 11858 . 89 10 , 000 . 00 18 . 5 CONTRACTUAL SERVICES 01- 210- 62 - 00- 5408 MAINTENANCE - EQUIPMENT 11618 . 18 10 , 941 . 85 11 , 000 . 00 99 . 4 01- 210- 62 -00- 5409 MAINTENANCE - VEHICLES 41183 . 31 25 , 182 . 68 35 , 000 . 00 71 . 9 01 - 210- 62 -00- 5410 MAINT-OFFICE EQUIPMENT 0 . 00 0 . 00 4 , 500 . 00 0 . 0 01 - 210- 62 -00- 5411 MAINTENANCE - COMPUTERS 0 . 00 0 . 00 10 , 000 . 00 0 . 0 01- 210- 62 -00- 5412 MAINTENANCE- K9 0 . 00 394 . 35 21000 . 00 19 . 7 01 - 210- 62 -00- 5414 WEATHER WARNING SIREN MAINT 0 . 00 5 , 197 . 94 6 , 600 . 00 78 . 7 01 - 210- 62 -00 - 5421 WEARING APPAREL 4 , 969 . 78 14 , 266 . 64 30 , 000 . 00 47 . 5 P1O DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 11 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED - - -- -- - - - ------- - --------- - - -------------- ----- ----- - ----- --------- - -- -------- - ------ PUBLIC SAFETY/ POLICE DEPT . EXPENSES CONTRACTUAL SERVICES 01 - 210- 62 - 00- 5422 COPS GRANT IV - VESTS 11324 . 00 5 , 143 . 54 6 , 000 . 00 85 . 7 01 -210- 62 - 00-5429 PSYCHOLOGICAL TESTING 0 . 00 1 , 750 . 00 41000 . 00 43 . 7 01 -210- 62 - 00- 5430 HEALTH SERVICES 0 . 00 2 , 889 . 00 41000 . 00 72 . 2 01 -210 - 62 -00- 5436 TELEPHONE 1 , 384 . 82 91820 . 95 23 , 000 . 00 42 . 6 01 -210 - 62 -00- 5438 CELLULAR TELEPHONE 11492 . 44 91766 . 21 17 , 500 . 00 55 . 8 01-210- 62 -00- 5441 MTD-ALERTS FEE 21574 . 00 51534 . 10 10 , 562 . 00 52 . 3 ---------------------- -------------------- - -------- - ------ ---- --- ------- TOTAL CONTRACTUAL SERVICES 17 546 . 53 90 , 887 . 26 164 , 162 . 00 55 . 3 PROFESSIONAL DEVELOPMENT 01-210- 64 -00- 5600 DUES 210 . 00 21284 . 95 4 , 000 . 00 57 . 1 01 - 210- 64 - 00-5603 SUBSCRIPTIONS 0 . 00 40 . 00 500 . 00 8 . 0 01 -210- 64 -00- 5604 TRAINING & CONFERENCE 765 . 00 11 , 091 . 75 33 , 025 . 00 33 . 5 01 -210- 64 -00- 5605 TRAVEL EXPENSES 1 , 499 . 20 71989 . 21 12 , 075 . 00 66 . 1 01- 210- 64 -00- 5606 COMMUNITY RELATIONS 1 . 61 41328 . 20 10 , 000 . 00 43 . 2 01- 210- 64 - 00- 5607 POLICE COMMISSION 61540 . 98 10 , 132 . 03 22 , 050 . 00 45 . 9 01 -210- 64 - 00-5608 TUITION REIMBURSEMENT 0 . 00 3 , 588 . 50 14 , 000 . 00 25 . 6 01 - 210- 64 - 00-5609 POLICE RECRUIT ACADEMY 0 . 00 11 , 736 . 04 20 , 000 . 00 58 . 6 01 -210- 64 -00-5610 GUN RANGE FEES 500 . 00 500 . 00 11000 . 00 50 . 0 01 -210- 64 -00- 5611 SET FEE 0 . 00 1 , 490 . 00 41025 . 00 37 . 0 01-210- 64 -00- 5612 NEIGHBORHOOD WATCH 43 . 92 192 . 62 1 , 200 . 00 16 . 0 01- 210- 64 - 00-5613 CITIZENS POLICE ACADEMY 0 . 00 317 . 95 21420 . 00 13 . 1 01- 210- 64 - 00-5614 CHAPLAIN PROGRAM 0 . 00 0 . 00 1 , 400 . 00 0 . 0 01 -210- 64 - 00- 5615 COMPLIANCE CHECKS 1 , 873 . 75 79 . 31 500 . 00 15 . 8 O1 -210- 64 - 00- 5616 DARE PROGRAM 0 . 00 0 . 00 51000 . 00 0 . 0 01 -210- 64 -00- 5617 HUMAN RESOURCE COMMITTEE 0 . 00 0 . 00 0 . 00 0 . 0 ------------------- --------- ---- - ---- ___---__-_--__ ___--_--_---- __--- TOTAL PROFESSIONAL DEVELOPMENT 11 , 434 . 46 53 , 770 . 56 131 , 195 . 00 40 . 9 OPERATIONS 01 - 210- 65- 00-5802 OFFICE SUPPLIES 33 . 36 4 , 871 . 47 10 , 000 . 00 48 . 7 01 -210- 65- 00- 5803 EVIDENCE TECH SUPPLIES 0 . 00 0 . 00 5 , 000 . 00 0 . 0 01 -210- 65-00- 5804 OPERATING SUPPLIES 1 , 387 . 98 6 , 846 . 64 19 , 320 . 00 35 . 4 01- 210- 65-00- 5808 POSTAGE & SHIPPING 711 . 27 21499 . 21 51000 . 00 49 . 9 01 - 210- 65-00- 5809 PRINTING & COPYING 44 . 00 3 , 937 . 67 6 , 000 . 00 65 . 6 P11 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 12 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED - -------- --- ----- -- - - --- _______-_--_- - --__ ___ _------- _ ___ _-_---- ------ - --_- _____--_ PUBLIC SAFETY/ POLICE DEPT . EXPENSES OPERATIONS 01 - 210- 65-00-5810 PUBLISHING & ADVERTISING 67 . 65 316 . 73 2 , 000 . 00 15 . 8 01 - 210- 65-00 - 5812 GASOLINE 51499 . 44 35 , 278 . 79 75 , 000 . 00 47 . 0 01 - 210- 65- 00-5813 AMMUNITION 0 . 00 0 . 00 61000 . 00 0 . 0 -_--_--___ -- ---------- --- -- _ __- _ _--- _____ TOTAL OPERATIONS 7 , 743 . 70 53 , 750 . 51 128 , 320 . 00 41 . 8 RETIREMENT 01 - 210-72 - 00- 6500 IMRF PARTICIPANTS 11189 . 99 91869 . 77 16 , 000 . 00 61 . 6 01 - 210-72 - 00- 6501 SOCIAL SECURITY & MEDICARE 12 , 037 . 64 106 , 222 . 45 165 , 500 . 00 64 . 1 01 -210 -72 - 00- 6502 POLICE PENSION 0 . 00 263 , 697 . 62 275 , 000 . 00 95 . 8 ---- --------- -------- ----------------------- ------------------------ ------------- TOTAL RETIREMENT 13 , 227 . 63 379 , 789 . 84 456 , 500 . 00 83 . 1 CAPITAL OUTLAY 01-210-75- 00-7002 COMPUTER EQUIP & SOFTWARE 0 . 00 2 , 505 . 12 71500 . 00 33 . 4 TOTAL CAPITAL OUTLAY 0 . 00 2 , 505 . 12 7 , 500 00 33 . 4 OTHER OPERATING EXPENSES 01- 210-78 - 00- 9004 BIKE PATROL 0 . 00 0 . 00 2 , 500 . 00 0 . 0 01 -210-78 - 00- 9005 MERIT/COLA 0 . 00 0 . 00 0 . 00 0 . 0 01 -210-78 - 00- 9012 SALARY SURVEY 0 . 00 0 . 00 0 . 00 0 . 0 ----- ---- ----- ---------------- -- --- ------------------------ ---- - ----------------- TOTAL OTHER OPERATING EXPENSES 0 . 00 0 . 00 2 , 500 . 00 0 . 0 TOTAL EXPENSES : PUBLIC SAFETY/ POLICE DEPT . 216 , 076 . 51 1 , 981 , 426 . 49 31227 , 352 . 00 61 . 3 PLANNING & DEVELOPMENT EXPENSES PERSONNEL SERVICES 01 -220- 50- 00- 5107 SALARIES - PLANNING & DEV . 26 , 227 . 07 180 , 823 . 84 305 , 000 . 00 59 . 2 ----------------- -------- ---- ------------ ------ -- -------------- ------------- - --- - TOTAL PERSONNEL SERVICES 26 , 227 . 07 180 , 823 . 84 305 , 000 . 00 59 . 2 P12 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 13 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ----- - - --- ------ - -- -------- ------ ---------------------------- -------------- ------------- ------ - - ------- ------------- ------------- --- PLANNING & DEVELOPMENT PROFESSIONAL SERVICES 01 - 220- 61 - 00- 5300 LEGAL SERVICES 4 , 555 . 60 12 , 443 . 51 20 , 000 . 00 62 . 2 - - -------- -------- ----- ---- - ------- - ----- --- ------------------- ------ ---------- -- TOTAL PROFESSIONAL SERVICES 4 , 555 . 60 12 , 443 . 51 20 , 000 . 00 62 . 2 CONTRACTUAL SERVICES 01-220- 62- 00- 5401 CONTRACTUAL SERVICES 0 . 00 54 , 315 . 29 54 , 315 . 00 100 . 0 01- 220- 62- 00- 5430 PLANNING CONSULTANT 0 . 00 0 . 00 0 . 00 0 . 0 01- 220- 62- 00-5432 ECONOMIC DEVELOPMENT 45 , 000 . 00 45 , 000 . 00 45 , 000 . 00 100 . 0 01 -220 - 62 - 00- 5438 CELULAR TELEPHONE 82 . 16 570 . 19 1 , 000 . 00 57 . 0 ___ ____________ _________ __ ____________ ___ _--_ _--- TOTAL CONTRACTUAL SERVICES 45 , 082 . 16 99 , 885 .. 46 100 , 315 . 00 99 . 5 PROFESSIONAL DEVELOPMENT 01-220- 64 - 00-5600 DUES 0 . 00 762 . 00 1 , 500 . 00 50 . 8 01-220 - 64 - 00-5604 TRAINING & CONFERENCES 25 . 00 31831 . 70 7 , 500 . 00 51 . 0 01 - 220- 64 - 00-5605 TRAVEL EXPENSE 80 . 98 431 . 98 2 , 500 . 00 17 . 2 ----------- -------------------------------- - ----------------------- -------------- TOTAL PROFESSIONAL DEVELOPMENT 105 . 98 5 , 025 . 68 11 , 500 . 00 43 . 7 OPERATIONS 01- 220- 65-00- 5804 OPERATING SUPPLIES 850 . 26 41767 . 48 71500 . 00 63 . 5 01- 220- 65-00- 5809 PRINTING & COPYING 23 . 07 151 . 73 2 , 000 . 00 7 . 5 01- 220- 65- 00-5810 PUBLISHING & ADVERTISING 0 . 00 459 . 21 21000 . 00 22 . 9 01 -220- 65 - 00- 5814 BOOKS & MAPS 37 . 94 155 . 10 2 , 000 . 00 7 . 7 ----- ---------- ---- ------------ -------------------- ----------- ------ -------- ----- TOTAL OPERATIONS 911 . 27 5 , 533 . 52 13 , 500 . 00 40 . 9 RETIREMENT 01 -220-72 -00- 6500 IMRF PARTICIPANTS 1 , 995 . 88 13 , 760 . 76 24 , 563 . 00 56 . 0 01- 220-72 -00- 6501 SOCIAL SECURITY & MEDICARE 2 , 000 . 98 13 , 813 . 96 24 , 693 . 00 55 . 9 ------------------ - ---------------- - ----- - --------------------------------------- TOTAL RETIREMENT 3 , 996 . 86 27 , 574 . 72 49 , 256 . 00 55 . 9 CAPITAL OUTLAY 01 -220-75 -00-7002 COMPUTER EQUIP & SOFTWARE 0 . 00 7 , 204 . 50 10 , 000 . 00 72 . 0 01 -220- 75 - 00-7003 OFFICE EQUIPMENT 0 . 00 10 , 972 . 28 5 , 000 . 00 219 . 4 P13 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 14 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED _ ________ _____ _ _ PLANNING & DEVELOPMENT EXPENSES CAPITAL OUTLAY 01 -220 - 75- 00-7004 IL TOMORROW GRANT MATCH 0 . 00 0 . 00 10 , 200 . 00 0 . 0 _________ _ _____ ____ _ ____ _ ___ ____ _____ _ __ _ ____ _ ____________ __________ ______ _______ TOTAL CAPITAL OUTLAY 0 . 00 18 , 176 . 78 25 , 200 . 00 72 . 1 OTHER OPERATING EXPENSE 01- 220- 78 -00- 9005 MERIT/COLA 0 . 00 0 . 00 0 . 00 0 . 0 01 - 220-78 -00- 9012 SALARY SURVEY 0 . 00 0 . 00 0 . 00 0 . 0 __--__-_ -- - ------------------------- -------- -------- ---------- - TOTAL OTHER OPERATING EXPENSE 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL EXPENSES : PLANNING & DEVELOPMENT 80 , 878 . 94 349 , 463 . 53 524 , 771 . 00 66 . 5 STREETS EXPENSES PERSONNEL SERVICES 01 - 410-50-00-5107 SALARIES- STREETS 23 , 173 . 34 179 , 599 . 76 280 , 000 . 00 64 . 1 01- 410- 50-00-5136 SALARIES - PART TIME 0 . 00 4 , 475 . 25 5 , 500 . 00 81 . 3 01 - 410- 50-00- 5137 SALARIES - OVERTIME 61332 . 37 10 , 286 . 55 20 , 000 . 00 51 . 4 -------------------- ------ - ----------- --------------------------- --- ------- --- - -- TOTAL PERSONNEL SERVICES 29 , 505 . 71 194 , 361 . 56 305 , 500 . 00 63 . 6 PROFESSIONAL SERVICES 01- 410- 61 -00-5313 ENGINEERING - IN TOWN RD PROG 1 , 210 . 00 148 , 940 . 61 250 , 000 . 00 59 . 5 01 - 410- 61 -00-5314 INSPECTIONS & LICENSES 0 . 00 255 . 50 400 . 00 63 . 8 __ _ ________ _____ _ _ _ ___________ _ _____ _______ ________ ____________ ______ TOTAL PROFESSIONAL SERVICES 1 , 210 . 00 149 , 196 . 11 250 , 400 . 00 59 . 5 CONTRACTUAL SERVICES 01 - 410- 62- 00- 5401 CONTRACTUAL SERVICES 173 . 34 671 . 67 2 , 000 . 00 33 . 5 01 - 410- 62 -00 - 5408 MAINTENANCE-EQUIPMENT 3 , 122 . 75 9 , 861 . 71 8 , 000 . 00 123 . 2 01- 410- 62-00-5409 MAINTENANCE-VEHICLES 0 . 00 9 , 829 . 27 15 , 000 . 00 65 . 5 01- 410- 62 -00- 5414 MAINTENANCE-TRAFFIC SIGNALS 461 . 68 10 , 605 . 55 18 , 000 . 00 58 . 9 01 - 410- 62 - 00- 5415 MAINTENANCE-STREET LIGHTS ( 41192 . 70 ) 10 , 531 . 14 26 , 500 . 00 39 . 7 P14 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 15 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ______- -_ _ _______ _ __________ ______ _________ _ _________ ____ _ ___ __ _ ____ ________ __ ________ __ ___ _ __ ______ STREETS EXPENSES CONTRACTUAL SERVICES 01- 410- 62 -00-5420 MAINTENANCE-STORM SEWER 0 . 00 508 . 00 10 , 000 . 00 5 . 0 01-410- 62 -00- 5421 WEARING APPAREL 0 . 00 11605 . 69 6 , 150 . 00 26 . 1 01 -410- 62 -00- 5422 RAYMOND DETENTION BASE 0 . 00 11390 . 00 75 , 000 . 00 1 . 8 01 - 410- 62 -00- 5423 RAYMOND STORM SEWER OUTFLOW 90 . 00 88 , 469 . 57 529 , 913 . 00 16 . 6 01 - 410- 62 -00- 5424 RAYMOND STORM SW . THE 0 . 00 413 , 391 . 60 0 . 00 ( 100 . 0 ) O1 - 410- 62 -00- 5434 RENTAL-EQUIPMENT 0 . 00 352 . 50 21000 . 00 17 . 6 01 - 410- 62 -00- 5435 ELECTRICITY 8 , 541 . 01 56 , 892 . 11 74 , 400 . 00 76 . 4 01 - 410- 62 -00- 5438 CELLULAR TELEPHONE 246 . 48 2 , 026 . 57 41000 . 00 50 . 6 01- 410 - 62-00- 5440 STREET LIGHTING 0 . 00 0 . 00 61000 . 00 0 . 0 _ ______ _________ _ _________ ___ _ _____ _____ ____ _______________ ___ ___ _______ ___ ______ TOTAL CONTRACTUAL SERVICES 81442 . 56 606 , 135 . 38 776 , 963 . 00 78 . 0 PROFESSIONAL DEVELOPMENT 01 - 410- 64 -00- 5604 TRAINING & CONFERENCES 0 . 00 4 , 274 . 97 7 , 525 . 00 56 . 8 _______ ____ ________ ________ ________ ______________ __________ _______ _ ___ ___________ TOTAL PROFESSIONAL DEVELOPMENT 0 . 00 4 , 274 . 97 71525 . 00 56 . 8 OPERATIONS 01- 410 - 65-00-5804 OPERATING SUPPLIES 679 . 80 2 , 490 . 48 15 , 000 . 00 16 . 6 01 - 410 - 65- 00-5812 GASOLINE 11878 . 46 22 , 588 . 53 30 , 250 . 00 74 . 6 01-410- 65- 00-5815 HAND TOOLS 0 . 00 650 . 97 2 , 500 . 00 26 . 0 01 -410- 65-00- 5817 GRAVEL 0 . 00 11589 . 57 2 , 500 . 00 63 . 5 _________ ___________________ ______________________ _ __________ ______ ______________ TOTAL OPERATIONS 21558 . 26 27 , 319 . 55 50 , 250 . 00 54 . 3 RETIREMENT 01 - 410- 72 -00- 6500 IMRF PARTICIPANTS 2 , 245 . 35 14 , 450 . 21 21 , 238 . 00 68 . 0 01- 410-72 -00- 6501 SOCIAL SECURITY & MEDICARE 2 , 246 . 54 14 , 813 . 88 21 , 349 . 00 69 . 3 _ ____ _ _ ___________ _ ________________ _____ _ ___ _______________________ __ ___ _________ TOTAL RETIREMENT 4 , 491 . 89 29 , 264 . 09 42 , 587 . 00 68 . 7 CAPITAL OUTLAY 01- 410-75- 00- 4404 HANGING BASKETS 0 . 00 1 , 800 . 00 21000 . 00 90 . 0 01-410-75- 00-5416 MOSQUITO CONTROL 0 . 00 28 , 414 . 00 30 , 000 . 00 94 . 7 01 -410- 75- 00-7004 SAFETY EQUIPMENT 0 . 00 678 . 00 1 , 000 . 00 67 . 8 P15 DATE : 01 / 29 /2008 UNITED CITY OF YORKVILLE PAGE : 16 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED _ - _ _ _ _-_ _ _ ___ _ ___ ____________ _ _ __ _ _________________ ________________________________ ___ ________ __ STREETS EXPENSES CAPITAL OUTLAY 01- 410-75-00-7099 GRANDE RESERVE PERIMETER ROADS 0 . 00 3 , 119 . 80 750 , 000 . 00 0 . 4 01- 410-75-00-7100 STREET REHAB PROJECTS 0 . 00 0 . 00 0 . 00 0 . 0 01- 410- 75-00- 7101 IN TOWN ROAD PROGRAM 21575 . 00 1 , 670 , 113 . 57 2 , 500 , 000 . 00 66 . 8 01 - 410-75-00- 7102 TREE & STUMP REMOVAL 0 . 00 13 , 150 . 00 23 , 000 . 00 57 . 1 O1- 410- 75-00- 7103 SIDEWALK CONSTRUCTION 0 . 00 1 , 473 . 00 2 , 500 . 00 58 . 9 01- 410-75-00-7104 SSA EXPENSE- FOX HILL SUNFLOWER 0 . 00 21 , 946 . 50 18 , 000 . 00 121 . 9 01 - 410-75-00- 7105 FOX ROAD SIDEWALK 0 . 00 0 . 00 25 , 000 . 00 0 . 0 01- 410 - 75-00 -7106 ROAD CONTRIBUTION FUND PROJ 0 . 00 0 . 00 0 . 00 0 . 0 01- 410-75-00-7107 ROAD CONTRIBUTION FUND-RESERVE 0 . 00 0 . 00 620 , 000 . 00 0 . 0 01 - 410-75- 00-7108 126 / 71 IMPROVEMENTS 0 . 00 0 . 00 19 , 000 . 00 0 . 0 01 - 410-75 - 00-7109 TRAFFIC SIGNAL RT 34 & SYCAMOR 0 . 00 0 . 00 0 . 00 0 . 0 01 -410 -75 - 00-7110 ASPHAULT PAVEMENT 0 . 00 0 . 00 0 . 00 0 . 0 _____ ____ _ _ _________ _____ __________________ ____________ ______________ ___ _________ TOTAL CAPITAL OUTLAY 2 , 575 . 00 1 , 740 , 694 . 87 3 , 990 , 500 . 00 43 . 6 --- UNDEFINED CODE --- 01 - 410-78 -00- 9005 MERIT/COLA 0 . 00 0 . 00 0 . 00 0 . 0 01 - 410-78 - 00- 9012 SALARY SURVEY 0 . 00 0 . 00 0 . 00 0 . 0 _-_________ __________ _____ _ _ _ ___________________________ ________ __ TOTAL - - - UNDEFINED CODE --- 0 . 00 0 . 00 0 . 00 0 . 0 TRANSFERS 01- 410- 99-00- 9930 TRANSFER TO WATER IMPROVEMENT 0 . 00 0 . 00 0 . 00 0 . 0 ____ _ _____ _ ___ _______ _______ ___-_________________ _____ _ _ TOTAL TRANSFERS 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL EXPENSES : STREETS 48 , 783 . 42 21751 , 246 . 53 5 , 423 , 725 . 00 50 . 7 HEALTH & SANITATION EXPENSES CONTRACTUAL SERVICES 01- 540- 62 -00- 5442 GARBAGE SERVICES 88 , 108 . 30 593 , 167 . 46 11000 , 000 . 00 59 . 3 01- 540- 62 -00- 5443 LEAF PICKUP 0 . 00 600 . 00 61000 . 00 10 . 0 P16 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 17 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : GENERAL FUND FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ______________ ____ ______ ________ _____ _____________ _____ _ ___ _ ___--_ TOTAL CONTRACTUAL SERVICES 88 , 108 . 30 593 , 767 . 46 11006 , 000 . 00 59 . 0 TOTAL EXPENSES : HEALTH & SANITATION 88 , 108 . 30 5931767 . 46 11006 , 000 . 00 59 . 0 TOTAL FUND REVENUES 998 , 139 . 21 8 , 795 , 321 . 17 17 , 5091107 . 00 50 . 2 TOTAL FUND EXPENSES 827 , 578 . 85 10 , 1491590 . 04 17 , 506 , 011 . 00 57 . 9 FUND SURPLUS ( DEFICIT ) 170 , 560 . 36 ( 1 , 354 , 268 . 87 ) 3 , 096 . 00 ( 3742 . 5 ) P17 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 18 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : MOTOR FUEL TAX FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED REVENUES TAXES 15 -000 - 40-00 - 3999 CARRY OVER BALANCE 0 . 00 0 . 00 190 , 000 . 00 0 . 0 15 - 000 - 40-00- 4060 MOTOR FUEL TAX ALLOTMENTS 8 , 606 . 26 185 , 518 . 58 315 , 000 . 00 58 . 8 TOTAL TAXES 8 , 606 . 26 185 , 518 . 58 505 , 000 . 00 36 . 7 MISCELLANEOUS 15 - 000- 44 -00- 4401 GAME FARM ROAD DESIGN 0 . 00 0 . 00 157 , 000 . 00 0 . 0 15- 000- 44 -00- 4490 MISC . INCOME 0 . 00 0 . 00 0 . 00 0 . 0 ---------------- ---- ------------------------- ------------ ------------- ----------- TOTAL MISCELLANEOUS 0 . 00 0 . 00 157 , 000 . 00 0 . 0 INTEREST 15- 000- 46- 00- 4600 INVESTMENT INCOME 1 , 964 . 15 17 , 340 . 80 15 , 000 . 00 115 . 6 ________________ _______ _ _____ ----_-_--- -_-------_-_ _ __- ---- -____-_ ----- - TOTAL INTEREST 1 , 964 . 15 17 , 340 . 80 15 , 000 . 00 115 . 6 TOTAL REVENUES : 10 , 570 . 41 202 , 859 . 38 677 , 000 . 00 29 . 9 EXPENSES OPERATIONS 15 - 000- 65 -00-5800 CONTINGENCY 0 . 00 2 , 452 . 00 9 , 052 . 00 27 . 0 15 - 000- 65- 00-5818 SALT 91125 . 71 19 , 866 . 99 75 , 925 . 00 26 . 1 _-- ---_ _ _----__ ------------------------------------ - TOTAL OPERATIONS 9 , 125 . 71 22 , 318 . 99- 84 , 977 . 00 26 . 2 CAPITAL OUTLAY 15- 000- 75- 00 -7007 SIGNS 157 . 02 6 , 806 . 98 9 , 990 . 00 68 . 1 15- 000- 75- 00- 7008 CRACK FILLING 0 . 00 2 , 084 . 32 2 , 085 . 00 99 . 9 15- 000-75-00- 7106 GAME FARM SURVEYING 34 , 242 . 22 93 , 912 . 96 68 , 000 . 00 138 . 1 15 -000-75-00-7107 CONSTRUCTION ENGINEERING 0 . 00 0 . 00 317 , 000 . 00 0 . 0 15 -000-75-00-7110 COLD PATCH 0 . 00 1 , 902 . 44 81000 . 00 23 . 7 15 -000 - 75-00-7111 HOT PATCH 0 . 00 11879 . 16 91600 . 00 19 . 5 15- 000- 75- 00-7112 VAN EMMON 0 . 00 0 . 00 30 , 000 . 00 0 . 0 15- 000- 75- 00- 7113 COUNTRYSIDE PKWY CONSTRUCTION 0 . 00 0 . 00 0 . 00 0 . 0 P18 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 19 TIME : 15 : 59 : 91 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : MOTOR FUEL TAX FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED -------------------------- - --- ----- - --- - - ---------------------- ------- ----- ---------- ----------------------------------- -------- ---- EXPENSES CAPITAL OUTLAY 15-000-75-00-7119 ROUTE 126 / 71 TRAFFIC SIGNALS 0 . 00 0 . 00 0 . 00 0 . 0 15- 000-75-00-7115 PALMER COURT 0 . 00 0 . 00 67 , 398 . 00 0 . 0 15- 000-75-00-7116 WOOD DALE 0 . 00 0 . 00 30 , 000 . 00 0 . 0 15- 000-75-00-7117 FAXON ROAD ROW ACQ 0 . 00 5 , 915 . 00 50 , 000 . 00 11 . 8 15- 000-75-00-7118 RT 39 & SYCAMORE TRAFFIC SGNL 8 , 189 . 00 22 , 901 . 91 0 . 00 ( 100 . 0 ) -- - - ----- ------- --------- ----------- ----------- ---- - ---------- --------------- ---- TOTAL CAPITAL OUTLAY 92 , 588 . 29 135 , 902 . 77 592 , 023 . 00 22 . 8 TOTAL EXPENSES : 51 , 713 . 95 157 , 721 . 76 677 , 000 . 00 23 . 2 TOTAL FUND REVENUES 10 , 570 . 91 202 , 859 . 38 677 , 000 . 00 29 . 9 TOTAL FUND EXPENSES 51 , 713 . 95 157 , 721 . 76 677 , 000 . 00 23 . 2 FUND SURPLUS ( DEFICIT ) ( 91 , 193 . 59 ) 95 , 137 . 62 0 . 00 100 . 0 P19 DATE : 01 / 29 /2008 UNITED CITY OF YORKVILLE PAGE : 20 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : MUNICIPAL BUILDING FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED REVENUES CARRY OVER 16- 000- 40-00-3999 CARRY OVER BALANCE 0 . 00 0 . 00 0 . 00 0 . 0 -------------------------- - ----- -------------- -------------------""--- ----"' -- TOTAL CARRY OVER 0 . 00 0 . 00 0 . 00 0 . 0 CHARGES FOR SERVICES 16- 000- 42 -00- 4211 DEVELOPMENT FEES-BUILDING 11500 . 00 47 , 850 . 00 296 , 705 . 00 16 . 1 16- 000- 42 -00- 4215 BEECHER RENTAL FEE 11000 . 00 81000 . 00 91000 . 00 88 . 8 ----- --- ------- - --------------- ------------- ---- - ------ - ------------------ ------- TOTAL CHARGES FOR SERVICES 21500 . 00 55 , 850 . 00 305 , 705 . 00 18 . 2 -- - UNDEFINED CODE -- - 16- 000 - 44 - 00- 4400 BEECHER CENTER DONATIONS 0 . 00 25 , 000 . 00 0 . 00 100 . 0 ______ ___________ ______ _ __ _____ _ __________________________ __________ _____________ TOTAL --- UNDEFINED CODE --- 0 . 00 25 , 000 . 00 0 . 00 100 . 0 TRANSFERS 16- 000- 49- 00-4901 TRANSFER FROM GENERAL FUND 0 . 00 0 . 00 0 . 00 0 . 0 16- 000 - 49-00- 4902 TRANSFER FROM LAND ACQUISITION 0 . 00 0 . 00 0 . 00 0 . 0 _________________________________ _ _ ___----______ _________ TOTAL TRANSFERS 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL REVENUES : 2 , 500 . 00 80 , 850 . 00 305 , 705 . 00 26 . 4 EXPENSES CONTRACTUAL SERVICES 16- 000 - 62- 00-5416 MAINT-GENERAL BLDG & GROUNDS 0 . 00 21440 . 35 2 , 441 . 00 99 . 9 ------ ------- ---- ------------------- ---- - --- ---------------------- ----------- ---- TOTAL CONTRACTUAL SERVICES 0 . 00 21440 . 35 2 , 441 . 00 99 . 9 CAPITAL OUTLAY 16-000-75-00-7008 ENTRY WAY SIGNS 0 . 00 0 . 00 0 . 00 0 . 0 16-000-75-00-7200 BLDG IMPROV- BEEHCER/RIVFRNT 0 . 00 4 , 210 . 72 2 , 721 . 00 154 . 7 16- 000-75-00-7203 BLDG IMPROVEMENTS- PUBLIC WORKS 150 . 00 3 , 270 . 00 2 , 000 . 00 163 . 5 16- 000-75-00-7204 BLDG MAINT - CITY HALL 214 . 99 13 , 047 . 76 12 , 760 . 00 102 . 2 P20 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 21 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B300O . WOW FUND : MUNICIPAL BUILDING FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED EXPENSES CAPITAL OUTLAY 16-000-75-00-7206 LANDSCAPING-PUBLIC BUILDINGS 0 . 00 1 , 289 . 30 860 . 00 149 . 9 16-000-75-00-7210 BLDG MAINT- POST OFFICE 0 . 00 0 . 00 0 . 00 0 . 0 16-000-75-00 -7211 NEW BUILDINGS 0 . 00 0 . 00 0 . 00 0 . 0 ----------- -------- ------- __ __-- ---_- _-___---_--_--__- - __-_-___--_-_-_ ___ TOTAL CAPITAL OUTLAY 364 . 99 21 , 817 . 78 18 , 341 . 00 118 . 9 OTHER 16-000-78 -00- 9009 RESERVE 0 . 00 0 . 00 0 . 00 0 . 0 - - --------- ------ - --------------------- ----- -------------------------- ---------- - TOTAL OTHER 0 . 00 0 . 00 0 . 00 0 . 0 TRANSFERS 16- 000- 99-00- 9901 TRANSFER TO GENERAL FUND 0 . 00 91 , 250 . 00 182 , 500 . 00 50 . 0 16-000- 99- 00- 9965 TRANSFER TO DEBT SERVICE 0 . 00 51 , 212 . 00 102 , 423 . 00 50 . 0 -- - - --- ---------------------- ------ ___ _-- ------__-_ --_-__- ------____ --_ TOTAL TRANSFERS 0 . 00 142 , 462 . 00 284 , 923 . 00 50 . 0 TOTAL EXPENSES : 364 . 99 166 , 720 . 13 305 , 705 . 00 54 . 5 TOTAL FUND REVENUES 2 , 500 . 00 80 , 850 . 00 305 , 705 . 00 26 . 4 TOTAL FUND EXPENSES 364 . 99 166 , 720 . 13 305 , 705 . 00 54 . 5 FUND SURPLUS ( DEFICIT ) 2 , 135 . 01 ( 85 , 870 . 13 ) 0 . 00 100 . 0 P21 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 22 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : POLICE EQUIPMENT CAPITAL FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED REVENUES CARRY OVER 20- 000- 40 - 00- 3999 CARRY OVER -WEATHER WARN SIREN 0 . 00 0 . 00 80 , 000 . 00 0 . 0 TOTAL CARRY OVER 0 . 00 0 . 00 80 , 000 . 00 0 . 0 CHARGES FOR SERVICES 20- 000- 42 - 00- 4212 DEV FEES - POLICE 3 , 600 . 00 87 , 450 . 00 155 , 000 . 00 56 . 4 TOTAL CHARGES FOR SERVICES 3 , 600 . 00 87 , 450 . 00 155 , 000 . 00 56 . 4 MISCELLANEOUS 20-000- 44 - 00- 4402 K- 9 DONATIONS 0 . 00 50 . 00 50 . 00 100 . 0 20-000 - 44 -00- 4403 IN CAR VIDEO DONATIONS 100 . 00 11231 . 20 2 , 000 . 00 61 . 5 20-000- 44 -00- 4404 DONATIONS 0 . 00 21000 . 00 21000 . 00 100 . 0 20 - 000- 44 -00 - 4405 WEATHER WARNING SIREN 0 . 00 0 . 00 7 , 500 . 00 0 . 0 20 - 000- 44 -00-4431 SALE OF POLICE SQUADS 0 . 00 400 . 00 400 . 00 100 . 0 ------------ ---------------------- ------------------------------- ----------- ----- TOTAL MISCELLANEOUS 100 . 00 3 , 681 . 20 11 , 950 . 00 30 . 8 TRANSFERS 20- 000- 49-00 - 4901 TRANSFER FROM GENERAL FUND 0 . 00 0 . 00 0 . 00 0 . 0 -- ----- -- --------- ------ ---------------- ----------------- - ----------------------- TOTAL TRANSFERS 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL REVENUES : 31700 . 00 91 , 131 . 20 246 , 950 . 00 36 . 9 EXPENSES WEAPONS 20-000- 65-00- 5811 LETHAL/NON-LETHAL WEAPONS 0 . 00 41810 . 66 8 , 000 . 00 60 . 1 ---- ----------------- ------------- -------------------------- --------- ------- ----- TOTAL WEAPONS 0 . 00 4 , 810 . 66 81000 . 00 60 . 1 CAPITAL OUTLAY 20-000- 75-00-7001 EQUIPMENT 1 , 265 . 00 26 , 972 . 00 20 , 000 . 00 134 . 8 20-000- 75-00- 7002 K- 9 EQUIPMENT 0 . 00 0 . 00 2 , 500 . 00 0 . 0 P22 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 23 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B300D . WOW FUND : POLICE EQUIPMENT CAPITAL FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL $ ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED EXPENSES CAPITAL OUTLAY 20- 000 - 75- 00-7005 VEHICLES 0 . 00 58 , 624 . 08 80 , 000 . 00 73 . 2 20- 000 - 75- 00-7006 CAR BUILD OUT 10 , 288 . 37 14 , 015 . 85 531802 . 00 26 . 0 20-000 - 75-00-7008 NEW WEATHER WARNING SIRENS 0 . 00 0 . 00 0 . 00 0 . 0 20-000 - 75-00-7009 RESERVE-WEATHER WARNING SIREN 0 . 00 0 . 00 82 , 648 . 00 0 . 0 20- 000- 75-00-7010 NEW WORLD SOFTWARE 0 . 00 0 . 00 0 . 00 0 . 0 - --- - ----------------- ------- ----------------------- ----- ------- ------- --------- - TOTAL CAPITAL OUTLAY 11 , 553 . 37 99 , 611 . 93 238 , 950 . 00 41 . 6 OTHER 20-000-78 - 00- 9009 RESERVE 0 . 00 0 . 00 0 . 00 0 . 0 ------------ - - ---- - - - ' -- --------- -- ----------------- ----------- --- TOTAL OTHER 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL EXPENSES : 11 , 553 . 37 104 , 422 . 59 246 , 950 . 00 42 . 2 TOTAL FUND REVENUES 31700 . 00 91 , 131 . 20 246 , 950 . 00 36 . 9 TOTAL FUND EXPENSES 11 , 553 . 37 104 , 422 . 59 246 , 950 . 00 42 . 2 FUND SURPLUS ( DEFICIT ) ( 7 , 853 . 37 ) ( 13 , 291 . 39 ) 0 . 00 100 . 0 P23 DATE : 01 / 29/2008 UNITED CITY OF YORKVILLE PAGE : 24 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : PUBLIC WORKS EQUIP CAPITAL FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL 8 ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED REVENUES CARRY OVER 21- 000- 40- 00-3999 CARRY OVER BALANCE 0 . 00 0 . 00 200 , 000 . 00 0 . 0 ___ -- -_ ------- ------- ------------------------------- --------- TOTAL CARRY OVER 0 . 00 0 . 00 200 , 000 . 00 0 . 0 CHARGES FOR SERVICES 21 - 000- 42 - 00- 4213 DEVELOPMENT FEES- PUBLIC WORKS 8 , 400 . 00 207 , 350 . 00 369 , 600 . 00 56 . 1 TOTAL CHARGES FOR SERVICES 8 , 400 . 00 207 , 350 . 00 369 , 600 . 00 56 . 1 MISCELLANEOUS 21- 000- 44 -00- 4430 SALE OF EQUIPMENT 0 . 00 63 , 316 . 00 63 , 316 . 00 100 . 0 TOTAL MISCELLANEOUS 0 . 00 63 , 316 . 00 63 , 316 00 100 . 0 TRANSFERS 21 - 000-49- 00- 4915 TRANSFER FROM WATER FUND 0 . 00 0 . 00 0 . 00 0 . 0 21 - 000- 49- 00- 4920 TRANSFER FROM SEWER FUND 0 . 00 0 . 00 0 . 00 0 . 0 _-- _____ ___----_ ______ ___________ _ ____ _ TOTAL TRANSFERS 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL REVENUES : 81400 . 00 270 , 666 . 00 632 , 916 . 00 42 . 7 EXPENSES CAPITAL OUTLAY 21-000 -75 -00-7001 EQUIPMENT 0 . 00 0 . 00 125 , 000 . 00 0 . 0 21- 000- 75 - 00-7005 VEHICLES 0 . 00 0 . 00 313 , 316 . 00 0 . 0 21-000-75-00-7015 SKIDSTEER UPGRADE 0 . 00 31600 . 00 91500 . 00 37 . 8 21-000-75- 00-7107 TRUCK ACCESSORIES 0 . 00 0 . 00 14 , 000 . 00 0 . 0 21-000-75-00-7120 STREET SWEEPER 0 . 00 0 . 00 0 . 00 0 . 0 21 -000-75- 00-7130 BLDG ADDITION - SALT DOME 0 . 00 0 . 00 53 , 600 . 00 0 . 0 TOTAL CAPITAL OUTLAY 0 . 00 3 , 600 . 00 515 , 416 00 0 . 6 OTHER P24 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 25 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B300D . WOW FUND : PUBLIC WORKS EQUIP CAPITAL FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED EXPENSES OTHER 21 -000- 78 - 00- 9009 RESERVE 0 . 00 0 . 00 75 , 000 . 00 0 . 0 -------------- ----- ------------------ - ------------- ------ ------------------------ TOTAL OTHER 0 . 00 0 . 00 75 , 000 . 00 0 . 0 TRANSFERS 21 -000- 99- 00- 9941 TRANSFER TO PARKS CAPITAL 0 . 00 21 , 250 . 00 42 , 500 . 00 50 . 0 ---- ------ -------- ---------- -- -------------- --------- ------- - ------------------ -- TOTAL TRANSFERS 0 . 00 21 , 250 . 00 42 , 500 . 00 50 . 0 TOTAL EXPENSES : 0 . 00 24 , 850 . 00 632 , 916 . 00 3 . 9 TOTAL FUND REVENUES 81400 . 00 270 , 666 . 00 632 , 916 . 00 42 . 7 TOTAL FUND EXPENSES 0 . 00 24 , 650 . 00 632 , 916 . 00 3 . 9 FUND SURPLUS ( DEFICIT ) 8 , 400 . 00 245 , 816 . 00 0 . 00 100 . 0 P25 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 26 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : PARKS & REC EQUIP CAPITAL FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL $ ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED REVENUES CARRY OVER 22 - 000- 40-00- 3999 CARRY OVER BALANCE 0 . 00 0 . 00 85 , 000 . 00 0 . 0 TOTAL CARRY OVER 0 . 00 0 . 00 85 , 000 . 00 0 . 0 CHARGES FOR SERVICES 22- 000- 42 -00- 4216 PARKS CAPITAL FEE 4 , 700 . 00 16 , 750 . 00 18 , 000 . 00 93 . 0 22- 000- 42 - 00- 4217 PARK CAPITAL DONATIONS 0 . 00 0 . 00 0 . 00 0 . 0 ------------ ---- - ---- ---_ ____ _--------___ _ _--_- TOTAL CHARGES FOR SERVICES 41700 . 00 16 , 750 . 00 18 , 000 . 00 93 . 0 MISCELLANEOUS 22 -000 - 44 - 00- 4430 SALE OF VEHICLES /EQUIPMENT 0 . 00 0 . 00 16 , 000 . 00 0 . 0 TOTAL MISCELLANEOUS 0 . 00 0 . 00 16 , 000 . 00 0 . 0 TRANSFERS 22 - 000- 49-00-4930 TRANSFER FROM GF 0 . 00 0 . 00 0 . 00 0 . 0 22- 000- 49- 00- 4950 TRANSFER FROM PW CAPITAL 0 . 00 21 , 250 . 00 42 , 500 . 00 50 . 0 ---------- ---- - ----------------- ----- --- ----------------------------------------- TOTAL TRANSFERS 0 . 00 21 , 250 . 00 42 , 500 . 00 50 . 0 TOTAL REVENUES : 4 , 700 . 00 38 , 000 . 00 161 , 500 . 00 23 . 5 PARKS EXPENSES CAPITAL OUTLAY 22 - 610 - 75-00-7006 PICK UP TRUCK 0 . 00 0 . 00 25 , 000 . 00 0 . 0 22 - 610-75-00-7015 MOWER 0 . 00 91388 . 00 66 , 000 . 00 14 . 2 22 - 610-75-00-7016 COMPUTER SERVER 0 . 00 4 , 728 . 71 51000 . 00 94 . 5 22 - 610- 75- 00-7018 PARK RE-DEVELOPEMENTS 0 . 00 52 , 518 . 71 65 , 500 . 00 80 . 1 ____ ---- ---------------------- ------------------ - -------- -------------- TOTAL CAPITAL OUTLAY 0 . 00 66 , 635 . 42 161 , 500 . 00 41 . 2 P26 DATE : 01 / 29 / 2006 UNITED CITY OF YORKVILLE PAGE : 27 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : PARKS & REC EQUIP CAPITAL FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL $ ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED _ _ _ -_-___ __ ___________ ________ _ _ _____ _______________ ___________ _____ ______ _________ ___ TOTAL EXPENSES : PARKS 0 . 00 66 , 635 . 42 161 , 500 . 00 41 . 2 TOTAL FUND REVENUES 4 , 700 . 00 38 , 000 . 00 161 , 500 . 00 23 . 5 TOTAL FUND EXPENSES 0 . 00 66 , 635 . 42 161 , 500 . 00 41 . 2 FUND SURPLUS ( DEFICIT ) 4 , 700 . 00 ( 28 , 635 . 42 ) 0 . 00 100 . 0 P27 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 28 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . W0W FUND : SANITARY SEWER IMPROVEMENT FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED REVENUES CARRY OVER 37 - 000- 40- 00-3999 CARRY OVER 0 . 00 0 . 00 0 . 00 0 . 0 ----- ---- - - ----- --------------------------------------- TOTAL CARRY OVER 0 . 00 0 . 00 0 . 00 0 . 0 CHARGES FOR SERVICES 37 - 000- 42 - 00- 4220 CONNECTION FEES 64 , 750 . 00 670 , 350 . 00 874 , 375 . 00 76 . 6 37 - 000- 42-00- 4221 RIVER CROSSING FEES 0 . 00 150 . 50 150 . 00 100 . 3 --- ----------------------- --- ---------- --------- ------ - ------------------- - ------ TOTAL CHARGES FOR SERVICES 64 , 750 . 00 670 , 500 . 50 874 , 525 . 00 76 . 6 INTEREST 37 - 000- 46- 00- 4600 INVESTMENT INCOME 2 , 317 . 71 22 , 710 . 37 30 , 000 . 00 75 . 7 --------- -- -------- - ---- ------------ ----------------------------------------- ---- TOTAL INTEREST 2 , 317 . 71 22 , 710 . 37 30 , 000 . 00 75 . 7 OTHER OPERATING RECEIPTS 37 - 000-48 -00-4803 ROB ROY INTERCEPTOR 0 . 00 0 . 00 550 , 745 . 00 0 . 0 37 - 000- 48 -00- 4804 SOUTHWEST SVC AREA INTERCEPTOR 0 . 00 0 . 00 5 , 500 , 000 . 00 0 . 0 37 - 000- 48 -00- 4805 COUNTRYSIDE INTERCEPTOR 23 , 163 . 88 0 . 00 0 . 00 0 . 0 _______________________________________________ _____________ _________________ _ ___ TOTAL OTHER OPERATING RECEIPTS 23 , 163 . 88 0 . 00 6 , 050 , 745 . 00 0 . 0 TRANSFERS 37 - 000- 49-00- 4901 TRANSFER FROM GENERAL FUND 0 . 00 75 , 000 . 00 150 , 000 . 00 50 . 0 - ---------- - ------ - - ----------------------- - - ------------ ---- ---------------- ---- TOTAL TRANSFERS 0 . 00 75 , 000 . 00 150 , 000 . 00 50 . 0 TOTAL REVENUES : 90 , 231 . 59 768 , 210 . 87 71105 , 270 . 00 10 . 8 EXPENSES CONTRACTUAL SERVICES 37- 000- 62 -00-5401 CONTRACTURAL/ PROFESSIONAL SERV 0 . 00 0 . 00 0 . 00 0 . 0 37 - 000- 62 -00-5402 ENG/LEGAL/CONTG . COUNTRYSIDE 0 . 00 1 , 336 . 61 0 . 00 ( 100 . 0 ) ---------------- ----------- --- - ---- -- ------------------"'--- --- --- -------- ---- -- TOTAL CONTRACTUAL SERVICES 0 . 00 1 , 336 . 61 0 . 00 ( 100 . 0 ) P28 DATE : 01 / 29 /2008 UNITED CITY OF YORKVILLE PAGE : 29 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : SANITARY SEWER IMPROVEMENT FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL $ ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED --- - - - ---- -- - ------ -- --- ------ - ------- - -------- --------------- -------------------------- ----------------- ------ --------------- ------ OTHER 37 - 000- 65- 00-5800 CONTINGENCY 0 . 00 0 . 00 0 . 00 0 . 0 --------------------- ---- ------ ----- ------------------ ------------------- -------- TOTAL OTHER 0 . 00 0 . 00 0 . 00 0 . 0 DEBT SERVICE 37 - 000- 66-00- 6012 DEBT ISSUANCE COSTS 0 . 00 0 . 00 0 . 00 0 . 0 ----- -------- -- - - --- ---------- --- - ----- ---------------------- --- - ---------- ------ TOTAL DEBT SERVICE 0 . 00 0 . 00 0 . 00 0 . 0 CAPITAL OUTLAY 37 - 000 -75-00 - 7503 COUNTRYSIDE INTERCEPTOR 23 , 163 . 88 20 , 840 . 43 20 , 232 . 00 103 . 0 37- 000-75- 00- 7505 ROB ROY CREEK SANITARY 0 . 00 81187 . 88 81188 . 00 99 . 9 37 - 000-75- 00-7506 SOUTHWEST SVC AREA INTERCEPTOR 0 . 00 4 , 806 . 24 5 , 504 , 807 . 00 0 . 0 37 -000-75-00-7508 MANHOLE REHAB PROJECT 0 . 00 0 . 00 11 , 807 . 00 0 . 0 37 -000- 75-00-7509 SCADA SYSTEM 0 . 00 0 . 00 0 . 00 0 . 0 37 - 000-75-00-7510 FOX HILL SANITARY SEWER RECAP . 0 . 00 0 . 00 150 , 000 . 00 0 . 0 37 -000 -75-00-7511 PALMER COURT 0 . 00 0 . 00 50 , 000 . 00 0 . 0 TOTAL CAPITAL OUTLAY 23 , 163 . 88 33 , 834 . 55 51745 , 034 . 00 0 . 5 TRANSFERS 37 - 000- 99-00- 9901 TRANSFER TO GENERAL FUND 0 . 00 75 , 000 . 00 150 , 000 . 00 50 . 0 37 -000- 99- 00- 9965 TRANSFER TO DEBT SERVICE 0 . 00 605 , 118 . 00 11210 , 236 . 00 50 . 0 -------------------------------- ------------------------- -------- -- ---------- -- -- TOTAL TRANSFERS 0 . 00 680 , 118 . 00 1 , 3601236 . 00 50 . 0 TOTAL EXPENSES : 23 , 163 . 88 715 , 289 . 16 7 , 105 , 270 . 00 10 . 0 TOTAL FUND REVENUES 90 , 231 . 59 768 , 210 . 87 7 , 1051270 . 00 10 . 8 TOTAL FUND EXPENSES 23 , 163 . 88 715 , 289 . 16 7 , 105 , 270 . 00 10 . 0 FUND SURPLUS ( DEFICIT ) 67 , 067 . 71 52 , 921 . 71 0 . 00 100 . 0 P29 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 30 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . W0W FUND : WATER IMPROV . EXPANSION FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED REVENUES CARRY OVER 41 - 000- 40-00-3999 CARRY OVER 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL CARRY OVER 0 . 00 0 . 00 0 . 00 0 . 0 CHARGES FOR SERVICES 41 - 000- 42 -00- 4220 CONNECTION FEES 58 , 380 . 00 840 , 840 . 00 1 , 062 , 000 . 00 79 . 1 41- 000- 42 -00-4221 SOUTHWEST WATER MAIN REVENUE 0 . 00 0 . 00 21000 , 000 . 00 0 . 0 41- 000- 42 -00-4222 USGS SHALLOW WATER REV 0 . 00 96 , 000 . 00 96 , 000 . 00 100 . 0 --------- --- ----------- --- - ----- ----- ------------------------------------- ------- TOTAL CHARGES FOR SERVICES 58 , 380 . 00 936 , 840 . 00 31158 , 000 . 00 29 . 6 INTEREST 41 - 000- 46- 00- 4600 INVESTMENT INCOME 21571 . 92 22 , 875 . 87 30 , 000 . 00 76 . 2 - - ------------------ -------- ---------------------- -- --------------------------- -- TOTAL INTEREST 2 , 571 . 92 22 , 875 . 87 30 , 000 . 00 76 . 2 OTHER OPERATING RECEIPTS 41 -000- 48 - 00- 4800 LOAN PROCEEDS B . 1 CONTRACT 0 . 00 456 , 410 . 00 456 , 410 . 00 100 . 0 ----------------------- -------------- - - ------------------------------------------ TOTAL OTHER OPERATING RECEIPTS 0 . 00 456 , 410 . 00 456 , 410 . 00 100 . 0 TRANSFERS 41 - 000- 49-00- 4901 TRANSFER FROM GENERAL FUND 0 . 00 100 , 000 . 00 200 , 000 . 00 50 . 0 ------------ -------- ---- - - -- --- ---- --------- ---------------------- --------------- TOTAL TRANSFERS 0 . 00 100 , 000 . 00 200 , 000 . 00 50 . 0 TOTAL REVENUES : 60 , 951 . 92 11516 , 125 . 87 31844 , 410 . 00 39 . 4 EXPENSES PROFESSIONAL SERVICE 41 - 000- 61 - 00-5300 LEGAL SERVICES 0 . 00 0 . 00 81000 . 00 0 . 0 41 - 000- 61-00-5301 ENGINEERING - GENERAL SERVICES 1 , 107 . 73 4 , 211 . 82 40 , 000 . 00 10 . 5 41 - 000- 61 - 00-5400 RADIUM COMPLIANCE-CONT . B2 & 3 0 . 00 708 . 50 709 . 00 99 . 9 41 - 000- 61 - 00-5401 ENGINEERING-RADIUM CONT B2 & 3 0 . 00 38 , 073 . 00 40 , 000 . 00 95 . 1 P30 DATE : 01 / 29 /2008 UNITED CITY OF YORKVILLE PAGE : 31 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B300D . WOW FUND : WATER IMPROV . EXPANSION FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED EXPENSES PROFESSIONAL SERVICE 41 -000 - 61 -00- 5405 PROF . SVCS- RADIUM CONT B2 & 3 0 . 00 0 . 00 50 , 000 . 00 0 . 0 41- 000- 61 -00- 5407 CONTRACT B . 1 CONSTRUCTION 0 . 00 0 . 00 0 . 00 0 . 0 41- 000- 61 - 00- 5408 CENTRAL ZONE - CONTRACT C 0 . 00 0 . 00 0 . 00 0 . 0 41 - 000- 61 -00- 5410 ENGINEERING-CENTRAL ZONE C 0 . 00 0 . 00 0 . 00 0 . 0 41-000- 61 - 00-5415 USGS GROUNDWATER STUDY 0 . 00 0 . 00 41000 . 00 0 . 0 41 - 000- 61 -00- 5416 USGS GROUNDWATER COUTRYWIDE 0 . 00 13 , 128 . 00 13 , 128 . 00 100 . 0 41 -000- 61 -00- 5417 USGS GROUNDWATER SHALLOW WATER 0 . 00 8 , 328 . 00 11173 . 00 709 . 9 41- 000- 61 -00-5418 ENG-TOWER LANE REHAB H . 1 61490 . 85 9 , 045 . 04 400 . 00 2261 . 2 41- 000- 61 -00- 5419 ENG-WELL 4 REHAB H . 1 4 , 000 . 00 61500 . 00 0 . 00 ( 100 . 0 ) 41 - 000- 61 -00- 5420 TOWER LANE CONSTRUCTION H . 1 0 . 00 0 . 00 0 . 00 0 . 0 41- 000- 61-00- 5421 WELL 4 CONSTRUCTION H . 1 0 . 00 0 . 00 0 . 00 0 . 0 -------------- - ----------- ------------------------ ------------- -------- ----- ----- TOTAL PROFESSIONAL SERVICE 11 , 598 . 58 79 , 994 . 36 157 , 410 . 00 50 . 8 OTHER 41 -000- 65- 00-5421 GIB SYSTEM 0 . 00 0 . 00 0 . 00 0 . 0 41 -000- 65 - 00-5800 CONTINGENCY 0 . 00 59 , 977 . 66 442 , 843 . 00 13 . 5 -------- ----------- ----------------------- --- --------------- - ------------- ------- TOTAL OTHER 0 . 00 59 , 977 . 66 442 , 843 . 00 13 . 5 CAPITAL OUTLAY 41 -000- 75-00-7504 NORTH WATER TOWER-CONTRACT A 0 . 00 0 . 00 0 . 00 0 . 0 41 -000- 75 - 00-7509 SCADA SYSTEM 0 . 00 19 , 754 . 40 22 , 313 . 00 88 . 5 41 - 000- 75- 00-7510 SW INTERCEPTOR 0 . 00 0 . 00 21000 , 000 . 00 0 . 0 41 -000- 75- 00-7520 WATERMAIN PROJECTS 52 , 410 . 23 111 , 206 . 49 217 , 289 . 00 51 . 1 41 -000- 75-00-7522 IN TOWN ROAD PROG WATER PROJ 0 . 00 102 , 004 . 20 220 , 000 . 00 46 . 3 --------- ---------- ------------------------ --------------------------- ------- ---- TOTAL CAPITAL OUTLAY 52 , 410 . 23 232 , 965 . 09 21459 , 602 . 00 9 . 4 TRANSFERS 41 -000- 99-00- 9901 TRANSFER TO GENERAL FUND 0 . 00 100 , 000 . 00 200 , 000 . 00 50 . 0 41 - 000- 99-00- 9965 TRANSFER TO DEBT FUND 0 . 00 228 , 538 . 00 584 , 555 . 00 39 . 0 _----_-___ ------ _ _-___ ---- ----------------- ----- ------- --- TOTAL TRANSFERS 0 . 00 328 , 538 . 00 784 , 555 . 00 41 . 8 P31 DATE : O1 / 29/ 200B UNITED CITY OF YORKVILLE PAGE : 32 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B300D . WOW FUND : WATER IMPROV . EXPANSION FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ------ - - - - - - -------------- ---- _--___ _ _ __- --___ __ __--_ _ -__ _------_--_-_-----_ _----- - _ TOTAL EXPENSES : 64 , 008 . 81 701 , 475 . 11 3 , 844 , 410 . 00 18 . 2 TOTAL FUND REVENUES 60 , 951 . 92 1 , 516 , 125 . 87 3 , 844 , 410 . 00 39 . 4 TOTAL FUND EXPENSES 64 , 008 . 81 701 , 475 . 11 3 , 844 , 410 . 00 18 . 2 FUND SURPLUS ( DEFICIT ) ( 31056 . 89 ) 814 , 650 . 76 0 . 00 100 . 0 P32 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 33 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : DEBT SERVICE FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL 8 ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED REVENUES MISCELLANEOUS 42- 000 - 44 -00- 4440 RECAPTURE-WATER/SEWER 150 . 00 25 , 400 . 53 44 , 500 . 00 57 . 0 42- 000 - 44 -00- 4441 LIBRARY BOND REFERENDUM 34 , 407 . 28 713 , 478 . 86 578 , 661 . 00 123 . 2 --------------------------------- -------------- -------------------------- ---- ---- TOTAL MISCELLANEOUS 34 , 557 . 28 738 , 879 . 39 623 , 161 . 00 118 . 5 TRANSFERS 42 -000- 49-00- 4901 TRANSFER FROM GENERAL FUND 0 . 00 142 , 102 . 00 231 , 884 . 00 61 . 2 42 -000- 49- 00-4925 TRANSFER FROM SANITARY SEWER 0 . 00 605 , 118 . 00 11210 , 236 . 00 50 . 0 42 -000- 49-00- 4930 TRANSFER FROM WATER IMPRV FUND 0 . 00 228 , 538 . 00 584 , 555 . 00 39 . 0 42 -000 - 49- 00- 4940 TRANSFER FROM MUNICIPAL BLDG 0 . 00 51 , 212 . 00 102 , 423 . 00 50 . 0 ------------------ --------------- - ----------------------- ----- ------------------- TOTAL TRANSFERS 0 . 00 11026 , 970 . 00 2 , 129 , 098 . 00 48 . 2 TOTAL REVENUES : 34 , 557 . 28 1 , 765 , 849 . 39 2 , 752 , 259 . 00 64 . 1 EXPENSES DEBT SERVICE 42 - 000 - 66-00- 6001 CITY HALL BONDS PRINCIPAL PMT 500000 . 00 50 , 000 . 00 50 , 000 . 00 100 . 0 42- 000 - 66-00- 6002 CITY HALL BONDS INTEREST PMT 3 , 200 . 00 61400 . 00 6 , 400 . 00 100 . 0 42 -000- 66-00- 6003 IRBB-BRUELL ST . INTEREST PMT 0 . 00 40 , 897 . 50 81 , 795 . 00 50 . 0 42 -000- 66- 00- 6004 IRBB-BRUELL ST . PRINCIPAL PMT 0 . 00 0 . 00 80 , 000 . 00 0 . 0 42 -000- 66-00- 6005 NORTH H2O TOWER INTEREST PMT 0 . 00 0 . 00 0 . 00 0 . 0 42 -000- 66- 00- 6006 NORTH H2O TOWER PRINCIPAL PMT 0 . 00 0 . 00 0 . 00 0 . 0 42 -000- 66- 00- 6007 $ 4 . 8M DEBT CERT INTEREST PMT 93 , 133 . 13 168 , 021 . 20 160 , 630 . 00 104 . 6 42 -000- 66 - 00- 6008 COUNTRYSIDE ALT REV PRINC . PMT 135 , 000 . 00 135 , 000 . 00 135 , 000 . 00 100 . 0 42 -000- 66- 00- 6009 COUNTRYSIDE ALT REV INT . PMT 57 , 256 . 25 114 , 512 . 50 114 , 513 . 00 99 . 9 42-000 - 66-00- 6010 COMED/HYDRAULIC INTEREST PMT 19 , 473 . 75 38 , 947 . 50 38 , 947 . 00 100 . 0 42 - 000- 66-00- 6011 COMED/HYDRAULIC PRINCIPAL PMT 145 , 000 . 00 145 , 000 . 00 145 , 000 . 00 100 . 0 42- 000- 66-00- 6013 LIBRARY BOND 2005B INT PMT 160 , 562 . 51 321 , 125 . 02 321 , 125 . 00 100 . 0 42- 000- 66-00- 6015 LIBRARY BOND 2006 INT PMT 35 , 650 . 00 100 , 810 . 34 130 , 322 . 00 77 . 3 42- 000- 66-00- 6016 ROB ROY CREEK BOND 234 , 475 . 00 468 , 950 . 00 468 , 950 . 00 100 . 0 42- 000- 66-00- 6041 IEPA DRINK WTR PROJ L171563 0 . 00 0 . 00 56 , 528 . 00 0 . 0 42-000- 66- 00- 6042 IEPA DRINK WTR PRJ L171563 INT 0 . 00 0 . 00 52 , 708 . 00 0 . 0 42 - 000- 66- 00- 6045 SEES IEPA PRINCIPAL PMT 0 . 00 0 . 00 0 . 00 0 . 0 P33 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 34 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : DEBT SERVICE FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED EXPENSES DEBT SERVICE 42 -000- 66-00- 6049 SANITARY SIPHON INTEREST PMT 0 . 00 3 , 737 . 46 8 , 301 . 00 45 . 0 42 - 000 - 66-00- 6050 SANITARY SIPHON PRINCIPAL PMT 0 . 00 15 , 752 . 53 30 , 679 . 00 51 . 3 42 - 000- 66-00- 6055 SSES IEPA L171153 PRINC . PMT 0 . 00 108 , 142 . 24 109 , 234 . 00 99 . 0 42 - 000- 66-00- 6056 REFUNDING 2006 INTEREST PMT 46 , 053 . 13 95 , 026 . 79 95 , 027 . 00 99 . 9 42 - 000- 66-00- 6057 REFUNDING 2006A PRINCIPAL PMT 5 , 100 . 00 5 , 100 . 00 51100 . 00 100 . 0 42 - 000- 66-00- 6058 $ 2 . SM NORTH WATER TOWER 2002 0 . 00 0 . 00 0 . 00 0 . 0 42 - 000- 66- 00- 6059 2007A GO REFUND 02 , 02A, 03 0 . 00 0 . 00 83 , 476 . 00 0 . 0 42 -000- 66- 00- 6070 $ 650K ROAD IMPROV PROG INT 11 , 410 . 00 22 , 820 . 00 22 , 820 . 00 100 . 0 42 -000 - 66- 00- 6071 $ 650K ROAD IMPROV PROG PRINC 75 , 000 . 00 75 , 000 . 00 75 , 000 . 00 100 . 0 42 -000- 66-00- 6072 $ 2M ALT REV B2 & B3 INT PMT 44 , 462 . 50 88 , 925 . 00 88 , 925 . 00 100 . 0 42 - 000- 66-00- 6073 $ 2M ALT REV B2 & B3 PRINC PMT 75 , 000 . 00 75 , 000 . 00 75 , 000 . 00 100 . 0 42-000- 66- 00- 6074 $ 3 . 825M IN TOWN ROAD INT PMT 78 , 389 . 38 156 , 778 . 76 156 , 779 . 00 99 . 9 42 - 000 - 66-00 - 6075 $ 3 . 825M IN TOWN ROAD PRINC 160 , 000 . 00 160 , 000 . 00 160 , 000 . 00 100 . 0 TOTAL DEBT SERVICE 1 , 429 , 165 . 65 2 , 3951946 . 84 21752 , 259 . 00 87 . 0 TOTAL FUND REVENUES 34 , 557 . 28 1 , 7651849 . 39 2 , 752 , 259 . 00 64 . 1 TOTAL FUND EXPENSES 1 , 429 , 165 . 65 2 , 395 , 946 . 84 2 , 752 , 259 . 00 B7 . 0 FUND SURPLUS ( DEFICIT ) ( 1 , 394 , 608 . 37 ) ( 630 , 097 . 45 ) 0 . 00 100 . 0 P34 DATE : 01 / 29/2008 UNITED CITY OF YORKVILLE PAGE : 35 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : WATER OPERATIONS FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ----- - - - - ---- - -- ------ - ------- - -------- ------- ------------------ ---- ---- ----------------- - - - ------- ------------------ --------------- REVENUES CARRY OVER 51 - 000- 40- 00-3999 CARRY OVER BALANCE 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL CARRY OVER 0 . 00 0 . 00 0 . 00 0 . 0 CHARGES FOR SERVICES 51 -000 - 42 -00- 4240 BULK WATER SALES 3 , 740 . 48 13 , 095 . 94 20 , 000 . 00 65 . 4 51- 000- 42 -00- 4241 WATER SALES 220 , 216 . 77 1 , 143 , B18 . 98 11350 , 000 . 00 84 . 7 51 - 000 -42 -00- 4242 WATER METER SALES 20 , 500 . 00 242 , 631 . 00 240 , 000 . 00 101 . 0 51- 000 - 42-00- 4243 LEASE REVENUE - H2O TOWER 4 , 333 . 82 21 , 102 . 19 31 , 000 . 00 68 . 0 __ ____-___ _ ------___-_ -------------- ------- ---------------- TOTAL CHARGES FOR SERVICES 248 , 791 . 07 11420 , 648 . 11 1 , 641 , 000 . 00 86 . 5 MISCELLANEOUS 51- 000- 44 -00- 4490 MISCELLANEOUS INCOME 0 . 00 0 . 00 0 . 00 0 . 0 51 - 000- 44 -00- 4499 BAD DEBT RECOVERY 0 . 00 0 . 00 0 . 00 0 . 0 ------------------------ -- ------------------------------- -------- ---------- ------ TOTAL MISCELLANEOUS 0 . 00 0 . 00 0 . 00 0 . 0 INTEREST 51- 000- 46-00- 4600 INVESTMENT INCOME 9 , 743 . 78 67 , 629 . 81 35 , 000 . 00 193 . 2 ---------------------- -------- - ----------------------------- -- ------------------- TOTAL INTEREST 9 , 743 . 78 67 , 629 . 81 35 , 000 . 00 193 . 2 TOTAL REVENUES : 258 , 534 . 85 1 , 488 , 277 . 92 1 , 676 , 000 . 00 88 . 7 EXPENSES PERSONNEL 51- 000- 50-00- 5107 SALARIES- WATER OP . 25 , 516 . 21 221 , 231 . 64 350 , 000 . 00 63 . 2 51- 000-50-00-5136 SALARIES- PART TIME 0 . 00 3 , 412 . 75 8 , 500 . 00 40 . 1 51 -000- 50- 00- 5137 SALARIES - OVERTIME 21518 . 33 21 , 476 . 29 40 , 000 . 00 53 . 6 TOTAL PERSONNEL 28 , 034 . 54 246 , 120 . 68 398 , 500 . 00 61 . 7 PROFESSIONAL SERVICES P35 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 36 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : WATER OPERATIONS FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL $ ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED EXPENSES PROFESSIONAL SERVICES 51 - 000- 61 -00- 5300 LEGAL SERVICES 0 . 00 0 . 00 21000 . 00 0 . 0 51 - 000 - 61 -00- 5303 JULIE SERVICE 922 . 20 61326 . 35 11 , 000 . 00 57 . 5 ------ --------- ----- --------- -- - ----- ---------- - ------- ---- ---- ----------- ------- TOTAL PROFESSIONAL SERVICES 922 . 20 6 , 326 . 35 13 , 000 . 00 48 . 6 CONTRACTURAL SERVICES 51- 000 - 62 -00- 5401 CONTRACTUAL SERVICES 11723 . 33 8 , 371 . 44 91000 . 00 93 . 0 51- 000- 62 -00- 5407 TREATMENT FACILITIES O&M 5 , 435 . 00 120 , 298 . 94 157 , 000 . 00 76 . 6 51 - 000 - 62 -00- 5408 MAINTENANCE-EQUIPMENT 0 . 00 11467 . 24 51000 . 00 29 . 3 51- 000- 62 - 00- 5409 MAINTENANCE - VEHICLES 0 . 00 1 , 857 . 75 71000 . 00 26 . 5 51- 000- 62 -00- 5411 MAINTENANCE-COMPUTERS 0 . 00 0 . 00 0 . 00 0 . 0 51 - 000- 62 - 00- 5413 MAINTENANCE-CONTROL SYSTEM 0 . 00 25 . 00 775 . 00 3 . 2 51 -000- 62 - 00- 5421 WEARING APPAREL 263 . 00 21477 . 81 41850 . 00 51 . 0 51 -000- 62 -00- 5422 WATER TOWER PAINTING 0 . 00 0 . 00 0 . 00 0 . 0 51 - 000 - 62 -00- 5434 RENTAL - EQUIPMENT 0 . 00 0 . 00 21000 . 00 0 . 0 51- 000- 62 -00 - 5435 ELECTRICITY 14 , 326 . 50 182 , 960 . 77 250 , 000 . 00 73 . 1 51 - 000- 62 -00- 5436 TELEPHONE 11600 . 64 11 , 282 . 63 22 , 000 . 00 51 . 2 51 - 000- 62-00- 5438 CELLULAR TELEPHONE 354 . 24 2 , 441 . 54 3 , 300 . 00 73 . 9 ------ --------- ----- --------------- - ------- ----- --------------- ---------- _ TOTAL CONTRACTURAL SERVICES 23 , 702 . 71 331 , 183 . 12 460 , 925 . 00 71 . 8 PROFESSIONAL DEVELOPMENT 51- 000- 64 -00- 5600 DUES 165 . 00 755 . 83 11000 . 00 75 . 5 51- 000- 64 -00- 5603 SUBSCRIPTIONS 0 . 00 131 . 45 250 . 00 52 . 5 51 - 000 - 64 -00- 5604 TRAINING & CONFERENCES 0 . 00 409 . 00 2 , 900 . 00 14 . 1 51 - 000 - 64 -00- 5605 TRAVEL EXPENSES 39 . 16 11667 . 90 5 , 400 . 00 30 . 8 --- ------- ----- ---- - --- ---------------------------------- -------- ---------------- TOTAL PROFESSIONAL DEVELOPMENT 204 . 16 21964 . 18 9 , 550 . 00 31 . 0 OPERATIONS 51 - 000- 65-00- 5800 CONTINGENCIES 0 . 00 0 . 00 0 . 00 0 . 0 51 - 000- 65-00- 5804 OPERATING SUPPLIES 336 . 76 31 , 390 . 21 50 , 000 . 00 62 . 7 51 -000- 65- 00- 5808 POSTAGE & SHIPPING 2 , 145 . 83 10 , 045 . 75 181000 . 00 55 . 8 51 -000- 65-00- 5809 PRINTING & COPYING 0 . 00 6 , 463 . 51 110000 . 00 58 . 7 51 - 000- 65- 00- 5810 PUBLISHING & ADVERTISING 0 . 00 240 . 06 1 , 000 . 00 24 . 0 P36 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 37 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : WATER OPERATIONS FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL $ ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED EXPENSES OPERATIONS 51 -000- 65-00- 5812 GASOLINE 1 , 878 . 46 20 , 220 . 28 35 , 000 . 00 57 . 7 51 -000- 65 -00- 5815 HAND TOOLS 0 . 00 11230 . 59 1 , 300 . 00 94 . 6 51 - 000- 65-00- 5817 GRAVEL 0 . 00 11430 . 05 5 , 000 . 00 28 . 6 51 - 000- 65-00- 5820 CHEMICALS 0 . 00 0 . 00 0 . 00 0 . 0 51- 000- 65- 00- 5821 CATHODIC PROTECTION 0 . 00 0 . 00 0 . 00 0 . 0 51 - 000- 65- 00- 5822 WATER SAMPLES 90 . 00 91278 . 90 14 , 000 . 00 66 . 2 - - - -------------- - ------- ---- - ------- - --- -- ---------- -------- - ---------- - TOTAL OPERATIONS 41451 . 05 80 , 299 . 35 135 , 300 . 00 59 . 3 DEBT SERVICE 51 -000- 66-00-8200 INTEREST EXPENSE 0 . 00 0 . 00 0 . 00 0 . 0 ---------- ---------- ------- ------------ - ---- -------------- - --- ------------------- TOTAL DEBT SERVICE 0 . 00 0 . 00 0 . 00 0 . 0 RETIREMENT 51 - 000- 72 - 00- 6500 IMRF PARTICIPANTS 21133 . 43 18 , 469 . 10 30 , 250 . 00 61 . 0 51 - 000-72 - 00- 6501 SOCIAL SECURITY & MEDICARE 21198 . 19 18 , 954 . 90 30 , 000 . 00 63 . 1 TOTAL RETIREMENT 4 , 331 . 62 37 , 424 . 00 60 , 250 . 00 62 . 1 CAPITAL OUTLAY 51 -000-75-00-7002 COMPUTER EQUIP & SOFTWARE 0 . 00 1 , 096 . 22 11500 . 00 73 . 0 51 -000-75-00-7004 SAFETY EQUIPMENT 173 . 00 468 . 54 1 , 500 . 00 31 . 2 51 -000-75 -00-7506 METER READERS 893 . 50 11 , 040 . 94 12 , 000 . 00 92 . 0 51 -000-75 -00-7507 HYDRANT REPLACEMENT 2 , 377 . 00 6 , 216 . 97 10 , 000 . 00 62 . 1 51 -000-75- 00-7508 METERS & PARTS 7 , 161 . 55 130 , 814 . 91 266 , 976 . 00 48 . 9 TOTAL CAPITAL OUTLAY 10 , 605 . 05 149 , 637 . 58 291 , 976 . 00 51 . 2 OTHER 51 -000-78 -00- 9005 REFUND 0 . 00 0 . 00 11500 . 00 0 . 0 51 -000- 78 -00- 9006 MERIT 0 . 00 0 . 00 0 . 00 0 . 0 51 -000-78 -00- 9008 RESERVE-H2O TOWER MAINTENANCE 0 . 00 0 . 00 0 . 00 0 . 0 51 -000- 78 -00- 9009 RESERVE 0 . 00 11596 . 00 54 , 999 . 00 2 . 9 51 -000 -78 -00- 9012 SALARY SURVEY 0 . 00 0 . 00 0 . 00 0 . 0 P37 DATE : 01 / 29 /2008 UNITED CITY OF YORKVILLE PAGE : 38 TIME : 15 : 59 : 91 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL9B3000 . WOW FUND : WATER OPERATIONS FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL $ ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED EXPENSES OTHER 51 - 000- 78 -00- 9099 BAD DEBT 0 . 00 0 . 00 0 . 00 0 . 0 - ------------- ------- ------------- ------------- -------- - ------ --- --------- ------- TOTAL OTHER 0 . 00 11596 . 00 56 , 999 . 00 2 . 8 TRANSFERS 51 -000 - 99-00- 9901 TRANSFER TO GENERAL FUND 0 . 00 125 , 000 . 00 250 , 000 . 00 50 . 0 51 -000- 99-00- 9950 TRANSFER TO PW EQUIP CAPITAL 0 . 00 0 . 00 0 . 00 0 . 0 ------------- - ------- ---------- - -------------------------------------------- - --- - TOTAL TRANSFERS 0 . 00 125 , 000 . 00 250 , 000 . 00 50 . 0 TOTAL EXPENSES : 72 , 251 . 33 980 , 551 . 26 11676 , 000 . 00 58 . 5 TOTAL FUND REVENUES 258 , 539 . 85 1 , 988 , 277 . 92 11676 , 000 . 00 88 . 7 TOTAL FUND EXPENSES 72 , 251 . 33 980 , 551 . 26 1 , 676 , 000 . 00 58 . 5 FUND SURPLUS ( DEFICIT ) 186 , 283 . 52 507 , 726 . 66 0 . 00 100 . 0 P38 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 39 TIME : 15 : 59 : 41 DETAILED REVENUE 6 EXPENSE REPORT F-YR : 08 ID : GL4B3000 . W0W FUND : SEWER MAINTENANCE FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED REVENUES CARRY OVER 52 - 000 - 40-00- 3999 CARRY OVER/FUND BALANCE 0 . 00 0 . 00 0 . 00 0 . 0 ---------- - -------------- - -------- --------- - - ---------------- -- ------ ------- ----- TOTAL CARRY OVER 0 . 00 0 . 00 0 . 00 0 . 0 CHARGES FOR SERVICES 52 -000- 42 -00- 4240 LIFT STATION INCOME 344 . 22 11709 . 18 41000 . 00 42 . 7 52 - 000- 42 -00-4250 SEWER MAINTENANCE FEES 110 , 823 . 66 438 , 237 . 34 486 , 000 . 00 90 . 1 52 -000- 42 -00-4251 SEWER CONNNECTION FEES 3 , 000 . 00 103 , 200 . 00 146 , 000 . 00 70 . 6 __________________ ________ _ _____ __________________________________ _____ _______ ___ TOTAL CHARGES FOR SERVICES 114 , 167 . 88 543 , 146 . 52 636 , 000 . 00 85 . 4 --- UNDEFINED CODE - -- 52 - 000 - 44 -00- 4499 BAD DEBT RECOVERY 0 . 00 0 . 00 0 . 00 0 . 0 ------------------------------- --- ----- ---- - ----------------- -------- --- --------- TOTAL --- UNDEFINED CODE --- 0 . 00 0 . 00 0 . 00 0 . 0 INTEREST 52- 000- 46- 00- 4600 INVESTMENT INCOME 91743 . 78 67 , 629 . 82 35 , 000 . 00 193 . 2 - --------------------- ---------------- -------------------- - -------------------- -- TOTAL INTEREST 9 , 743 . 78 67 , 629 . 82 35 , 000 . 00 193 . 2 TOTAL REVENUES : 123 , 911 . 66 610 , 776 . 34 671 , 000 . 00 91 . 0 EXPENSES PERSONNEL SERVICES 52- 000 -50-00- 5108 SALARIES- SEWER OP . 7 , 517 . 80 86 , 131 . 43 170 , 343 . 00 50 . 5 52 -000- 50-00- 5136 SALARIES - PART TIME 0 . 00 340 . 00 11000 . 00 34 . 0 52-000- 50-00- 5137 SALARIES- OVERTIME 466 . 13 1 , 247 . 44 . 12 , 000 . 00 10 . 3 ____________________ _______________________ _ __________ _ ___ TOTAL PERSONNEL SERVICES 7 , 983 . 93 87 , 718 . 87 183 , 343 . 00 47 . 8 CONTRACTUAL SERVICES 52 -000- 62 - 00-5401 CONTRACTUAL SERVICES 173 . 33 1 , 611 . 33 4 , 000 . 00 40 . 2 52 -000- 62 - 00-5408 MAINTENANCE-EQUIPMENT 0 . 00 11773 . 32 41500 . 00 39 . 4 P39 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 40 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3OOO . WOW FUND : SEWER MAINTENANCE FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL 8 ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED EXPENSES CONTRACTUAL SERVICES 52 - 000- 62 -00- 5409 MAINTENANCE-VEHICLES 0 . 00 992 . 61 3 , 500 . 00 28 . 3 52 -000- 62 - 00-5419 MAINTENANCE-SANITARY SEWER 167 . 54 31280 . 05 20 , 000 . 00 16 . 4 52 -000- 62 - 00- 5421 WEARING APPAREL 0 . 00 1 , 508 . 98 2 , 350 . 00 64 . 2 52 - 000- 62 - 00- 5422 LIFT STATION MAINTENANCE 0 . 00 51557 . 68 25 , 000 . 00 22 . 2 52 -000- 62 - 00-5434 RENTAL - EQUIPMENT 0 . 00 0 . 00 11000 . 00 0 . 0 52 -000- 62- 00-5435 ELECTRICITY 0 . 00 4 , 696 . 09 50 , 000 . 00 9 . 3 52 -000- 62 - 00-5438 CELLULAR TELEPHONE 123 . 24 11568 . 36 21500 . 00 62 . 7 ------------ -------- ------------------ ---------------------------- ----------- ---- TOTAL CONTRACTUAL SERVICES 464 . 11 20 , 968 . 42 112 , 850 . 00 18 . 5 PROFESSIONAL DEVELOPMENT 52 - 000- 64 - 00- 5604 TRAINING & CONFERENCES 0 . 00 650 . 00 2 , 000 . 00 32 . 5 52 - 000- 64 - 00-5605 TRAVEL/MEALS /LODGING 78 . 14 465 . 76 31000 . 00 15 . 5 -------------- ------ - ----------------- ------------------------------------------- TOTAL PROFESSIONAL DEVELOPMENT 76 . 14 11115 . 76 51000 . 00 22 . 3 OPERATIONS 52 - 000- 65-00- 5800 CONTINGENCIES 0 . 00 0 . 00 5 , 054 . 00 0 . 0 52 - 000- 65-00- 5802 OFFICE SUPPLIES 136 . 24 896 . 58 2 , 500 . 00 35 . 8 52 - 000- 65-00- 5805 SHOP SUPPLIES 119 . 59 1 , 024 . 70 21500 . 00 40 . 9 52 - 000- 65-00-5812 GASOLINE 1 , 878 . 46 20 , 002 . 37 25 , 000 . 00 80 . 0 52 - 000- 65-00- 5815 HAND TOOLS 0 . 00 663 . 86 11200 . 00 56 . 9 52 -000- 65-00- 5817 GRAVEL 0 . 00 873 . 73 - 3 , 000 . 00 29 . 1 52 -000- 65- 00- 5823 SEWER CHEMICALS 0 . 00 0 . 00 0 . 00 0 . 0 ------------------------------------------------------ ------------ --------------- TOTAL OPERATIONS 2 , 134 . 29 23 , 481 . 24 39 , 254 . 00 59 . 8 DEBT SERVICE 52- 000 - 66-00-8200 INTEREST EXPENSE 0 . 00 0 . 00 0 . 00 0 . 0 -------------- - ----- ------ ------- ---- ------------------------ -------------------- TOTAL DEBT SERVICE 0 . 00 0 . 00 0 . 00 0 . 0 RETIREMENT 52 - 000-72 -00- 6500 IMRF PARTICIPANTS 607 . 58 6 , 649 . 44 13 , 344 . 00 49 . 8 52 - 000-72 -00- 6501 SOCIAL SECURITY & MEDICARE 610 . 76 61710 . 51 13 , 414 . 00 50 . 0 P40 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 41 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3OOO . WOW FUND : SEWER MAINTENANCE FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED TOTAL RETIREMENT 1 , 218 34 13 , 359 . 95 26 , 758 . 00 49 . 9 CAPITAL OUTLAY 52 -000 -75 - 00-7002 COMPUTER EQUIP & SOFTWARE 0 . 00 51 . 46 2 , 000 . 00 2 . 5 52 - 000-75 - 00-7003 OFFICE EQUIPMENT 0 . 00 828 . 46 5 , 000 . 00 16 . 5 52 - 000 - 75 - 00-7004 SAFETY EQUIPMENT 0 . 00 298 . 45 2 , 000 . 00 14 . 9 -- -------------- - -- ------- - ---------------- - - --------------- -------- ------------- TOTAL CAPITAL OUTLAY 0 . 00 1 , 178 . 37 9 , 000 . 00 13 . 0 OTHER 52 - 000- 78 - 00- 9005 MERIT 0 . 00 0 . 00 0 . 00 0 . 0 52 -000- 78 -00- 9009 RESERVE 0 . 00 0 . 00 224 , 217 . 00 0 . 0 52- 000- 78 -00- 9012 SALARY SURVEY 0 . 00 0 . 00 0 . 00 0 . 0 52 - 000- 78 -00- 9099 BAD DEBT 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL OTHER 0 . 00 0 . 00 224 , 217 . 00 0 . 0 TRANSFERS 52 - 000- 99-00-9901 TRANSFER TO GENERAL FUND 0 . 00 35 , 290 . 00 70 , 578 . 00 50 . 0 52 - 000- 99-00- 9950 TRANSFER TO PW EQUIP CAPITAL 0 . 00 0 . 00 0 . 00 0 . 0 ------------------------------------------------------------- -------------------- TOTAL TRANSFERS 0 . 00 35 , 290 . 00 70 , 578 . 00 50 . 0 TOTAL EXPENSES : 11 , 878 . 81 183 , 132 . 61 671 , 000 . 00 27 . 2 TOTAL FUND REVENUES 123 , 911 . 66 610 , 776 . 34 671 , 000 . 00 91 . 0 TOTAL FUND EXPENSES 11 , 878 . 81 183 , 132 . 61 671 , 000 . 00 27 . 2 FUND SURPLUS ( DEFICIT ) 112 , 032 . 85 427 , 643 . 73 0 . 00 100 . 0 P41 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 42 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3OOO . WOW FUND : LAND CASH FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED - ------ - - ------- ------ - - ---- -- - ----------- ------ --------- -- - -------- -- ---- - -- ----- -------- - ----------------------------------------- REVENUES CARRY OVER 72- 000 - 40- 00- 3999 CARRY OVER 0 . 00 0 . 00 ( 251 , 283 . 00 ) 0 . 0 ------- - ------------- ---- -------- - - --------- ------------- - -------------------- --- TOTAL CARRY OVER 0 . 00 0 . 00 ( 251 , 283 . 00 ) 0 . 0 - - - UNDEFINED CODE --- 72 -000- 45- 00- 4501 CANNONBALL RIDGE GRANT 0 . 00 0 . 00 128 , 000 . 00 0 . 0 -------- -- ----- --------- ----------------- ------ ------ ---------------------------- TOTAL - -- UNDEFINED CODE - -- 0 . 00 0 . 00 128 , 000 . 00 0 . 0 CONTRIBUTIONS 72-000- 47 - 00- 4700 OSLAD GRANT 0 . 00 0 . 00 762 , 000 . 00 0 . 0 72 -000- 47 -00- 4701 GREENBRIAR-LAND CASH 0 . 00 0 . 00 0 . 00 0 . 0 72 -000 - 47 -00- 4702 BIKE PATH GRANT 0 . 00 0 . 00 0 . 00 0 . 0 72 - 000 - 47 -00- 4703 PRAIRIE GARDEN-LAND CASH 0 . 00 0 . 00 0 . 00 0 . 0 72 -000- 47 -00- 4705 COUNTRY HILLS-LAND CASH 0 . 00 0 . 00 11200 . 00 0 . 0 72 -000- 47 - 00- 4707 FOX HIGHLANDS-LAND CASH 0 . 00 0 . 00 0 . 00 0 . 0 72 -000- 47 -00- 4709 SUNFLOWER-LAND CASH 0 . 00 361 . 00 361 . 00 100 . 0 72 -000 - 47 -00- 4712 RIVER ' S EDGE-LAND CASH 0 . 00 0 . 00 2 , 684 . 00 0 . 0 72 -000 - 47 - 00- 4715 WHITE OAK UNIT 1 &2 -LAND CASH 0 . 00 0 . 00 0 . 00 0 . 0 72 -000 - 47- 00- 4716 WHITE OAK UNIT 3 & 4 -LAND CASH 0 . 00 0 . 00 0 . 00 0 . 0 72-000- 47 -00- 4717 KYLN ' S CROSSING-LAND CASH 0 . 00 0 . 00 1 , 570 . 00 0 . 0 72 -000 - 47 -00-4718 FOXFIELD II PARK LC 0 . 00 0 . 00 0 . 00 0 . 0 72 -000 - 47 -00- 4719 WILDWOOD-LAND CASH 0 . 00 0 . 00 0 . 00 0 . 0 72 - 000 - 47 -00-4722 KYLN ' S RIDGE-LAND CASH 0 . 00 0 . 00 0 . 00 0 . 0 72 - 000- 47 -00-4723 HEARTLAND CIRCLE-LAND CASH 0 . 00 0 . 00 20 , 000 . 00 0 . 0 72- 000-47 -00- 4725 WINDETTE RIDGE-LAND CASH 0 . 00 0 . 00 0 . 00 0 . 0 72- 000- 47 -00- 4727 GRAND RESERVE-LAND CASH 0 . 00 0 . 00 0 . 00 0 . 0 72-000- 47 - 00- 4731 MONTALBANO HOMES LAND CASH 0 . 00 0 . 00 0 . 00 0 . 0 72-000- 47 -00-4732 RAINTREE VILLAGE LAND CASH 0 . 00 0 . 00 0 . 00 0 . 0 72 -000- 47 -00- 4734 WHISPERING MEADOWS ( K . HILL) 0 . 00 10 , 713 . 91 14 , 100 . 00 75 . 9 72 -000- 47-00- 4735 PRAIRIE MEADOWS ( MENARDS RES ) 0 . 00 0 . 00 0 . 00 0 . 0 72 -000- 47 -00- 4736 BRIARWOOD 0 . 00 0 . 00 113 , 043 . 00 0 . 0 72 -000 - 47 - 00- 4737 CALEDONIA 0 . 00 0 . 00 0 . 00 0 . 0 72 - 000 - 47 -00- 4738 AUTUMN CREEK 0 . 00 26 , 517 . 20 26 , 517 . 00 100 . 0 72 - 000 - 47 -00- 4739 WYNSTONE TOWNHOMES 0 . 00 0 . 00 0 . 00 0 . 0 P42 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 43 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : LAND CASH FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL $ ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ---- ---- - -------- - - -------- - ----- ------ ------ ----- -- - -------- ------- ---------- --- ------------ - - ------------ ----- --------- - -------- -- REVENUES CONTRIBUTIONS 72 -000- 47 - 00- 4740 VILLAS AT THE PRESERVE 0 . 00 0 . 00 0 . 00 0 . 0 72 -000- 47 - 00- 4741 BAILEY MEADOWS 0 . 00 0 . 00 0 . 00 0 . 0 72 -000- 47 - 00- 4742 BLACKBERRY WOODS 0 . 00 0 . 00 0 . 00 0 . 0 72 -000-47 -00- 4743 CORNEILS CROSSING 0 . 00 0 . 00 0 . 00 0 . 0 72 -000- 47 -00- 4744 HUDSON LAKES 0 . 00 0 . 00 10 , 000 . 00 0 . 0 72 -000- 47 - 00- 4745 PRESTWICK 0 . 00 6 , 606 . 76 20 , 000 . 00 33 . 0 72 -000- 47 - 00- 4746 WESTBURY 0 . 00 0 . 00 0 . 00 0 . 0 72 - 000- 47 - 00- 4747 WESTHAVEN 0 . 00 0 . 00 0 . 00 0 . 0 72 -000- 47 - 00- 4748 WILLMAN 0 . 00 0 . 00 0 . 00 0 . 0 72 - 000- 47 - 00- 4749 BLACKBERRY WOODS 0 . 00 41545 . 44 4 , 545 . 00 100 . 0 72 -000- 47 - 00-4750 KENDALLWOOD ESTATES 0 . 00 0 . 00 10 , 000 . 00 0 . 0 72 -000- 47 -00-4751 CANNONBALL RIDGE PARK GRANT 0 . 00 128 , 000 . 00 0 . 00 100 . 0 TOTAL CONTRIBUTIONS 0 . 00 176 , 744 . 31 986 , 020 . 00 17 . 9 TRANSFERS 72- 000- 49-00- 4901 TRANSFER FROM GENERAL FUND 0 . 00 24 , 122 . 00 48 , 245 . 00 49 . 9 72 - 000- 49-00- 4902 TRANSFER FROM LAND ACQUISITION 0 . 00 0 . 00 0 . 00 0 . 0 72- 000- 49- 00- 4903 TRANSFER FROM PARK & REC 0 . 00 0 . 00 0 . 00 0 . 0 -------- -------- --------------------------------------------- --------- ----------- TOTAL TRANSFERS 0 . 00 24 , 122 . 00 48 , 245 . 00 49 . 9 TOTAL REVENUES : 0 . 00 200 , 866 . 31 910 , 982 . 00 22 . 0 EXPENSES CAPITAL OUTLAY 72- 000-75- 00-7308 RIVERS EDGE PARK # 2 0 . 00 0 . 00 0 . 00 0 . 0 72- 000-75- 00-7317 HEARTLAND CIRCLE 0 . 00 0 . 00 0 . 00 0 . 0 72 -000-75- 00-7326 MOSIER HOLDING COSTS 0 . 00 10 , 000 . 00 15 , 700 . 00 63 . 6 72- 000-75- 00-7327 GRANDE RESERVE PARK 0 . 00 19 , 114 . 95 0 . 00 ( 100 . 0 ) 72 -000-75 -00-7328 PRAIRIE MEADOWS (MENARDS RES ) 102 , 682 . 35 165 , 849 . 09 150 , 000 . 00 110 . 5 72 -000- 75- 00-7330 WHISPERING MEADOWS ( K . HILL ) 27 , 697 . 35 213 , 192 . 66 350 , 000 . 00 60 . 9 72 -000-75 - 00-7333 RAINTREE VILLAGE 0 . 00 1 , 800 . 00 0 . 00 ( 100 . 0 ) 72 -000- 75-00-7334 HOOVER HOLDING COSTS 0 . 00 0 . 00 60 , 000 . 00 0 . 0 P43 DATE : 01 / 29 /2008 UNITED CITY OF YORKVILLE PAGE : 44 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : LAND CASH FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED -------- - ------------------------- ------ ----------------- -------------------- ---- TOTAL CAPITAL OUTLAY 130 , 379 . 70 409 , 956 . 70 575 , 700 . 00 71 . 2 OTHER 72- 000- 78 - 00- 9009 RESERVE 0 . 00 0 . 00 319 , 282 . 00 0 . 0 -------------- ------- - -- - ----- ------ --- - --------------------------- ------- ---- --- TOTAL OTHER 0 . 00 0 . 00 319 , 282 . 00 0 . 0 TRANSFERS 72 - 000- 99- 00- 9901 TRANSFER TO GENERAL FUND 0 . 00 8 , 000 . 00 16 , 000 . 00 50 . 0 TOTAL TRANSFERS 0 . 00 8 , 000 00 16 , 000 . 00 50 . 0 TOTAL EXPENSES : 130 , 379 . 70 417 , 956 . 70 910 , 982 . 00 45 . 8 TOTAL FUND REVENUES 0 . 00 200 , 866 . 31 910 , 982 . 00 22 . 0 TOTAL FUND EXPENSES 130 , 379 . 70 417 , 956 . 70 910 , 982 . 00 45 . 8 FUND SURPLUS ( DEFICIT ) ( 130 , 379 . 70 ) ( 217 , 090 . 39 ) 0 . 00 100 . 0 P44 DATE : 01 /29/ 2008 UNITED CITY OF YORKVILLE PAGE : 45 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : LAND ACQUISITION FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED REVENUES CARRY OVER 73 -000- 40- 00- 3999 CARRY OVER BALANCE 0 . 00 0 . 00 50 , 000 . 00 0 . 0 ------------ -- - -_--- ____ _--- _____ _--- ___-__---____---- _ TOTAL CARRY OVER 0 . 00 0 . 00 50 , 000 . 00 0 . 0 EXPENSES OTHER 73- 000- 65- 00- 5800 CONTINGENCY 0 . 00 1 , 000 . 00 0 . 00 ( 100 . 0 ) ------------ ---- - -------------- -------- - ------- ---------------- --- ------- - ------- TOTAL OTHER 0 . 00 1 , 000 . 00 0 . 00 ( 100 . 0 ) --- UNDEFINED CODE --- 73-000-75- 00-7501 LAND ACQUISITION 49 , 000 . 00 99 , 000 . 00 49 , 000 . 00 100 . 0 TOTAL --- UNDEFINED CODE --- 49 , 000 . 00 49 , 000 . 00 49 , 000 OO 100 . 0 --- UNDEFINED CODE --- 73- 000-78 - 00- 9001 LAND APPRAISALS 0 . 00 0 . 00 1 , 000 . 00 0 . 0 TOTAL --- UNDEFINED CODE --- 0 . 00 0 . 00 1 , 000 . 00 0 . 0 TRANSFERS 73-000- 99- 00- 9935 TRANSFER TO LAND CASH 0 . 00 0 . 00 0 . 00 0 . 0 73- 000- 99-00- 9945 TRANSFER TO MUNICIPAL BUILDING 0 . 00 0 . 00 0 . 00 0 . 0 _____ ________ _ __ ________ ______________ _ _______ _____________________________ ______ TOTAL TRANSFERS 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL EXPENSES : 49 , 000 . 00 50 , 000 . 00 50 , 000 . 00 100 . 0 TOTAL FUND REVENUES 0 . 00 0 . 00 50 , 000 . 00 0 . 0 TOTAL FUND EXPENSES 49 , 000 . 00 50 , 000 . 00 50 , 000 . 00 100 . 0 FUND SURPLUS ( DEFICIT ) ( 49 , 000 . 00 ) ( 50 , 000 . 00 ) 0 . 00 100 . 0 P45 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 46 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : PARKS & RECREATION FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED REVENUES CARRY OVER 79- 000 -40- 00 - 3999 CARRY OVER BALANCE 0 . 00 0 . 00 42 , 540 . 00 0 . 0 - ----- ---- - - -- ----------- -------------- ---- - --------------------- ---- ---------- -- TOTAL CARRY OVER 0 . 00 0 . 00 42 , 540 . 00 0 . 0 CHARGES FOR SERVICES 79-000- 42 - 00- 4270 FEES FOR PROGRAMS 13 , 402 . 00 190 , 682 . 83 275 , 000 . 00 69 . 3 79-000- 42 - 00- 4280 CONCESSIONS/ALL SALE ITEMS 35 . 50 15 , 135 . 25 18 , 000 . 00 84 . 0 79-000- 42- 00- 4281 DEPOSITS 0 . 00 0 . 00 1 , 500 . 00 0 . 0 79- 000 - 42 -00- 4285 VENDING MACHINE INCOME 0 . 00 2 , 150 . 00 2 , 150 . 00 100 . 0 79- 000- 42 -00- 4286 RENTAL INCOME 0 . 00 0 . 00 0 . 00 0 . 0 79- 000- 42 -00- 4287 PARK RENTAL INCOME 0 . 00 1 , 815 . 00 11815 . 00 100 . 0 79- 000- 42 -00- 4288 GOLF OUTING REVENUE 0 . 00 30 , 694 . 00 30 , 694 . 00 100 . 0 79-000- 42 - 00- 4291 HOMETOWN DAYS 0 . 00 110 , 936 . 88 110 , 936 . 00 100 . 0 __ _____________ _ _____________________________ ______________ __________ _ ___________ TOTAL CHARGES FOR SERVICES 13 , 437 . 50 351 , 413 . 96 440 , 095 . 00 79 . 8 MISCELLANEOUS 79- 000- 44 -00- 4400 DONATIONS 1 , 160 . 62 10 , 756 . 62 13 , 000 . 00 82 . 7 79- 000 - 44 - 00-4404 TREE DONATIONS 1 , 536 . 28 1 , 300 . 00 1 , 300 . 00 100 . 0 ------- ------------- ------ ----------------- ---------- -------------- - --------- ---- TOTAL MISCELLANEOUS 2 , 696 . 90 12 , 056 . 62 14 , 300 . 00 84 . 3 INTERGOVERNMENTAL 79- 000- 45-00-4550 YOUTH SERVICES GRANT 10000 . 00 21000 . 00 3 , 600 . 00 55 . 5 ------ ---- ----------------------------- _--_---__---____-__----_------ ---- TOTAL INTERGOVERNMENTAL 1 , 000 . 00 21000 . 00 3 , 600 . 00 55 . 5 INTEREST 79 - 000 - 46-00-4600 INVESTMENT INCOME 436 . 06 51618 . 71 6 , 200 . 00 90 . 6 ---------- --------- ----------------- ----------------- ---------------- -------- ---- TOTAL INTEREST 436 . 06 5 , 618 . 71 61200 . 00 90 . 6 TRANSFERS 79-000- 49-00- 4901 TRANSFER FROM GENERAL FUND 96 , 814 . 83 776 , 518 . 64 1 , 161 , 778 . 00 66 . 8 - ----------------- ------ --- - ------------------------------------- --- ----- ---- ---- TOTAL TRANSFERS 96 , 814 . 83 776 , 518 . 64 11161 , 778 . 00 66 . 8 P46 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 47 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : PARKS & RECREATION FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ------ -------- - - ------- --- --------- -- - -- --- ----------- -- --- _------ -______ _- - _---_______-_-_ _--_ ----- -_-----------_-- TOTAL REVENUES : 114 , 385 . 29 11147 , 607 . 93 1 , 668 , 513 . 00 68 . 7 EXPENSES TRANSFERS 79 - 000 - 99- 00- 9935 TRANSFER TO LAND CASH 0 . 00 0 . 00 0 . 00 0 . 0 -------- ------ ----------- ---- ---------------------------- - --- ----- ----- ---------- TOTAL TRANSFERS 0 . 00 0 . 00 0 . 00 0 . 0 PARKS EXPENSES PERSONNAL SERVICES 79- 610-50-00 - 5107 SALARIES- PARKS 32 , 483 . 67 277 , 875 . 32 427 , 000 . 00 65 . 0 79- 610 -50-00- 5136 SALARIES- PART-TIME 32 . 00 32 , 841 . 00 48 , 000 . 00 68 . 4 79- 610-50- 00- 5137 SALARIES- OVERTIME 522 . 53 3 , 504 . 24 7 , 000 . 00 50 . 0 ______________________ ___ _ _____ ______________________ _____ _______________________ TOTAL PERSONNAL SERVICES 33 , 038 . 20 314 , 220 . 56 482 , 000 . 00 65 . 1 PROFESSIONAL SERVICES 79- 610 - 61-00- 5320 MASTER PLAN / COMMUNITY SURVEY 0 . 00 51747 . 45 10 , 500 . 00 54 . 7 - ------ -------------- - - ---- ---- ----- - ---- ------________-___ TOTAL PROFESSIONAL SERVICES 0 . 00 5 , 747 . 45 10 , 500 . 00 54 . 7 CONTRACTUAL SERVICES 79- 610- 62 -00- 5405 PARK CONTRACTUAL 319 . 00 17 , 596 . 59 21 , 500 . 00 81 . 8 79- 610- 62 -00-5408 MAINTENANCE-EQUIPMENT 267 . 15 41270 . 91 81000 . 00 53 . 3 79- 610- 62 -00- 5417 MAINTENANCE-PARKS 1 , 984 . 00 20 , 663 . 31 50 , 000 . 00 41 . 3 79- 610- 62-00- 5421 WEARING APPAREL 198 . 00 3 , 548 . 82 71000 . 00 50 . 6 79- 610- 62- 00-5434 RENTAL-EQUIPMENT 0 . 00 1 , 504 . 38 3 , 000 . 00 50 . 1 79- 610- 62- 00- 5438 CELLULAR TELEPHONE 460 . 60 2 , 532 . 71 41000 . 00 63 . 3 79- 610- 62-00- 5440 LAND DEVELOPER 7 , 555 . 92 7 , 555 . 92 8 , 550 . 00 88 . 3 79- 610- 62-00- 5445 LEGAL EXPENSES 0 . 00 1 , 896 . 50 31000 . 00 63 . 2 ------ -- ----------------- -------- ----- -- - ------------------------- --------------- TOTAL CONTRACTUAL SERVICES 10 , 784 . 67 59 , 569 . 14 105 , 050 . 00 56 . 7 PROFESSIONAL DEVELOPMENT 79- 610- 64 - 00- 5604 TRAINING & CONFERENCE 0 . 00 1 , 770 . 00 81000 . 00 22 . 1 P47 DATE : 01 / 29 /2008 UNITED CITY OF YORKVILLE PAGE : 48 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : PARKS & RECREATION FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL 8 ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED -_ _____ _ _____ ______ _ _________________ ___ _ ___ __ _____ _________ ___ ____ _ __ __________ ___ __ _ _________ ________ _ PARKS EXPENSES PROFESSIONAL DEVELOPMENT 79 - 610- 64 -00- 5605 TRAVEL EXPENSE 0 . 00 11491 . 96 3 , 000 . 00 49 . 7 _____________ _________ ___ _____________ _______ ______ ____ ________________________ __ TOTAL PROFESSIONAL DEVELOPMENT 0 . 00 3 , 261 . 96 111000 . 00 29 . 6 OPERATIONS 79- 610 - 65-00- 5802 OFFICE SUPPLIES 0 . 00 62 . 60 1 , 500 . 00 4 . 1 79- 610- 65- 00- 5804 OPERATING SUPPLIES 1 , 903 . 71 19 , 387 . 08 30 , 000 . 00 64 . 6 79- 610- 65 - 00- 5812 GASOLINE 0 . 00 0 . 00 0 . 00 0 . 0 79- 610- 65- 00-5815 HAND TOOLS 17 . 33 1 , 013 . 03 31500 . 00 28 . 9 79- 610 - 65-00- 5824 CHRISTMAS DECORATIONS 574 . 41 972 . 40 51000 . 00 19 . 4 79- 610- 65- 00- 5825 PUBLIC DECORATION 0 . 00 830 . 38 3 , 000 . 00 27 . 6 __ _________ _ _ ___ ___ _ _ _________ _______ _ ____ ________ _______________________________ TOTAL OPERATIONS 2 , 495 . 45 22 , 265 . 49 43 , 000 . 00 51 . 7 RETIREMENT 79- 610 - 72 -00- 6500 IMRF PARTICIPANTS 2 , 511 . 76 21 , 360 . 77 32 , 500 . 00 65 . 7 79- 610 - 72 -00- 6501 SOCIAL SECURITY/MEDICARE 2 , 513 . 93 23 , 923 . 36 37 , 750 . 00 63 . 3 _________________ _________ ______________ ____ __ _____ ____________________ ______ ____ TOTAL RETIREMENT 51025 . 69 45 , 284 . 13 70 , 250 . 00 64 . 4 CAPITAL OUTLAY 79- 610 - 75-00-7003 OFFICE EQUIPMENT 0 . 00 0 . 00 21500 . 00 0 . 0 79- 610-75-00-7701 FLOWERS /TREES 0 . 00 2 , 845 . 75 71000 . 00 40 . 6 ___ _ _ _____ _ __________ _______________________________________________________ _____ TOTAL CAPITAL OUTLAY 0 . 00 2 , 845 . 75 - 9 , 500 . 00 29 . 9 OTHER 79- 610-7B- 00- 9005 MERIT 0 . 00 0 . 00 0 . 00 0 . 0 79 - 610-78 - 00- 9012 SALARY SURVEY 0 . 00 0 . 00 0 . 00 0 . 0 __ _ __ _______________________ _____________ ___ _ _______ ___________ ____________ ______ TOTAL OTHER 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL EXPENSES : PARKS 51 , 344 . 01 453 , 194 . 48 731 , 300 . 00 61 . 9 P48 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 49 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : PARKS & RECREATION FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ----- - ----- ------- - ---- --- - -------------- --- --- --- -------- - ------------------------------- - - ------------------ ------------------ ---- RECREATION EXPENSES PERSONNEL SERVICES 79- 650- 50- 00- 5107 SALARIES- RECREATION 27 , 712 . 43 250 , 652 . 61 393 , 000 . 00 63 . 7 79- 650- 50-00- 5108 CONCESSION STAFF 0 . 00 61237 . 87 61750 . 00 92 . 4 79- 650- 50-00- 5109 SALARIES- PRE SCHOOL 7 , 293 . 75 41 , 825 . 50 83 , 000 . 00 50 . 3 79 - 650- 50-00- 5137 SALARIES- OVERTIME 0 . 00 15 . 00 15 . 00 100 . 0 79- 650- 50-00- 5150 SALARIES- INSTRUCTOR CONTRACTU 5 , 042 . 24 59 , 102 . 27 57 , 400 . 00 102 . 9 79- 650- 50- 00- 5155 SALARIES - RECORDING SECRETARY 136 . 50 1 , 771 . 86 2 , 500 . 00 70 . 8 ------------------- ----- - ------- ------- ----- ---- ---------------- ------------ ----- TOTAL PERSONNEL SERVICES 40 , 184 . 92 359 , 605 . 11 542 , 665 . 00 66 . 2 CONTRACTUAL SERVICES 79- 650- 62 -00-5408 MAINTENANCE SUPPLIES 218 . 93 3 , 009 . 62 51000 . 00 60 . 1 79- 650- 62 -00-5409 MAINTENANCE-VEHICLES 210 . 58 812 . 12 2 , 500 . 00 32 . 4 79- 650- 62 -00-5410 MAINTENANCE-OFFICE EQUIPMENT 0 . 00 3 , 201 . 67 6 , 000 . 00 53 . 3 79- 650- 62 -00- 5426 YOUTH SERVICES GRANT EXPENSES 0 . 00 326 . 00 2 , 000 . 00 16 . 3 79- 650 - 62-00- 5435 ELECTRICITY 100 . 22 7 , 574 . 27 8 , 820 . 00 85 . 8 79- 650- 62-00- 5437 TELEPHONE/ INTERNET 198 . 12 856 . 30 11300 . 00 65 . 8 79- 650 - 62 -00- 5438 CELLULAR TELEPHONE 410 . 81 3 , 201 . 95 51000 . 00 64 . 0 79- 650- 62-00- 5445 PORTABLE TOILETS 388 . 31 8 , 163 . 03 71000 . 00 116 . 6 79- 650- 62 -00- 5603 PUBLISHING/ADVERTISING 0 . 00 20 , 790 . 59 27 , 920 . 00 74 . 4 79- 650- 62 -00-5605 BOOKS / PUBLICATIONS 0 . 00 0 . 00 500 . 00 0 . 0 79- 650- 62- 00- 5606 PARK DEPOSIT REFUND 0 . 00 0 . 00 1 , 500 . 00 0 . 0 __________________________________________ _____ _ _ __________ __________________ ____ TOTAL CONTRACTUAL SERVICES 1 , 526 . 97 47 , 935 . 55 67 , 540 . 00 70 . 9 PROFESSIONAL DEVELOPMENT 79- 650- 64 -00- 5600 DUES 0 . 00 701 . 36 21500 . 00 28 . 0 79- 650- 64 -00-5604 TRAINING AND CONFERENCES 970 . 00 3 , 560 . 00 10 , 200 . 00 34 . 9 79- 650- 64 -00-5605 TRAVEL EXPENSE 0 . 00 670 . 39 5 , 220 . 00 12 . 8 - ------------ _ ____-_____-_----__ _-_-_---------__---___ _____-_--- TOTAL PROFESSIONAL DEVELOPMENT 970 . 00 4 , 931 . 75 17 , 920 . 00 27 . 5 OPERATIONS 79- 650- 65-00-5802 OFFICE SUPPLIES 966 . 43 41528 . 65 6 , 000 . 00 75 . 4 79- 650- 65-00- 5803 PROGRAM EXPENSES 1 , 702 . 99 40 , 912 . 79 50 , 100 . 00 81 . 6 79- 650- 65-00- 5804 OPERATING SUPPLIES 112 . 96 11835 . 87 3 , 800 . 00 48 . 3 P49 DATE : 01 / 29 /2008 UNITED CITY OF YORKVILLE PAGE : 50 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : PARKS & RECREATION FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED __ _--- _ _ _______--- -_ ___ _ ____ ____ _______ _ _____ ____ ____ _ _____ _____ _________ __________ _____________ _ __ RECREATION EXPENSES OPERATIONS 79- 650- 65 -00-5805 RECREATION EQUIPMENT 940 . 70 3 , 649 . 56 6 , 000 . 00 60 . 8 79- 650- 65-00- 5808 POSTAGE & SHIPPING 339 . 24 51626 . 86 7 , 600 . 00 74 . 0 79- 650- 65-00- 5812 GASOLINE 372 . 89 2 , 987 . 25 4 , 200 . 00 71 . 1 79- 650- 65-00-5826 MILEAGE 0 . 00 133 . 50 200 . 00 66 . 7 79- 650- 65-00-5827 GOLF OUTING EXPENSES 0 . 00 18 , 779 . 08 18 , 780 . 00 99 . 9 79 - 650- 65 -00-5828 CONCESSIONS 26 . 00 16 , 675 . 71 17 , 650 . 00 94 . 4 79- 650- 65 -00- 5833 HOMETOWN DAYS EXPENSES 1 , 098 . 00 96 , 783 . 09 95 , 686 . 00 101 . 1 79- 650- 65-00- 5840 SCHOLARSHIPS 75 . 00 512 . 00 11800 . 00 28 . 4 79- 650- 65- 00- 5841 PROGRAM REFUND 145 . 00 6 , 033 . 50 8 , 000 . 00 75 . 4 _____ __ ________ _____ _____ _____ _______________________________ ____ _ TOTAL OPERATIONS 5 , 779 . 21 198 , 457 . 86 219t816 . 00 90 . 2 RETIREMENT 79- 650-72 -00- 6500 IMRF PARTICIPANTS 21297 . 53 20 , 090 . 88 36 , 346 . 00 55 . 2 79- 650-72 -00- 6501 SOCIAL SECURITY/MEDICARE 2 , 941 . 47 24 , 919 . 97 36 , 537 . 00 68 . 2 TOTAL RETIREMENT 5 , 239 . 00 45 , 010 . 85 72 , 883 . 00 61 . 7 CAPITAL OUTLAY 79- 650-75-00-7002 COMPUTER EQUIP & SOFTWARE 1 , 258 . 08 1 , 568 . 13 2 , 025 . 00 77 . 4 _____________________ ____________________ _____ _ ______________ ___ _________________ TOTAL CAPITAL OUTLAY 1125B . 08 1 , 568 . 13 2 , 025 . 00 77 . 4 OTHER 79- 650-78 -00- 9005 MERIT 0 . 00 0 . 00 0 . 00 0 . 0 79 - 650-78 -00- 9009 RESERVE 0 . 00 51372 . 11 14 , 364 . 00 37 . 3 79- 650-78 -00- 9012 SALARY SURVEY 0 . 00 0 . 00 0 . 00 0 . 0 ____________________ ________ ____ _ ___ _____ ______ _____ ___ ______ ___ ___________ ______ TOTAL OTHER 0 . 00 5 , 372 . 11 14 , 364 . 00 37 . 3 TOTAL EXPENSES : RECREATION 54 , 958 . 18 662 , 881 . 36 937 , 213 . 00 70 . 7 TOTAL FUND REVENUES 114 , 385 . 29 1 , 147 , 607 . 93 1 , 668 , 513 . 00 68 . 7 TOTAL FUND EXPENSES 106 , 302 . 19 1 , 116 , 075 . 84 1 , 6681513 . 00 66 . 8 FUND SURPLUS ( DEFICIT ) 8 , 083 . 10 31 , 532 . 09 0 . 00 100 . 0 P50 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 51 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : LIBRARY FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED -------------- ---- ----- ---- ---------------------- --------- -- - ---- -- -- ------- ---- - -- - -------- ---- ------------ --------- --------- - ----- REVENUES TAXES 82 -000- 40- 00-3992 LIBRARY BOND PAYBACK 874 , 040 . 86 874 , 040 . 86 0 . 00 100 . 0 82 -000- 40-00-3995 CARRYOVER-BOND EXPANSION 0 . 00 0 . 00 547 , 893 . 00 0 . 0 82 -000- 40- 00-3996 CARRY OVER- BOOK DEV FEES 0 . 00 0 . 00 66 , 700 . 00 0 . 0 82 -000- 40- 00-3997 CARRY OVER - BLDG DEV FEES 0 . 00 0 . 00 74 , 782 . 00 0 . 0 82 -000- 40- 00-3998 CARRY OVER-MEMORIALS 0 . 00 0 . 00 0 . 00 0 . 0 82 - 000- 40- 00-3999 CARRY OVER BALANCE 0 . 00 0 . 00 20 , 273 . 00 0 . 0 82- 000- 40- 00- 4000 REAL ESTATE TAXES 0 . 00 573 , 258 . 28 573 , 258 . 00 100 . 0 82- 000- 40-00- 4010 PERSONAL PROPERTY TAX 0 . 00 21443 . 42 3 , 360 . 00 72 . 7 82 - 000- 40-00- 4015 TRANSFER FROM GENERAL FUND 0 . 00 0 . 00 0 . 00 0 . 0 -----_ _____________________ __________________________________ _ TOTAL TAXES 874 , 040 . 86 1 , 449 , 742 . 56 1 , 286 , 266 . 00 112 . 7 CHARGES FOR SERVICES 82- 000 - 42- 00- 4211 DEVELOPMENT FEES - BUILDING 0 . 00 72 , 050 . 00 100 , 000 . 00 72 . 0 82 -000- 42 -00- 4215 DEVELOPMENT FEES - BOOKS 0 . 00 72 , 050 . 00 100 , 000 . 00 72 . 0 82 -000- 42 -00- 4260 COPY FEES 20 . 00 1 , 404 . 94 1 , 254 . 00 112 . 0 82 -000- 42 -00- 4261 LIBRARY SUBSCRIPTION CARDS 1 , 052 . 25 11 , 061 . 93 8 , 797 . 00 125 . 7 82 -000- 42 -00 - 4286 RENTAL INCOME 194 . 00 2 , 534 . 50 2 , 040 . 00 124 . 2 82 -000- 42 -00- 4287 LIBRARY BLDG RENTAL 240 . 00 615 . 10 195 . 00 315 . 4 ----- -------- ---- ------ ---------- - ------- - --------------------- ---- ---- - TOTAL CHARGES FOR SERVICES 1 , 506 . 25 159 , 716 . 47 212 , 286 . 00 75 . 2 FINES 82 - 000- 43- 00- 4330 LIBRARY FINES 453 . 55 4 , 751 . 95 3 , 784 . 00 125 . 5 --------- ------ ------------- ---- -------- ---------------- ---- ----- ---------------- TOTAL. FINES 453 . 55 41751 . 95 3 , 784 . 00 125 . 5 MISCELLANEOUS 82 - 000 - 44 -00- 4432 SALE OF BOOKS 96 . 00 791 . 59 11144 . 00 69 . 1 82 - 000- 44 -00- 4450 MEMORIALS 109 . 75 5 , 848 . 59 5 , 719 . 00 102 . 2 ---------------------- ---- - ------------ ---------- ---- ------------ ---------------- TOTAL MISCELLANEOUS 205 . 75 61640 . 18 6 , 863 . 00 96 . 7 INTERGOVERNMENTAL 82 -000- 45-00- 4550 GRANTS 0 . 00 0 . 00 17 , 500 . 00 0 . 0 P51 DATE : 01 /29/2008 UNITED CITY OF YORKVILLE PAGE : 52 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : LIBRARY FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED ------ - - --- - ------- --- -- - ------------------- ------ ----------------------- ------------------ ----------------- - ------ ------------ ----- REVENUES INTERGOVERNMENTAL 82 - 000- 45- 00- 4560 LIBRARY PER CAPITA GRANT 0 . 00 0 . 00 0 . 00 0 . 0 --- ------------------ -- -------- --- ------ - ---------------- ------------------------ TOTAL INTERGOVERNMENTAL 0 . 00 0 . 00 17 , 500 . 00 0 . 0 INTEREST 82 -000- 46- 00- 4600 INVESTMENT INCOME 3 , 881 . 79 24 , 041 . 24 13 , 177 . 00 182 . 4 82 - 000- 46- 00- 4601 INVESTMENT INCOME-BLDG 0 . 00 71142 . 80 7 , 143 . 00 99 . 9 ------------------------- ----------------- ---- -- ------------------------ ------- -- TOTAL INTEREST 3 , 881 . 79 31 , 184 . 04 20 , 320 . 00 153 . 4 TOTAL REVENUES : 880 , 088 . 20 1 , 652 , 035 . 20 11547 , 019 . 00 106 . 7 EXPENSES PERSONNEL SERVICES 82- 000- 50- 00- 5107 SALARIES- LIBRARY 35 , 456 . 54 253 , 985 . 48 425 , 000 . 00 59 . 7 82 - 000- 50-00- 5203 GROUP HEALTH INSURANCE 3 , 876 . 06 28 , 478 . 88 45 , 717 . 00 62 . 2 82 - 000- 50-00- 5204 GROUP LIFE INSURANCE 82 . 68 330 . 72 2 , 500 . 00 13 . 2 82 -000- 50-00- 5205 DENTAL & VISION ASSISTANCE 366 . 14 1 , 464 . 56 3 , 000 . 00 48 . 8 ---- --------- -- ---- ------------------------------------------ -------------- ------ TOTAL PERSONNEL SERVICES 39 , 781 . 42 284 , 259 . 64 476 , 217 . 00 59 . 6 PROFESSIONAL SERVICES 82 - 000- 61 -00- 5322 BONDING 0 . 00 11875 . 00 2 , 500 . 00 75 . 0 82 - 000- 61 -00- 5323 ATTORNEY 0 . 00 960 . 00 2 , 500 . 00 38 . 4 ----- ------- -- ----------------- --------- ----------------------------------------- TOTAL PROFESSIONAL SERVICES 0 . 00 21835 . 00 51000 . 00 56 . 7 CONTRACTUAL SERVICES 82-000- 62 - 00 - 5401 CONTRACT SERVICES 0 . 00 622 . 61 3 , 000 . 00 20 . 7 82-000- 62 -00-5407 MAINTENANCE-BLDG/JANITORIAL 138 . 00 3 , 969 . 29 6 , 000 . 00 66 . 1 82- 000- 62 - 00-5410 MAINTENANCE-OFFICE EQUIPMENT 203 . 99 21584 . 26 15 , 298 . 00 16 . 8 B2- 000- 62 - 00-5412 MAINTENANCE- PHOTOCOPIER 0 . 00 173 . 79 12 , 680 . 00 1 . 3 82 - 000- 62 - 00- 5435 ELECTRICITY 0 . 00 498 . 86 11500 . 00 33 . 2 82 - 000- 62 - 00-5436 TELEPHONE 291 . 18 4 , 206 . 59 6 , 000 . 00 70 . 1 P52 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 53 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : LIBRARY FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED EXPENSES CONTRACTUAL SERVICES 82 -000- 62 - 00- 5437 GAS HEAT 1 , 132 . 40 8 , 546 . 04 50 , 000 . 00 17 . 0 --__---_ - - ------- ---- ----------- ------------------ ---- ------------------ TOTAL CONTRACTUAL SERVICES 1 , 765 . 57 20 , 601 . 44 94 , 478 . 00 21 . 8 PROFESSIONAL DEVELOPMENT 82 - 000- 64 -00-5603 SUBSCRIPTIONS 332 . 00 3 , 326 . 81 8 , 000 . 00 41 . 5 82- 000- 64 - 00- 5604 TRAINING & CONFERENCES 40 . 00 195 . 00 21000 . 00 9 . 7 82-000- 64 - 00- 5607 PUBLIC RELATIONS 547 . 79 547 . 79 11500 . 00 . 36 . 5 82 - 000- 64 - 00- 5616 EMPLOYEE RECOGNITION 1 , 042 . 53 1 , 097 . 48 2 , 000 . 00 54 . 8 __-____ --- ----------- _____---__-_-------_ ______-_-- TOTAL PROFESSIONAL DEVELOPMENT 1 , 962 . 32 51167 . 08 13 500 . 00 38 . 2 OPERATIONS 82 -000- 65- 00- 5800 CONTINGENCIES 11064 . 55 41470 . 72 15 , 000 . 00 29 . 8 82 -000- 65- 00- 5802 OFFICE SUPPLIES 424 . 08 4 , 216 . 68 81000 . 00 52 . 7 82 - 000- 65- 00- 5806 LIBRARY SUPPLIES 407 . 08 31642 . 78 8 , 000 . 00 45 . 5 82 -000- 65-00-5807 CUSTODIAL SUPPLIES 465 . 92 3 , 089 . 00 18 , 000 . 00 17 . 1 82-000- 65-00- 5808 POSTAGE & SHIPPING 246 . 00 783 . 00 3 , 000 . 00 26 . 1 82 -000- 65-00-5810 PUBLISHING & ADVERTISING 0 . 00 59 . 60 2 , 000 . 00 2 . 9 82-000- 65-00- 5826 MILEAGE 98 . 79 382 . 62 1 , 000 . 00 38 . 2 82 -000- 65- 00 - 5832 VIDEOS 555 . 13 2 , 825 . 57 5 , 000 . 00 56 . 5 82 -000- 65- 00- 5833 ALARM MONITORING 307 . 00 587 . 00 2 , 000 . 00 29 . 3 82 -000- 65- 00- 5834 LIBRARY PROGRAMMING 148 . 45 21787 . 91 81000 . 00 34 . 8 82 - 000- 65-00- 5835 LIBRARY BOARD EXPENSES 0 . 00 295 . 40 2 , 000 . 00 14 . 7 82 - 000- 65- 00- 5836 BOOKS-ADULT 3 , 074 . 90 11 , 787 . 38 25 , 000 . 00 47 . 1 82 - 000- 65 -00- 5837 BOOKS-JUVENILE 3 , 048 . 06 16 , 150 . 89 30 , 000 . 00 53 . 8 82 - 000- 65 -00- 5838 BOOKS-AUDIO 0 . 00 1 , 553 . 13 9 , 000 . 00 17 . 2 82 - 000- 65- 00-5839 BOOKS-REFERENCE 0 . 00 71824 . 28 20 , 000 . 00 39 . 1 82 -000 - 65-00-5840 BOOKS- DEVELOPMENT FEE 0 . 00 15 , 700 . 15 100 , 000 . 00 15 . 7 82 -000- 65- 00-5841 MEMORIALS /GIFTS 1 , 434 . 75 11476 . 75 5 , 719 . 00 25 . 8 82 - 000- 65- 00-5842 BLDG-DEVELOPMENT FEES 414 . 00 2 , 043 . 26 100 , 000 . 00 2 . 0 82 - 000- 65- 00- 5843 CD ' S/MUSIC 0 . 00 768 . 57 41000 . 00 19 . 2 82 - 000- 65 - 00- 5844 MEETING ROOM 0 . 00 0 . 00 0 . 00 0 . 0 _____ ------------ --- - ----------------- ------ ------------ ------------------ TOTAL OPERATIONS 11 , 688 . 71 80 , 444 . 69 365 , 719 . 00 21 . 9 P53 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 54 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : LIBRARY FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED RETIREMENT 82 -000-72 -00- 6500 IMRF PARTICPANTS 1 , 005 . 71 8 , 031 . 14 15 , 641 . 00 51 . 3 82- 000 -72-00- 6501 SOCIAL SECURITY/MEDICARE 2 , 712 . 41 19 , 430 . 43 39 , 755 . 00 48 . 8 ----------- --- --- - --------------- -------- ----- ---- --------- ---------------------- TOTAL RETIREMENT 3 , 718 . 12 27 , 461 . 57 55 , 396 . 00 49 . 5 CAPITAL OUTLAY 82- 000-75-00-7002 COMPUTER EQUIPMENT & SOFTWARE 0 . 00 5 , 542 . 25 18 , 000 . 00 30 . 7 82- 000-75 -00-7003 AUTOMATION 0 . 00 12 , 018 . 60 20 , 000 . 00 60 . 0 82-000-75-00-7703 BUILDING EXPANSION 0 . 00 376 , 574 . 66 547 , 893 . 00 68 . 7 ________________ ____________________________ _______ ____________________________ __ TOTAL CAPITAL OUTLAY 0 . 00 394 , 135 . 51 585 , 893 . 00 67 . 2 --- UNDEFINED CODE -- - 82-000-78 -00- 9020 LIBRARY BOND PAYBACK 874 , 040 . 86 874 , 040 . 86 0 . 00 ( 100 . 0 ) -------- - ---------------- _ _--_--_ ___--_-----_--- __--- ---_--- - TOTAL --- UNDEFINED CODE - -- 874 , 040 . 86 874 , 040 . 86 0 . 00 ( 100 . 0 ) TOTAL EXPENSES : 932 , 957 . 00 1 , 6881945 . 79 1 , 596 , 203 . 00 105 . 8 TOTAL FUND REVENUES 880 , 088 . 20 11652 , 035 . 20 11547 , 019 . 00 106 . 7 TOTAL FUND EXPENSES 932 , 957 . 00 11688 , 945 . 79 1 , 596 , 203 . 00 105 . 8 FUND SURPLUS ( DEFICIT ) ( 52 , 868 . 80 ) ( 36 , 910 . 59 ) ( 49 , 184 . 00 ) 75 . 0 P54 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 55 TIME : 15 : 59 : 41 DETAILED REVENUE 6 EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : FOX INDUSTRIAL FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL 8 ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED --- - - -------------- - --- ------- - ----- - - --- ---------- - - - -------- ----- ----- ------- --- ------- -- ----- - - ------ ---"'---- _------ - ------- --- REVENUES TAXES 85- 000- 40-00-3999 CARRY OVER BALANCE 0 . 00 0 . 00 87 , 553 . 00 0 . 0 85- 000- 40-00- 4090 TIF REVENUES 12 , 183 . 36 168 , 928 . 58 146 , 600 . 00 115 . 2 --------------- ----- ------ -- - - ---- ------ - --- -------------------------- - ---------- TOTAL TAXES 12 , 183 . 36 168 , 928 . 58 234 , 153 . 00 72 . 1 INTEREST 85- 000- 46- 00- 4600 INVESTMENT INCOME 394 . 40 3 , 583 . 68 3 , 500 . 00 102 . 3 _____ ________ ______________________ _____-______----_-_-___----- -------_- TOTAL INTEREST 394 . 40 3 , 583 . 68 3 , 500 . 00 102 . 3 TRANSFERS 85- 000- 49-00-4905 TRANSFER FROM MFT FUND 0 . 00 0 . 00 0 . 00 0 . 0 ___---_ ------ ----- ---- --- ------------------------------- -- TOTAL TRANSFERS 0 . 00 0 . 00 0 . 00 0 . 0 TOTAL REVENUES : 12 , 577 . 76 172 , 512 . 26 237 , 653 . 00 72 . 5 EXPENSES DEBT SERVICES 85 - 000- 66-00- 6021 FOX IND BOND-PRINCIPAL PMT 0 . 00 60 , 000 . 00 60 , 000 . 00 100 . 0 85-000- 66-00- 6022 FOX IND BOND-INT PAYMENT 0 . 00 18 , 015 . 00 18 , 015 . 00 100 . 0 ___ ________ ____________________________________________________________________ __ TOTAL DEBT SERVICES 0 . 00 78 , 015 . 00 78 , 015 . 00 100 . 0 CAPITAL OUTLAY 85-000-75- 00-7901 FOX INDUSTRIAL - NON MFT 0 . 00 0 . 00 0 . 00 0 . 0 85-000-75- 00-7902 FOX INDUSTRIAL EXPENSES 0 . 00 0 . 00 0 . 00 0 . 0 ------------------------------------- -- ----------------- ---------------- --------- TOTAL CAPITAL OUTLAY 0 . 00 0 . 00 0 . 00 0 . 0 OTHER 85 - 000-78-00- 9007 ADMINSITRATION FEES 0 . 00 179 . 10 375 . 00 47 . 7 85- 000-78 -00- 9010 RESERVE- FUTURE BOND PYMTS 0 . 00 0 . 00 159 , 263 . 00 0 . 0 ___________ _________________________ ___________ _ _______________________ __________ TOTAL OTHER 0 . 00 179 . 10 159 , 638 . 00 0 . 1 P55 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 56 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B300O . WOW FUND : FOX INDUSTRIAL FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED -_-- --_ _______ _ _____ _ _______ ________ ____ _ ____ _______ _________ -_-- - ---__ _ __________-_ _ __-----__ ___ ___ _ __ - TOTAL EXPENSES : 0 . 00 78 , 194 . 10 237 , 653 . 00 32 . 9 TOTAL FUND REVENUES 12 , 577 . 76 172 , 512 . 26 237 , 653 . 00 72 . 5 TOTAL FUND EXPENSES 0 . 00 78 , 194 . 10 237 , 653 . 00 32 . 9 FUND SURPLUS ( DEFICIT ) 12 , 577 . 76 94 , 318 . 16 0 . 00 100 . 0 P56 DATE : 01 / 29 /2008 UNITED CITY OF YORKVILLE PAGE : 57 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B300O . WOW FUND : POLICE PENSION FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO- DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED REVENUES -- - UNDEFINED CODE --- 86-000-46-00-4600 INTEREST INCOME 1 , 419 . 04 11932 . 20 0 . 00 100 . 0 86-000- 46-00-4601 UNREALIZED GAIN/LOSS ON INVSTM 0 . 00 0 . 00 0 . 00 0 . 0 86- 000- 46-00- 4602 DIVIDEND INCOME 0 . 00 0 . 00 0 . 00 0 . 0 ---- -- --------------- ---------- - ------- - ------ - - -- ------------- ------- -- - -------- TOTAL --- UNDEFINED CODE --- 1 , 419 . 04 1 , 932 . 20 0 . 00 100 . 0 --- UNDEFINED CODE --- 86- 000 -48 -00- 4805 EMPLOYER CONTRIBUTIONS PROP TX 263 , 697 . 62 263 , 697 . 62 0 . 00 100 . 0 86- 000 - 48 -00- 4855 EMPLOYEE CONTRIBUTIONS 106 , 497 . 01 106 , 497 . 01 0 . 00 100 . 0 ------ ------ ---------- -- -------- ------- - --------- ----------------------- --------- TOTAL --- UNDEFINED CODE --- 370 , 194 . 63 370 , 194 . 63 0 . 00 100 . 0 TOTAL REVENUES : 371 , 613 . 67 372 , 126 . 83 0 . 00 100 . 0 EXPENSES --- UNDEFINED CODE --- 86- 000- 50-00- 5108 SALARIES- POLICE PENSION 91045 . 01 75 , 558 . 71 0 . 00 ( 100 . 0 ) ---- -- ------------------ -------- ------- ------------------------ --------- ----- ---- TOTAL --- UNDEFINED CODE - -- 91045 . 01 75 , 558 . 71 0 . 00 - ( 100 . 0 ) -- - UNDEFINED CODE --- 86-000-81 -00 -8100 ADMINISTATIVE EXPENSES 61890 . 67 61890 . 67 0 . 00 ( 100 . 0 ) 86- 000- 81-00-8200 LEGAL EXPENSES 3 , 700 . 00 31700 . 00 0 . 00 ( 100 . 0 ) 86-000-81 -00- 8300 INVESTMENT FEES /MANAGEMENT FEE 0 . 00 0 . 00 0 . 00 0 . 0 ----- --------- -- -- - ---- _------____ _---- ______--- -_-____ --------__ TOTAL - -- UNDEFINED CODE --- 10t590 . 67 10 , 590 . 67 0 . 00 ( 100 . 0 ) TOTAL EXPENSES : 19 , 635 . 68 86 , 149 . 38 0 . 00 ( 100 . 0 ) TOTAL FUND REVENUES 371 , 613 . 67 372 , 126 . 83 0 . 00 100 . 0 TOTAL FUND EXPENSES 19 , 635 . 68 86 , 149 . 38 0 . 00 ( 100 . 0 ) FUND SURPLUS ( DEFICIT ) 351 , 977 . 99 285 , 977 . 45 0 . 00 100 . 0 P57 DATE : 01 / 29 / 2008 UNITED CITY OF YORKVILLE PAGE : 58 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : COUNTRYSIDE TIF PROJECT FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED REVENUES CARRY OVER 87 - 000- 40- 00-3999 CARRY OVER BALANCE 0 . 00 0 . 00 2 , 919 , 125 . 00 0 . 0 87- 000- 40 - 00- 4090 TIF REVENUES 158 . 86 7 , 936 . 60 31965 . 00 200 . 1 TOTAL CARRY OVER 158 . 86 7 , 936 60 2 , 9231090 . 00 0 . 2 INTEREST 87 - 000 - 46- 00- 4600 INVESTMENT INCOME 10 , 907 . 12 73 , 673 . 61 75 , 000 . 00 98 . 2 ------------------------- ------------ --- _----------- ----- -- TOTAL INTEREST 10 , 907 . 12 73 , 673 . 61 75 , 000 . 00 98 . 2 TOTAL REVENUES : 11 , 065 . 98 811610 . 21 2 , 998 , 090 . 00 2 . 7 EXPENSES OTHER FINANCING 87 -000- 66-00- 6002 COUNTRYSIDE TIE- INTEREST PMT 0 . 00 71 , 433 . 75 0 . 00 ( 100 . 0 ) 87 -000- 66-00- 6022 BOND - INT PAYMENT 0 . 00 71 , 433 . 75 142 , 868 . 00 49 . 9 ----- ------------- - - ---- -- ----- ----------- --------------------------------------- TOTAL OTHER FINANCING 0 . 00 142 , 867 . 50 142 , 868 . 00 99 . 9 OTHER 87- 000-78 - 00- 9007 ADMINISTRATION FEES 0 . 00 11215 . 00 2 , 500 . 00 48 . 6 87 - 000-78 - 00- 9009 RESERVE 0 . 00 0 . 00 0 . 00 0 . 0 87-000-78 - 00- 9010 RESERVE - FUTURE BOND PAYMENT 0 . 00 0 . 00 2 , 852 , 722 . 00 0 . 0 --------------------------------------------------- ---------- --- ----------------- TOTAL OTHER 0 . 00 11215 . 00 21855 , 222 . 00 0 . 0 TOTAL EXPENSES : 0 . 00 144 , 082 . 50 2 , 998 , 090 . 00 4 . 8 TOTAL FUND REVENUES 11 , 065 . 98 81 , 610 . 21 2 , 998 , 090 . 00 2 . 7 TOTAL FUND EXPENSES 0 . 00 144 , 082 . 50 21998 , 090 . 00 4 . 8 FUND SURPLUS ( DEFICIT ) 11 , 065 . 98 ( 62 , 472 . 29 ) 0 . 00 100 . 0 P58 DATE : 01 / 29/ 2008 UNITED CITY OF YORKVILLE PAGE : 59 TIME : 15 : 59 : 41 DETAILED REVENUE & EXPENSE REPORT F-YR : 08 ID : GL4B3000 . WOW FUND : DOWNTOWN TIF FOR 8 PERIODS ENDING DECEMBER 31 , 2007 REVISED FISCAL FISCAL % ACCOUNT DECEMBER YEAR-TO-DATE YEAR COLLECTED/ NUMBER DESCRIPTION ACTUAL ACTUAL BUDGET EXPENDED _ ____ -_ -_ _ __________________ ______ ______________ _ _______ _____ ______ _ ______ _______ ___ _____________________________ UNDEFINED CODE --- REVENUES --- UNDEFINED CODE --- 88 -000- 40-00-3999 CARRY OVER 0 . 00 0 . 00 0 . 00 0 . 0 88 - 000- 40-00-4090 TIF REVENUES 2 , 087 . 58 34 , 694 . 16 26 , 059 . 00 133 . 1 _________________ _ __ _____- _-______ _-____ ____________________ _____ TOTAL - -- UNDEFINED CODE --- 21087 . 58 34 , 694 . 16 26 , 059 . 00 133 . 1 EXPENSES --- UNDEFINED CODE - -- 88 -000 -78 -00- 9007 ADMINISTRATIVE FEES 0 . 00 6 , 001 . 00 10 , 000 . 00 60 . 0 88 -000 - 78 -00- 9010 RESERVE 0 . 00 0 . 00 16 , 059 . 00 0 . 0 TOTAL --- UNDEFINED CODE --- 0 . 00 6 , 001 . 00 26 , 059 . 00 23 . 0 TOTAL FUND REVENUES 2 , 087 . 58 34 , 694 . 16 26 , 059 . 00 133 . 1 TOTAL FUND EXPENSES 0 . 00 6 , 001 . 00 26 , 059 . 00 23 . 0 FUND SURPLUS ( DEFICIT ) 2 , 087 . 58 28 , 693 . 16 0 . 00 100 . 0 P59 `�fpD C/pr Reviewed By: Agenda Item Number 2 p. O J T Legal ❑ Finance ❑ EST. , 1836 Engineer ❑ -�� g Tracking Number 4 City Administrator ❑ Consultant ❑ �T)M arc _ 0 g <CE Eby ❑ Agenda Item Summary Memo Title: December Treasurer's Report Meeting and Date: Administration Committee 2/14/08 Synopsis: Council Action Previously Taken: Date of Action: Action Taken: Item Number: Type of Vote Required: Council Action Requested: Submitted by: Jennifer Milewski Finance Name Department Agenda Item Notes: United City of Yorkville Kendall County, IL Monthly Treasurer's Report Pre Audit Financial Summary As of December 31, 2007 FY FY Beginning Decebmer Decebmer Ending FYTD Budgeted FYTD Budgeted Fund Balance Revenues Expenses Balance Revenues Revenue Expenses Expenses 01 General 3,587,640 1,003,677 833,117 3,758,200 8,795,321 17,509,107 10,149,590 17,506,011 15 Motor Fuel Tax 565,574 10,570 51,714 524,431 202,859 677,000 157,722 677,000 16 Municipal Building (364,112) 21500 365 (361,977) 80,850 305,705 166,720 305,705 20 PD Capital 223,936 3,700 11,553 216,083 91,131 246,950 104,423 246,950 21 PW Capital 757,760 8,400 - 766,160 270,666 632,916 24,850 632,916 22 Parks & Rec Equip Capital 72,868 4,700 - 77,568 38,000 161,500 66,635 161,500 37 Sanitary Sewer Improvement 5,373,377 90,232 23,164 5,440,445 768,211 71105,270 715,289 7,105,270 41 Water Improvement Exp (654,668) 60,952 64,009 (657,725) 1,516,126 3,844,410 701,475 3,844,410 42 Debt Service 663,945 34,557 1,429,165.65 (730,664) 1,765,849 2,752,259 2,395,947 21752,259 51 Water 321,443 258,535 72,251 507,727 1,488,278 1,676,000 980,551 1,676,000 52 Sewer 315,611 123,912 11,879 427,644 610,776 671,000 183,133 671,000 72 Land Cash (337,994) - 130,380 (468,374) 200,866 910,982 417,957 910,982 73 Land Acquisition 49,000 - 49,000 - - 50,000 50,000 50,000 79 Parks & Recreation 78,589 114,385 106,302 86,672 1,147,608 1,668,513 1,116,076 1,668,513 82 Library 725,607 880,088 932,957 672,738 1,652,035 1,547,019 1,688,946 1,596,203 85 Fox Industrial 169,294 12,578 - 181,872 172,512 237,653 78,194 237,653 87 Countryside TIF Project 2,845,587 11,066 - 2,856,653 81,610 2,998,090 144,083 2,998,090 88 Downtown TIF 26,606 2,087.58 - 28,693 34,694 26,059 6,001 26,059 95 Trust & Agency 540,794 545,118 - 1,085,912 2,353,582 - 1,267,671 - Totals 14,960,856 3,167,058 3,715,857 14,412,058 21,270,977 43,020,433 20,415,261 43,066,521 Note: Revenue defect to be offset with fund balance. As Treasurer of the United City of Yorkville, I hereby attest, to the best of my knowledge, that the information contained in this Treasurer's Report is accurate as of the date detailed herein. Full detail information is available in the Finance Department William Powell, Treasurer Fund Balance Reserve General Fond 26.34% Water Op 30.30% Sewer Maintenance 63.73% Combined Fund Balance 28.50% Prepared by Jennifer Milewski-Sr Accounting Clerk `�fpD C/T y Reviewed By: Agenda Item Number J= a s� -e Legal ❑ Finance ❑ EST. , 1836 Engineer ❑ Tracking Number O Iii ri y City Administrator ❑ Consultant ❑ An M 9u)9 bq <kE �V Agenda Item Summary Memo Title: Monthly Vehicle Report for December 2007 Meeting and Date: Administration—February 14, 2008 Synopsis: Council Action Previously Taken: Date of Action: Action Taken: Item Number: Type of Vote Required: Council Action Requested: Submitted by: Meghan Gehr Administration Name Department Agenda Item Notes: December 2007 Vehicle Reports - pg. 1 Monthly urrent Dept. Vehicle Vehicle 2 (Squad #) Usage Type Miles Miles I Replace/Reassign Date I�� Notes t Maintenance T._. Police 2006 Dodge Charger M-1 Patrol/K-9 2,572 32,745 2009/2010 _._...__.. 2202 2222_-2222_--- �. .......__.._. _ 2006 Chevrolet Impala M-2 _ Chief 1_,757_ - x__- 33,133 2011/2012 _- - 2222 2002 2000 ._ 1998 Ford Crown Victoria ' 2222__ M-3 '�. _ Detectve 268 143,6661 200612007_ 2002 Chevrolet Impala { M-4 Police Cadet I 1,421 110,240 2006/2007 1998 Ford Crown Victoria M-5 Administration ' _ 317 147,230 _ 2006/2007 2003 Chevrolet Impala M-6 Lieutenant 1 ,055 65,619 200712008 . .__.._.. 2001 Ford Crown Victoria M-7 DARE 275 71 ,242 2009/2010 _. -_ __-2202._._... .__.._..____. 2004 Ford Crown Victoria M-8 YMS-SRO 4 88,751 200712008 2000 Ford Crown Victoria M-9 Lieutenant 10 82,750 2008/2009 2006 Chevrolet Impala M-10 Patrol 1 ,325 ':; 24,726 2009/2010 ... ._...__..._.2009._. 2003 Ford Crown Victoria M-11 _ Y_H_S_- SRO 62.4 _ 104 662 2009/2010 _ _ _ 2222.. .......... ._.__._. 1999 Ford Ex edition M-12 �I Operations 7 636 76,763 200712008 _ _ 2001 Ford Crown Victoria M-13 Patrol / K-9 1 ,138 96,585 _�__._ . . 2 01 012 0 1 1 _ 2003 Ford Crown Victoria M-14 Administrative I 359 107,224 2005/2006 - ____ _ _i_ __..._.... 2004 Ford Crown Victoria M-15 Patrol / K-9 1 ,449 64,212 200812009 2004 Ford Expedition M-16 _ Patrol Sergeant 1 ,147 74,905 2008/2009 .-__. -0222__ 2000___. .. __. _ . _ ._._- 2004 Chevrolet Impala M-17 Detective 471 30,218 2014/2015 2222 _ 2005 Chevrolet Impala I M-18 Patrol 1 482 61 ,820 i 2222__ 2008/2009 _ _ -- . 2005 Chevrolet Impala M-19 Patrol � 2,990 56,381 2008/2009 I _ .__ ' 2005 Chevrolet Tahoe M-20 PatrolfTrucks '. 1 ,321 27,348 '� 2011/2012 2007 Ford Crown Victor! T---Patrol 2,295 29,999 200912010 2007 Ford Crown Victoria M-22 Patrol 3,392 33,874 2009/2010 _ 2222__- - _ 2220 0202__ 2007 Ford Crown Victoria i M-23 Patrol _ 4,108 35,640 2009/2010 I 2008 Ford Explorer � M-24 1 Patrol Sergeant 2,077 � 4,283 2011/2012 i � _..___.. .. ....... ..__..- - 2222 2200.. Administration 2000 Chevrolet Impala General 161 50,179 (Police Dept car as of Jan ) _�_ . 2202 Engineering 2007 Ford Explorer _City Engineer __ 141 2,855 � 2014/2015 none Joe/Jackie 2222___--2020_ _ - -_ - _-_ _ 2007 Ford Explorer Engineering Tech , 627 6,626 '. 2014/2015 none Mike _._._.._..__._.._._ _. - __._ ......_ .. 2004 Ford F-150 pickup-truck Engineering Tech ; 602 41 ,049 ! 2012/2013 none Bill _ - _ 0000 2005 Ford F-250 pickup truck Engineering Tech l 878 _ 25,973 '._ 2013/2014 none _ _ Darrell 2004 Ford F-150 pickup truck JULIE Locator '.� - 1 ,029 48,809 2012/2013 _ none _ - - Aimee _ 0022___ Public Works 2002 Fortl 350 Utility Y1 692 _ 35,230 2007 2202 2222 2004 Int. 4x2 Vac Y2 79 7,001 ', 2009 _ _ ,2000.__ - _ 2003 Ford F350 Utility_ _ Y3 2222 1 ,132 43,945 _2222 2008 f _ 2001 Ford F350 Utility Y4 799 51 ,309_ 2006 2222 _ 2001 Ford F250 Utility Y5 1 ,452 69,952 I 2006 2004 Ford F150 Utility Y6 1 ,196 49,206 j 2009 _ 2222_ 2004 Ford F150 Utility ri 2009 - Engineering,Vehicle _ 2003 Ford F350 Utility Y8 1 ,155 j 40,263 I 2008 1 5 1999 Int 4x2 Y9 2006 Sold -- 2004 Int 4x Y12 10309,034 l -- - 2009 _♦- - _ _ -2222_ 2003 Int. 4x2 Y10 883 7,974 2010 _ 20021nt 4x2-2 Y11 706 11 ,915 2009 I 2001 Int. 6x4 Y14 2008 Sold 2000 Ford 550 Dump Y18 2005 Sold 2004 Ford F350 Dump Y19 !I - 2,704 31 ,404 2009 2005 F350 Crane Y20 1344 13,586 2010 2005 Freightliner FC80 Y21 ' 0 i 11 ,229 I 2011 December 2007 Vehicle Reports - pg . 2 Monthly Current Dept. Vehicle ! Vehicle 2 (Squad #) Usage Type Miles Miles ReplaceiReassign Date Notes / Maintenance Public Works 20061nt. 74006x4 __-- ----- Y22 --- 1201 12,197 _.....__ ,2011 __. con't) 20061nt. 74004x2 � Y23 1121 5,179 2011 _—— 2007 Ford 250 Y24 534 I 11 ,772 2012 ___..._ 2007 Ford 250 Y25 719 7,923 2012 ._.__._._ -- -- 18,512as needed 2006 F250 4x4 Bucket Y26 399 12007 Int Hary 5 yd Y27 894 2,842 2014 12007 Int. Hary 5 yd _, _ _ Y28 721 ! 3,601 2014 —Parks- . .__+_____ Parks 2003 F-350 Pickup 1 FTSF31513ED42301 Maintenance 386 33,236 2008-09 2003 F-350 Dump !: 1FDWF3758ED42392 Maintenance 612 29,065 2008-09 2003 F-150 Pickup 2FTRF17273CA61524 Maintenance ', 5 22,765 2008-09 2004 F-150 Pickup _ 2FTRF17224CA79916 Maintenance 1 15,177 2009-10 '. 12005 F-350 Flat Bed _ _ _ 1FDWF36Y95EC37003 Maintenance 44 9,077 __ _ _ ,_ 2010-11 _.__.. 2005 Taurus 1 FAFP53U25Ai55061 Administration 138 21 ,622 2009-10 7 12006 F-350 Utility 1FDW37Y37EA13940 Maintenance 482 7,944 2011-12 2006 F-350 Dump 1FDWF37Y57EA13941 Maintenance 411 9,561 ! 2011-12 P _--1 -- _e._ _ — _. — — . 2008 F-350 Pickup FTWF31528EA08412 Maintenance _ 103 3,676 2012 -12008F350 Pickup ! 1FTWF31548EA08413 Maintenance 242 6,003 2012 26-08-F--35OPicWp 1FTWF31568EA08414 Maintenace 407 4,031 2012 Recreation GMC Van 2000 _ Rec Staff 167 20,845 200612007 Ford Crown Vic 20_01 ' Supt. Rec 28 ! 130,246 _ 2007%2008 Chevy Impala Director �_ 251 20,435 r; 2008/2009 Dodge Grand. Caravan 2006 Rec Staff ! 196 8,094 20122013 .. ComDev Chevy Caprice ComDev Staff 0 148,079 Admin. car as of✓anua D CIP Reviewed By: Agenda Item Number J n O c s T Legal ❑ I�t'W �U�V i�1'GSS � leas esr. � Finance F1 1 - Engineer ❑ Tracking Number City Administrator ❑ Consultant o At)M d oog I O Agenda Item Summary Memo Title: Monthly FOIA Report for January 2008 Meeting and Date• Administration—February 14, 2008 Synopsis: Council Action Previously Taken: Date of Action: Action Taken: Item Number: Type of Vote Required: Council Action Requested: Submitted by: Meghan Gehr Administration Name Department Agenda Item Notes: 2008 FOM Log - January 1 of 1 Date Request Department(s) Amt. of Time to Date Request Received From Address Description of Records Requested Responding Fulfill Request Fulfilled 204 Dearbom Cou Storage tank, fire department, and/or building 1/7/08 Kelly Anderson - ETS Suite 124 dept. records for SE corner of Rt. 47 and Bldg 1/15/08 Environmental & Assoc. Clerk Geneva, IL 60134 1 Beaver St. 625 White OaOlVay Number of in ground pool permits issued in 1/8/08 Ray Wolson Yorkville 2005, 2006s & 2007. Bldg 1 /8!08 performed construction work at Raintree Village.Kashuba One E. Wacker Dr., Names of all contractors & subcontractors that 1/8/08 Goldberg, Weisman Floor #: p g Bldg 1/8/08 Cairo Chicago, IL 60601 -- -- — --- - -- -- — - 14501 Hertz Quail 1/8/08 Jo Ann Rott - Hertz Springs Pkwy. Copy of building permit for Home Depot at Bldg 1/8/08 Oklahoma City, OK ' Kendall Marketplace. - - Equipment Local2 -- w ment Rental Arnold F. Elmhorst 300 S. Ashland Name & contact info for Elevator Bldg I 1/16/08 Suite 206 Inspector/Consultant and 2008 meeting 1/23/08 Chicago, IL 60607 ' schedule. Clerk Rowena Vergara - 101 S. River Street List of all establishments with liquor licenses 1/18/08 Beacon News Aurora, IL 60506 and/or tobacco licenses and date of original Clerk 1 /25/08 application. Joyce Tanzosh - Huff & 915 Harger Rd., Ste. 1 /24/08 330 Oak Brook, IL Fire department records. (no information) Clerk 1/25/08 Huff, Inc. _ 60613 _ p & 10 N. Dearborn, 4th Fir. All subdivision bonds for Westbury East Village Clerk 1/29108 Marc Donnelly,Li mski - Riordan 1/25/08 ' Chicago, IL 60602 dated on or after 1/1/05. Tara Liuzz Ltd. 23230 Char in Blvd. Pa ment Perfomance Bonds for Yorkville Public McKee, Ltd 1/29/08 Offices of Michael C #940 Library (work performed by Henry Brothers Clerk Brown Clevland, OH 44122 '', Construction. Monthly F®IA Totals I 30 --- - - f { 2s - - il I 20 - -- - --- - - - - i i ■2006 Totals i ■2007 Totals 15 =!2008 Totals i 1 10 - - - - 0 - - -- - - -- — -- -- Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. N,<eD cli Reviewed By: Agenda Item Number 4� 9 *%A Legal ❑ NEW BUSINESS #5 EST, 1836 lass ❑ Engineer ❑ Tracking Number ®� �® (a City Administrator ❑ Consultant El K.nencann ` ❑ ADM 2008-11 <LE 1l�. Agenda Item Summary Memo Title: FY 08/09 Budget Meeting and Date: Administration — February 14, 2008 Synopsis: Council Action Previously Taken: Date of Action: Action Taken: Item Number: Type of Vote Required: Council Action Requested: Submitted by: Brendan McLaughlin Administration Name Department Agenda Item Notes: co, Memorandum EST. -` .�` .:. 1836 To: Administration Committee ��, I From: Brendan McLaughlin, City Administrator O L Date: February 8, 2008 Subject: DRAFT 2008/09 BUDGET Purpose: This memo is intended to: 1 ) Transmit the Proposed Fiscal Year 2008/09 General Fund Budget 2) Highlight the Major Changes 3) Seek Admin Committee input Global View: As an overall synopsis, the proposed budget is a "ride out the economic slump" budget. Revenues have been budgeted to recognize the current economic state. Expenditures have been budgeted to maintain current staffing levels. With population growth, additional roadways and parks to maintain, and a greater area to patrol, the ability to continue providing today' s level of service will be challenged. Staff is up to this challenge. Recognizing that this economic ride will change and that the city maintains a reserve in the General Fund to help bridge this type of economic condition, staff is recommending that the City Council consider budgeting to use a portion of the fund balance in an effort to keep pace with the growing service demands. A separate "B-Budget" is included for City Council's consideration. Essentially, these are items that were included in the Department Requests which, in an effort to keep expenditures in-line with anticipated revenues, were not included in the Proposed Budget. Budget Structure: This budget includes a few logistical changes in order to better manage city finances. They include: Moving General Fund Capital items into a separate City-wide Capital Fund - This will aid us in keeping the General Fund restricted to operating revenues and expenditures and will allow us to track year-to-year trends better. It also provides greater tracking control of earmarked revenues to ensure they are used for the purposes collected. Distinguishing Community Relations budget separately from Administration - This change is made in order to better track expenses for Community Relations. Elimination of the "carry over" line item - This is an unusual practice in government finance. Some Departments have grown to expect the use of carry over funds to supplement their approved budget. A more accepted practice in municipal finance is to have the "carry over" recognized on the City's Balance Sheet as an increase of Fund Balance. Use of the Fund Balance — Rather than budgeting a "carry over" line item to get revenues to balance with expenditures, a more appropriate practice is to budget showing a use of fund balance (i.e. budgeted expenditures can exceed budgeted revenues as an intentional use of fund balance). Key Fiscal Items: There is no In-Town Road Program included in this year's budget. Road Contribution Fees and Road Funding MPI are moved to City Wide Capital Fund. General Fund Real Estate Taxes increased by $ 182,501 based on the increased EAV realized this year. Municipal Sales Tax is reduced by $345,000. While additional retail is coming on line, the city only receives 50% of these new dollars. In 2006/07, one-third of sales tax came from F. E. Wheaton - based on the housing industry slow down, these revenues have taken a hit. Building Permits are projected for 400 new home starts and commercial projects already platted. This is a $350,000 reduction from 2007-08 ' s budget. Garbage Surcharge is budgeted for residents to pay the actual cost for refuse service. Seniors are not slated for an increase. Merit/Cola: Line Items are budgeted with an increase pool of six percent. While it would be easy to reduce wage increases, I would caution against doing so. I believe the City is better served by paying the employees we have competitively and expect them to carry a heavier load by limiting the number of new positions. As reference, the December 2007 Consumer Price Index for the Chicago Region is 4.7 percent for the past twelve months. The proposed budget eliminates three vacant authorized positions. The positions are Assistant Finance Director, Assistant Public Works Director, and Mechanic. Department Highlights: In Administration, there are two new line items to reflect the creation of a separate capital fund. The Capital Fund budgets for non-utility and non-parks capital items. The $100,000 transfer is for the Clark Property installment contract and the $465,000 transfer is for overall capital items, which will be reviewed in March. Community Relations now has a separate budget from Administration. The line items shown in this budget have, for the most part, experienced equivalent reductions in the Administration budget. A straight line comparison item-to-item is not possible as the expenses are detailed out more specifically when compared to how they were budgeted in the current year. Engineering is essentially a hold-the-line budget and reflects the Engineering Capital line item being budgeted in the Capital Fund next year. The contractual services line item is intentionally low and may need to be revisited at the mid-year mark. The Police Budget only has a few reductions from the current year's budget. Most line items have moderate increases. If additional employees are authorized, incremental expenses would occur in some of the supporting-line items. Community Development has reduced many line items, but does include funds to update the Zoning Ordinance. DPW Streets' budget is re-vamped to only reflect operating costs. Capital is moved to the City-wide Capital Fund. Health & Sanitation is budgeted based on the existing refuse contract and the projected number of households. CONCLUSION: As an apples-to-apples comparison, the General Fund and new City-wide Capital Fund are budgeted for a 19% reduction from the 2007/08 budget. The 2007/08 Fiscal Year started with an unreserved, undesignated fund balance of $2,841 , 106. This equates to roughly twenty percent of the proposed budget. Staff continues to monitor the current year's budget to actuals and will be projecting our anticipated year end numbers in the coming weeks. Our major revenue shortfalls are related to sales tax and the timing of payments from the State of Illinois. Depending on year-end projections and any reductions the City Council would like to make to the proposed budget, there may an ability to add a few positions to the proposed budget to keep up with desired service levels. The City Council will need to have a policy discussion on when it is appropriate to dip into the General Fund reserves and what dollar amount would be prudent to spend as we wait out the economic downturn. UNITED CITY OF YORKVILLE NEW POSITIONS ANALYSIS B - BUDGET Salary Benefits IMRF FICA Medicare Training & Other TOTAL Com Relations Corn Relations Assist 45,000 18,128 3,443 2,790 653 21200 72,213 Police Officer 461000 18, 128 21852 667 61500 74,147 Officer 46,000 18, 128 21852 667 61500 74,147 Officer 46,000 18, 128 21852 667 6,500 74, 147 Officer 46,000 18,128 21852 667 6,500 74,147 Promotion Deputy Chief 20,000 11240 290 21,530 Promotion Lt 12,000 744 174 12,918 Promotion Srgt 12,000 744 174 12,918 Promotion Patrol Srgt 10,000 620 145 10,765 PT Records Clerk 10,400 645 151 11,196 Records Clerk 36,000 18,128 2,754 21232 522 600 60,236 426, 152 Streets Maintainance Worker 35,000 18,128 2,678 2,170 508 21600 61,083 Mechanic 54,000 18,128 4, 131 3,348 783 2600 82,990 144,074 NEW POSITIONS ANALYSIS B - BUDGET Salary Benefits IMRF FICA Medicare Training & Other TOTAL Park & Rec Recreation Manager 61100 6,100 Park Operator 41,019 18,128 31138 21543 595 21600 68,023 Main Worker 1 33,946 18,128 2,597 21105 492 2,600 59,868 Main Worker II 37,630 18,128 21879 2,333 546 2,600 64, 116 Admin Assist 36,615 18,128 2,801 21270 531 21100 62,446 Part Time Preschool Assist 12,480 955 774 181 14,389 274,942 GENERALFUND 917,382 Water Superintendent 37,500 91064 2,869 2,325 544 21600 54,902 Sewer Superintendent 37,500 9,064 21869 2,325 544 21600 54,902 UNITED CITY OF YORKVILLE PROPOSED FY 08109 BUDGET GENERALFUND A D E E - A E - A 2006-2007 2007-2008 DEPT PROPOSED FY DESCRIPTION 2005-2006 Actual Actual Budget REQUEST 08109 BUDGET $ CHANGE % CHANGE Revenues Revenues 13,640,046 14,625,881 19,346,897 13,334,653 13,836,653 (5,510,244) -28% City Wide Capital 1 ,605,000 1 ,495,000 1,495,000 100% TOTAL REVENUES: 13,640,046 14,625,881 19,346,897 14,939,653 15,331 ,653 (4,015,244) -21 % Expenditures Administration 21368,511 21933,160 2,407,007 3,799,683 2,560,275 153,268 6% Finance 2,432,663 3,645,004 4,490,323 4,851 ,783 4,699,919 209,596 5% Com Relations - - - 223,723 156,694 156,694 100% Engineering 395,610 470,658 553,439 593,678 558,478 5,039 1% Police 2,101,634 2,589,749 3,215,632 3,936,195 3,553,571 337,939 11% Com Develop 193,088 386,864 573,575 665,564 591,564 17,989 3% Streets 2,859,373 1 ,657,567 7,069,560 761 ,979 660,755 (6,408,805) -91% Health & Sanita 598,567 752,421 1 ,037,401 1 ,306,000 1,306,000 268,599 26% City Wide Capital 1,605,000 1 ,495,000 1 ,495,000 100% TOTAL EXPENDITURES: 10,949,446 12,435,423 19,346,937 17,743,605 15,582,256 (3,764,681) -19% CHANGE IN FUND BALANCE 2,690,600 2,190,458 (40) (2,803,952) (250,603) UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERAL FUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08109 BUDGET $ CHANGE % CHANGE GENERAL FUND REVENUES 01-000-40-00-3999 RESERVE FUND BALANCE - 5,185 125,000 - (125,000) CARRY OVER FY 06/07 - - - - - - 01-000-40-00-3991 CARRY OVER FY 05/06 - - 417,177 800,000 800,000 382,823 92% 01 -000-40-00-3992 LIBRARY BOND PAYBACK - - 160,000 - - (160,000) 01-000-40-00-3993 EMPLOY CONTRIB HEALTH REIMB - - 18,000 100,000 100,000 82,000 456% 01-000-40-00-3994 AMUSEMENT TAX - - 135,000 1350000 1 135,000 - 0% 01-000-40-00-3995 CIB / CD'S IN BANK - - 104,000 - - (104,000) 01-000-40-00-3996 ROAD CONTRIBUTION FEE 971 ,098 850,661 11200,000 - - (1 ,200,000) 01-000-40-00-3997 IN-TOWN ROAD PROGRAM FUND 3,783,562 21783,075 2,575,000 - - (20575,000) 01-000-40-00-3998 ROAD FUNDING - MPI 40 0 1 ,000,000 - - (11000,000) 01-000-40-004000 REAL ESTATE TAXES 1 ,387,085 1 ,319,395 1 ,810,490 1 ,992,991 11992,991 182,501 10% 01 -00040-004001 TOWN ROAD/BRIDGE TAX 101 ,791 993155 125,000 1313000 2 131 ,000 6,000 5% 01 -00040-004002 FOX HILL LEVY REVENUE - 18,204 18,000 - - (18,000) 01 -00040-004010 PERSONAL PROPERTY TAX 13,337 20,233 10,000 203000 3 20,000 10,000 100% 01 -00040-004020 STATE INCOME TAX 516,423 1 ,187,293 974,748 1 ,008,360 4 1 ,008,360 333612 3% 01-000-40-00-4030 MUNICIPAL SALES TAX 1 ,958,806 2,934, 185 3, 120,000 2,7753000 21775,000 (345,000) -11 % 01-000-40-00-4032 STATE USE TAX 890252 145,026 144,532 145,652 5 145,652 11120 1% 01-000-40-00-4040 MUNICIPAL UTILITY TAX 388,592 4633480 425,000 4253000 425,000 - 0% 01-000-40-004041 UTILITY TAX - NICOR 159,111 232,616 300,000 350,000 350,000 50,000 17% 01-000-40-00-4042 UTILITY TAX - CABLE TV 83,242 138,527 129,144 150,000 150,000 203856 16% 01-000-40-00-4043 UTILITY TAX - TELEPHONE 335,574 4483351 425,000 400,000 400,000 (25,000) -6% 01-00040-00-4050 HOTEL TAX 18,894 19,085 20,000 203000 20,000 - 0% 01-00040-004060 TRAFFIC SIGNAL REVENUE - 0 5,000 5,000 51000 - 0% 01-00041-00-4100 LIQUOR LICENSE 24,366 153691 26,000 32,900 32,900 6,900 27% 01-00041-00-4101 OTHER LICENSES 2,700 11518 3,000 4,200 4,200 1 ,200 40% 01 -00041-004110 BUILDING PERMITS 1 ,363,781 13278,672 1,550,000 1 ,200,000 112003000 (350,000) -23% 01-00042-00-4205 FILING FEES 7,023 9,860 20,000 5,000 51000 (15,000) -75% 01-00042-00-4206 GARBAGE SURCHARGE 208,490 248,024 540,756 1 ,200,000 6 1 ,200,000 659,244 122% 01-000-42-00-4207 REFUSE STICKERS - Page 1 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08109 BUDGET GENERAL FUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08109 BUDGET $ CHANGE % CHANGE GENERAL FUND REVENUES CONTINUED 01-000-42-00-4208 COLLECTION FEE - YBSD 31 ,881 32,916 35,000 603000 602000 25,000 71 % 01-00042-00-4210 DEVELOPMENT FEES 1 ,227,206 1 ,153,125 1 ,475,000 1 ,475,000 11475,000 - 0% 01-00042-00-4211 ENGINEERING CAPITAL FEE 52,200 380900 60,000 - - (60,000) -100% 01-000-42-00-4281 BEECHER DEPOSITS - 11010 - - - - 01 -000-42-00-4286 BEECHER RENTALS - 2,325 - 9,000 91000 9,000 New 01-000-43-00-4310 TRAFFIC FINES 76,534 83,379 80,000 90,000 90,000 10,000 13% 01-000-43-00-4315 REIMBURSE POLICE TRAINING 113805 0 21 ,000 15,000 15,000 (6,000) -29% 01-000-43-00-4320 ORDINANCE FEES 2,670 2,925 2,500 2,500 2,500 - 0% 01-000-44-00-4401 DARE DONATIONS 125 0 10250 1 ,250 1 ,250 - 0% 01-000-44-00-4402 ROB ROY CREEK HYDRAULIC STUDY 22,700 0 10,000 - - (10,000) -100% 01-000-44-00-4403 MISCELLANEOUS DONATIONS - 400 - - - - 01-000-44-00-4404 HANGING BASKET DONATIONS - 3,820 - 500 500 500 New 01-000-44-00-4405 RAYMOND SEWER OUTFALL - 0 1 ,300,000 500,000 500,000 (800,000) -62% 01-000-44-00-4407 HOLIDAY UNDER THE STARS - 0 - 12,500 12,500 12,500 New 01-000-44-00-4410 REIMB - FROM OTHER GOVT'S - - - - 01-000-44-00-4411 REIMB-POLICE PROTECTION 2,477 3,308 3,300 3,300 3$ 00 - 0% 01-000-44-00-4420 SIDEWALK CONSTRUCTION - - - - 01-000-44-00-4490 MISCELLANEOUS INCOME 11 ,798 163287 15,000 5,000 5,000 (10,000) -67% 01 -000-44-004499 BAD DEBT RECOVERY 01 -000-45-00-4504 TRAFFICE SIGNAL REVENUE - - - - 01-00045-004505 COPS GRANT - VESTS - 5,280 3,000 3,000 3,000 - 0% 01 -000-45-00-4510 COPS GRANT - - - - 01 -00045-00-4511 POLICE - STATE TOBACCO GRANT - 1 ,540 1 ,500 1 ,500 1 ,500 - 0% 01-00045-004521 ICJIA BLOCK GRANT - - - - 01-00045-004525 GRANTS - BROWNFIELD COM DEV 49,675 0 - - - - 01-00045-00-4540 BEAVER ST DEVELOP GRANT - 222,540 - - - - 01-00046-004600 INVESTMENT INCOME 117,808 153,890 752000 65,000 65,000 (10,000) -13% DEVELOPER SIGNS REIMBURSEMENT - 5,000 5,000 5,000 New INSURANCE REIMBURSEMENTS - 21000 2,000 2,000 New Page 2 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERALFUND A D E E - A . E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08/09 BUDGET $ CHANGE % CHANGE GENERAL FUND REVENUES CONTINUED 01-000-49-00-4914 TRANSFER FROM WORKING CASH - - - - 01-000-49-00-4915 TRANSFER FROM WATER OPS 200,000 250,000 265,000 250,000 250,000 (15,000) -6% 01-000-49-00-4920 TRANSFER FROM SEWER MAINT. 70,000 70,000 70,000 70,000 70,000 - 0% 01-000-49-00-4925 TRANSFER FROM SAN. SEWER IMP 150,000 150,000 150,000 150,000 150,000 - 0% 01-000-49-00-4930 TRANSFER FROM WATER IMPROVE. 200,000 200,000 200,000 200,000 200,000 - 0% 01-00049-00-4935 TRANSFER FROM LAND CASH - 16,000 16,000 16,000 16,000 - 0% 01-00049-004940 TRANSFER FROM MUNICIPAL BLDG 0 182,500 - - (1823500) -100% TOTAL REVENUES: GENERAL 13,640,046 14,625,881 19,346,897 13,836,653 13,836,653 (5,510,244) -28% Page 3 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERALFUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08109 BUDGET $ CHANGE % CHANGE GENERAL FUND REVENUES - COMMENTS 1 5% of 1 ,500 daily passes per day for 100 days per year @$20 per pass 2 This is a property tax that is County-Wide / Township Wide 3 This is based off of 2.5% of income from the State 4 $90 * 11 ,204 (Population) 5 $13 * 11 ,204 (Population) 6 Senior Discount will result in $100,000 loss minimum Page 4 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERALFUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08109 BUDGET $ CHANGE % CHANGE ADMINISTRATION EXPENSES 01-110-50-00-5100 SALARIES - MAYOR 3,775 71394 11 ,310 11 ,310 11 ,310 - 0% 01-110-50-00-5101 SALARIES - CITY CLERK 1 ,800 4,500 6,410 8,600 8,600 2,190 34% 01-110-50-00-5102 SALARIES - CITY TREASURER 1 ,800 3,705 6,410 6,410 61410 - 0% 01 -110-50-00-5103 SALARIES - ALDERMAN 15,450 30,970 40,880 30,970 30,970 (91910) -24% 01 -110-50-00-5104 SALARIES - LIQUOR COMMISSIONER 500 1 ,281 1 ,000 1 ,000 1 ,000 - 0% 01-110-50-00-5105 SALARIES - CITY ATTORNEY 11 ,060 11 ,503 9,500 - - (91500) -100% 01 -110-50-00-5106 SALARIES - ADMINISTRATIVE 568,870 715,063 446,025 465,985 1 460,985 14,960 3% 01 -110-50-00-5136 SALARIES - PART TIME 49,393 28,909 22,500 15,000 2 51000 (17,500) -78% 01 -110-50-00-5137 SALARIES - OVERTIME 375 3,691 750 750 500 (250) -33% 01-110-61-00-5300 LEGAL SERVICES 77,265 188,534 85,000 240,000 120,000 35,000 41 % 01 -110-61-00-5311 CODIFICATION 5,614 11822 51000 31500 3,500 (1 ,500) -30% 01-110-61-00-5314 BUILDING INSPECTIONS 1 ,142,685 995,966 1 ,1253000 950,000 950,000 (175,000) -16% 01-110-61-00-5322 BONDING - - - - - 01-110-62-00-5401 CONTRACTUAL SERVICES 41 ,995 47,792 27,500 50,000 20,000 (7,500) -27% 01 -110-62-00-5403 SPECIAL CENSUS 67,377 (19) - - - - 01-110-62-00-5404 CABLE CONSORTIUM FEE 41 ,116 39,923 35,000 40,000 35,000 - 0% 01-110-62-00-5406 OFFICE CLEANING 6,600 7,737 7,500 7,500 7,500 - 0% 01-110-62-00-5410 MAINTENANCE - OFFICE EQUIPMENT 190 129 500 250 250 (250) -50% 01-110-62-00-5421 WEARING APPAREL 897 28 - 540 540 540 New 01-110-62-00-5427 FACADE PROGRAM 20,000 - 153000 20,000 15,000 - 0% 01-110-62-00-5436 TELEPHONE 14,174 18,758 15,000 19,000 16,000 1 ,000 7% 01 -110-62-00-5438 CELLULAR TELEPHONE 1 ,962 21654 1 ,920 2,500 2,500 580 30% 01-110-62-00-5439 TELEPHONE SYSTEMS MAINTENANCE 21836 3,648 7,500 5,000 5,000 (2,500) -33% 01-110-62-00-5440 BEAVER ST GRANT EXPENSE - - - - - 01 -110-64-00-5600 DUES 3,758 5,197 5,510 12,000 11 ,000 5,490 100% 01 -110-64-00-5601 ILLINOIS MUNICIPAL LEAGUE DUES 781 900 800 918 918 118 15% 01 -110-64-00-5603 SUBSCRIPTIONS/BOOKS 315 733 500 250 250 (250) -50% Page 5 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08109 BUDGET GENERAL FUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08/09 BUDGET $ CHANGE % CHANGE ADMINISTRATION EXPENSES CONTINUED 01 -110-64-00-5604 TRAINING & CONFERENCES 7,325 19,441 19,500 10,000 3 61000 (13,500) -69% 01-110-64-00-5605 TRAVEL / MEALS / LODGING 14,268 2,931 71500 21 ,000 4 18,000 10,500 140% TUITION REIMBURSEMENT 6,000 5 6,000 61000 New 01-110-64-00-5606 PROMOTIONAUMARKETING EXP'S - 23941 120000 - - (12,000) -100% 01-110-64-00-5607 PUBLIC RELATIONS 27, 109 8,570 - - 6 500 500 01-110-64-00-5608 HRC SPONSORSHIPS 300 620 1 ,500 2,500 1 ,500 - 0% 01-110-64-00-5609 YMCA PARTNERSHIP - - 1 ,500 - - (11500) -100% 01-110-65-00-5800 CONTINGENCIES 46,460 561 ,045 146,500 150,000 50,000 (96,500) -66% 01-110-65-00-5801 FUND BALANCE RESERVE - - - - - - 01-110-65-00-5802 OFFICE SUPPLIES 15,995 15,616 8,500 8,000 7,000 (1 ,500) -18% 01-110-65-00-5804 OPERATING SUPPLIES 71416 14,435 5,000 6,250 5,000 - 0% 01-110-65-00-5808 POSTAGE & SHIPPING 9,761 16,257 21 ,925 18,000 18,000 (3,925) -18% 01-110-65-00-5809 PRINTING & COPYING 14,952 20,525 11 ,000 11 ,000 9,000 (2,000) -18% 01-110-65-00-5810 PUBLISHING & ADVERTISING 31866 3,866 5,000 4,000 3,500 (1 ,500) -30% 01 -110-72-00-6500 IMRF PARTICIPANTS 45,400 55,136 39,756 42,303 41 ,879 2,122 5% 01-110-72-00-6501 SOCIAL SECURITY & MEDICARE 53,429 62,202 39,965 43,224 42,040 2,075 5% 01-110-75-00-7002 COMPUTER EQUIP & SOFTWARE - 0 2,000 11 ,000 7 - (2,000) -100% 01 -110-75-00-7003 OFFICE EQUIPMENT 1 ,591 2,876 2,500 3,000 1 ,000 (1 ,500) -60% 01-110-78-00-9002 NICOR GAS 40,052 25,881 30,000 30,000 30,000 - 0% 01-110-78-00-9004 MISCELLANEOUS - - 250 - - (250) -100% 01-110-78-00-9005 MERIT/COLA - - 163333 27,959 27,659 11 ,326 69% 01-110-78-00-9007 APPRECIATION DINNER - - 10,000 2,000 2,000 (8,000) -80% 01-110-78-00-9008 VOLUNTEER APPRECIATION DAY - - 23000 - - (2,000) -100% 01-110-78-00-9009 WEBSITE - - 2,500 - - (2,500) -100% 01-110.78-00-9010 COMMUNITY EVENTS - - 453200 - - (45,200) -100% 01-110-78-00-9011 TENNIS CRT REFURBISHING - 403000 (40,000) -100% 01-110-78-00-9012 SALARY SURVEY - 60,063 - - (600063) -100% TRANSFER TO CW CAP FOR LAND - 100,000 100,000 100,000 New Page 6 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08109 BUDGET GENERAL FUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08109 BUDGET $ CHANGE % CHANGE ADMINISTRATION EXPENSES CONTINUED 01 -110-99-00-9923 TRANSFER TO LIBRARY - - - - - 01-110-99-00-9925 TRANSFER TO SAN SEWER - - - - - 01-110-99-00-9940 TRANSFER TO PARK & RECREATION - - - - - 01-110-99-00-9941 TRANSFER TO PARK/REC CAPITAL - - - - - 01-110-99-00-9942 TRANSFER TO POLICE CAPITAL - - - - - 01-110-99-00-9945 TRANSFER TO MUNICIPAL BLDG - - - - 01-110-99-00-9965 TRANSFER TO DEBT SERVICE - - - - TRANSFER TO CITY WIDE CAPITAL - 1 ,376,000 465,000 465,000 New 01 -110-78-00-9013 HOLIDAY UNDER THE STARS - - - - - COUNCIL CHAMBER RENOVATIONS - 20,000 - - New KENDALL COUNTY PARATRANSIT - 13,964 13,964 13,964 New CITY HALL OFFICE RENOVATIONS 21000 - - New TOTAL EXPENSES: ADMINISTRATION 2,368,511 2,933,160 2,407,007 3,799,683 2,560,275 153,268 6% Page 7 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERALFUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08/09 BUDGET $ CHANGE % CHANGE ADMINISTRATION - COMMENTS 7 Decrease tied to maternity leave for employee 2 For part-time employee while other employee is on maternity leave. Also, Admin Intern removed from budget. 3 IML $1 ,750; ICMA $2,000; ILCMA $200; IAMMA $390; Metro Managers $280; Admin Employees & Elected Officials $5,000 4 IML $16,940; ICMA $3,280; ILCMA $120; IAMMA $40; Metro Managers $550 5 Tuition reimbursement breakdown on separate spreadsheet. 6 Condolences, Openings 7 Computer replacement for Admin Secretary only. Page 8 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERAL FUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08109 BUDGET $ CHANGE % CHANGE FINANCE EXPENSES 01-120-50-00-5106 SALARIES - ADMINISTRATIVE - - 293,883 329,120 329,120 35,237 12% 01-120-50-00-5136 SALARIES - PART TIME - - 51000 51000 5,000 - 0% 01-120-50-00-5137 SALARIES - OVERTIME - - 750 750 750 - 0% 01 -120-50-00-5202 BENEFITS-UNEMPLOY. COMP. TAX 15,233 20,308 24,000 28,800 1 28,800 4,800 20% 01-120-50-00-5203 BENEFITS - HEALTH INSURANCE 771 ,967 818,559 850,000 1 ,064,000 2 11064,000 214,000 25% 01-120-50-00-5204 BENEFITS - GROUP LIFE INSURANCE 19,864 24,355 75,000 28,000 3 28,000 (47,000) -63% 01-120-50-00-5205 BENEFITS - DENTAL/VISION ASST 70,770 81 ,550 27,218 95,000 3 85,000 57,782 212% 01-120-61-00-5304 AUDIT FEES & EXPENSES 25,500 49,083 32,000 40,325 4 40,325 81325 26% 01-120-61-00-5305 ACCOUNTING ASSISTANCE - 21785 - - - 01-120-61-00-5307 ACCOUNTING SYSTEM REVIEW - - - - - 01-120-61 -00-5308 GASB 34 23,806 - - - - 01-120-61 -00-5310 EMPLOYEE ASSISTANCE 21867 3,068 41500 4,500 4,500 - 0% 01 -120-62-00-5400 INSURANCE-LIABILITY & PROPERTY 124,161 173,519 163,422 210,000 210,000 46,578 29% 01-120-62-00-5401 CONTRACTUAL SERVICES - - - 15,000 5 15,000 15,000 New 01-120-62-00-5410 MAINTENANCE - OFFICE EQUIPMENT - - 500 500 500 - 0% 01-120-62-00-5411 MAINTENANCE - COMPUTERS 1 ,808 1 ,364 2,000 1 ,000 1 ,000 (1 ,000) -50% 01-120-62-00-5412 MAINTENANCE - PHOTOCOPIERS 19,478 22,530 22,750 28,000 28,000 5,250 23% 01 -120-62-00-5437 ACCTG SYSTEM SERVICE FEE 8,090 9,652 9,200 15,000 15,000 5,800 63% 01 -120-62-00-5438 CELLULAR TELEPHONE - - 720 950 950 230 32% 01-120-64-00-5603 SUBSCRIPTIONS/BOOKS - - 100 250 250 150 150% 01-120-64-00-5604 TRAINING & CONFERENCES - - 3,125 4,600 6 2,000 (1 , 125) -36% 01-120-64-00-5605 TRAVEL / MEALS / LODGING - - 4,000 4,000 7 3,000 (1 ,000) -25% 01-120-65-00-5802 OFFICE SUPPLIES - - 80500 61000 51000 (3,500) -41 % 01-120-65-00-5804 OPERATING SUPPLIES - - 5,000 81000 61500 1 ,500 30% 01-120-65-00-5808 POSTAGE & SHIPPING 21500 2,500 2,500 New 01-120-65-00-5844 MARKETING - HOTEL TAX 18,469 19,332 20,000 20,000 20,000 - 0% 01-120-72-00-6500 IMRF PARTICIPANTS - - 28,642 27,549 27,549 (1 ,094) -4% Page 9 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08109 BUDGET GENERALFUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08109 BUDGET $ CHANGE % CHANGE FINANCE EXPENSES CONTINUED 01-120-72-00-6501 SOCIAL SECURITY & MEDICARE - - 282793 28,071 28,071 (722) -3% 01-120-75-00-7002 COMPUTER EQUIP & SOFTWARE 15,709 28, 144 30,000 34,000 20,000 (10,000) -33% 01-120-75-00-7003 OFFICE EQUIPMENT - - 2,500 2,500 1 ,000 (1 ,500) -60% 01-120-78-00-9001 CITY TAX REBATE 70 57 750 750 750 - 0% 01-120-78-00-9003 SALES TAX REBATE 278,920 600,253 725,000 630,000 630,000 (95,000) -13% 01-120-78-00-9005 MERIT/COLA - - 12,444 19,747 19,747 7,303 59% 01-120-78-00-9012 SALARY SURVEY - - 67,051 - - (67,051 ) -100% 01-120-78-00-9013 AMUSEMENT TAX REBATE - - 74,250 74,250 8 74,250 - 0% 01-120-99-00-9923 TRANSFER TO THE LIBRARY 28,000 35,430 - 01-120-99-00-9925 TRANSFER TO SAN SEWER 150,000 1502000 1503000 1500000 150,000 - 0% 01-120-99-00-9930 TRANSFER TO WATER IMPROVEMENT - - 200,000 200,000 200,000 - 0% 01-120-99-00-9935 TRANSFER TO LAND CASH - - 48,245 - - (48,245) -100% 01-120-99-00-9940 TRANSFER TO PARK & RECREATION 755,908 13015,107 11161 ,778 1 ,348,497 1 ,228,233 66,455 6% 01-120-99-00-9941 TRANSFER TO PARK & REC CAP - 150,000 - 01-120-99-00-9942 TRANSFER TO POLICE CAPITAL - 82,402 - 01-120-99-00-9945 TRANSFER TO MUN BLDG 102,043 64,647 125,000 - - (125,000) -100% 01-120-99-00-9965 TRANSFER TO DEBT SERVICE - 292,859 284,202 425,124 425,124 140,922 50% TOTAL EXPENSES: FINANCE 21432,663 3,645,004 4,490,323 4,851 ,783 4,699,919 209,595 5% Page 10 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERAL FUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08/09 BUDGET $ CHANGE % CHANGE FINANCE - COMMENTS 1 Increase is projected to be 25% over last year 2 There is a net increase of $10,000 between these two funds. Budgeting error in the previous fiscal year. 3 $950,000 is the projected expenditure for Fiscal Year 2008 and then an additional 12% increase 4 There are 3 TIF's that need an independent report 6 Arbitrage Calculations need to be completed on the bonds sold in 2003 6 IML $575; GFOA $475; MSI $1 ,000; IPERLA $800; HR $450; IT $400; GFOA GASB Updates $900 7 IML $525; GFOA $950; IPERLA $1 ,200 8 55% of total amusement tax rebate back to the water park Page 11 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERAL FUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08109 BUDGET $ CHANGE % CHANGE COMMUNITY RELATIONS 01-130-50-00-5106 SALARIES-EMPLOYEES - - - 104,662 59,662 59,662 0% 01-130-50-00-5136 PART TIME SALARIES - - - 9,880 1 9,880 9,880 0% 01-130-62-00-5401 CONTRACTUAL SERVICES - - - 4,000 4,000 4,000 0% 01 -130-64-00-5607 PUBLIC RELATIONS - - - 10,000 2 8,000 8,000 0% 01-130-65-00-5810 PUBLISHING & ADVERTISING - - - 20,000 3 15,000 15,000 0% 01-130-64-00-5603 SUBSCRIPTIONS / BOOKS - - - 400 400 400 0% 01-130-64-00-5604 TRAINING & CONFERENCES - - - 2,050 4 1 ,500 1 ,500 0% 01-130-64-00-5605 TRAVEL / MEALS / LODGING - - - 1 ,000 1 ,000 1 ,000 0% 01-130-65-00-5802 OFFICE SUPPLIES - - - 750 750 750 0% 01-130-65-00-5808 POSTAGE & SHIPPING - - - 7,520 7,520 71520 0% 01 -130-65-00-5809 PRINTING & COPYING - - - 14,000 14,000 143000 0% 01-130-72-00-6500 IMRF PARTICIPANTS - - - 8,487 4,838 4,838 0% 01-130-72-00-6501 SOCIAL SECURITY & MEDICARE - - - 9,195 5,565 51565 0% 01-130-75-00-7002 COMPUTER EQUIP & SOFTWARE - - - 4,500 5 - - 0% 01-130-78-00-9005 MERIT/COLA - - - 6,280 3,580 3,580 0% 01-130-78-00-9010 COMMUNITY EVENTS - - - 5,000 6 5,000 5,000 0% 01-130-78-00-9013 HOLIDAY UNDER THE STARS - - - 25,000 25,000 252000 0% TOTAL EXPENSES: COMMUNITY RELATIONS - - - 232,723 165,694 165,694 New Page 12 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERALFUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08/09 BUDGET $ CHANGE % CHANGE COMMUNITY RELATIONS - COMMENTS 1 19 hrs per week / $10 per hour 2 Magnets $1 ,500 / New Resident folders $1 ,700 / event brochures $1 ,700 / newsletters $4,000 / Misc $1 ,100 3 Newsletters to residents $16,000 / Promenade of the Arts / Theatre in the park / Art in City Hall / City of Yorkville Fact Sheet 4 Dealing with the Angry Public conference / Certificate from the Civic Leadership from Northern 3 classes @ $99 each session 6 Subscription to Liquidlibrary online graphic software and upgrades / replacement computer / cost of Crystal Tech 6 Theatre in the Park $1 ,0001 Community Appreciation day $2,000 Page 13 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERAL FUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08/09 BUDGET $ CHANGE % CHANGE ENGINEERING EXPENSES 01-150-50-00-5107 SALARIES-EMPLOYEES 244,762 271 ,075 318,914 406,935 406,935 88,021 28% 01-150-50-00-5137 SALARIES-OVERTIME - 800 1 ,000 1 ,000 13000 - 0% 01-150-62-00-5401 CONTRACTUAL SERVICES 88,889 92,475 47,500 603000 30,000 (17,500) -37% 01-150-62-00-5402 GIS SYSTEM 51000 294 - - - - 01-150-62-00-5403 FEES 1 ,000 1 ,000 2,000 2,000 11000 (1 ,000) -50% 01-150-62-00-5409 MAINTENANCE-VEHICLES 866 11482 2,000 2,000 2,000 - 0% 01-150-62-00-5410 MAINTENANCE-OFFICE EQUIP 276 164 11000 1 ,000 1 ,000 - 0% 01-150-62-00-5411 MAINTENANCE-COMPUTERS 13587 487 2,000 2,000 21000 - 0% 01-150-62-00-5421 WEARING APPAREL 254 269 12400 11400 1 ,400 - 0% 01-150-62-00-5438 CELLULAR TELEPHONE 2,426 21537 21520 4,100 1 4,100 1 ,580 63% 01-150-64-00-5600 DUES 293 339 600 600 600 - 0% 01-150-64-00-5604 TRAINING & CONFERENCES 227 552 4,000 41000 2,000 (2,000) -50% 01-150-64-00-5605 TRAVEL EXPENSE 11231 496 13000 1 ,000 1 ,000 - 0% 01-150-64-00-5608 TUITION REIMBURSEMENT - - 2$ 80 2,000 2,000 (580) -22% 01-150-64-00-5616 BOOKS & PUBLICATIONS 163 - 200 200 200 - 0% 01-150-65-00-5801 ENGINEERING SUPPLIES 23520 21205 33000 33000 2,500 (500) -17% 01-150-65-00-5802 OFFICE SUPPLIES 21464 10563 22500 21500 2,000 (500) -20% 01-150-65-00-5809 PRINTING & COPYING 1 ,667 1 ,853 2,250 21250 2,250 - 0% 01-150-65-00-5814 STORMWTR SOFTWARE TRAINING - - - - - - 01-150-65-00-5815 ROB ROY HYDRALIC STUDY - - ISWSGROUNDWTRSTUDY - - - 12000 17000 1 ,000 New 01-150-65-00-5820 ENGINEERING CAPITAL RESERVE - 39,691 40,000 - - (40,000) -100% 01-150-72-00-6500 IMRF PARTICIPANTS 19,812 21 ,193 27,393 33,075 33,075 51682 21 % 01-150-72-00-6501 SOCIAL SECURITY & MEDICARE 18,344 20,403 27,537 323902 32,902 5,365 19% 01-150-75-00-7002 COMPUTER EQUIP & SOFTWARE 3,759 91224 20,500 52300 2 4,100 (16,400) -80% 01-150-75-00-7003 OFFICE EQUIPMENT 70 21556 2,500 1 ,000 1 ,000 (1 ,500) -60% 01-150-78-00-9005 MERIT/COLA - - 13,843 24,416 243416 10,573 76% 01-150-78-00-9012 SALARY SURVEY - - 27,202 - - (27,202) -100% TOTAL EXPENSES: ENGINEERING 395,610 470,658 553,439 593,678 558,478 5,039 1 % Page 14 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERALFUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08109 BUDGET $ CHANGE % CHANGE ENGINEERING - COMMENTS 1 $40 per month per employee, plus $740 for 3 new camera phones 2 Software subscriptions ($3,900) new monitor $200 Page 15 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERALFUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08109 BUDGET $ CHANGE % CHANGE PUBLIC SAFETY/POLICE DEPT. EXPENSES 01-210-50-00-5107 SALARIES - EMPLOYEES 612,211 859,924 1 ,254,261 1 ,586,326 1 11402,326 148,065 12% 01-210-50-00-5131 SALARIES - LIEUT./SERGEANTS/CHIEF 541 ,474 606,857 555,341 760,227 2 705,227 149,886 27% 01 -210-50-00-5133 SALARIES - COPS 100,534 116,455 - - - - 01-210-50-00-5134 SALARIES - CROSSING GUARD 16,406 18,824 22,425 26,350 26,350 3,925 18% 01-210-50-00-5135 SALARIES - POLICE CLERKS 102,684 128,326 111 ,269 238,535 3 202,535 91 ,266 82% 01-210-50-00-5136 SALARIES - PART TIME 37,588 21 ,895 36,750 40,000 40,000 3,250 9% 01-210-50-00-5137 SALARIES - OVERTIME 432671 47,584 802000 900000 85,000 5,000 6% 01-210-50-00-5200 CADET PROGRAM 9,814 18,324 33,000 36,000 36,000 3,000 9% 01-210-61 -00-5300 LEGAL SERVICES 17,726 33,874 20,000 15,000 15,000 (52000) -25% ARCHITECT FEES - - 20,000 - - New 01-210-62-00-5408 MAINTENANCE - EQUIPMENT 8,000 8,600 11 ,000 20,000 15,000 4,000 36% 01-210-62-00-5409 MAINTENANCE - VEHICLES 27,805 35,405 35,000 40,000 40,000 5,000 14% 01 -210-62-00-5410 MAINT-OFFICE EQUIPMENT 2$ 00 21625 4$ 00 5,000 51000 500 11 % 01-210-62-00-5411 MAINTENANCE - COMPUTERS 2, 100 6,000 10,000 15,000 4 10,000 - 0% 01-210-62-00-5412 MAINTENANCE - K9 - - 21000 2,000 21000 - 0% 01-210-62-00-5414 WEATHER WARNING SIREN MAINT 3,310 6,520 6,600 61930 61930 330 5% 01-210-62-00-5421 WEARING APPAREL 24,773 29,656 30,000 42,000 35,000 5,000 17% 01-210-62-00-5422 COPS GRANT IV - VESTS 2,634 3,471 6,000 8,000 5 6,000 - 0% 01-210-62-00-5423 CLASY GRANT - 1 ,000 - - - 01-210-62-00-5424 ICJIA - JUVENILE 01-120.62-00-5427 ICJIA BLOCK GRANT - - - 01 -210-62-00-5429 PSYCHOLOGICAL TESTING 1 ,470 3,250 3,500 4,500 21000 (1 $ 00) -43% 01 -210-62-00-5430 HEALTH SERVICES 2,357 7,527 3,500 8,000 4,000 500 14% 01-210-62-00-5431 LABORATORY FEES - - - - - - KENDALL CO. JUVENILE PROBATION - - 3,000 3,000 3,000 New 01-210-62-00-5436 TELEPHONE 16,908 17,245 23,000 26,000 26,000 3,000 13% Page 16 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERALFUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08109 BUDGET g CHANGE % CHANGE PUBLIC SAFETY EXPENSES CONTINUED 01-210-62-00-5438 CELLULAR TELEPHONE 11 ,993 14,524 17,500 19,420 19,420 11920 11 % 01-210-62-00-5440 PAGERS - 01-210-62-00-5441 MTD-ALERTS FEE 4,620 5,038 10,562 15,086 15,086 41524 43% 01-210-64-00-5600 DUES 1 ,953 2,500 4,000 4,500 4,500 500 13% 01-210-64-00-5603 SUBSCRIPTIONS 266 346 500 600 600 100 20% 01-210-64-00-5604 TRAINING & CONFERENCE 19,214 16,532 332025 39,750 33,025 - 0% 01-210-64-00-5605 TRAVEL EXPENSES 10,367 8,735 12,075 15,500 12,075 - 0% 01-210-64-00-5606 COMMUNITY RELATIONS 5,500 11 ,685 10,000 11 ,000 10,000 - 0% 01-210-64-00-5607 POLICE COMMISSION 71600 8,333 22,050 300000 30,000 7,950 36% 01-210-64-00-5608 TUITION REIMBURSEMENT 12,522 13,328 14,000 14,700 14,700 700 5% 01-210-64-00-5609 POLICE RECRUIT ACADEMY - 19,340 20,000 13,000 - (20,000) -100% 01-210-64-00-5610 GUN RANGE FEES 625 400 1 ,000 1 ,000 11000 - 0% 01-210-64-00-5611 SPECIAL RESPONSE TEAM FEE 2,000 3,490 4,025 4,250 4,250 225 6% 01-210-64-00-5612 NEIGHBORHOOD WATCH - - 1 ,200 1 ,500 1 ,500 300 25% 01-210-64-00-5613 CITIZENS POLICE ACADEMY - - 2,420 2,500 21500 80 3% 01-210-64-00-5614 CHAPLAIN PROGRAM - - 11400 1 ,400 1 ,400 - 0% 01-210-64-00-5615 COMPLIANCE CHECKS - - 500 500 500 - 0% 01-210-64-00-5616 DARE PROGRAM - - 5,000 51250 5,250 250 5% 01-210-64-00-5617 HUMAN RESOURCE COMMITTEE - - - - - _ 01-210-65-00-5800 CONTINGENCIES - - - - _ 01-210-65-00-5802 . OFFICE SUPPLIES 6,499 71751 10,000 10,500 9,000 (1 ,000) -10% 01-210-65-00-5803 EVIDENCE TECH SUPPLIES - - 5,000 50250 5,250 250 5% 01-210-65-00-5804 OPERATING SUPPLIES 16,000 20,027 19,320 20,500 19,500 180 1 % 01-210-65-00-5808 POSTAGE & SHIPPING 2,662 3,635 5,000 51250 5,250 250 5% 01-210-65-00-5809 PRINTING & COPYING 4,500 5,484 61000 7,500 7,500 10500 25% 01-210-65-00-5810 PUBLISHING & ADVERTISING 10000 521 2,000 21000 2,000 - 0% 01-210-65-00-5812 GASOLINE 53,503 60,618 75,000 92,000 80,000 51000 7% 01-210-65-00-5813 AMMUNITION 5,000 5,439 61000 6,300 61300 300 5% Page 17 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08109 BUDGET GENERALFUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08109 BUDGET $ CHANGE % CHANGE PUBLIC SAFETY EXPENSES CONTINUED 01 -210-72-00-6500 IMRF PARTICIPANTS 8,331 10,344 11 ,800 22,832 19,661 7,861 67% 01-210-72-00$501 SOCIAL SECURITY & MEDICARE 112,468 139,421 140,750 211 ,179 2001337 593587 42% 01-210-72-00-6502 POLICE PENSION 231 ,124 248,988 275,000 300,000 300,000 25,000 9% 01-210-75-00-7002 COMPUTER EQUIP & SOFTWARE 8,499 8,716 71500 9,000 10,000 2,500 33% NEW WORLD LIVE SCAN - - 8,634 6 81634 8,634 New 01-210-78-00-9004 BIKE PATROL 1 ,423 1 , 192 2,500 21500 2,500 - 0% 01 -210-78-00-9005 MERIT/COLA - - 27,318 59,926 54,466 27,148 99% 01-210-78-00-9012 SALARY SURVEY - - 215,041 - - (2150041 ) -100% 01-210-99-00-9910 TRANSFER TO POLICE CAPITAL - - - - - - TOTAL EXPENSES: PUBLIC SAFETY/POLICE DEPT. 21101 ,634 2,5891749 31215,632 3,936,195 3,553,571 337,940 11 % Page 18 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERALFUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08/09 BUDGET $ CHANGE % CHANGE POLICE / PUBLIC SAFETY - COMMENTS 1 4 New Officers ($46,000 each) 2 Promotions: 1 Deputy Chief / 1 LT / 1 Srgt / Add 1 Srgt for the Traffic Unit ($55,000 total) 3 1 New Records Clerk ($36,000) 4 1 New Lap Top / Docking Station for Squad ($4,560) & Refurbish 2 Lap Tops for Squads ($800 each) 5 2 Replacements / 8 New Vests 6 $6,639 New World / $1 ,995 Live Scan Page 19 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERAL FUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08/09 BUDGET $ CHANGE % CHANGE COMMUNITY DEVELOPMENT EXPENSES 01-220-50-00-5107 EMPLOYEE SALARIES 7,665 121 ,163 302,853 340,955 340,955 38,102 13% 01 -220-61 -00-5300 LEGAL SERVICES 50,291 283805 20,000 20,000 20,000 - 0% 01-220-62-00-5401 CONTRACTUAL SERVICES 34,669 55,415 37,500 750000 30,000 (7,500) -20% 01-220-62-00-5430 PLANNING CONSULTANT 8,028 37,958 50,000 75,000 50,000 - 0% 01-220-62-00-5432 ECONOMIC DEVELOPMENT 45,000 45,000 45,000 45,000 45,000 - 0% 01-220-62-00-5438 CELLULAR TELEPHONE 307 1 ,059 11000 2,000 1 ,500 500 50% 01-220-64-00-5600 DUES 400 1 ,753 1 ,500 1 ,500 1 ,500 - 0% 01-220-64-00-5604 TRAINING & CONFERENCES 2,284 5,175 7,500 7,500 52000 (2,500) -33% 01-220-64-00-5605 TRAVEL EXPENSE - 2,479 2,500 2,500 2,000 (500) -20% 01-220-6400-5616 BOOKS & PUBLICATIONS 423 - - - - - 01-220-65-00-5804 OPERATING SUPPLIES 11676 52761 7,500 8,000 8,000 500 7% 01-220-65-00-5809 PRINTING & COPYING 558 521 21000 10500 1 ,500 (500) -25% 01-220-65-00.5810 PUBLISHING & ADVERTISING 4,660 3,040 81000 1 ,500 1 ,500 (6,500) -81 % 01-220-65-00-5814 BOOKS & MAPS 1 ,079 2,469 4,000 2,000 2,000 (2,000) -50% 01-220-72-00-6500 IMRF PARTICIPANTS - 81345 242563 27,648 27,648 3,085 13% 01-220-72-00-6501 SOCIAL SECURITY & MEDICARE - 91221 24,693 27,503 27,503 2,811 11 % 01-220-75-00-7002 COMPUTER EQUIP & SOFTWARE 8,966 47,630 10,000 5,000 6,000 (4,000) -40% 01-220-75-00-7003 OFFICE EQUIPMENT 27,081 10,070 5,000 2,500 1 ,000 (4,000) -80% 01-220-75-00-7004 IL TOMORROW GRANT MATCH - - - - 01-220-78-00-9005 MERIT/COLA - - 11 ,645 20,457 20,457 8,812 76% 01-220-78-00-9012 SALARY SURVEY - - 81281 - - (8,281) -100% TOTAL EXPENSES: BU PLANNING & DEVELOPMENT 193,088 386,864 573,535 665,564 591 $ 64 18,029 3% Page 20 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERALFUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08/09 BUDGET $ CHANGE % CHANGE STREETS EXPENSES 01-410-50-00-5107 SALARIES - EMPLOYEE 169,756 222,077 263,748 329,625 1 294,625 30,877 12% 01-410-50-00-5136 SALARIES - PART TIME 11484 3,096 9,600 10,000 102000 400 4% 01-410-50-00-5137 SALARIES - OVERTIME 16,557 12,637 20,000 20,000 15,000 (5,000) -25% 01410-61 -00-5313 ENGINEERING - IN TOWN ROAD PG 1013814 - 250,000 - 2 - (250,000) -100% 01410-61-00-5314 INSPECTIONS & LICENSES 318 509 400 400 400 - 0% 01-410-62-00-5401 CONTRACTUAL SERVICES 11176 2,659 2,000 2,000 21000 - 0% 01-410-62-00-5408 MAINTENANCE-EQUIPMENT 10,505 5,803 8,000 10,000 9,000 1 ,000 13% 01-410-62-00-5409 MAINTENANCE-VEHICLES 14,913 17,030 15,000 25,000 3 18,000 3,000 20% 01410-62-00-5414 MAINTENANCE-TRAFFIC SIGNALS 11 ,299 22,645 18,000 15,000 15,000 (3,000) -17% 01-410-62-00-5415 MAINTENANCE-STREET LIGHTS 28,548 15,824 26,500 20,000 20,000 (6,500) -25% 01-410-62-00-5420 MAINTENANCE-STORM SEWER - 21231 10,000 10,000 4 10,000 - 0% 01-410-62-00-5421 WEARING APPAREL 5,157 41401 6,150 6,150 4,150 (2,000) -33% 01 -410-62-00-5422 RAYMOND DETENTION BASE - 75,000 - - (75,000) -100% 01-410-62-00-5423 RAYMOND STORM SEWER OUTFLOW - 1 ,300,000 - - (1 ,300,000) -100% 01-410-62-00-5424 RAYMOND OUTFALL - - - - - 01-410-62-00-5434 RENTAL-EQUIPMENT - 1 ,271 21000 1 ,000 1 ,000 (1 ,000) -50% 01-410-62-00-5435 ELECTRICITY 56,246 77,684 74,400 78,120 78,120 3,720 5% 01410-62-00-5438 CELLULAR TELEPHONE - 2,814 3,197 41000 43500 5 3,300 (700) -18% 01-410-62-00-5440 STREET LIGHTING 687 200 6,000 4,000 1 ,000 (53000) -83% 01-410-64-00-5604 TRAINING & CONFERENCES 4,862 947 71525 7,500 6 51500 (21025) -27% 01-410-65-00-5421 GIS SYSTEM - - - 01-410-65-00-5804 OPERATING SUPPLIES 19,236 18,166 30,000 20,000 15,000 (150000) -50% 01-410-65-00-5812 GASOLINE 32,943 36,368 30,250 33,275 33,275 31025 10% 01-410-65-00-5815 HAND TOOLS 2,507 187 2,500 1 ,500 11500 (1 ,000) -40% 01410-65-00-5817 GRAVEL 902 2,149 2,500 2,500 2,500 - 0% 01-410-72-00-6500 IMRF PARTICIPANTS 15,060 18,313 21 ,238 28,259 25,039 31801 18% 01-410-72-00-6501 SOCIAL SECURITY & MEDICARE 14,365 18,200 21 ,349 28,873 25,669 4,319 20% Page 21 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08/09 BUDGET GENERALFUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08109 BUDGET $ CHANGE % CHANGE STREETS EXPENSES CONTINUED 01-410-75-00-5418 MOSQUITO CONTROL 20,296 28,414 30,000 31 ,500 30,000 - 0% 01-410-75-00-5419 MAINTENANCE SUPPLIES - STREETS - - - - PROPERTY MAINTENANCE - - - 25,000 15,000 15,000 01-410-75-00-7004 SAFETY EQUIPMENT 708 1 ,793 1 ,000 11000 11000 - 0% 01-410-75-00-7099 GRANDE RES PERIMETER RDS 401 ,370 385,659 13000,000 - 7 - (110002000) -100% 01-410-75-00-7100 STREET REHAB PROJECTS 35,647 52,755 - - 8 - - 01-410-75-00-7101 IN-TOWN ROAD PROGRAM 1 ,646,805 424,726 2$ 00,000 - 9 - (2,500,000) -100% 01-410-75-00-7102 TREE & STUMP REMOVAL 9,510 91623 23,000 20,000 51000 (18,000) -78% 01-410-75-00-7103 SIDEWALK CONSTRUCTION 570 - 2,500 - 10 - (2,500) -100% 01-410-75-00-7104 FOX HILL SSA EXPENSES 71278 8,625 18,000 - 11 - (18,000) -100% 01-410-75-00-7105 FOX ROAD SIDEWALK - - 25,000 - 12 - (253000) -100% 01-410-75-00-7106 ROAD CONTRIB FUND PROJECTS 11 ,043 37,936 180,000 - 13 - (180,000) -100% 01-410-75-00-7107 ROAD CONTRIB FUND - RESERVE - - 1 ,020,000 - 14 - (1 ,020,000) -100% 01-410-75-00-7108 126/711MPROVEMENTS - 19,000 - - (19,000) -100% 01-410-75-00-7109 TRAFFIC SIGNALS RT. 34 & Sycamore - - - - - 01.410-75-00-7110 ASPHAULT PAVEMENT - 27$ 73 - 15 - (27,573) -100% DEVELOPER SIGNS 5,000 - - 01 -410-75-00-4404 HANGING BASKETS - 21442 2,000 2,000 22000 - 0% 01-410-78-00-9012 SALARY SURVEY - - 6,353 - - (6,353) -100% 01-410-78-00-9005 MERIT/COLA - - 8,974 19,778 17,678 8,704 97% 01-410-99-00-9930 TRANSFER TO WATER IMPROVE 215,000 220,000 - - - - TOTAL EXPENSES: STREETS 21859,373 10657,567 7,069,560 761 ,979 660,755 (6,408,805) -91 % Page 22 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08109 BUDGET GENERALFUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08/09 BUDGET $ CHANGE % CHANGE STREETS - COMMENTS 1 1 New Hire MW 1 $35,000 2 Moved to City-Wide Capital Fund 3 Increase for other department work can lower other departments fine items 4 West Main storm sewer and maintenance 5 Additional Phone and Service 6 Certification updates for 4 employees / National Congress Foreman and 1/3 for Director 7 Moved to City-Wide Capital Fund 8 Moved to City-Wide Capital Fund 9 Moved to City-Wide Capital Fund 10 Moved to City-Wide Capital Fund 11 Moved to Fox Hill SSA Fund 12 Moved to City-Wide Capital Fund 13 Moved to City-Wide Capital Fund 14 Moved to City-Wide Capital Fund 15 Moved to City-Wide Capital Fund Page 23 of 24 UNITED CITY OF YORKVILLE PROPOSED FY 08109 BUDGET GENERAL FUND A D E E - A E - A 2005-2006 2006-2007 2007-2008 DEPT PROPOSED FY ACCOUNT NUMBER DESCRIPTION Actual Actual Budget REQUEST 08/09 BUDGET $ CHANGE % CHANGE HEALTH & SANITATION EXPENSES 01-540-62-00-5442 GARBAGE SERVICES 591 ,517 747,186 1 ,031 ,401 1 ,300,000 11300,000 268,599 26% 01-540-62-00-5443 LEAF PICKUP 7,050 5,235 6,000 6,000 6,000 - 0% TOTAL EXPENSES: HEALTH & SANITATION 598,567 752,421 1 ,037,401 1 ,306,000 1 ,3061000 268,599 26% TOTAL GENERAL FUND REVENUES 13,640,046 14,625,881 19,346,897 13,836,653 13,836,653 (51510,244) -28% TOTAL GENERAL FUND EXPENSES 10,949,446 12,435,423 193346,897 16,147,605 14,096,256 (51250,641 ) -27% FUND SURPLUS (DEFICIT) ENDING BALANCE 21690,600 21190,458 (0) (2,310,952) (259,603) (259,602) Page 24 of 24 �EO Cl?- Reviewed By: Agenda Item Number J o % Legal ❑ 1�.� _b ! >LC,i I N (p Finance ❑ EST. , 1836 Engineer ❑ Tracking Number City Administrator ❑ 9 M:W1��" `�O Consultant ❑ ADM 2008-12 <k E `VV Agenda Item Summary Memo Title: Ordinance Amending City Code regarding Participation of Aldermen by Video or Audio Conference Meeting and Date• Administration—February 14, 2008 Synopsis: Council Action Previously Taken: Date of Action: Action Taken: Item Number: Type of Vote Required: Council Action Requested: Submitted by: Kathleen Field Orr City Attorney Name Department Agenda Item Notes: Ordinance No. AN ORDINANCE AMENDING THE CODE OF ORDINANCES OF THE UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS, REQUIRING A QUORUM PHYSICALLY PRESENT AT A REGULAR MEETING AND ALLOWING ALDERMEN TO BE PRESENT BY VIDEO OR AUDIO CONFERENCE WHEREAS, the United City of Yorkville (the "City") is a non home-rule municipality in accordance with the Constitution of the State of Illinois of 1970 and has the powers granted to it by law; WHEREAS, the Open Meetings Act, as amended, (5 ILCS 120/1 , et. seq. ), requires a quorum of members of a public body to be physically present at a meeting, and allows the remaining aldermen to be present via video or audio conference. NOW THEREFORE, BE IT ORDAINED by the Mayor and City Council of the United City of Yorkville, Kendall County, Illinois, as follows: Section I. Title 1 , Chapter 3 , Section 2 of the United City of Yorkville Code of Ordinances is hereby amended by the addition of the following new definitions: MEETING: Any gathering, whether in person, video or audio conference, telephone call, electronic means (such as, without limitation, electronic mail, electronic chat, and instant messaging), or other means of contemporaneous interactive communication, of a majority of a quorum of the members of a public body held for the purpose of discussing public business. PUBLIC BUILDING: Any building or portion thereof owned or leased by any public body. Section 2. Title 1 , Chapter 5 , Section 2, Subsection D of the United City of Yorkville Code of Ordinances is hereby deleted and replaced with the following: D. A quorum of the city council must be physically present at the location of a regular meeting of the city council. If however, the regular meeting of the city council is held simultaneously at one of its offices and one or more other locations in a public building through an interactive video conference, and the city council provides public notice and public access as required under the Open Meetings Act for all locations, then aldermen physically present in those locations all count towards determining a quorum. Section 3. Title 1 , Chapter 5, Section 2 of the United City of Yorkville Code of Ordinances is hereby amended by the addition of Subsection E, which shall read as follows: E. 1 . If a quorum of the city council is physically present as required by Subsection D, a majority of the city council may allow an alderman to attend the meeting by video or audio conference if the alderman is prevented from physically attending because of: a. Personal illness or disability; b. Employment purposes or the business of the city council; or c. Family or other emergency. 2. The absent alderman' s voice on the video or audio conference, after being identified by the rest of the council as belonging to the alderman, shall be simultaneously broadcast to the public present at the regular meeting and then to the media, and the absent alderman shall also be able to hear any public comment regarding the issue elicited at the meeting. 3 . The alderman shall publicly state the reason for not being physically present at the regular meeting. 4. No more than three (3) aldermen shall be permitted to vote via video or audio conference at any public meeting. Section 5. This Ordinance shall be in full force and effect upon its passage, approval, and publication as provided by law. ADOPTED by this day of 2007, pursuant to a roll call vote as follows: AYES: NAYS: ABSENT: APPROVED by me this day of , 2007. Mayor ATTEST: City Clerk 2 0 C/p�. Reviewed By: Agenda Item Number ry O J F A T Legal El ► 'c,b` ;1.iV II Finance ❑ 1� ' esr. Engineer ❑rasa g Tracking Number City Administrator ❑ Consultant El` ❑ ADM 2008-13 Agenda Item Summary Memo Title: Indemnification Ordinance Meeting and Date: Administration—February 14, 2008 Synopsis: Council Action Previously Taken: Date of Action: Action Taken: Item Number: Type of Vote Required: Council Action Requested: Submitted by: Kathleen Field Orr City Attorney Name Department Agenda Item Notes: Ordinance No. AN ORDINANCE AMENDING THE CODE OF ORDINANCES OF THE UNITED CITY OF YORKVILLE, KENDALL COUNTY, ILLINOIS, PROVIDING FOR THE INDEMNIFICATION OF ELECTED OFFICIALS WHEREAS, the United City of Yorkville (the "City") is a duly organized and validly existing non home-rule municipality created in accordance with the Constitution of the State of Illinois of 1970 and the laws of the State; and, WHEREAS, in order to encourage qualified and capable individuals to vie for elective public office, it is in the best interests of the City to indemnify its elected officials to the extent the elected official' s conduct is within the scope of their powers and authority. NOW THEREFORE, BE IT ORDAINED by the Mayor and City Council of the United City of Yorkville, Kendall County, Illinois, as follows: Section 1. Title 1 , Chapter 6 of the United City of Yorkville Code of Ordinances is hereby amended by adding the following new Section 10: 1-6-10: INDEMNIFICATION OF ELECTED OFFICIALS: A. To the fullest extent permitted by the Constitution of the State of Illinois of 1970 and all other applicable laws, the mayor and members of the city council shall be indemnified, defended, and held harmless by the city from and against all liabilities, expenses of defense and investigation, judgments, and amounts paid in settlement which may be imposed upon or reasonably incurred or paid by such official in connection with or resulting from any claim made against him or her, or any action, suit, proceeding, or investigation in which he or she may be involved, by reason of being or having been elected as such official of the city and as a result of conduct within the scope of the duties of office, whether or not he or she continues to be such official at the time of such claim, action, suit, proceeding, or investigation. B. The indemnity provided for in subsection (A) shall not extend to any of the following: 1 . Any liability or cost with respect to any matter as to which such official is finally adjudged to be guilty of bad faith or actual malice or willful and wanton misconduct in the performance of the duties of such official; 2. Any payment, expense, or cost arising out of a settlement of any claim, action, suit, or proceeding, unless (i) such settlement shall be approved by the court having jurisdiction over such claim, action, suit, or proceeding, with express knowledge of the existence of the indemnification provided hereby, or (ii) such settlement shall have been made upon the written opinion of the city's attorney or independent legal counsel to the effect that there is no reasonable ground for any finding of bad faith or of actual malice or willful and wanton misconduct on the part of such official and that the anticipated cost of such settlement will not substantially exceed the estimated cost and expense of defending such claim, action, suit, or proceeding to a final conclusion; 3 . Any claim, action, suit, proceeding, or investigation in respect of which such official has failed to deliver notice to the city as provided in this subsection. Notice, for the purposes of this subsection, means a written notice signed by such official and identifying, in reasonable detail, the particular claim, action, suit, proceeding, or investigation and the date upon and manner in which such official first learned of the pendency of such claim, action, suit, proceeding, or investigation. It shall be sufficient delivery of the notice if the notice shall be mailed by registered mail, postage prepaid, addressed to the city, city hall, attention: mayor, provided such mailing takes place no later than the first of the following to occur: (i) twenty (20) days after the date upon which such official first learned of the pendency of such claim, action, suit, proceeding, or investigation; or (ii) twenty (20) days prior to the date upon which any response to the claim, action, suit, proceeding, or investigation is required by law; 4. Any proceeding brought by the city or any liability or judgment payable to the city itself, 5. The cost of independent legal representation in any such action, suit, or proceeding if the city offers or otherwise indicates its willingness to provide a legal defense with respect to such claim, action, suit, proceeding or investigation. C. In the event the city shall not have employed independent legal counsel to have charge of the defense of any such claim, action, suit, proceeding, or investigation or such claim, action, suit, proceeding or investigation is asserted against both the city and such official, and such official shall have reasonably concluded that there may be defenses available to him which are different from or additional to those available to the city (in which case the city shall not have the right to direct the defense o such action on behalf of such official), legal and other expenses incurred by such official shall be borne by the city. D. The foregoing rights of indemnification shall apply to any criminal action or proceeding, if the indemnified person had no reasonable cause to believe the conduct (which must be within the scope of the duties of office) was unlawful. The termination of any action or proceeding by judgment or settlement, conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the person did not act in good faith and in a manner reasonably believed to be in or not opposed to best interests of the city, and with respect to any criminal action or proceeding, had reasonable cause to believe that the conduct was unlawful. E. The foregoing rights of indemnification shall be in addition to any other rights to which such official may otherwise be entitled as a matter of law. Section 2. This Ordinance shall be in full force and effect upon its passage, approval, and publication as provided by law. 2 ADOPTED by this day of 2008, pursuant to a roll call vote as follows: AYES: NAYS: ABSENT: APPROVED by me this day of 2008. Mayor ATTEST: City Clerk 3 `,(0D Ci)-y Reviewed By: Agenda Item Number Legal El ❑ N EVE l�A��N ESQ #c� a Esr. 1 1836 Finance ❑ 1 - Engineer ❑ Tracking Number .. G LI e W City Administrator ❑ 09 , u, O Consultant ❑ At-)VA <4E `Vv Agenda Item Summary Memo Title: Northern Illinois Municipal Electric Cooperative (NIMEC) Meeting and Date: Administration Committee 2/14/07 Synopsis: Council Action Previously Taken: Date of Action: Action Taken: Item Number: Type of Vote Required: Majority Council Action Requested: Vote to approve Finance Director to allow NIMEC to go out to bid on behalf of the City for electric costs. Submitted by: Susan Mika Finance Name Department Agenda Item Notes: Please see attached memo. `LED C/)� ® Memorandum To: City Council EST 1636 From: Susan Mika, Finance Director ® Imp ,� , \ � CC: Brendan McLaughlin, City Administrator ' 0', � p Date: January 11 , 2008 "`" t ` Subject: NIMEC ` CE Last year, we signed up with an organization, Northern Illinois Municipal Electric Cooperative (NIMEC) to save the City on its energy costs. We switched a majority of our accounts to Constellation New Energy from ComEd. The contract we entered into is a 17 month contract of which will be coming up in June of this year. NIMEC is looking to start going out to bid sometime in February and are predicting a 10% increase in energy costs from the last bidding cycle. This bid, once awarded is good for 12 months. I am looking for authorization from the Council to move forward and have Yorkville added to the list either for the first bid process in February or shortly thereafter. If anyone has any questions, please let me know. Thanks. 0 cli, Reviewed By: Agenda Item Number J� a 0-a c it Legal El ���Ll_� iy :;i i� C`,> - �IAA Finance ❑ EST. , 1836 Engineer ❑ Tracking Number City Administrator ❑ 9 f �u �O Consultant El ADM 2007-86 ` ❑ Agenda Item Summary Memo Title: Plan Commission Roster Composition Meeting and Date° Administration—February 14, 2008 Synopsis: Council Action Previously Taken: Date of Action: ADM 1/10/08 Action Taken: None Item Number: Type of Vote Required: Council Action Requested: Submitted by: Kathleen Field Orr City Attorney Name Department Agenda Item Notes: MEMORANDUM To: Mayor and City Council From: Kathleen Field Orr, City Attorney Date: January 3, 2008 Subject: Attorney General Opinion, December 24, 1997 Transfer of the Power of Appointment At the most recent Administration Committee meeting, Alderman Golinski distributed the referenced document as a validation of the proposal before the City Council to restrict members of the Plan Commission to residents of the City and eliminating residents residing within 1 Y2 miles of the City's borders as qualified to be members of this commission. Alderman Golinski points to the penultimate paragraph of this opinion as dispositive of his argument. After a thorough review of the cases cited in the opinion, I respectfully do not agree due to the fact that of all of the cases cited involved home rule municipalities and a home rule county. The proposal to the City Council as stated above would restrict the statutory authority of the Mayor by eliminating a specific pool of eligible candidates. Unlike a home rule municipality, there is no statutory or constitutional authority for the City Council of a non-home rule municipality to undertake such restricting legislation. In fact, the decision rendered in Pechous v. Slawko (1976), 64 I11.2d 576 provides the most analogues direction wherein it stated that "without referendum approval, the ordinances encroached upon the appointive power granted to the village manager by statute, and were therefore invalid." I hope this memo will assist you in your discussion. r- OFFICE OF THE ATTORNEY GENERAL .STATE OF ILLINOIS Jim Ryan. December 24 , 1997 ATTORNEY GENERAL FILE NO . 97 - 028 MUNICIPALITIES : Transfer of Appointment Power from Mayor to City Council The Honorable Marty Butler Chairman, Local Government and Elections Committee State Senator , 28th District 800 East Northwest Highway, Suite 102 Mount Prospect , Illinois 60056 Dear Senator Butler : I have your letter ein u inquire whether the city council of a home rule c ' may , ordi e , transfer to itself the mayor ' s power to ma e appointm n s to various boards and commissions . F re s s he i after stated , it is my opinion that t proposed tr er of appointment authority would constitute hang e in h form of government of the city in question whi urIS to article VII , section 6 ( f ) of the Illinois Constitu n , may be effected only with referendum approval . There has been a proposal made in a home rule city to abolish various boards and commissions established pursuant to 500 South Second Street, Springfield, Illinois 62706 (217) 782.1090 • TTY: (217) 785.2771 FAX: (2l 7) 782.7046 100 West Randolph Street. Chimp, Illinois 60601 (512) 814.9000 TTY: (512) 814-8374 FAX: (412) 814.8806 1001 East Main, Carbondale, Illinois 62901 (61 B) 457-3505 • TTY: (618) 4574421 • FAX: (61 B) 457-5509 ®- The Honorable Marty Butler - 2 . statutes which prescribe mayoral appointment of their members , and to recreate similar bodies by ordinances providing for the appointment of their membership by the city council . The city in question operates under the managerial form of government , as provided in article 5 of the Municipal Code ( 65 ILCS 5 /5 - 1 - 1 et sec. . (West 1996 ) ) : With respect to appointments in managerial cities , section 5 - 3 - 7 of the Code ( 65 ILCS 5 /5 - 3 - 7 (West 1996 ) ) provides : The powers and duties of the manager shall be : * * * ( 2 ) To appoint and remove all directors of departments . * * * ( 4 ) If the city or village was subject to the aldermanic form provisions of Article 3 at the time of adoption of this Article 5 to appoint and remove all officers who are not required to be elected by Article 3 ; * * * n Section 5 - 3 - 1 ( 65 ILCS 5 /5 - 3 - 1 (West 1996 ) ) provides : If any other acts or any article of this Code , other than Article 3 or Article 4 , provides for the appointment of a board , commission or other agency by the mayor or president , such appointments shall be made in [the] manner so provided . " The Honorable Marty Sutler - 3 . Section 5 - 3 -6 of the Code ( 65 ILCS 5 /5 - 3 - 6 (West 1996 ) ) provides : " The powers of the council or board shall be purely legislative except as may be otherwise provided by any other act or by any article of this Code other than Articles 3 or 4 . The executive and administrative powers conferred on the commissioners by Article 4 shall only be exercised when delegated to the appointive officers provided in this Article 5 . # i t it Under these provisions , it is clear that in the manage - rial form of government , the executive appointment authority reposes in the manager , with respect to most officers and employ- ees , and in the mayor , with respect to boards and commissions designated as being so appointed . The powers of the city council are purely legislative , except to the extent otherwise provided for by statute . The transfer of the executive appointment authority from the mayor to the city council would significantly alter the balance of powers between the executive and the legis - lative branches of the city government . Article VII , section 6 ( f ) of the 1970 Illinois Consti - tution provides , in part : ( f ) A home rule unit shall have the power subject to approval by referendum to adopt , alter or repeal a form of government provided by law , except that the form of government of Cook County shall be subject to the provisions of Section 3 of this Article . A home rule municipality shall have the power to provide for its officers , their manner of selection and terms of office only as ap - The Honorable Marty Butler - 4 , proved by referendum or as otherwise autho - rized by law . Our courts have held that a change in the balance of powers between the executive and the legislative branches is a change in the form of government that cannot be effected without referendum approval . For example , in Pechous v . Slawko ( 1976 ) , 64 I11 . 2d 576 , the supreme court considered consolidated cases in which the city council of the city of Berwyn and the village board of the village of Oak Lawn , both of which were home rule municipalities organized under the managerial form of government , sought to transfer from the mayor or the manager to the council or board , respectively, the authority to appoint certain officers or employees . The court held that each of the municipal ordinances challenged was invalid . Under the managerial form , the board of trustees or the city council exercises no power with respect to r administration ; the powers of the council or board are purely legislative except as may otherwise be provided by statute . Any attempt to alter the relationship between the executive and the legislative authority, to give the board or the council powers of appointment or removal , requires referendum approval . Similarly , in Dunne v . County of Cook ( 1987 ) , 164 I11 . App . 3d 929 , ordinances by which the county commissioners at - tempted to empower themselves to hire and fire their own personal f The Honorable Marty Butler - 5 . staff employees , in derogation of the board president ' s author - ity, were held unconstitutional . Such ordinances constituted an attempt to alter the form of government without referendum approval . Also held unconstitutional was an attempt by the county board to alter the relationship between executive and legislative authority by changing from four - fifths to three - fifths the majority necessary to override a veto by the board president . Dunne v . County of Cook ( 1985 ) , 108 I11 . 2d 161 . It has been suggested that a city council can abolish various boards and commissions established in accordance with statutes which specify mayoral appointment , and create similar boards and commissions pursuant to its home rule authority , but provide for council appointment of their membership . This procedure , it is argued , will supersede the provisions of section 5 - 3 - 1 , which specify mayoral appointment of the membership of such boards and commissions . Such a procedure was specifically rejected in Pechous v . Slawko . In that case , the Oak Lawn village board had abol - ished the office of village attorney , appointed by the village manager , and created a position of corporation counsel to be appointed by the board . The court held that , without referendum approval , the ordinances encroached upon the appointive power granted to the village manager by statute , and were therefore invalid . Pechous v . Slawko ( 1976 ) , 64 Ill , 2d 576 , 587 . The Honorable Marty Butler - 6 . A number of cases have been cited in support of this proposition . None of these cases , however , contradicts the rule set out in Pechous v . Slawko . In Paglini v . Police Board ( 1975 ) , 61 I11 . 2d 233 , for example , it was held that the city of Chicago could authorize its police board to appoint hearing officers without referendum approval . Members of the police board , like members of the boards and commissions here under consideration , are not officers in the form and structure of government whose terms of office and manner of selection cannot be altered without a referendum . More importantly , in Paglini v . Police Board , the city council did not attempt to expropriate to itself the power to appoint . The appointment authority remained in the executive agency , whose members were appointed by the mayor . In Stryker v . Village of Oak Park ( 1976 ) , 62 I11 . 2d 523 , it was held that a home rule municipality could alter the composition of its board of fire and police commissioners . The village ' s ordinance deviated from the statute in setting out the qualifications for membership on the board . There was , however , no attempt to change the manner of selection of the board mem- bers . in People ex rel . Hanrahan v . Beck ( 1973 ) , 54 Ill . 2d 561 , it was held that a home rule county could transfer powers , duties and functions among county officers . According to the court , determining which duties are to be carried out by which officers is a matter of legislative policy . There was no attempt The Honorable Marty Butler - 7 . by the county board , in that case , to expropriate to itself the power to appoint persons to the various offices . These cases support the general proposition that the city council has the power to create , abolish, change the quali - fications for or alter the duties of the various city boards and commissions . In none of these cases , however , was there judicial approval of an attempt by a city council to transfer to itself , without referendum approval and in derogation of the authority of the mayor and the city manager , the power to appoint either officers or employees . Based upon the cases cited , it is my opinion that the proposed ordinances , in attempting to transfer the mayor ' s statutory authority to make appointments to the city council without referendum approval , would constitute an impermissible change in the form of government of the city contrary to the requirements of article VII , section 6 ( f ) of the Constitution . Sincerely, SAMES E . RYAN ATTORNEY GENERAL `CEO C/r y Reviewed By: Agenda Item Number J2 F 0 1 T Legal ❑ EST. 1836 Finance ❑ 1 Engineer El Tracking Number City Administrator ❑ 9 �m�• �O Consultant ❑ F-1 ADM 2008-06 n ` <LE Agenda Item Summary Memo Title: Foundation for Senior Community Center Discussion Meeting and Date: Administration—February 14, 2008 Synopsis: Council Action Previously Taken: Date of Action: ADM 1/10/08 Action Taken: None Item Number: Type of Vote Required: Council Action Requested: Submitted by: Kathleen Field Orr City Attorney Name Department Agenda Item Notes: LAW OFFICE KATHLEEN FIELD OR.R & ASSOCIATES 180 NORTH MICHIGAN AVENUE SUITE 1040 CHICAGO, ILLINOIS 60601 (312) 382-2113 KATHLEEN FIELD ORR FAX (312) 382-2127 P. JOSEPH MONTANA kfoOkfoassoc .com pjm@kfoassoc.com MEMORANDUM To: Mayor and City Council of the United City of Yorkville From: Kathleen Field Orr Date: February 7, 2008 Subject: Establishing a Senior Citizens Organization You have inquired about the process requires to organize a senior citizens center to provide recreational activities and services to the senior citizens of the United City of Yorkville. In order to accomplish this it is required that you file Articles of Incorporation with the State of Illinois as a not-for-profit organization and thereafter apply for tax exempt status with the IRS. Attached are the sample forms, sample by-laws for the corporation, and literature from the Illinois Secretary of State and Internal Revenue Service regarding the process to become a not-for-profit and tax-exempt organization. The first step is to establish a not-for-profit corporation. In order to do this, the following information and actions are needed: 1 . A corporate name. 2. Name and address of the registered agent. 3 . Names and addresses of the three persons who will act as incorporating directors for the not-for-profit corporation. 4. A complete and accurate description of the purpose of the corporation. The purpose must show both a not-for-profit purpose as well as a purpose that will qualify it for tax exempt status. 5 . Prepare the by-laws. 6. Register with the State of Illinois by filing form 102. 10 (Articles of Incorporation). 1 KATHLEEN FIELD ORR & ASSOCIATES 7. Once you receive the Articles of Incorporation back from the State, you must register with the County Recorder of Deeds and the Illinois Attorney General. After you have received the Articles of Incorporation from the State, the second and final step is to immediately proceed with the application for tax exempt status. 501 (c)3 tax exempt status is granted for several reasons, one of the most common being that the corporation' s purpose is charitable. 501 (c)3 tax-exempt status is the most desirable tax-exempt option for the senior citizen organization because it allows all contributions to be tax deductible. This obviously can be a very beneficial fund-raising point. Some of the services that the senior center will provide may be considered charitable in nature. The recreational services will likely be considered by the IRS as social in nature. If the main purpose of the senior center is not considered charitable but rather social in nature, the IRS will grant either a 501 (c)4 (Civil Leagues and Social Welfare Organizations) or 501 (c)7 (Social and Recreation Clubs) exempt status. The goal is to gain 501 (c)3 status for the senior center in order to allow contributions to be tax- deductible which will likely lead to more contributions. That being said, if possible, I would suggest that you tailor the purpose of the senior center around charitable services in order to apply for 501 (c)3 status. However, if the IRS feels that the purpose of the organization does not qualify for 501 (c)3 tax-exempt status, it will then automatically grant tax-exempt status under one of the other provisions (501 (c)4 or 501 (c)7). If 501 (c)4 or 501(c)7 status is granted, then the contributions to the senior center organization will not be tax deductible. When the incorporation is complete and while the tax exempt application is pending, the group should proceed to organize its full Board of Directors, make appointments, and elect officers. Amg 2 FORM NFf 102.10 (rev. Dec. 2003) ARTICLES OF INCORPORATION General Not For Profit Corporation Act Jesse White, Secretary of State Department of Business Services 501 S. Second St., Rm. 350 Springfield, IL 62756 217-782-9522 www.cyberdriveillinois.com Remit payment in the form of a cashier's check, certified check, money order or Illinois attorney's or C.P.A:s check payable to Secretary of State. File #, Filing Fee: $50 Approved: -- - - Submit in duplicate ——— — Type or Print clearly in black ink —— —— Do not write above this line - --- Article 1 . Corporate Name: Article 2. Name and Address of Registered Agent and Registered Office in Illinois: Registered Agent: First Name Middle Name Last Name Registered Office: Number Street Suite # (P.O. Box alone is unacceptable) IL City ZIP Code County Article 3. The first Board of Directors shall be in number, their Names and Addresses being as follows Not less than three Director Name Street Address City State Zip Code Article 4. Purpose(s) for which the Corporation is organized: (continued on back) Printed by authority of the State of Illinois. March 2007 - 15M - C 157.15 Article 4.(continued) Is this Corporation a Condominium Association as established under the Condominium Property Act? (check one) ❑ Yes ❑ No Is this Corporation a Cooperative Housing Corporation as defined in Section 216 of the Internal Revenue Code of 1954? (check one) ❑ Yes ❑ No Is this Corporation a Homeowner's Association, which administers a common-interest community as defined in subsection (c) of Section 9-102 of the code of Civil Procedure? (check one) ❑ Yes ❑ No Article S. Other provisions (For more space, attach additional sheets of this size.): Article 6. Names & Addresses of Incorporators The undersigned incorporator(s) hereby declare(s), under penalties of perjury, that the statements made in the foregoing Articles of Incorporation are true. Dated Month & Day Year Signatures and Names Post Office Address 1 . 1 . Signature Street Name (print) Ciry, State, ZIP 2. 2. Signature Street Name (print) Ciry, State, ZP 3. 3. Signature Street Name (print) City, State, ZIP 4. 4. Signature _. Street Name (print) City, State, ZIP 5, 5. Signature Street Name (print) City, State, ZIP Signatures must be in BLACK INK on the original document. Carbon copies, photocopies or rubber stamped signatures may only be used on the duplicate copy. If a corporation acts as incorporator, the name of the corporation and the state of incorporation shall be shown and the execution shall be by a duly authorized corporate officer. Please print name and title beneath the officer's signature. The registered agent cannot be the corporation itself. The registered agent maybe an individual, resident in Illinois, or a domestic or foreign corporation, authorized to act as a registered agent. The registered office may be, but need not be, the same as its principal office. A corporation that is to function as a club, as defined in Section 1 -3.24 of the "Liquor Control Act" of 1934, must insert in its purpose clause a statement that it will comply with the State and local laws and ordinances relating to alco- holic liquors. Printed by authority of the State of Illinois. March 2007 - 15M - 0 157.15 Steps in Organizing a Not-for-Profit Corporation Page 1 of 8 Steps in Organizing a blot-for-Profit Corporation 1. Preliminary Considerations Before proceeding to organize a not-for-profit corporation, it is essential that you decide whether you wish to apply for federal income tax exemption. Not all not-for-profit organizations qualify for a tax exemption. For instance, the American Heart Association is a not-for-profit corporation which would also qualify for federal tax exemption. On the other hand, a neighborhood homeownersO association is also not-for-profit but would not qualify for a tax break. Only certain kinds of not-for- profit organizations--charities, schools, churches, clubs, etc.--fall into the tax exempt category. In general, this packet is geared toward those not-for-profit organizations which also qualify as tax-exempt organizations. To find out if your organization will qualify, obtain IRS Publication 557, entitled "How to Apply for and Retain Tax Bxempt Status for Your Corporation." You may apply for tax exempt status (using Form 1023 or 1024) before incorporating. However, you must be incorporated before the IRS will consider the application. Therefore, you will want to draft the Articles of Incorporation with the IRS regulations in mind. Before actually commencing the process of organizing a not-for- profit corporation, we strongly urge you to consult both an accountant and an attorney as there are many intricacies in the process and a number of obligations in maintaining such an organization. This will ensure that no details are overlooked. 2. Drafting the Articles of Incorporation This is the legal document by which a corporation is formed. Two identical copies of Form NP- 102. 10 must be submitted. Some o the more important components of the Articles of Incorporation are as follows: a. Corporate Name Any name may be used, so long as it is distinguishable from any other Illinois corporation. Be careful that the name does not indicate that your cooperation is doing business for a profit. You may find out if a name is available by writing or calling the Secretary of State. Names may be reserved for a period of up to 90 days. b. Registered Agent and Office The purpose of appointing an agent is to provide an individual upon whom service of process may be made and http://www.cyberdriveillinois.com/departments/library/what_we_have/readyref/giving/nfp_.. . 6/4/2007 Steps in Organizing a Not-for-Profit Corporation Page 2 of 8 also a person to whom correspondence from the Secretary of State can be sent. This entity must be either a natural person and a resident of Illinois or a corporation with a purpose clause permitting it to be an agent for other corporations, with an office in Illinois. c. Duration You must include the time you plan to be incorporated. The duration is presumed to be perpetual, unless otherwise stated. d. Purpose This is a statement of the function or character of the corporation. This statement must be a narrow and specific purpose. It cannot be general or vague. Purposes should be confined to one or more of the following similar purposes: 1 . To promote, encourage, or foster any athletic, charitable, benevolent, or eleemosynary purpose or activity; 2. To administer and operate property owned on a condominium basis; 3 . To promote or encourage or foster any civic, patriotic, or political purpose or activity; 4. To promote or encourage any educational, research, or scientific purpose or activity; 5. To form any professional, commercial, trade, or industrial association; 6. To promote, encourage, or foster any religious, social, or literary purpose or activity; 7. To promote or encourage any agricultural or horticultural purpose or activity; 8 . To encourage and foster soil, crop, livestock, and poultry improvements; 9. To promote the development, establishment, and expansion of industries; IO.To provide electrification on a cooperative basis; 11 .To provide telephone service on a mutual or cooperative basis; 12.To own and operate water supply facilities for drinking and general use on a mutual or cooperative basis; http://www.cyberdriveillinois.com/departments/library/what_we have/readyref/giving/nfp_. .. 6/4/2007 Steps in Organizing a Not-for-Profit Corporation Page 3 of 8 13 .To own residential property on a cooperative basis; 14.To administer and operate an organization on a cooperative basis producing or furnishing goods, services, or facilities primarily for the benefit of its members who are consumers of such goods, services, or facilities; 15 .To administer and operate property owned on a condominium basis or by a homeowner's association. After confining the purpose, you should then give a more specific and detailed purpose. For examp e, "To send needy cHiTdren to summer camp" will suffice. Again, do not state any purpose which may imply a for-profit purpose. e. Tax-Exempt Status If you plan to apply for tax-exempt status, you must elaborate on the purpose you set forth in the section for "Other Provisions." The purpose must be tied into the tax exempt activity. Remember, not all not-for-profit corporations are tax-exempt. Thus, your purpose should show both a not-for-profit purposias well as a purpose that will quali it for tax exempt status. f. Directors You must have at least three directors. You may impose any qualifications you choose, and these restrictions may be set forth in the "Other Provisions" section or you may set them forth in the bylaws. g. Incorporators One or more incorporators may organize a corporation. An incorporator may be either a natural person 18 years or older or a corporation, domestic or foreign, whether not-for-profit or otherwise. h. Other Provisions Here you may list provisions regarding the internal affairs of the corporation. These may include: 1 . Tax-Exempt Status: If you will be applying for tax- exempt status and the Internal Revenue Code under which your corporation falls requires an elaboration of purposes, you should make those statements here. That statement must conform to the specifications of the Code, particularly section 501 (c)(3). In certain cases, this information may be included in your bylaws. 2. Corporate Officers: You may also impose restrictions or qualifications on who can be an officer of the corporation. This can also be done in the bylaws. http://www.cyberdriveillinois.com/departments/library/what_we_have/readyref/giving/nfp_. .. 6/4/2007 Steps in Organizing a Not-for-Profit Corporation Page 4 of 8 3 . Other Regulations: You may list any other regulation for the governing of the internal affairs of the corporation. Again, this can also be left for the bylaws. 3. Prepare the Bylaws The bylaws set forth the details of how the corporation will operate, including qualification of officers, annual meetings, board of directors, fiscal year, elections, etc. If information regarding tax-exempt status, officer qualifications, or other regulations were not included in the Articles of Incorporation, you will want to be sure to include them here. An important issue in setting up the operation of the corporation is whether the organization will be a member or non-member corporation. A member corporation is one which relies more heavily on its members in making decisions. A non-member corporation relies heavily on a Board of Directors to make decisions. For instance, a member corporation may come together once a year to vote on important issues. A non-member corporation would rely on an elected Board to perform these duties. Whether a corporation is member or non-member will depend on the size and nature of the organization. Non-member corporations are much more common, as they often allow for more efficient decision-making and operation. Note: Attached is an example of bylaws for a non-member corporation. 4. Register with the Secretary of State Deliver two copies of the Articles of Incorporation and $50 in the form of a certified check, cashier's check, or money order to the Secretary of State. When approved, the Secretary of State will stamp the date of filing on both copies and return one copy, with the certificate of incorporation, to the incorporators or their representative. 5. After Incorporating a. One-Time-Only Duties 1 . Register with the Recorder of Deeds: You must file a copy of the articles of incorporation with the Office of the Recorder of Deeds of the county in which the registered office of the corporation is located. This recording must be within 15 days after the Secretary of State has mailed these items, or as soon as possible thereafter. http ://www.cyberdriveillinois.com/departments/library/what_we_have/readyref/giving/nfp_.. . 6/4/2007 Steps in Organizing a Not-for-Profit Corporation Page 5 of 8 2. Federal Employer I.D. Number: Even if your corporation will not be tax-exempt, you should apply for your Federal Employer Identification Number. Almost all corporations will need this number at some point. Form SS-4 from the IRS is the correct form to use. 3 . Register with the Illinois Attorney General: Almost all charitable organizations must register with the Attorney General, Division of Charitable Trust and Solicitations. Information and forms should be obtained from the Office of the Illinois Attorney General. 4. Inquire within the Post Office about charitable bulk mailing rates. b. Annual/Continual Obligations These are duties which must be performed on an annual or continual basis, as applicable. We generally recommend a calendar year for the corporation so that it can be set up to ensure that these duties are performed at the same time each year. This ensures that they are not overlooked. 1 . Federal Income Tax: To apply for federal income tax exemption, obtain Form 1023 or 1024 from the IRS. Complete and submit the application with copies of the certificate, Articles of Incorporation, and bylaws. The IRS will contact you regarding their decision and inform you of any annual reports that will be required in the future. You only need to apply for tax exempt status once. Otherwise, your organization will need to file a return each year. Note that although an organization may be tax exempt, it is not exempt from filing other annual IRS forms, even if it is only a small charity. This part of the process is somewhat complicated, depending on the size of the organization. It generally takes 3 to 9 months to receive IRS approval. It is very common for the IRS to impose some further requirements and request changes in the bylaws or other operating documents before actually granting tax-exempt status. 2. Illinois Income Tax: If your corporation receives federal tax exemption, it is automatically exempt from Illinois income tax. No reports need be filed. Otherwise, your organization will need to file an Illinois Income Tax Return each year. 3 . Illinois Sales Tax: Some organizations qualify for an exemption from paying sales tax on goods bought for use of the organization if they are formed for charitable, religious, or educational purposes. To find out if you http://www.cyberdriveillinois.com/departments/library/what_we_have/readyref/giving/nfp_. . . 6/4/2007 Steps in Organizing a Not-for-Profit Corporation Page 6 of 8 qualify, write a letter of request to the Illinois Department of Revenue, Sales Tax Division, and enclose copies of the Articles of Incorporation, bylaws or constitution, IRS exemption letters, or other helpful documents. If you qualify, you will be issued a letter ruling and will not need to address this issue again unless the organization of the corporation changes. 4. Employee Issues : If the corporation pays salaries to employees, it will be required to file an Employer's Quarterly Return, withhold taxes, etc. The organization may also be subject to acquiring unemployment insurance for employees. 5 . Annual Reports to the Secretary of State: All not-for- profit corporations must file an annual report of officers and directors with the Secretary of State. The report will be due before the first day of the month in which the corporation was originally formed. Forms will be sent to the registered agent approximately 60 days before the due date. 6. Other Reports to Agencies: Depending on your tax- exempt status, the IRS, Department of Revenue, Attorney General, or local government may require various annual returns. The IRS may require annual forms to be filed, even if an organization has tax-exempt status. Whether you must file these reports and which reports you must file depends in part on your status as a tax-exempt organization. Consult an attorney to be sure of your reporting obligations. 7. Other Reports to the Secretary of State: Any changes to the corporate structure affecting the Articles of Incorporation, including a change in the corporate name, duration, or purpose, will require that the Articles of Incorporation be amended. All forms for these items are available from the Secretary of State and should be filed upon the occurrence of the particular event. 8. Accounting Systems and Controls: It is vital that the organization establish some sort of accounting system. A reliable accounting system allows you to retrieve information quickly and consistently to use in complying with annual reporting requirements. One of the most common problems for charitable organizations is that they are sometimes too informal in managing financial procedures. It is recommended that there be a system installed so that all checks drawn on the corporation have a dual signature requirement. We urge you to consult an accountant in order to arrive at the type of system which http://www.eyberdriveillinois.com/departments/library/What we—have/readyref/giving/nfp_. . . 6/4/2007 Steps in Organizing a Not-for-Profit Corporation Page 7 of 8 will be most efficient to your organization. 9. Insurance Coverage: You should inquire whether you need insurance coverage such as (D & O) coverage, general liability coverage, and coverage for equipment and premises. IO.Indemnification: The corporation in its bylaws should agree to indemnify its officers, directors, employees, and agents to protect them from personal liability. You should obtain indemnification for costs, attorneys' fees, and judgment or settlement. It is important that the individuals working for a corporation are not subjected to liability on behalf of the corporation. Please Note: This is not necessarily an all-encompassing list. Please contact competent counsel to ensure that your organization is abiding by all applicable laws and requirements. Addresses and Phone Plumbers Secretary of State Secretary of State Corporation Department Centennial Building Third Floor Springfield, IL 62756 217-782-7880 Department of Revenue State of Illinois Department of Revenue Income Tax Division P.O. Box 3545 Springfield, IL 62708 1 -800-641-2150 State of Illinois Department of Revenue Sales Tax Division 101 West Jefferson Springfield, Illinois 62708 1 -800-641 -2150 Attorney General Illinois Attorney General http://www.eyberdriveillinois.com/departments/library/what_we_have/readyref/giving/nfp_... 6/4/2007 Steps in Organizing a Not-for-Profit Corporation Page 8 of 8 Charitable Trust Bureau 100 W. Randolph St., 3rd Floor Chicago, IL 60601 312-814-2595 TTY: 312-814-3374 Internal Revenue Service (form pick-up only) Internal Revenue Service 320 West Washington Room 611 Springfield, IL 62703 217-789-4220 All places in Illinois not listed above, call: 1 -800-252-2921 Top of Page http ://www.cyberdriveillinois.com/departments/library/what_we_have/readyref/giving/nfp_.. . 6/4/2007 Charitable Giving to Illinois Public Libraries Page I of 6 Charitable Giving to Illinois Public Libraries Local libraries and public library districts in Illinois are tax- exempt political subdivisions that may receive and administer charitable donations for the present and future benefit oe iT—e — communi . Through the use of donors' gifts, en owments, and bequests, the libraries and public library districts are able to enhance the educational, cultural, and historical value of the area. In addition, the donors are benefited by a wide range of opportunities to express their philanthropy. The history of America is replete with examples of philanthropy towards our public libraries. Indeed, virtually all public libraries found their genesis in local community groups, women' s clubs, reading circles and parent-teacher organizations. "Charitable giving" came in all sizes and types: book loans, lumber, nails, bricks and mortar (and the talent to use them), grass cutting, bake sales, and, yes, cash. Andrew Carnegie, at the turn of the century, is best remembered for the direct infusion in hundreds of communities of money for library building programs. Charitable giving to libraries and public library districts has and does make it possible for libraries to serve the future generations. Things Libraries Should Know About Receiving Charitable Gifts To encourage charitable giving in the private sector, Congress has, for more than 60 years, granted favorable tax treatment to charitable contributions by individuals. In addition, many organizations benefit greatly when a charitable gift is made. However, when a person or organization makes monetary or property donations for the benefit of an organization such as a local library or public library district, some of the most common questions asked are "How does a local library or public library district qualify to accept charitable gifts?" "Should the local library or public library district set up a foundation?" "Are there other alternative methods available?" "What are the tax benefits and/or consequences, both to the donor and the local library or public library district, of charitable gifts to the library?" This article will attempt to briefly answer these questions. There are two ways in which a public library may qualify to accept a charitable gift. The first method is to set up a tax exempt foundation qualified under the Internal Revenue Code, §501 (c) First, the local library or public library district would have to establish a not-for-profit organization "organized and operated exclusively for . . literary or educational _purposes," IRC &501 (e . Technically and legally, this corporation would be a separate entity from the library. The most common example in http://www.cyberdriveillinois.com/departments/library/what_we_have/readyref/giving/givin. . . 6/4/2007 Charitable Giving to Illinois Public Libraries Page 2 of 6 Illinois would be a Not-for-Profit Illinois Corporation organized through the Secretary of State' s office. Articles of Incorporation, bylaws, a Board of Directors, a registered agent, registered office, and an annual report filing are all necessary elements to such an organization. Second, since the IRS defines a charitable contribution as a "contribution or gift to or for the use of certain types of organizations, the corporation would have to apply to the IRS for "charitable foundation status" commonly calf c status. nce esta ishe , t e foundation may receive charitable contributions, much like more famous 501 (c)(3) foundations (e.g. American Cancer Society, United Way). This relatively inexpensive and easy not-for-profit incorporation does not by itself make the entity either tax exempt itself or contributions to it tax deductible. The method of fonning a foundation is not only a lengthy process, in terms of forms and approval from the IRS, but expensive in terms of application and renewal fees, annual tax returns, and accountant or attorneys' fees, and a highly technical process with many traps for the unwary. In addition, although a donor' s charitable contributions are usually deductible for tax purposes, a transfer of money or other property to a charitable organization is not always an allowable charitable contribution for tax purposes. A charitable gift is deductible only if it is made to or for the use of a charitable organization qualified to receive such a gift. The precise question of deductibility should and must be left to the donor and his, her, or its attorney or accountant, since it varies somewhat, based on the donor' s particular status. The second method, and we believe usually the better way, by which the local library or public library district may qualify to receive charitable gifts is inherent in their nature as a part of a municipality (local library) or a sovereign political subdivision (public library district). Both types of libraries fall within the term "political subdivision" as used by the IRS. The Internal Revenue Code § 170(c)(1 ) states any political subdivision may receive charitable contributions, "but only if the gift is made for exclusively public purposes." Under Illinois library law, any person or group of persons may make donations of money or property for the benefit of any local library or public library district. 75 ILCS 5/1-6 (formerly Ill.Rev.Stat., ch. 81, ¶¶1-6) and 75 ILCS 16/30-75 (formerly ch. 81, ¶1004-13 .1) Title to the donation vests in the library board of trustees, upon acceptance according to the terms of the donor's deed, gift, devise, or bequest. The library's board of trustees automatically becomes a special trustee of the donated property under the library statutes without having to form a separate corporation or apply for the §501 (c)(3) status of a foundation. http://www.eyberdriveillinois.com/departments/library/what_we_have/readyref/giving/givin. . . 6/4/2007 Charitable Giving to Illinois Public Libraries Page 3 of 6 Because of § 170(c)(1) of the IRC, the political subdivisions do not have to file for qualifications as a §501 (c)(3) organization initially nor report annually to the IRS with information tax returns. The benefits of § 170(c)(1 ) and being a part of a municipality or political subdivision (rather than forming a foundation) are: 1. The libraries save money. (a) The municipality/ political subdivision has already been "incorporated" when it was formed or organized wider Illinois law and there is no need to form a separate not- for-profit organization or to incur the costs for doing so. (b) There are no additional state forms to be completed and no annual reporting besides the annual state library report. (c) There are no additional filing fees or attorneys' fees. (d) The §501 (c)(3) application to the IRS and subsequent determination are not needed since § 170(c)(1) applies. (e) There is no waiting for approval from the IRS, no filing fees incurred, no annual tax returns, and no separate audits. 2. The donor will receive a tax deduction if the donor's status is otherwise qualified. 3 . The restrictions placed on the donation under §501 (c)(3) are the same under § 170(c)( 1 ). (a) The donor can direct how the charitable donation is to be used. For example, the donor might instruct the board of trustees to use the charitable donation to purchase computers (of course the library need not agree to accept terms they do not approve). (b) If the gift is accepted, the library board of trustees is bound legally to honor the donor's request. (c) Like the foundation, a charitable donation given to a § 170 (c)(1 ) municipality or political subdivision may be a long- term investment. The extent to which individuals may deduct charitable contributions for income tax purposes is limited by federal law. Limitations are imposed both on the amount of contribution that may be deducted and on the extent to which the contribution deduction may reduce a donor' s taxable income. The income tax results of such gifts differ widely among individual donors. The tax benefits derived from charitable giving depend ultimately on the nature of the property given, the types of organizations to which donations are made, the current and future income level of the donor, and the donor's marital status. A word of caution--neither the libraries nor the library board of trustees can give accurate advice regarding the taxability of a donor' s contributions. Donors should seek the tax advice of counsel or their accountant to ensure they are in http://www.eyberdriveillinois.com/departments/library/what_we have/readyref/giving/givin. . . 6/4/2007 Charitable Giving to Illinois Public Libraries Page 4 of 6 compliance with their tax returns and deductions. The humanitarian and moral aspects of private philanthropy have always been its primary motivating force. The tax benefits resulting from charitable giving, however, have assumed increasing importance as our tax system has grown in complexity and scope. Donors who make charitable contributions to governmental units under §170(c)( 1 ) must be aware that they can receive a favorable tax deduction. They are not treated any more favorably by contributing to a §501 (c)(3) foundation. Moreover, the initial costs and the annual fees incurred by a foundation are much higher than any incurred by a unit of government such as a library, so that more of the principal should be available for actual use or the "end purpose" of the donation and less for "administration," accountant' s, or attorney' s fees. Of course the size of expected donations may influence the decision regarding the creation of a corporation/foundation. If the "set-up" costs initially are $ 1 ,000.00 and the annual costs $200 to $300, then donations in the range of $5,000 to $ 15,000 may not justify the costs involved, i.e. the costs match the income from such principle or even may require use of some of that principle. On the other hand donations in six figures, particularly if more likely to a foundation than a governmental unit, can well justify those costs. But even here, consideration should be given to much cheaper options (see discussion below of the ILSDO "Fund for Illinois Libraries." The three most common concerns expressed on this are that 1) potential donors do not wish to give to a tax-supported governmental unit, 2) the bylaws of many private corporations' foundations (which presumably have already been approved by the IRS and are not otherwise in need of amendment) require 501 (c)3 status of their donees thus keeping governmental units from benefiting therefrom, and 3) that creating a foundation will focus library/community energies on private fundraising and thereby supplement library revenues. The third point does not in fact hold true. The success of energetic fundraising does not correlate to the use of foundations. In other words, there are many examples of successful and energetic fundraising done by governmental units (and their "friends"), particularly public libraries, without the use of foundations, and there are many examples of ineffective and unsuccessful fundraising where foundations had been established (and where eventually the annual costs and requirements lead to dissolution, either voluntarily or by state and federal action, or even where the failure to file information returns penalties are much larger than any and all donations received). In our experience there are two truths to keep in mind: 1 ) never use paid, professional fundraising, and 2) your success will http://www.cyberdriveillinois.com/departments/library/what_we have/readyref/giving/givin. .. 6/4/2007 Charitable Giving to Illinois Public Libraries Page 5 of 6 depend on locating, recruiting, retaining, and utilizing the type of committed and talented local people who themselves are donors and will encourage others to donate (whether a foundation is used or not). As for the other two concerns, if there are foundations likely to donate or grant to the library with such restrictive bylaw provisions, and the size of the donations and/or their frequency will justify the "set-up" costs and annual costs of a foundation, then it is entirely appropriate to do so, but the ILSDO "Fund for Illinois Libraries" program may be far more preferable (and much cheaper both in the short-term and in the long-term). It is unlikely, but may be worth the attempt to raise with the foundation the possibility of amending their bylaws to broaden the restriction to include local governmental units or specifically public libraries, but the costs of doing so from their perspective may be prohibitive. Such a foundation would have the same or similar requirements as a library foundation, and it points up the high standard of business activity which the IRS and, to a lesser extent, the State of Illinois requires of 501 (c)3 organizations. As for the hesitancy of a donor to give to a taxing body, it may be a persistent view, but often after the history of charitable support for public libraries is explained, the donor will reconsider. In addition many prospective donors, particularly the more sophisticated, will appreciate the savings of those "set-up" costs and annual costs of a foundation so that 100% of the principle and income from donations can be used for the library or the purpose of the donation to begin with. Due to the necessarily strict state and federal rules for operations of tax-exempt corporations and the attendant high costs of proper operation thereof (as well as the frequent failure, in fact, of such foundations to meet all compliance without suffering penalties and interest charges), but also the occasional need for libraries. to have a 501 (c)3 "alternative" for some types of donors, in 1999 the Illinois Library System Directors Organization ("ILSDO"), itself a properly operating 501 (c)3 formed to promote the development of Illinois libraries, initiated a free program for Illinois libraries. ILSDO created the "Fund for Illinois Libraries" as a temporary receptacle for donor checks whose rules or bylaws only permit giving to 501 (c)3s. Upon deposit of such with ILSDO, for the credit of an Illinois library, ILSDO will immediately send its comparable payment to the library. ILSDO will not serve as an investment advisor or agent, nor will the money be invested by ILSDO; it will be sent directly to the library. But ILSDO will, as it has done as a 501 (c)3 all along, file the required state and federal reports and tax returns, thus saving the libraries the responsibility and costs of doing so. Top of Page http://www.cyberdriveillinois.com/departments/library/what_we_have/readyref/giving/givin.. . 6/4/2007 Charitable Giving to Illinois Public Libraries Page 6 of 6 http://www.eyberdriveillinois.com/departments/library/what_we_have/readyref/giving/givin. .. 6/4/2007 :Y } N\ Iii w Vv lei :. • - iY :. . .� ib a L � � z 3 1 ss�^ d{f. k � C �`^tS 4 Y`fh•�s S .,,- E E ^s- ryv_ k SF SECRETA � F STATE t � x 9' My office provides this booklet to assist you in the process of forming your own Not-for-Profit Corporation, a procedure that sometimes can be complicated. The booklet provides detailed guidelines for filing the Articles of Incorporation, as well as infor- mation on filing fees, government agencies you must contact, and legal obligations you will assume after incorporation. Because some of the terminology used in this booklet may be new and confusing, I encourage you to consult with an attorney to learn your exact legal obligations at each stage of the process. If you have further questions about organizing your Not-for-Profit Corporation, please contact my office's Department of Business Services, Corporations Division, at 217-782-6961 . Jesse White :, Illinois Secretary of State e i , � A GUIDE FOR ORGANIZING NOT-FOR-PROFIT CORPORATIONS TABLE OF CONTENTS Articles of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Tax-Exempt Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Articles of Incorporation Requirements Corporate Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Registered Agent and Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Incorporators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Other Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Cost and Expedited Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Filings After incorporating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Recording . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Federal Income Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Illinois Income Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Illinois Sales Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Illinois Attorney General Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Contact Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Illinois General Not-For-Profit Act of 1986, Illinois Compiled Statutes, 1992, Chapter 805, Act 105. ARTICLES OF INCORPORATION The Articles of Incorporation is a legal document through which a corporation is formed. This document is sometimes referred to as the "charter." Regardless of your future tax-exempt status, you must complete and submit two (2) identical copies of the Articles of Incorporation, Form NP-102.10, with at least one copy being the original. All the interrogatories must be answered. Please type or print all responses. TAX-EXEMPT STATUS NOT ALL NOT-FOR-PROFIT CORPORATIONS ARE TAX EXEMPT. Before you take any action, you should decide whether you wish to apply for federal income tax-exempt status (e.g., 501(c) (3) status). Only certain kinds of charities, schools, churches, research institutes, clubs, etc. fall into that category. The words "athlet- ic," "benevolent," "eleemosynary," and "social" are not acceptable as purposes if a corporation is going to apply for 501 (c) (3) status. To find out if your corporation may qualify for a tax break, obtain and read IRS P, ublicafinn 557 — How to Apply for and Retain Exempt Status for Your Organization. An organization does not have to be incorporated to apply for exempt status. Should you decide to apply you will use either Form 1023 or Form 1024. However, you must be incorporated before the IRS will consider your application as a Not- for-Profit Corporation. Incorporation does not guarantee federal tax exemption, but if you wish to apply for that status your Articles of Incorporation may have to be written with the IRS regulations in mind. ARTICLES OF INCORPORATION REQUIREMENTS Corporate Name (a) Restrictions ( 1 ) You may choose any name as long as it is distinguishable from the name of an existing Illinois corporation, a foreign corporation authorized to conduct affairs in Illinois, an existing Illinois Limited Liability Company (LLC) or a foreign LLC registered in Illinois or a name the exclusive right to which is currently reserved. (2) No name shall contain the words "regular democrat, " "regular dem- ocratic, " "regular republican, " "democrat, " "republican," or the name of any other established political party, unless consent is given by the State Central Committee of such established political party. (3) The name must end with the letters NFP if the corporate name con- tains any word or phrase that indicates or implies that the corpora- tion is organized for any purpose other than a purpose for which corporations may be organized under this Act. 1 (b) Name Check You may find out if a name is available by writing or calling the Secretary of State's office in Springfield at 217-782-9520. A preliminary check also may be done on the Secretary of State's Web site at wwwcyberdriveilli- nois.com. Include a brief description of the corporate purpose and be pre- pared with alternate choices of names. (c) Name Reservation You may reserve a name, if available, for a period of 90 days for a $25 fee. You must make a written request, listing the name and a brief descrip- tion of the corporate purpose. You may also use Form NFP-104. 10. Name reservations are renewable by repeating this procedure. Registered Agent and Office (a) Purpose The purpose of requiring each corporation to maintain a registered agent and a registered office in Illinois is to provide a public record of the name of a person upon whom service of process against the corporation may be made, and of the place where such person may be found. This person also is the one to whom official correspondence from the Secretary of State is sent. (b) Qualifications (1 ) The registered agent must be: (i) A natural person, resident in Illinois OR (ii) A corporation with a purpose clause that permits it to be the agent for other corporations, with an office in Illinois; (2) The registered office must be in Illinois and must be a street or road address, not just a P.O. Box number. (c) Changes Any change in either the agent or the office must be reported as soon as you know of the change. Prompt reporting of changes is important so that correspondence will not be delayed or lost. Form NFP-105.10 is used to report changes. Duration The duration is the period of time you plan to be incorporated. The duration is perpetual, unless otherwise stated in the Articles of Incorporation. Purpose (a) Generally The purpose is a statement of the type of function or character for which the corporation is formed. Illinois requires this statement to be a narrow or specific purpose and will not accept a purpose that is too broad, general or vague. 2 (b) Allowable Purposes Not-for-profit corporations may be organized for any one or more of the following or similar purposes: 1 ) Charitable 10) Literary 2) Benevolent 11 ) Athletic 3) Eleemosynary 12) Scientific 4) Educational 13) Research 5) Civic 14) Agricultural 6) Patriotic 15) Horticultural 7) Political 16) Soil 'improvement 8) Religious 17) Crop improvement 9) Social 18) Livestock or poultry improvement 19) Professional, commercial, industrial or trade association 20) Promoting the development, establishment or expansion of indus- tries 21 ) Electrification on a cooperative basis 22) Telephone service on a mutual or cooperative basis 23) Ownership and operation of water supply facilities for drinking and general domestic use on a mutual or cooperative basis 24) Ownership or administration of residential property on a coopera- tive basis 25) Administration and operation of property owned on a condominium basis or by a homeowner association 26) Administration and operation of an organization on a cooperative basis producing or providing goods, services or facilities primarily for the benefit of members who are consumers of such goods, serv- ices or facilities 27) Operation of a community mental health board or center organized pursuant to the Community Mental Health Act for the purpose of providing direct patient services 28) Provision of debt management services as authorized by the Debt Management Service Act 29) Promotion, operation and administration of a ridesharing arrange- ment as defined in Section 1 -176.1 of the Illinois Vehicle Code 30) Administration and operation of an organization for the purpose of assisting low-income consumers in the acquisition of utility and tele- phone services 31) Any purpose permitted to be exempt from taxation under Section 501 (c) or 501 (d) of the U.S. Internal Revenue Code, as now in or hereafter amended 32) Any purpose that would qualify for tax-deductible gifts under the Section 170(c) of the U.S. Internal Revenue Code, as now or here- after amended (Any such purpose is deemed to be charitable under subsection (a)(1 ) of this Section.) 33) Furnishing natural gas on a cooperative basis. 3 (c) Specifics After prefacing or confining the purpose, a more detailed or specific pur- pose may be listed. Simple, everyday language can be used. For exam- ple: 'To find homes for stray dogs and cats," 'To send needy inner city children to summer camp," or "To form a neighborhood block club." DO NOT use any language that may indicate or imply a business purpose as such is not a proper not-for-profit purpose. A corporation that is to function as a club, as defined in Section 1 -3-24 of the Liquor Control Act of 1934, must insert in its purpose clause the fol- lowing statement: the corporation will comply with the state and local laws and ordinances relating to alcoholic liquors. State whether the corporation is a condominium association as established under the Condominium Property Act, a cooperative housing corporation defined in Section 216 of the Internal Revenue Code of 1954, or a homeowner asso- ciation, which administers a common-interest community as defined in subsection (c) of Section 9.102 of the Code of Civil Procedures. (d) Tax-Exempt Status If you intend to apply for federal tax-exempt status, you must elaborate on the purposes set forth in this section under a separate section for Other Provisions. (e) Powers All Not-for-Profit Corporations are granted many powers by statute. Because these powers are statutory, they do not need to be listed and should not be listed in the purpose clause either as purposes or as pow- ers. Among the granted, statutory powers are the powers to sue and be sued, complain and defend, in the corporate name; to have and affix a corporate seal; to purchase, lease, acquire, hold, use, own, or otherwise deal in and with any real and personal property; to make contracts and incur liabilities; to elect or appoint officers; to make and alter by-laws; to loan money for its corporate purposes; to have and exercise all powers necessary or convenient to effect any or all of the purposes for which the corporation is organized. Directors There must be at least three (3) directors. They do not have to be Illinois res- idents or corporation members, but you may require these restrictions or impose any other qualifications you choose. Restrictions and qualifications may be set forth on the Articles of Incorporation under the Other Provisions section, or you may leave restrictions and qualifications to be set forth in the corporate by-laws. Incorporators One or more incorporators may organize a corporation under this Act. An incorporator may be either a natural person age 18 or older or a corporation, domestic or foreign, whether not-for-profit or otherwise. 4 Other Provisions Below or following the purpose clause, you may list any other provisions regarding the internal affairs of the corporation you wish to have included as part of the Articles of Incorporation. These may include: (a) Tax-Exempt Status If you intend to apply to the IRS for tax-exempt status and the section of the Internal Revenue Code under which your corporation will fall requires an elaboration of purposes, the means for achieving them, procedures for dissolution, etc., this is the place to make those statements. This section must be written in language and format that conforms to the specifications of the IRS Code. These statements will play a large part in the determina- tion of your tax status by the IRS. (Note — In certain cases, this informa- tion may be included in your by-laws instead of placed in the Articles of Incorporation. Check Publication 557, ask the IRS, or consult an attorney if you are uncertain about this.) (b) Restrictions and Qualifications List who can be a member, an officer, or a director and what duties each must perform. This information need not be a part of the Articles of Incorporation, but if it is not, such information should be a part of the by-laws. (c) Other Regulations List any other regulation for the governing of the internal affairs of the cor- poration or leave these for the by-laws. COST AND EXPEDITED SERVICE To become a Not-for-Profit Corporation, submit two (2) identical copies of the Articles of Incorporation, with at least one copy being the original, and the $50 fil- ing fee in the form of a certified check, cashiers check or money order payable to Secretary of State. All Articles of Incorporation, including the filing fee, must be mailed to the Department of Business Services office in Springfield for review. The department offers the review and, if approved, the filing of Articles of Incorporation on an expedited basis within 24 hours of receipt in either the Springfield or Chicago office. Pursuant to the provisions of the Illinois General Not For Profit Corporation Act, all such requests for expedited service must be made in person either in the Springfield or Chicago office and accompanied by a seper- ate expedited service fee of $25, payable to Secretary of State, in addition to the $50 filing fee. Any Articles of Incorporation hand-delivered to either the Springfield or Chicago office not requesting expedited service will be reviewed on a routine (non-expedited) basis in the Springfield office. When approved, the Secretary of State will stamp the date of filing on both copies and return one copy to the incorporators or their representative. 5 FILINGS AFTER INCORPORATING Recording After receiving the Articles of Incorporation from the Secretary of State, you mustfile them with the Recorder of Deeds of the county in which the registered office of the corporation is located. This recording must be made within 15 days after the Secretary of State has mailed these items, or as soon as pos- sible thereafter. Federal Income Tax Should you decide to apply for federal income tax exemption, you must do so after you have been incorporated and have received the filed Articles of Incorporation from the Secretary of State. Obtain the proper application form from the IRS, and complete and submitthe application, along with photocopies of yourArticles of Incorporation and your by-laws, to the IRS. The IRS will noti- fy you of their determination, and the annual reports that will be required in the future, after receiving your documents. If you do not apply for or do not receive a federal tax exemption, you must file federal income tax returns and pay the appropriate tax. Consult the IRS for the time to file and the forms to use. Illinois Income Tax If your corporation receives a federal tax exemption, it is exempt from Illinois income tax. No reports need to be filed and no tax is due. If you do not apply for or do not receive a federal tax exemption, you must file Illinois income tax returns and pay the appropriate tax. Consult the Illinois Department of Revenue, Income Tax Division, for the time to file and forms to use. Illinois Sales Tax Some notfor-profit corporations may qualify for an exemption from paying sales tax on goods purchased for the use of the organization if they are formed for exclusively charitable, religious or educational purposes or for senior citi- zens. To find out if you qualify, write a letter of request to the Illinois Department of Revenue, Sales Tax Division, and enclose photocopies of your Articles of Incorporation, by-laws, constitution, IRS exemption letter, or any other document that may help in determining your status. The Department of Business Services will notify you of your status. If you qualify for sales tax exemption, you will be issued a letter ruling to that effect. You may not use your not-for-profit registration number or IRS number to claim exemption from Illinois sales tax. Illinois Attorney General Registration Certain charitable organizations must register with the Attorney General, Division of Charitable Trust and Solicitations, under either or both the Illinois Charitable Trust Act or the Illinois Solicitation Act. Information and forms may be obtained from the Office of the Illinois Attorney General. 6 REPORTING REQUIREMENTS Annual Reports to the Secretary of State ALL Not-for-Profit Corporations must file an annual report of officers and direc- tors with the Secretary of State. The due date depends upon when the corpo- ration was formed. The annual report is due before the first day of the corpo- ration's anniversary month each year. The anniversary month is the month in which the corporation was formed. For example, if the date of incorporation was Sept. 15, the anniversary month is September and each annual report is due before the first day of September each year. Forms will be sent to the reg- istered agent approximately 60 days before the due date. Failure to file an annual report may result in involuntary dissolution of the corporation. Annual Reports to Other Government Agencies The Internal Revenue Service, the Illinois Department of Revenue and the Illinois Attorney General may require other annual returns. Whether you must file a return and which return you will use depends in part on your status as a tax-exempt or non-tax-exempt corporation. To be sure of your obligations, please consult the proper agency. Other Reports to the Secretary of State Any change in the corporate name, duration or purpose will require that the Articles of Incorporation be amended, using the proper form. Also, should the corporation need to report a merger, dissolution or reinstatement, it should use the proper form. All forms for these reports are available from the Secretary of State and should be filed upon the occurrence of the particular event. The government agencies listed in this guide are not intended to be a com- plete list, but merely those agencies most frequently required to be consulted, Some local governments also may require filings or reports. 7 CONTACT INFORMATION SECRETARY OF STATE Secretary of State Secretary of State Department of Business Services Department of Business Services Corporations Division Corporations Division 350 Howlett Building 69 W. Washington, Ste. 1240 Springfield, IL 62756 Chicago, IL 60602 217-782-6961 312-793-3380 www.cyberdriveillinols.com DEPARTMENT OF REVENUE Department of Revenue Department of Revenue Income Tax Division Income Tax Division 101 W. Jefferson 100 W. Randolph Springfield, IL 62708 Chicago, IL 60601 800-732-6866 800-732-8866 Department of Revenue Department of Revenue Sales Tax Division Sales Tax Division 101 W. Jefferson 100 W. Randolph Springfield, IL 62708 Chicago, IL 60601 800-732-8866 800-732-8866 www.revenue.state.if.us/ ATTORNEY GENERAL Illinois Attorney General Division of Charitable Trust and Solicitations 100 W. Randolph,12th Ff. Chicago, IL 60601 312-814-2595 INTERNAL REVENUE SERVICE (Form pick-up only) Internal Revenue Service Internal Revenue Service 320 W. Washington, Rm. 611 230 S. Dearborn Springfield, IL 62703 Chicago, IL 60609 Attn: Forms Services 800-829-3676 All places in Illinois not listed above, call: 800-829-1040 All IRS forms and publications may be obtained from: Internal Revenue Service Forms P.O. Box 24672 Kansas City, MO 64131 www.irs.ustreas.gov/procl 8 JESSE WHITE SECRETARY OF STATE KIM..CMEWRDRIVEILLINOIS. COM Printed by authority of the State of Illinois. March 2007— 5M—C 165.25 [SAMPLE] BY-LAWS OF THE [NAME] ARTICLE I Purposes. The purposes of the [NAME] (the "[NAMED"), are exclusively charitable and educational within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986 or its corresponding successor section. The purpose and mission of the [NAME] is to promote, encourage, or foster any charitable, benevolent, or eleemosynary purpose or activity which enhances the operation ofthe library servicing the Village of Park Forest, its library facilities and its contribution to the Village community. ARTICLE H Offices. The Association shall have and continuously maintain in this State a registered office and a registered agent, whose office is identical with such registered office. ARTICLE III Members. The general public shall be eligible for membership for such term, upon such application and upon payment of such donation as the Board of Directors shall determine. Any organization, individual, or business enterprise in the United States which endorses the purposes of the [NAME] shall be eligible for membership for such term, upon such application, and upon payment of such donation as the Board of Directors shall determine. An organization Member shall designate one official representative to attend meetings and functions of the [NAME]. The official representative ofthe organization shall have the rights and privileges of an individual Member and shall be registered annually with the Secretary. Membership shall automatically terminate when the requirements for membership are no longer met. Membership shall not be assignable nor otherwise transferable. No members shall have voting rights; all voting rights are vested solely in the Board of Directors. ARTICLE IV Meetings of Members. Section 1. Annual Meefing. An Annual Meeting of Members shall be held after March l' and prior to April 30`s of each year at the same time and place as the Annual Meeting of the Board ofDirectors. The purpose of the Annual Meeting of Members shall be to inform the members of the activities of the [NAME] and to approve the budget and financial policy for the next fiscal year. Section 2. Special Meetings. Special Meetings of the Members may be called by the President or a quorum of the Board of Directors at any time. Section 3. Notice of Meetings. Written or printed notice stating the place, day and hour of any meeting of Members shall be delivered, either personally, by mail or by electronic mail, to each Member not less than five (5) days before the date of such meeting, by or at the direction of the President, Secretary or the officers or persons calling the meeting. In case of any meeting, notice of the meeting shall be deemed delivered when deposited in the United States mail addressed to the Member at his address as it appears on the records of the [NAME], with postage thereon prepaid. ARTICLE V Board of Directors. Section I. General Powers. The affairs of the [NAME] shall be managed by its Board of Directors who shall be nominated from the membership by those sitting Members of the Board who are the commissions ofthe Park Forest Library. The Board ofDirectors may exercise all such powers of the [NAME] as are directed or required or permitted to be exercised by the Board ofDirectors by law, by the Articles of Incorporation or by these by-laws. Section 2. Number and Selection. (a) The Board of Directors shall be comprised of not less than seven (7) nor more than eleven (11) members nominated and elected at the Annual Meeting of the Board of Directors. Except in the case of the original Board of Directors, each new Director shall be elected by a majority of the Board. (b) The Park Forest Library shall at all time collectively hold three (3) seats on the Board of Directors. Section 3. Terms of Office. (a) The standard term of office shall be two (2) years. The terms of office shall be staggered so that at least one-half ('/z) of the Directors remain on the Board of Directors each year. Individuals may serve on the Board ofDirectors for consecutive terms, totaling no more than two (2) consecutive terms, totaling no more than four (4) consecutive years. (b) Extensions to a Board Member's term of office, when deemed beneficial to the organization, can be approved by a majority vote of the Board of Directors on a case by case basis. 2 Section 4. Vacancies. Whenever a Director dies, resigns, or ceases to act, or when a Director's term expires, the vacancy created shall be filled by a new Director elected by a majority ofthe remaining members of the Board of Directors in accordance with Section 2 above. Candidates for vacant positions may be recommended by the Park Forest Library, or by the Board of Directors. Each Director so elected or appointed to fill a vacancy shall hold office for the unexpired term of his predecessor. Section 5. Meeting Attendance. Members of the Board of Directors are expected to attend regular meetings of the Board during each fiscal year. Section 6. Semi Annual Meeting. The Semi-Annual Meeting of the Board of Directors shall be held in the month of January and in the month of September on a date designated each year by the President, for the purpose of electing Directors and for the transaction of such other business as may come before the Meeting. Section 7. Regular Meeting. The Board of Directors may provide by resolution the time and place for Regular Meetings of the Board ofDirectors. No notice of any regular meeting of the Board of Directors shall be required except as provided in Section 9 below. Section 8. Special Meetings. Special Meetings of the Board of Directors maybe called by or at the request of the President or any two (2) Directors. The person or persons authorized to can Special Meetings of the Board may fix the place and time for holding any Special Meeting of the Board called by them. Section 9. Notice of Meetings. Notice of Meetings of the Board of Directors shall be submitted to the Park Forest Library for publication in the Library Calendar. Notice of any Special Meeting shall be given at least five (5) days previous thereto by written notice delivered personally, or sent by mail or telegram or electronic mail to each Director at his/her address as shown by the records of the [NAME]. If mailed, such notice shall be deemed to be delivered when deposited in the United States in a sealed envelope addressed to the Director with postage thereon prepaid. Section 10. Quorum. A majority of the Directors then in office shall constitute a quorum for the transaction of business at any meeting of the Board of Directors. In the absence of a quorum, a majority of the Directors present may adjourn the meeting without further notice. ARTICLE VI Officers. Section 1. General Qualifications. The officers of the [NAME] shall be a President, Vice- President, Treasurer, and Secretary. All officers shall be Members of and elected by the Board of Directors. The Board of Directors may elect or appoint such other officers as it shall deem desirable, such officers to have the authority and perform the duties prescribed by the Board of Directors. 3 Section 2. Election and Term of Office. The officers of the [NAME] shall be elected by the Board of Directors at the regular January meeting of the Board of Directors for a term of two (2) years and may be re-elected for additional two (2) year terms not to exceed two (2) consecutive terms. Extensions to an officer's term of office, when deemed beneficial to the organization, can be approved by a majority vote of the Board of Directors on a case by case basis. Section 3. Vacancies. A vacancy in any office may be filled by the Board of Directors for the unexpired portion of the term. Section 4. President. The President shall be the Chief Executive Officer of the [NAME] and shall serve as Chairman of the Board of Directors. The President shall supervise and control all of the business of the [NAME]. He/she shall preside at all meetings of the Board of Directors. The President may sign, with the Secretary or any other proper officer of the [NAME] authorized by the Board, any deeds, mortgages, bonds, contracts or other instruments which the Board has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board or by these by-laws or by statute to some other officer or agent of the [NAME]; and, in general, shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board from time to time. Section 5. Vice President. In the absence of the President, the Vice-President shall perform the duties of the President, and, when so acting, shall have the powers of and be subject to all the restrictions upon the President. The Vice-President shall perform duties as from time to time may be assigned to him/her by the President or by the Board of Directors. Section 6. Treasurer. The Treasurer is the Chief Financial Officer of the [NAME]. He/she shall be responsible for budget preparation and financial planning. The Treasurer shall have charge and custody of and be responsible for all funds and securities of the [NAME]; receive and give receipts for moneys due and payable to the [NAME], and deposit all such moneys in the name of the [NAME] in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of Article VII of these by-laws and in general, perform all the duties incident to the office of the Treasurer and such other duties as from time to time may be assigned to him/her by the President or by the Board of Directors. The Treasurer shall serve on any budget and/or finance committee created by the Board. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his/her duties, payable to the [NAME] in such sums and with such surety or sureties as the Board shall determine. The cost of the bond shall be paid by the [NAME]. Section 7. Secretary. The Secretary shall keep records and minutes of all board and membership meetings, record attendance, be custodian of the corporate seal, sign legal instruments in conjunction with the President, see that all notices are duly given in accordance with the provisions of these by-laws or as required by law, and, in general, perform all duties incident to the office of 4 Secretary and such other duties as from time to time may be assigned to him/her by the President or by the Board of Directors. ARTICLE VII Committees. Section 1. Executive Committee. The Executive Committee shall consist of the officers of the [NAME] and the chairpersons of any committees established pursuant to Section 2 of Article VII. The Executive Committee may exercisethe authority oftheBoard ofDirectors as provided in Section 108.40(c) of the Illinois General Not-for-Profit Corporation Act of 1986. Section 2. Other Committees. The Board of Directors may establish such committees as it deems necessary, giving the committees such other authority as the Board determines to be appropriate. Persons other than Directors may serve on committees, provided each committee shall consist of at least one (1) Director. Section 3. Term of Office. Each Member of a Committee shall continue as such until the next meeting of the Board of Directors or until his/her successor is appointed, unless the committee shall be sooner terminated. Section 4. Quorum. Unless otherwise provided by the Board of Directors, a majority of the whole committee shall constitute a quorum and the act of a majority of the Members present at the meeting at which a quorum is present shall be the act of the committee. ARTICLE VIII Contracts, Checks Deposits, G fts and Audits. Section 1. Contracts. The Board of Directors may authorize any officer or agent of the [NAME], in addition to the officers so authorized by these by-laws, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the [NAME], and such authority may be general or confined to specific instances. Section 2. Checks, Drafts. etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the [NAME] shall be signed by such officers or agents and in such manner as the Board of Directors shall determine. Section 3. Deposits. All funds of the [NAME] shall be deposited from time to time to the credit ofthe [NAME] in such banks, trust companies, or other depositories as the Board of Directors may select. 5 Section 4. Gifts. The Board of Directors will accept, on behalf of the [NAME], any contribution, gift, bequest or devise for the general purpose or from any special purpose of the [NAME] and be responsible for allocation of these funds. Section 5. Audits. The accounts of the [NAME] shall be audited annually by an independent auditor appointed by the Board of Directors. ARTICLE IX Books and Records. The [NAME] shall keep correct and complete books and records of account and shall also keep minutes of the proceedings of its Members, the Board of Directors, and committees having any of the authority of the Board of Directors. All books and records of the [NAME] may be inspected by any Director or Member or his agent or attorney, for any proper purpose, at any reasonable time. ARTICLE X Fiscal Year. The fiscal year of the [NAME] shall begin May 1s` and end April 30th. ARTICLE XI Amendments. Section ]. The By-Laws will be Amended as Needed. Section 2. Procedure to Amend (a) All members of the Board of Directors shall receive written notice of any proposed amendments of these by-laws at least ten (10) days prior to the Meeting of the Board of Directors as which the proposed amendment shall be introduced. (b) The proposed amendment shall be submitted to the vote of the Board of Directors. A two-thirds (2/3) majority of the Directors in office shall be required for adoption of an amendment. ARTICLE XII Indemnification. Sections (b), (c), (d), (f), (i), and 0) of Section 108.75 ofthe Illinois General Not-for-Profit Corporation Act of 1986 (concerning indemnification) shall be incorporated herein by reference and be made a part of these by-laws. 6 ARTICLE XIII Inurement. No part of the net earnings of the [NAME] shall inure to the benefit of, or be distributable to its Members or Board of Directors. The Directors shall receive no compensation from the [NAME]. Special expenses incurred by Directors on behalf of the [NAME] may be paid upon approval of the Board of Directors. No funds or property of the [NAME] shall be used to carry on propaganda or otherwise influence legislation. The [NAME] shall be used to carry on propaganda or otherwise influence legislation. The [NAME] shall not participate in nor intervene in any political campaign on behalf of any candidate for public office. The [NAME] shall not carry on any other activities prohibited to a tax exempt organization under Section 501 (c)(3) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Code). ARTICLE XIV Dissolution. In the even of dissolution, the residual assets ofthe [NAME] shall be distributed to one or more tax exempt organizations as described in Section 501 (c)(3) of the Internal Revenue Code of 1954 or corresponding section of any prior or future Internal Revenue Code, or to the federal, state or local governments for exclusive public purposes. I, [NAME], President, certify that this is a true and correct copy of the adopted by-laws of the [NAME]. [NAME], President Date: 7 Fnnn ■ ®23 Application for Recognition of Exemption OMB No. 1545-0056 Note: If exempt status is (Rev. June 2006) Under Section 501(c)(3) of the Internal Revenue Code approved, this Deparcmrert of Me Treasury application will be open Internal Revenue service for public inspection. Use the instructions to complete this application and for a definition of all bold items. For additional help, call IRS Exempt Organizations Customer Account Services toll-free at 1 -877-829-5500. Visit our website at www.irs.gov for forms and publications. If the required information and documents are not submitted with payment of the appropriate user fee, the application may be returned to you. Attach additional sheets to this application if you need more space to answer fully. Put your name and EIN on each sheet and identify each answer by Part and line number. Complete Parts I - A of Form 1023 and submit only those Schedules (A through H) that apply to you. Identification of Applicant 1 Full name of organization (exactly as It appears in your organizing document) 2 c/o Name (if applicable) 3 Mailing address (Number and street) (see instructions) Room/Suite 4 Emploper IdeM:fication Number (E€N i City or town, state or country, and ZIP + 4 5 Manth the annual accounting oenod ends (G1 - 12) 6 Primary contact (officer, director, trustee, or authorized representative) a Name: b Phone: c Fax: (optional) 7 Are you represented by an authorized representative, such as an attorney or accountant? If "Yes," ❑ Yes ❑ No provide the authorized representative's name, and the name and address of the authorized representative's firm. Include a completed Form 2848, Power of Attorney and Declaration of Representative, with your application if you would like us to communicate with your representative. 8 Was a person who is not one of your officers, directors, trustees, employees, or an authorized ❑ Yes ❑ No representative listed in line 7, paid, or promised payment, to help plan, manage, or advise you about the structure or activities of your organization, or about your financial or tax matters? If "Yes," provide the person's name, the name and address of the person's firm, the amounts paid or promised to be paid, and describe that person's role. 9a Organization's website: b Organization's email: (optional) 10 Certain organizations are not required to file an information return (Forth 990 or Forth 990-EZ). If you ❑ Yes ❑ No are granted tax-exemption, are you claiming to be excused from filing Forth 990 or Form 990-EZ? If "Yes," explain. See the instructions for a description of organizations not required to file Form 990 or Form 990-EZ. 11 Date incorporated if a corporation, or formed, If other than a corporation. (MM/DD/YYYY) / / 12 Were you formed under the laws of a foreign country? ❑ Yes ❑ No If "Yes," state the country. For Paperwork Reduction Act Notice, see page 24 of the instructions. Cat. No. 17133K Fonn 1 023 (Rev. 6-2006) Form 1023 (Rev. 6-2006) Name: EIN: — Page 2 Organizational Structure You must be a corporation (including a limited liability company), an unincorporated association, or a trust to be tax exempt. (See instructions.) DO NOT file this form unless you can check Wes" on lines 1, 2, 3, or 4. 1 Are you a corporation? If "Yes," attach a copy of your articles of incorporation showing certification ❑ Yes ❑ No of filing with the appropriate state agency. Include copies of any amendments to your articles and be sure they also show state filing certification. 2 Are you a limited liability company (LLC)? If "Yes," attach a copy of your articles of organization showing ❑ Yes ❑ No certification of filing with the appropriate state agency. Also, if you adopted an operating agreement, attach a copy. Include copies of any amendments to your articles and be sure they show stale filing certification, Refer to the instructions for circumstances when an LLC should not file its own exemption application. 3 Are you an unincorporated association? If "Yes," attach a copy of your articles of association, ❑ Yes ❑ No constitution, or other similar organizing document that is dated and includes at least two signatures. Include signed and dated copies of any amendments. 4a Are you a trust? If "Yes," attach a signed and dated copy of your trust agreement. Include signed ❑ Yes ❑ No and dated copies of any amendments. b Have you been funded? If "NW," explain how you are formed without anything of value placed in trust. ❑ Yes ❑ No 5 Have you adopted bylaws? If "Yes," attach a current copy showing date of adoption. If "No," explain ❑ Yes ❑ No how your officers, directors, or trustees are selected. Re wired Provisions in Your Organizing Document The following questions are designed to ensure that when you file this application, your organizing document contains the required provisions to meet the organizational test under section 501 (6)(3). Unless you can check the boxes in troth lines 1 and 2, your organizing document does not meet the organizational test. DO NOT file this application until you have amended your organizing document. Submit your original and amended organizing documents (showing state filing certification if you are a corporation or an LLC) with your application. 1 Section 501 (c)(3) requires that your organizing document state your exempt purpose(s), such as charitable, El religious, educational, and/or scientific purposes. Check the box to confirm that your organizing document meets this requirement. Describe specifically where your organizing document meets this requirement, such as a reference to a particular article or section in your organizing document. Refer to the instructions for exempt purpose language. Location of Purpose Clause (Page, Article, and Paragraph): 2a Section 561(6)(3) requires that upon dissolution of your organization, your remaining assets must be used exclusively ❑ for exempt purposes, such as charitable, religious, educational, and/or scientific purposes. Check the box on line 2a to confirm that your organizing document meets this requirement by express provision for the distribution of assets upon dissolution. If you rely on state law for your dissolution provision, do not check the box on line 2a and go to line 2c. 2b If you checked the box on line 2a, specify the location of your dissolution clause (Page, Article, and Paragraph). Do not complete line 2c if you checked box 2a. 2c See the instructions for information about the operation of state law in your particular state. Check this box if ❑ you rely on operation of state law for your dissolution provision and indicate the state: Narrative Description of Your Activities Using an attachment, describe your past, present, and planned activities in a narrative. If you believe that you have already provided some of this information in response to other parts of this application, you may summarize that information here and refer to the specific parts of the application for supporting details. You may also attach representative coples of newsletters, brochures, or similar documents for supporting details to this narrative. Remember that If this application is approved, it will be open for public Inspection. Therefore, your narrative description of activities should be thorough and accurate. Refer to the instructions for information that must be included in your description. Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Employees, and Independent Contractors is List the names, titles, and mailing addresses of all of your officers, directors, and trustees. For each person listed, state their total annual compensation, or proposed compensation, for all services to the organization, whether as an officer, employee, or other position. Use actual figures, if available. Enter "none" If no compensation is or will be paid. If additional space is needed, attach a separate sheet. Refer to the instructions for information on what to include as compensation. Compensation amount Name I me i Mailing address j (annual actual or estimated) i i i i _ ._. _ __ . _._ .._ ._. _ .__ ._. . __. _ ._ . { i i Form 1023 (Rev. 6-2006) Form 1023 (Rev. 6-2666) Name: EIN: Page 3 KjM Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Employees, and Independent Contractors (Continue b List the names, titles, and mailing addresses of each of your five highest compensated employees who receive or will receive compensation of more than $50,000 per year. Use the actual figure, if available. Refer to the instructions for information on what to include as compensation. Do not include officers, directors, or trustees listed in line Ia. j Compensation amount Name Title Mailing address (annual actual or estimated) t______ _ ___ _ ___ ___ ; _ ____ ____ ____ ____ _ ___ ____ _ _______ ____ ___f i j i i c List the names, names of businesses, and mailing addresses of your five highest compensated independent contractors that receive or will receive compensation of more than $50,000 per year. Use the actual figure, I available. Refer to the instructions for information on what to include as compensation, Compensation amount Name into Mailing address ! (annual actual or estimated) i I i i i I i I I � i ' . i i The following "Yes" or "No" questions relate to past, present, or planned relationships, transactions, or agreements with your officers, directors, trustees, highest compensated employees, and highest compensated independent contractors listed in lines 1a, 1b, and 1c. 2a Are any of your officers, directors, or trustees related to each other through family or business ❑ Yes ❑ No relationships? If "Yes," identify the individuals and explain the relationship. b Do you have a business relationship with any of your officers, directors, or trustees other than ❑ Yes ❑ No through their position as an officer, director, or trustee? If "Yes," identify the individuals and describe the business relationship with each of your officers, directors, or trustees. c Are any of your officers, directors, or trustees related to your highest compensated employees or ❑ Yes ❑ No highest compensated independent contractors listed on lines 1 b or 1 c through family or business relationships? If "Yes," identify the individuals and explain the relationship. 3a For each of your officers, directors, trustees, highest compensated employees, and highest compensated independent contractors listed on lines ia, 1b, or 1c, attach a list showing their name, qualifications, average hours worked, and duties. b Do any of your officers, directors, trustees, highest compensated employees, and highest ❑ Yes ❑ No compensated independent contractors listed on lines 1a, 1b, or 1c receive compensation from any other organizations, whether tax exempt or taxable, that are related to you through common control? If "Yes," identify the individuals, explain the relationship between you and the other organization, and describe the compensation arrangement. 4 In establishing the compensation for your officers, directors, trustees, highest compensated employees, and highest compensated independent contractors listed on lines ia, 1b, and 1c, the following practices are recommended, although they are not required to obtain exemption. Answer "Yes" to all the practices you use. a Do you or will the individuals that approve compensation arrangements follow a conflict of interest policy? ❑ Yes ❑ No b Do you or will you approve compensation arrangements in advance of paying compensation? ❑ Yes ❑ No c Do you or will you document in wdting the date and terms of approved compensation arrangements? ❑ Yes ❑ No Form 1023 (Rev. 6-2006) Form 1023 (Rev. 6-2006) Name: EIN: — Page 4 Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Employees, and Independent Contractors (Continued) d Do you or will you record in writing the decision made by each individual who decided or voted on ❑ Yes ❑ No compensation arrangements? e Do you or will you approve compensation arrangements based on information about compensation paid by ❑ Yes ❑ No similarly situated taxable or tax-exempt organizations for similar services, current compensation surveys compiled by independent firms, or actual written offers from similarly situated organizations? Refer to the Instructions for Part V, lines 1a, 1 b, and 1c, for Information on what to include as compensation. f Do you or will you record in writing both the information on which you relied to base your decision ❑ Yes ❑ No and its source? g If you answered "No" to any item on lines 4a through 4f, describe how you set compensation that is reasonable for your officers, directors, trustees, highest compensated employees, and highest compensated independent contractors listed in Part V, lines 1a, 1 b, and 1 c. 5a Have you adopted a conflict of interest policy consistent with the sample conflict of interest policy ❑ Yes ❑ No in Appendix A to the instructions? If "Yes," provide a copy of the policy and explain how the policy has been adopted, such as by resolution of your governing board. If "No," answer lines 5b and 5c. b What procedures will you follow to assure that persons who have a conflict of interest will not have influence over you for setting their own compensation? c What procedures will you follow to assure that persons who have a conflict of interest will not have influence over you regarding business deals with themselves? Note: A conflict of interest policy is recommended though it is not required to obtain exemption. Hospitals, see Schedule C, Section I, line 14. 6a Do you or will you compensate any of your officers, directors, trustees, highest compensated employees, ❑ Yes ❑ No and highest compensated independent contractors listed in lines Ia. 1b, or 10 through non-fixed payments, such as discretionary bonuses or revenue-based payments? If "Yes," describe all non-fixed compensation arrangements, including how the amounts are determined, who is eligible for such arrangements, whether you place a limitation on total compensation, and how you determine or will determine that you pay no more than reasonable compensation for services. Refer to the instructions for Part V, lines 1a, 1 b, and 1 c, for Information on what to include as compensation. b Do you or will you compensate any of your employees, other than your officers, directors, trustees, ❑ Yes ❑ No or your five highest compensated employees who receive or will receive compensation of more than $50,000 per year, through non-fixed payments, such as discretionary bonuses or revenue-based payments? If "Yes," describe all non-fixed compensation arrangements, including how the amounts are or will be determined, who is or will be eligible for such arrangements, whether you place or will place a limitation on total compensation, and how you determine or will determine that you pay no more than reasonable compensation for services. Refer to the instructions for Part V, lines 1 a, 1 b, and 1 c, for Information on what to Include as compensation. 7a Do you or will you purchase any goods, services, or assets from any of your officers, directors, ❑ Yes ❑ No trustees, highest compensated employees, or highest oompenseted independent contractors listed In lines 1 a, 1b, or 1c? If "Yes," descri be any such purchase that you made or intend to make, from whom you make or will make such purchases, how the terms are or will be negotiated at arm's length, and explain how you determine or will determine that you pay no more than fair market value. Attach copies of any written contracts or other agreements relating to such purchases. b Do you or will you sell any goods, services, or assets to any of your officers, directors, trustees, D. Yes ❑ No highest compensated employees, or highest compensated independent contractors listed in lines 1a, 1b, or 1c? If Wes," describe any such sales that you made or intend to make, to whom you make or will make such sales, how the terms are or will be negotiated at arm's length, and explain how you determine or will determine you are or will be paid at least fair market value. Attach copies of any written contracts or other agreements relating to such sales. Be Do you or will you have any leases, contracts, loans, or other agreements with your officers, directors, ❑ Yes ❑ No trustees, highest compensated employees, or highest compensated independent contractors listed in lines 1a, 1b, or 1c? If "Yes," provide the information requested in lines 8b through fif. b Describe any written or oral arrangements that you made or intend to make. c Identify with whom you have or will have such arrangements. d Explain how the terms are or will be negotiated at arm's length. e Explain how you determine you pay no more than fair market value or you are paid at least fair market value. f Attach copies of any signed leases, contracts, loans, or other agreements relating to such arrangements. 9a Do you or will you have any leases, contracts, loans, or other agreements with any organization in ❑ Yes ❑ No which any of your officers, directors, or trustees are also officers, directors, or trustees, or in which any individual officer, director, or trustee owns more than a 35% interest? If "Yes," provide the information requested in lines 9b through 9f. Form 1023 (Rev. 6-2006) Form 1023 (Rev. 6-2006) Name: EIN: — Page 5 Compensation and Other Financial Arrangements With Your Officers, Directors, Trustees, Employees, and Independent Contractors (Continued) b Describe any written or oral arrangements you made or intend to make. c Identify with whom you have or will have such arrangements. d Explain how the terms are or will be negotiated at arm's length. e Explain how you determine or will determine you pay no more than fair market value or that you are paid at least fair market value. f Attach a copy of any signed leases, contracts, loans, or other agreements relating to such arrangements. Your Members and Other Individuals and Organizations That Receive Benefits From You The following "Yes" or "No" questions relate to goods, services, and funds you provide to individuals and organizations as part of your activities. Your answers should pertain to past, present, and planned activities. (See instructions.) 1a In carrying out your exempt purposes, do you provide goods, services, or funds to individuals? If ❑ Yes ❑ No "Yes," describe each program that provides goods, services, or funds to individuals. b In carrying out your exempt purposes, do you provide goods, services, or funds to organizations? If ❑ Yes ❑ No "Yes," describe each program that provides goods, services or funds to organizations. 2 Do any of your programs limit the provision of goods, services, or funds to a specific individual or ❑ Yes ❑ No group of specific individuals? For example, answer 'Yes," if goods, services; or funds are provided only for a particular individual, your members, individuals who work for a particular employer, or graduates of a particular school. If 'Yes," explain the limitation and how recipients are selected for each program. 3 Do any individuals who receive goods, services, or funds through your programs have a family or ❑ Yes ❑ No business relationship with any officer, director, trustee, or with any of your highest compensated employees or highest compensated independent contractors listed in Part V, lines ta, 1b, and ic? If "Yes," explain how these related individuals are eligible for goods, services, or funds. Your History The following 'Yes" or "No" questions relate to your history. (See instructions.) I Are you a successor to another organization? Answer "Yes," if you have taken or will take over the ❑ Yes ❑ No activities of another organization; you took over 25% or more of the fair market value of the net assets of another organization; or you were established upon the conversion of an organization from for-profit to non-profit status. If 'Yes," complete Schedule G. 2 Are you submitting this application more than 27 months after the end of the month in which you ❑ Yes ❑ No were legally formed? If 'Yes," complete Schedule E. Your Speck Activities The following 'Yes" or "No" questions relate to specific activities that you may conduct. Check the appropriate box. Your answers should pertain to past, present, and planned activities. (See instructions.) 1 Do you support or oppose candidates in political campaigns in any way? If 'Yes," explain. ❑ Yes ❑ No 2a Do you attempt to influence legislation? If 'Yes," explain how you attempt to influence legislation ❑ Yes ❑ No and complete line 2b. If "No," go to line 3a. b Have you made or are you making an election to have your legislative activities measured by ❑ Yes ❑ No expenditures by filing Form 5768? If 'Yes," attach a copy of the Form 5768 that was already filed or attach a completed Form 5768 that you are filing with this application. If "No," describe whether your attempts to influence legislation are a substantial part of your activities. Include the time and money spent on your attempts to influence legislation as compared to your total activities. 3a Do you or will you operate bingo or gaming activities? If "Yes," describe who conducts them, and ❑ Yes ❑ No list all revenue received or expected to be received and expenses paid or expected to be paid in operating these activities. Revenue and expenses should be provided for the time periods specified in Part IX, Financial Data. b Do you or will you enter into contracts or other agreements with individuals or organizations to ❑ Yes ❑ No conduct bingo or gaming for you? If 'Yes," describe any written or oral arrangements that you made or intend to make, identify with whom you have or will have such arrangements, explain how the terms are or will be negotiated at arm's length, and explain how you determine or will determine you pay no more than fair market value or you will be paid at least fair market value. Attach copies or any written contracts or other agreements relating to such arrangements. c List the states and local jurisdictions, including Indian Reservations, in which you conduct or will conduct gaming or bingo. Form 1023 (Rev. 6-2006) Form 1023 (Rev. 6-2006) Name: EIN: — Page 8 Your Specific Activities (Continued) 4a Do you or will you undertake fundraising? If "Yes," check all the fundraising programs you do or will ❑ Yes ❑ No conduct. (See instructions.) ❑ mail solicitations ❑ phone solicitations ❑ email solicitations ❑ accept donations on your website ❑ personal solicitations ❑ receive donations from another organization's website ❑ vehicle, boat, plane, or similar donations ❑ government grant solicitations ❑ foundation grant solicitations ❑ Other Attach a description of each fundraising program. b Do you or will you have written or oral contracts with any individuals or organizations to raise funds ❑ Yes ❑ No for you? If "Yes," describe these activities. Include all revenue and expenses from these activities and state who conducts them. Revenue and expenses should be provided for the time periods specified in Part IX, Financial Data. Also, attach a copy of any contracts or agreements. c Do you or will you engage in fundraising activities for other organizations? If "Yes," describe these ❑ Yes ❑ No arrangements. Include a description of the organizations for which you raise funds and attach copies of all contracts or agreements. d List all states and local jurisdictions in which you conduct fundraising. For each state or local jurisdiction listed, specify whether you fundralse for your own organization, you fundraise for another organization, or another organization fundraises for you. e Do you or will you maintain separate accounts for any contributor under which the contributor has - ❑ Yes ❑ No the right to advise on the use or distribution of funds? Answer "Yes" if the donor may provide advice on the types of investments, distributions from the types of investments, or the distribution from the donor's contribution account. If 'Yes," describe this program, including the type of advice that may be provided and submit copies of any written materials provided to donors. 5 Are you affiliated with a govemmental unit? If 'Yes;' explain. ❑ Yes ❑ No 8a Do you or will you engage in economic development? If 'Yes," describe your program. ❑ Yes ❑ No b Describe in full who benefits from your economic development activities and how the activities promote exempt purposes 7a Do or will persons other than your employees or volunteers develop your facilities? If `Yes," describe ❑ Yes ❑ No each facility, the role of the developer, and any business or family relationship(s) between the developer and your officers, directors, or trustees. b Do or will persons other than your employees or volunteers manage your activities or facilities? If ❑ Yes ❑ No "Yes," describe each activity and facility, the role of the manager, and any business or family relationship(s) between the manager and your officers, directors, or trustees. c If there is a business or family relationship between any manager or developer and your officers, directors, or trustees, identify the individuals, explain the relationship, describe how contracts are negotiated at arm's length so that you pay no more than fair market value, and submit a copy of any contracts or other agreements. 8 Do you or will you enter into joint ventures, including partnerships or limited liability companies ❑ Yes ❑ No treated as partnerships, in which you share profits and losses with partners other than section 501 (c)(3) organizations? If 'Yes," describe the activities of these joint ventures in which you participate. 9a Are you applying for exemption as a childcare organization under section 501 (k)? If `Yes," answer ❑ Yes ❑ No lines 9b through 9d. If "No," go to line 10. b Do you provide child care so that parents or caretakers of children you care for can be gainfully ❑ Yes ❑ No employed (see instructions)? If "No," explain how you qualify as a childcare organization described in section 501 (k). c Of the children for whom you provide child care, are 85% or more of them cared for by you to ❑ Yes ❑ No enable their parents or caretakers to be gainfully employed (see instructions)? If "No," explain how you qualify as a childcare organization described in section 501 (k). d Are your services available to the general public? If "No," describe the specific group of people for ❑ Yes ❑ No whom your activities are available. Also, see the instructions and explain how you qualify as a childcare organization described in section 501 (k). 10 Do you or will you publish, own, or have rights in music, literature, tapes, artworks, choreography, ❑ Yes ❑ No scientific discoveries, or other intellectual property? If 'Yes," explain. Describe who owns or will own any copyrights, patents, or trademarks, whether fees are or will be charged, how the fees are determined, and how any items are or will be produced, distributed, and marketed. Form 1023 (Rev. 6-2006) Form 1023 (Rev. 6-2006) Name: EIN: — Page 7 Your Speck Activities (Continued) 11 Do you or will you accept contributions of: real property; conservation easements; closely held ❑ Yes ❑ No securities; intellectual property such as patents, trademarks, and copyrights; works of music or art; licenses; royalties; automobiles, boats, planes, or other vehicles; or collectibles of any type? If "Yes," describe each type of contribution, any conditions imposed by the donor on the contribution, and any agreements with the donor regarding the contribution. 12a Do you or will you operate in a foreign country or countries? If "Yes," answer lines 12b through ❑ Yes ❑ No 12d. If "No," go to line 13a. b Name the foreign countries and regions within the countries in which you operate. c Describe your operations in each country and region in which you operate. d Describe how your operations in each country and region further your exempt purposes. 13a Do you or will you make grants, loans, or other distributions to organization(s)? If "Yes," answer lines ❑ Yes ❑ No 13b through 13g. If "No," go to line 14a. b Describe how your grants, loans, or other distributions to organizations further your exempt purposes. c Do you have written contracts with each of these organizations? If "Yes," attach a copy of each contract. ❑ Yes ❑ No d Identify each recipient organization and any relationship between you and the recipient organization. e Describe the records you keep with respect to the grants, loans, or other distributions you make. If Describe your selection process, including whether you do any of the following: (] Do you require an application form? If "Yes," attach a copy of the form. ❑ Yes ❑ No n Do you require a grant proposal? If "Yes," describe whether the grant proposal specifies your C. Yes ❑ No responsibilities and those of the grantee, obligates the grantee to use the grant funds only for the purposes for which the grant was made, provides for periodic written reports concerning the use of grant funds, requires a final written report and an accounting of how grant funds were used, and acknowledges your authority to withhold and/or recover grant funds in case such funds are, or appear to be, misused. g Describe your procedures for oversight of distributions that assure you the resources are used to further your exempt purposes, including whether you require periodic and final reports on the use of resources. 14a Do you or will you make grants, loans, or other distributions to foreign organizations? If "Yes," ❑ Yes ❑ No answer lines 14b through 14f. If "No," go to line 15. b Provide the name of each foreign organization, the country and regions within a country in which each foreign organization operates, and describe any relationship you have with each foreign organization. c Does any foreign organization listed in line 14b accept contributions earmarked for a specific country ❑ Yes ❑ No or specific organization? If "Yes," list all earmarked organizations or countries. d Do your contributors know that you have ultimate authority to use contributions made to you at your ❑ Yes ❑ No discretion for purposes consistent with your exempt purposes? If "Yes," describe how you relay this Information to contributors. e Do you or will you make pre-grant inquiries about the recipient organization? If "Yes," describe these ❑ Yes ❑ No inquiries, including whether you inquire about the recipient's financial status, its tax-exempt status under the Internal Revenue Code, its ability to accomplish the purpose for which the resources are provided, and other relevant information. f Do you or will you use any additional procedures to ensure that your distributions to foreign ❑ Yes ❑ No organizations are used in furtherance of your exempt purposes? If "Yes," describe these procedures, including site visits by your employees or compliance checks by impartial experts, to verify that grant funds are being used appropriately. Forth 1023 (Rev. 6-2006) Form 1023 (Rev. 6-2006) Name: EIN: — Page B Your Specific Activities (Continued} 15 Do you have a close connection with any organizations? If "Yes," explain. ❑ Yes ❑ No 16 Are you applying for exemption as a cooperative hospital service organization under section ❑ Yes ❑ No 501 (e)? If "Yes," explain. 17 Are you applying for exemption as a cooperative service organization of operating educational ❑ Yes ❑ No organizations under section 501 jf)? If "Yes," explain. 18 Are you applying for exemption as a charitable risk pool under section 501 (n)? If "Yes," explain. ❑ Yes ❑ No 19 Do you or will you operate a school? If "Yes," complete Schedule B. Answer "Yes," whether you ❑ Yes ❑ No operate a school as your main function or as a secondary activity. 20 Is your main function to provide hospital or medical care? If "Yes," complete Schedule C. ❑ Yes ❑ No 21 Do you or will you provide low-income housing or housing for the elderly or handicapped? If ❑ Yes ❑ No "Yes," complete Schedule F. 22 Do you or will you provide scholarships, fellowships, educational loans, or other educational grants to ❑ Yes ❑ No individuals, including grants for travel, study, or other similar purposes? If "Yes," complete Schedule H. Note. Private foundations may use Schedule H to request advance approval of individual grant procedures. Fom 1023 (Rev. 6-2oo6) Form 1623 (Rev. 6-2DD6) Name: EIN: — Page 9 Financial Data For purposes of this schedule, years in existence refer to completed tax years. If in existence 4 or more years, complete the schedule for the most recent 4 tax years. If in existence more than 1 year but less than 4 years, complete the statements for each year in existence and provide projections of your likely revenues and expenses based on a reasonable and good faith estimate of your future finances for a total of 3 years of financial information. If in existence less than 1 year, provide projections of your likely revenues and expenses for the current year and the 2 following years, based on a reasonable and good faith estimate of your future finances for a total of 3 years of financial information. (See instructions.) A. Statement of Revenues and Expenses Type of revenue or expense i Current tax year 3 prior tax years or 2 succeeding tax years ' (a) From ---- -- -- (b) From -- -- --- --- (c) From ___ ___ ___ (d) From ---- -- --- - (e) Provide Total for (a) through (d) 1 Gifts, grants, and contributions received (do not I include unusual grants) 2 Membership fees received 3 Gross investment income j 4 Net unrelated business income 5 Taxes levied for your benefit 6 Value of services or facilities furnished by a governmental unit without charge (not ua ! including the value of services ! M generally furnished to the I w ! public without charge) I ¢ 7 Any revenue not otherwise 1 ! listed above or in lines 9-12 below (attach an itemized list) ! j 8 Total of lines 1 through 7 9 Gross receipts from admissions, j ! merchandise sold or services I ` performed, or furnishing of j j facilities in any activity that is related to your exempt purposes (attach itemized list) 10 Total of lines 8 and 9 ! 11 Net gain or loss on sale of j capital assets (attach schedule and see instructions) f 12 Unusual grants j13 Total Revenue Add lines 10 through 12 114 Fundraising expenses 115 Contributions, gifts, grants, I and similar amounts paid out (attach an itemized list) j 16 Disbursements to or for the benefit of members attach an ! itemized list) ' » = w 17 Compensation of officers, j m i directors, and trustees m 118 Other salaries and wages 119 Interest expense i20 Occupancy rent, utilities, etc.) 21 Depreciation and depletion 122 Professional fees 123 Any expense not otherwise classified, such as program services (attach itemized list) 124 Total Expenses Add lines 14 through 23 '. �!' %z-3� € €<# i• €%f% Form 1023 (Rev. 6-2om) Form 1023 (Rev. 6-2006) Name: EIN: — Page 10 Financial Data (ContinuecO B. Balance Sheet (for your most recently completed tax year) Year End: Assets (Whole dollars) 1 Cash . . 1 2 Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . 2 3 Inventories . . . . . . . . . . . . . . . . . . . . 3 4 Bonds and notes receivable (attach an itemized list) . . . . . . . . . . . . . . . 4 5 Corporate stocks (attach an itemized list) . . . . . . . l 5 6 Loans receivable (attach an itemized list) . . . . . . . . . . . 6 7 Other investments (attach an itemized list) . . . . . . . . . . . . . . ! 7 8 Depreciable and depletable assets (attach an itemized list) . . . i- 8 --- 9 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 10 Other assets (attach an itemized list) . . . . . . . . . . . . . . . . . . . . 10 11 Total Assets (add lines 1 through 10) . . 11 Liabilities 12 Accounts payable . . . . . . . . . . . . . . . . . ' 12 13 Contributions, gifts, grants, etc. payable . . . . . . . . . . . . . . . . . . ; 13 14 Mortgages and notes payable (attach an itemized list) . . . . . . . . . . . . . . . ` 14 15 Other liabilities (attach an itemized list) . . . . . . . . . . . . . . . . . . . ! 15 16 Total Liabilities (add lines 12 through 15) . . . . . . . . . . . . . . . ' 16 Fund Balances or Net Assets 17 Total fund balances or net assets . ! 17 18 Total Liabilities and Fund Balances or Net Assets (add lines 16 and 17) ! 1a 19 Have there been any substantial changes in your assets or liabilities since the end of the period ❑ yes C No shown above? If "Yes," explain. Public Charity Status Part X is designed to classify you as an organization that is either a private foundation or a public charity. Public charity status is a more favorable tax status than private foundation status. If you are a private foundation, Part X is designed to further determine whether you are a private operating foundation. (See instructions.) to Are you a private foundation? If "Yes," go to line 1 b. If "No," go to line 5 and proceed as instructed. iD Yes ❑ No If you are unsure, see the instructions. b As a private foundation, section 508(e) requires special provisions in your organizing document in C addition to those that apply to all organizations described in section 501 (c)(3). Check the box to confirm that your organizing document meats this requirement, whether by express provision or by reliance on operation of state law. Attach a statement that describes specifically where your organizing document meets this requirement, such as a reference to a particular article or section in your organizing document or by operation of state law. See the instructions, including Appendix B, for information about the special provisions that need to be contained in your organizing document. Go to line 2. 2 Are you a private operating foundation? To be a private operating foundation you must engage ID Yes G No directly in the active conduct of charitable, religious, educational, and similar activities, as opposed to indirectly carrying out these activities by providing grants to individuals or other organizations. If "Yes," go to line 3. If "No," go to the signature section of Part A. 3 Have you existed for one or more years? If "Yes," attach financial information showing that you are a private yes ❑ No operating foundation; go to the signature section of Part XI. If "No," continue to line 4. 4 Have you attached either (1) an affidavit or opinion of counsel, (Including a written affidavit or opinion ❑ Yes No from a certified public accountant or accounting firth with expertise regarding this tax law matter), that sets forth facts concerning your operations and support to demonstrate that you are likely to satisfy the requirements to be classified as a private operating foundation; or (2) a statement describing your proposed operations as a private operating foundation? 5 if you answered "No" to fine 1a, indicate the type of public charity status you are requesting by checking one of the choices below. You may check only one box. The organization is not a private foundation because it is: a 509(a)(1) and 170(bX1)(A)O—a church or a convention or association of churches. Complete and attach Schedule A. C b 509(a)(1) and 170(b)(i)(A)(11)—a school. Complete and attach Schedule B. C. c 509(a)(1) and 170(b)(1)(A)0i0—a hospital, a cooperative hospital service organization, or a medical research organization operated in conjunction with a hospital. Complete and attach Schedule C. d 509(a)(3)—an organization supporting either one or more organizations described in line 5a through c, f, g, or h or a publicly supported section 501 (c)(4), (5), or (6) organization. Complete and attach Schedule D. Form 1023 (Rev. 6-2006) Fom 1023 (Rev. 6-2006) Name: EIN: — Page t Public Charity Status (Continued) e 509(a)(4)—an organization organized and operated exclusively for testing for public safety. ❑ f 509(a)(1) and 170(b)(1)(A)(iv)—an organization operated for the benefit of a college or university that is owned or ❑ operated by a governmental unit. g 509(a)(1) and 170(b)(1)(A)(vi)—an organization that receives a substantial part of its financial support in the form ❑ of contributions from publicly supported organizations, from a governmental unit, or from the general public. h 509(a)(2) —an organization that normally receives not more than one-third of its financial support from gross ❑ investment income and receives more than one-third of its financial support from contributions, membership fees, and gross receipts from activities related to its exempt functions (subject to certain exceptions). i A publicly supported organization, but unsure if it is described in 5g or 5h. The organization would like the IRS to ❑ _ decide the correct status. _ 6 If you checked box g, h, or 1 in question 5 above, you must request either an advance or a definitive ruling by selecting one of the boxes below. Refer to the instructions to determine which type of ruling you are eligible to receive. a Request for Advance Ruling: By checking this box and signing the consent, pursuant to section 6501 (c)(4) of ❑ the Code you request an advance ruling and agree to extend the statute of limitations on the assessment of excise tax under section 4940 of the Code. The tax will apply only if you do not establish public support status at the end of the 5-year advance ruling period. The assessment period will be extended for the 5 advance ruling years to 8 years, 4 months, and 15 days beyond the end of the first year. You have the right to refuse or limit the extension to a mutually agreed-upon period of time or issue(s). Publication 1035, Extending the Tax Assessment Period, provides a more detailed explanation of your rights and the consequences of the choices you make. You may obtain Publication 1035 free of charge from the IRS web site at www.irs.gov or by calling toll-free 1 -800-829-3676. Signing this consent will not deprive you of any appeal rights to which you would otherwise be entitled. If you decide not to extend the statute of limitations, you are not eligible for an advance ruling. :Consent F`ntng Period :rf ianatations tlPon /�SSeSSment of' 'ax tJnr�sSechon 4940:.101. the Lilternat Revenue Code For Organization .. --'------------- ---- ---- -- -----'—_..._ -- - - ---- ----- --- - ------ -'__"'-'--.. .._..._.. .--- ------- - ----------- -- ----- --- (Signa[ure of Officey Director, Trustee, or other (type or prirrt name of signer) (Date) authwized official) _._ __.- ____... ........ .... .... .... . . ....___._ _ (Type or print title or authority of signer) For IRS Use Only -'-- - - ------------ --- -'--- n-------------. ..-- - --_ ___---. _.. .----------------- ---- ------ - ---- -------- ---- -._ .._. IRS Direc[oy Exempt Organizations (Gate) b Request for Definitive Ruling: Check this box if you have completed one tax year of at least 8 full months and ❑ you are requesting a definitive ruling. To confirm your public support status, answer line 6b(i) if you checked box g in line 5 above. Answer line 6b(i) if you checked box h in line 5 above. If you checked box 1 in line 5 above, answer both lines 6b(i) and (ii). @ (a) Enter 2% of line 8, column (e) on Part IX-A Statement of Revenues and Expenses. (b) Attach a list showing the name and amount contributed by each person, company, or organization whose ❑ gifts totaled more than the 2% amount. If the answer is "None," check this box. (ii) (a) For each year amounts are included on lines 1 , 2, and 9 of Part IX-A. Statement of Revenues and Expenses, attach a list showing the name of and amount received from each disquai�ed person. If the answer is "None," check this box. ❑ (b) For each year amounts are included on line 9 of Part IX-A. Statement of Revenues and Expenses, attach a list showing the name of and amount received from each payer, other than a disqualified person, whose payments were more than the larger of (1) 1 % of line 10, Part IX-A. Statement of Revenues and Expenses, or (2) $5,000. If the answer is "None," check this box. ❑ 7 Did you receive any unusual grants during any of the years shown on Part IX-A. Statement of ❑ Yes ❑ No Revenues and Expenses? If "Yes," attach a list including the name of the contributor, the date and amount of the grant, a brief description of the grant, and explain why it is unusual. Fomt 1023. (Rev. 6-2006) Form 1023 (Rev. 6-2006) Name: EIN: — Page 12 User Fee Information You must include a user fee payment with this application. It will not be processed without your paid user fee. If your average annual gross receipts have exceeded or will exceed $10,000 annually over a 4-year period, you must submit payment of $750. If your gross receipts have not exceeded or will not exceed $10,000 annually over a 4-year period, the required user fee payment is $300. See instructions for Part XI, for a definition of gross receipts over a 4-year period. Your check or money order must be made payable to the United States Treasury. User fees are subject to change. Check our website at www.irs.gov and type "User Fee" in the keyword box, or call Customer Account Services at 1-877-829-5500 for current information. 1 Have your annual gross receipts averaged or are they expected to average not more than $10,000? ❑ Yes ❑ No If "Yes," check the box on line 2 and enclose a user fee payment of $300 (Subject to change--see above). If "No.r, check the box Online 3 and enclose a user fee payment of $750 (Subject to change-see above). 2 Check the box if you have enclosed the reduced user fee payment of $300 (Subject to change). ❑ 3 Check the box if you have enclosed the user fee payment of $750 (Subject to change). ❑ I declare under the penalties of perjury that I am authorized to sign this application on behalf of the above organization and that 1 have examined this application, including the accompanying schedules and attachments, and to the beat of my knowledge R is We, correct, and complete. Please Sign - --- - -- ---- -- -- --- ---- ---- ---- ---- ---- ---- --- --- ---- ---- ---- ---- - --- ---- ---- --- - -------- ---- -- --- - -- - -- - -- - -- - --- - Here (Signature of Officer, Director, Trustee, or other (type or prim name of signer) (Date) authorized official) _____ ....______ __.______________________ __ __ (type or prim tiGe or au[hordy of signer) Reminder: Send the completed Form 1023 Checklist with your filled-in-application. Form 1023 (Rev. 6-zoos) Forth 1023 (Rev. 6-2006) Name: EIN: — Page 13 Schedule A. Churches to Do you have a written creed, statement of faith, or summary of beliefs? If "Yes," attach copies of ❑ Yes ❑ No relevant documents. b Do you have a form of worship? If "Yes," describe your form of worship. ❑ Yes ❑ No 2a Do you have a formal code of doctrine and discipline? If "Yes," describe your code of doctrine and ❑ Yes ❑ No discipline. b Do you have a distinct religious history? If "Yes," describe your religious history. ❑ Yes ❑ No c Do you have a literature of your own? If "Yes," describe your literature. ❑ Yes ❑ No 3 Describe the organization's religious hierarchy or ecclesiastical government. 4a Do you have regularly scheduled religious services? If "Yes," describe the nature of the services and C. Yes ❑ No provide representative copies of relevant literature such as church bulletins. b What is the average attendance at your regularly scheduled religious services? 5a Do you have an established place of worship? If "Yes," refer to the instructions for the information ❑ Yes ❑ No required. b Do you own the property where you have an established place of worship? ❑ Yes ❑ No 6 Do you have an established congregation or other regular membership group? If "No," refer to the Instructions. ❑ Yes ❑ No 7 How many members do you have? Sat Do you have a process by which an individual becomes a member? If "Yes," describe the process ❑ Yes ❑ No and complete lines 8b-8d, below. b If you have members, do your members have voting rights, rights to participate in religious functions, ❑ Yes ❑ No or other rights? If "Yes," describe the rights your members have. c May your members be associated with another denomination or church? ❑ Yes ❑ No d Are all of your members part of the same family? El Yes ❑ No 9 Do you conduct baptisms, weddings, funerals, etc.? ❑ Yes ❑ No 10 Do you have a school for the religious instruction of the young? ❑ Yes ❑ No 11a Do you have a minister or religious leader? If "Yes," describe this person's role and explain whether ❑ Yes ❑ No the minister or religious leader was ordained, commissioned, or licensed after a prescribed course of study. b Do you have schools for the preparation of your ordained ministers or religious leaders? ❑ Yes ❑ No 12 Is your minister or religious leader also one of your officers, directors, or trustees? ❑ Yes ❑ No 13 Do you ordain, commission, or license ministers or religious leaders? If "Yes," describe the ❑ Yes ❑ No requirements for ordination, commission, or licensure. 14 Are you part of a group of churches with similar beliefs and structures? If "Yes," explain. Include the ❑ Yes ❑ No name of the group of churches. 15 Do you issue church charters? If "Yes," describe the requirements for issuing a charter. ❑ Yes ❑ No 16 Did you pay a fee for a church charter? If "Yes," attach a copy of the charter. ❑ Yes ❑ No 17 Do you have other information you believe should be considered regarding your status as a church? ❑ Yes ❑ No If "Yes," explain. Form 1023 law. 6-2006) Form 1023 (Rev. 6-2006) Name: FIN: — Page 14 Schedule B. Schools, Colleges, and Universities If you operate a school as an activity, complete Schedule B Operational Information is Do you normally have a regularly scheduled curriculum, a regular faculty of qualified teachers, a ❑ Yes ❑ No regularly enrolled student body, and facilities where your educational activities are regularly carried on? if "No," do not complete the remainder of Schedule B. b Is the primary function of your school the presentation of formal instruction? If "Yes," describe your ❑ Yes ❑ No school in terms of whether it is an elementary, secondary, college, technical, or other type of school. If "No," do not complete the remainder of Schedule B. 2a Are you a public school because you are operated by a state or subdivision of a state? If "Yes," ❑ Yes ❑ No explain how you are operated by a state or subdivision of a state. Do not complete the remainder of Schedule B. b Are you a public school because you are operated wholly or predominantly from government funds ❑ Yes ❑ No or property? If "Yes," explain how you are operated wholly or predominantly from government funds or property. Submit a copy of your funding agreement regarding government funding. Do not complete the remainder of Schedule B. 3 In what public school district, county, and state are you located? 4 Were you formed or substantially expanded at the time of public school desegregation in the above ❑ Yes ❑ No school district or county? 5 Has a state or federal administrative agency or judicial body ever determined that you are racially ❑ Yes ❑ No discriminatory? If "Yes," explain. 6 Has your right to receive financial aid or assistance from a governmental agency ever been revoked ❑ Yes ❑ No or suspended? If "Yes," explain. 7 Do you or will you contract with another organization to develop, build, market, or finance your ❑ Yes ❑ No facilities? If "Yes," explain how that entity is selected, explain how the terms of any contracts or other agreements are negotiated at arm's length, and explain how you determine that you will pay no more than fair market value for services. Note. Make sure your answer is consistent with the information provided in Part VIII, line 7a. 8 Do you or will you manage your activities or facilities through your own employees or volunteers? if ❑ Yes ❑ No "No," attach a statement describing the activities that will be managed by others, the names of the persons or organizations that manage or will manage your activities or facilities, and how these managers were or will be selected. Also, submit copies of any contracts, proposed contracts, or other agreements regarding the provision of management services for your activities or facilities. Explain how the terms of any contracts or other agreements were or will be negotiated, and explain how you determine you will pay no more than fair market value for services. Note. Answer "Yes" if you manage or intend to manage your programs through your own employees or by using volunteers. Answer "No" if you engage or intend to engage a separate organization or independent contractor. Make sure your answer is consistent with the information provided in Part VIII, line 7b. Establishment of Racially Nondiscriminatory Policy Information required by Revenue Procedure 75-50. 1 Have you adopted a racially nondiscriminatory policy as to students in your organizing document, ❑ Yes ❑ No bylaws, or by resolution of your governing body? If "Yes," state where the policy can be found or supply a copy of the policy. If "No," you must adopt a nondiscriminatory policy as to students before submitting this application. See Publication 557. 2 Do your brochures, application forms, advertisements, and catalogues dealing with student ❑ Yes ❑ No admissions, programs, and scholarships contain a statement of your racially nondiscriminatory policy? a If "Yes," attach a representative sample of each document. b If "No," by checking the box to the right you agree that all future printed materials, including website ❑ content, will contain the required nondiscriminatory policy statement. 3 Have you published a notice of your nondiscriminatory policy in a newspaper of general circulation ❑ Yes ❑ No that serves all racial segments of the community? (See the instructions for specific requirements.) If "No," explain. 4 Does or will the organization. (or any department or division within it) discriminate in any way on the ❑ Yes ❑ No basis of race with respect to admissions; use of facilities or exercise of student privileges; faculty or administrative staff; or scholarship or loan programs? If "Yes," for any of the above, explain fully. Form 1023 (Rev. 6-2006) Form 1023 (Rev. 6-2006) Name: EIN: — Page 15 Schedule B. Schools, Colleges, and Universities (Continued) 5 Complete the table below to show the racial composition for the current academic year and projected for the next academic year, of: (a) the student body, (b) the faculty, and (c) the administrative staff. Provide actual numbers rather than percentages for each racial category. If you are not operational, submit an estimate based on the best information available (such as the racial composition of the community served). Racial Category _ (a) Student Body_ (b) Faculty (c) Administrative Staff i Current Year T Next Year Current Year Next Year Current Year Next Year i i i Total 8 In the table below, provide the number and amount of loans and scholarships awarded to students enrolled by racial categories. Racial Category Number of Loans Amount of Loans Number of Scholarships; Amount of Scholarships Current Year i Next Year Current Year Next Year I Current Year Next Year Current Year Next Year i ! i i ! j i i Total i 7a Attach a list of your incorporators, founders, board members, and donors of land or buildings, whether individuals or organizations. b Do any of these individuals or organizations have an objective to maintain segregated public or ❑ Yes ❑ No private school education? If "Yes," explain. 8 Will you maintain records according to the non-discrimination provisions contained in Revenue ❑ Yes ❑ No Procedure 75-50? If "No," explain. (See instructions.) Form 1023 (Aw. 6-2066) Form 1023 (Rev. 6-2006) Name: EIN: — Page 16 Schedule C. Hospitals and Medical Research Organizations Check the box if you are a hospital. See the instructions for a definition of the tens "hospital," which ❑ includes an organization whose principal purpose or function is providing hospital or medical care. Complete Section I below. Check the box if you are a medical research organization operated in conjunction with a hospital. See ❑ the instructions for a definition of the tens "medical research organization," which refers to an organization whose principal purpose or function is medical research and which is directly engaged in the continuous active conduct of medical research in conjunction with a hospital. Complete Section II. Hospitals 1a Are all the doctors in the community eligible for staff privileges? If "No," give the reasons why and ❑ Yes ❑ No explain how the medical staff is selected. 2a Do you or will you provide medical services to all individuals in your community who can pay for ❑ Yes ❑ No themselves or have private health insurance? If "No," explain. b Do you or will you provide medical services to all individuals in your community who participate in ❑ Yes ❑ No Medicare? If "No," explain. c Do you or will you provide medical services to all individuals in your community who participate in ❑ Yes ❑ No Medicaid? If "No," explain. 3a Do you or will you require persons covered by Medicare or Medicaid to pay a deposit before ❑ Yes ❑ No receiving services? If "Yes," explain. b Does the same deposit requirement, if any, apply to all other patients? If "No," explain. ❑ Yes ❑ No 4a Do you or will you maintain a full-time emergency room? If "No," explain why you do not maintain a ❑ Yes ❑ No full-time emergency room. Also, describe any emergency services that you provide. b Do you have a policy on providing emergency services to persons without apparent means to pay? if ❑ Yes ❑ No "Yes," provide a copy of the policy. c Do you have any arrangements with police, fire, and voluntary ambulance services for the delivery or ❑ Yes ❑ No admission of emergency cases? If "Yes," describe the arrangements, including whether they are written or oral agreements. If written, submit copies of all such agreements. 6a Do you provide for a portion of your services and facilities to be used for charity patients? If "Yes," ❑ Yes ❑ No answer 5b through 5e. b Explain your policy regarding charity cases, including how you distinguish between charity care and bad debts. Submit a copy of your written policy. c Provide data on your past experience in admitting charity patients, including amounts you expend for treating charity care patients and types of services you provide to charity care patients. d Describe any arrangements you have with federal, state, or local governments or government agencies for paying for the cost of treating charity care patients. Submit copies of any written agreements. e Do you provide services on a sliding fee schedule depending on financial ability to pay? If "Yes," ❑ Yes ❑ No submit your sliding fee schedule. 6a Do you or will you carry on a formal program of medical training or medical research? If "Yes," ❑ Yes ❑ No describe such programs, including the type of programs offered, the scope of such programs, and affiliations with other hospitals or medical care providers with which you carry on the medical training or research programs. _ b Do you or will you carry on a formal program of community education? If "Yes," describe such ❑ Yes ❑ No programs, including the type of programs offered, the scope of such programs, and affiliation with other hospitals or medical care providers with which you offer community education programs. 7 Do you or will you provide office space to physicians carrying on their own medical practices? If ❑ Yes ❑ No "Yes," describe the criteria for who may use the space, explain the means used to determine that you are paid at least fair market value, and submit representative lease agreements. 8 Is your board of directors comprised of a majority of individuals who are representative of the ❑ Yes ❑ No community you serve? Include a list of each board member's name and business, financial, or professional relationship with the hospital. Also, identify each board member who is representative of the community and describe how that individual is a community representative. 9 Do you participate in any joint ventures? If "Yes," state your ownership percentage in each joint ❑ Yes ❑ No venture, list your investment in each joint venture, describe the tax status of other participants in each joint venture (including whether they are section 501 (c)(3) organizations), describe the activities of each pint venture, describe how you exercise control over the activities of each joint venture, and describe how each joint venture furthers your exempt purposes. Also, submit copies of all agreements. Note. Make sure your answer is consistent with the information provided in Part VIII, line 8. Fwm 1023 (Rev. 6-2006) Form 1023 (Rev. 6-2006) Name: EIN: — Page 17 Schedule C. Hospitals and Medical Research Organizations Continued Hospitals (Continued) 10 Do you or will you manage your activities or facilities through your own employees or volunteers? If U. Yes ❑ No "No," attach a statement describing the activities that will be managed by others, the names of the persons or organizations that manage or will manage your activities or facilities, and how these managers were or will be selected. Also, submit copies of any contracts, proposed contracts, or other agreements regarding the provision of management services for your activities or facilities. Explain how the terms of any contracts or other agreements were or will be negotiated, and explain how you determine you will pay no more than fair market value for services. Note. Answer "Yes" If you do manage or intend to manage your programs through your own employees or by using volunteers. Answer "No" If you engage or intend to engage a separate organization or independent contractor. Make sure your answer is consistent with the information provided in Part VIII, line 7b. 11 Do you or will you offer recruitment incentives to physicians? If "Yes," describe your recruitment ❑ Yes ❑ No incentives and attach copies of all written recruitment incentive policies. 12 Do you or will you lease equipment, assets, or office space from physicians who have a financial or ❑ Yes ❑ No professional relationship with you? If "Yes," explain how you establish a fair market value for the lease. 13 Have you purchased medical practices, ambulatory surgery centers, or other business assets from ❑ Yes ❑ No physicians or other persons with whom you have a business relationship, aside from the purchase? If "Yes," submit a copy of each purchase and sales contract and describe how you arrived at fair market value, including copies of appraisals. 14 Have you adopted a conflict of interest policy consistent with the sample health care organization ❑ Yes ❑ No conflict of interest policy in Appendix A of the instructions? If "Yes," submit a copy of the policy and explain how the policy has been adopted, such as by resolution of your governing board. If "No," explain how you will avoid any conflicts of interest in your business dealings. Medical Research Organizations 1 Name the hospitals with which you have a relationship and describe the relationship. Attach copies of written agreements with each hospital that demonstrate continuing relationships between you and the hospital(s). 2 Attach a schedule describing your present and proposed activities for the direct conduct of medical research; describe the nature of the activities, and the amount of money that has been or will be spent in carrying them out. 3 Attach a schedule of assets showing their fair market value and the portion of your assets directly devoted to medical research. Fwm 1023 (Rev. 6-2oo6) Fomi 1023 (Bev. 6-2006) Name: EIN: — Page 18 Schedule D. Section 509(a)(3) Supporting Organizations Identifying Information About the Supported Organization(s) 1 State the names, addresses, and EINs of the supported organizations. If additional space is needed, attach a separate sheet. Name Address EIN — i 2 Are all supported organizations listed in line 1 public charities under section 509(a)(1) or (2)? If "Yes," ❑ Yes ❑ No go to Section II If "No," go to line 3 3 Do the supported organizations have tax-exempt status under section 501 (c)(4), 501 (c)(5), or ❑ Yes ❑ No 501 (c)(6)? If "Yes," for each 501 (c)(4), (5), or (6) organization supported, provide the following financial information: • Part IX-A. Statement of Revenues and Expenses, lines 1 -13 and • Part X, lines 6b(ii)(a), 6b(ii)(b), and 7. If "No," attach a statement describing how each organization you support is a public charity under section 509(a)(1) or (2). Relationship with Supported Organizations)—Three Tests To be classified as a supporting organization, an organization must meet one of three relationship tests: Test 1 : "Operated, supervised, or controlled by" one or more publicly supported organizations, or Test 2: "Supervised or controlled in connection with" one or more publicly supported organizations, or Test 3: "Operated in connection with" one or more publicly supported organizations. 1 Information to establish the "operated, supervised, or controlled by" relationship (rest 1) Is a majority of your governing board or officers elected or appointed by the supported ❑ Yes ❑ No organization(s)? If "Yes," describe the process by which your governing board is appointed and elected; go to Section III. If "No," continue to line 2. 2 Information to establish the "supervised or controlled in connection with" relationship (rest 2) Does a majority of your governing board consist of individuals who also serve on the governing ❑ Yes ❑ No board of the supported organization(s)? If "Yes," describe the process by which your governing board is appointed and elected; go to Section III. If "No," go to line 3. 3 Information to establish the "operated in connection with" responsiveness test (rest 3) Are you a trust from which the named supported organization(s) can enforce and compel an ❑ Yes ❑ No accounting under state law? If "Yes," explain whether you advised the supported organization(s) in writing of these rights and provide a copy of the written communication documenting this; go to Section 11, line 5. If "No," go to line 4a. 4 Information to establish the alternative "operated in connection with" responsiveness test (Test 3) a Do the officers, directors, trustees, or members of the supported organization(s) elect or appoint one ❑ Yes ❑ No or more of your officers, directors, or trustees? If "Yes," explain and provide documentation; go to line 4d, below. if "No," go to line 4b. b Do one or more members of the governing body of the supported organization(s) also serve as your ❑ Yes ❑ No officers, directors, or trustees or hold other important offices with respect to you? If "Yes," explain and provide documentation; go to line 4d, below. If "No," go to line 4c. c Do your officers, directors, or trustees maintain a close and continuous working relationship with the ❑ Yes ❑ No officers, directors, or trustees of the supported organization(s)? If "Yes," explain and provide documentation. d Do the supported organization(s) have a significant voice in your investment policies, in the making ❑ Yes ❑ No and timing of grants, and in otherwise directing the use of your income or assets? If "Yes," explain and provide documentation. e Describe and provide copies of written communications documenting how you made the supported organization(s) aware of your supporting activities. Form 1023 (Bev. 6-2006) Form 1023 (Rev. 6-2006) Name: EIN: — Page 19 Schedule D. Section 509(a)(3) Supporting Organizations Continue Relationship with Supported Organization(s)—Three Tests (Continued 5 Information to establish the `operated in connection with" integral part test (Test 3) Do you conduct activities that would otherwise be carried out by the supported organization(s)? If ❑ Yes ❑ No "Yes," explain and go to Section III. If "No," continue to line 6a. 6 Information to establish the alternative operated in connection with" integral part test (rest 3) a Do you distribute at least 85% of your annual net income to the supported organization(s)? If "Yes," ❑ Yes ❑ No go to line 6b. (See instructions.) If "No," state the percentage of your income that you distribute to each supported organization. Also explain how you ensure that the supported organization(s) are attentive to your operations. b How much do you contribute annually to each supported organization? Attach a schedule. c What is the total annual revenue of each supported organization? If you need additional space, attach a list. d Do you or the supported organization(s) earmark your funds for support of a particular program or ❑ Yes ❑ No activity? If "Yes," explain. _ 7a Does your organizing document specify the supported organization(s) by name? If "Yes," state the ❑ Yes ❑ No article and paragraph number and go to Section III. If "No," answer line 71b. b Attach a statement describing whether there has been an historic and continuing relationship between you and the supported organization(s). • Organizational Test 1 a If you met relationship Test 1 or Test 2 in Section 11, your organizing document must specify the ❑ Yes ❑ No supported organization(s) by name, or by naming a similar purpose or charitable class of beneficiaries. If your organizing document complies with this requirement, answer "Yes." If your organizing document does not comply with this requirement, answer "No," and see the instructions. b If you met relationship Test 3 in Section II, your organizing document must generally specify the ❑ Yes ❑ No supported organization(s) by name. If your organizing document complies with this requirement, answer "Yes," and go to Section IV. If your organizing document does not comply with this requirement, answer "No," and see the instructions. Disqualified Person Test You do not qualify as a supporting organization if you are controlled directly or indirectly by one or more disqualified persons (as defined in section 4946) other than foundation managers or one or more organizations that you support. Foundation managers who are also disqualified persons for another reason are disqualified persons with respect to you. 1a Do any persons who are disqualified persons with respect to you, (except individuals who are ❑ Yes ❑ No disqualified persons only because they are foundation managers), appoint any of your foundation managers? If "Yes;' (1) describe the process by which disqualified persons appoint any of your foundation managers, (2) provide the names of these disqualified persons and the foundation managers they appoint, and (3) explain how control is vested over your operations (including assets and activities) by persons other than disqualified persons. b Do any persons who have a family or business relationship with any disqualified persons with ❑ Yes ❑ No respect to you, (except individuals who are disqualified persons only because they are foundation managers), appoint any of your foundation managers? If "Yes," (1) describe the process by which individuals with a family or business relationship with disqualified persons appoint any of your foundation managers, (2) provide the names of these disqualified persons, the individuals with a family or business relationship with disqualified persons, and the foundation managers appointed, and (3) explain how control is vested over your operations (including assets and activities) in individuals other than disqualified persons. c Do any persons who are disqualified persons, (except individuals who are disqualified persons only ❑ Yes ❑ No because they are foundation managers), have any influence regarding your operations, including your assets or activities? If "Yes," (1) provide the names of these disqualified persons, (2) explain how influence is exerted over your operations (including assets and activities), and (3) explain how control is vested over your operations (including assets and activities) by individuals other than disqualified persons. Fomi 1023 (Rev. 6-2006) Forth 1023 (Rev. 6-2006) Name: EIN: — Page 20 Schedule E. Organizations Not Filing Form 1023 Within 27 Months of Formation Schedule E is intended to determine whether you are eligible for tax exemption under section 501 (c)(3) from the postmark date of your application or from your date of incorporation or formation, whichever is earlier. If you are not eligible for tax exemption under section 501 (c)(3) from your date of incorporation or formation, Schedule E is also intended to determine whether you are eligible for tax exemption under section 501 (c)(4) for the period between your date of incorporation or formation and the postmark date of your application. 1 Are you a church, association of churches, or integrated auxiliary of a church? If "Yes," complete ❑ Yes ❑ No Schedule A and stop here. Do not complete the remainder of Schedule E. 2a Are you a public charity with annual gross receipts that are normally $5,000 or less? If "Yes," stop ❑ Yes ❑ No here. Answer "No" if you are a private foundation, regardless of your gross receipts. b If your gross receipts were normally more than $5,000, are you filing this application within 90 days ❑ Yes ❑ No from the end of the tax year in which your gross receipts were normally more than $5,000? If "Yes," stop here. 3a Were you included as a subordinate in a group exemption application or letter? If "No," go to line 4. ❑ Yes ❑ No b If you were included as a subordinate in a group exemption letter, are you filing this application ❑ Yes ❑ No within 27 months from the date you were notified by the organization holding the group exemption letter or the Internal Revenue Service that you cease to be covered by the group exemption letter? If "Yes," stop here. c If you were included as a subordinate in a timely filed group exemption request that was denied, are ❑ Yes ❑ No you filing this application within 27 months from the postmark date of the Internal Revenue Service final adverse ruling letter? If Wes," stop here. 4 Were you created on or before October 9, 1969? If "Yes," stop here. Do not complete the remainder ❑ Yes ❑ No of this schedule. 5 If you answered "No" to lines 1 through 4, we cannot recognize you as tax exempt from your date of ❑ Yes ❑ No formation unless you qualify for an extension of time to apply for exemption. Do you wish to request an extension of time to apply to be recognized as exempt from the date you were formed? If "Yes," attach a statement explaining why you did not file this application within the 27-month period. Do not answer lines 6, 7, or 8. If "No;' go to line 6a. 6a If you answered "No" to line 5, you can only be exempt under section 501(c)(3) from the postmark ❑ Yes ❑ No date of this application. Therefore, do you want us to treat this application as a request for tax exemption from the postmark date? If "Yes," you are eligible for an advance ruling. Complete Part X, line 6a. If "No," you will be treated as a private foundation. Note. Be sure your ruling eligibility agrees with your answer to Part X, line 6. b Do you anticipate significant changes in your sources of support in the future? If "Yes," complete ❑ Yes ❑ No line 7 below. Farm 1023 (Rev. 6-2006) Form 1023 (Rev. 6-2006) Name: EIN: — Page 21 Schedule E. Organizations Not Filing Form 1023 Within 27 Months of Formation (Continued) 7 Complete this item only if you answered "Yes" to line 6b. Include projected revenue for the first two full years following the current tax year. Type of Revenue Projected revenue for 2 years following current tax year (a) From --- ------ (b) From -- - ---- - (c)Total To To 1 Gifts, grants, and contributions received (do j not include unusual rants i 2 Membership fees received j 3 Gross investment income i 4 Net unrelated business income 5 Taxes levied for your benefit i 8 Value of services or facilities furnished by a governmental unit without charge (not including the value of services generally furnished to the I public without charge) i 7 Any revenue not otherwise listed above or in lines 9-12 below (attach an itemized list) i 1 8 Total of lines 1 through 7 i I j 9 Gross receipts from admissions, merchandise j sold, or services performed, or furnishing of facilities in any activity that is related to your exempt purposes (attach itemized list) I i i 10 Total of lines 8 and 9 : 11 Net gain or loss on sale of capital assets i (attach an itemized list) f 12 Unusual grants j 13 Total revenue. Add lines 10 through 12 8 According to your answers, you are only eligible for tax exemption under section 501(c)(3) from the ► ❑ postmark date of your application. However, you may be eligible for tax exemption under section 501 (c)(4) from your date of formation to the postmark date of the Form 1023. Tax exemption under section 501 (c)(4) allows exemption from federal income tax, but generally not deductibility of contributions under Code section 170. Check the box at right if you want us to treat this as a request for exemption under 501 (c)(4) from your date of formation to the postmark date. Attach a completed Page 1 of Form 1024, Application for Recognition of Exemption Under Section 501 (a), to this application. Forth 1023 (Rev. 6-2W6) Form 1023 (Rev. 6.2006) Name: EIN: — Page 22 Schedule F. Homes for the Elderly or Handicapped and Low-Income Housing General Information About Your Housing 1 Describe the type of housing you provide. 2 Provide copies of any application forms you use for admission. 3 Explain how the public is made aware of your facility. 4a Provide a description of each facility. b What is the total number of residents each facility can accommodate? c What is your current number of residents in each facility? d Describe each facility in terms of whether residents rent or purchase housing from you. 5 Attach a sample copy of your residency or homeownership contract or agreement. 6 Do you participate in any joint ventures? If "Yes," state your ownership percentage in each joint ❑ Yes ❑ No venture, list your investment in each joint venture, describe the tax status of other participants in each joint venture (including whether they are section 501 (c)(3) organizations), describe the activities of each joint venture, describe how you exercise control over the activities of each joint venture, and describe how each joint venture furthers your exempt purposes. Also, submit copies of all joint venture agreements. Note. Make sure your answer is consistent with the information provided in Part VIII, line 8. 7 Do you or will you contract with another organization to develop, build, market, or finance your ❑ Yes ❑ No housing? If "Yes," explain how that entity is selected, explain how the terms of any contract(s) are negotiated at arm's length, and explain how you determine you will pay no more than fair market value for services. Note. Make sure your answer is consistent with the information provided in Part VIII, line 7a. 8 Do you or will you manage your activities or facilities through your own employees or volunteers? If ❑ Yes ❑ No "No," attach a statement describing the activities that will be managed by others, the names of the persons or organizations that manage or will manage your activities or facilities, and how these managers were or will be selected. Also, submit copies of any contracts, proposed contracts, or other agreements regarding the provision of management services for your activities or facilities. Explain how the terms of any contracts or other agreements were or will be negotiated, and explain how you determine you will pay no more than fair market value for services. Note. Answer "Yes" if you do manage or intend to manage your programs through your own employees or by using volunteers. Answer "No" If you engage or intend to engage a separate organization or independent contractor. Make sure your answer is consistent with the information provided in Part VIII, line 7b. 9 Do you participate in any govemment housing programs? If "Yes," describe these programs. ❑ Yes ❑ No 10a Do you own the facility? If "No," describe any enforceable rights you possess to purchase the facility ❑ Yes ❑ No in the future; go to line 10c. If "Yes," answer line 10b. b How did you acquire the facility? For example, did you develop it yourself, purchase aproject, etc. Attach all contracts, transfer agreements, or other documents connected with the acquisition of the facility. c Do you lease the facility or the land on which it is located? If "Yes," describe the parties to the ❑ Yes ❑ No lease(s) and provide copies of all leases. Fom 1023 (Rev. 6-2006) Form 1023 (Rev. 6-2006) Name: EIN: — Page 23 Schedule F. Homes for the Elderly or Handicapped and Low-Income Housing Continue • Homes for the Elderly or Handicapped is Do you provide housing for the elderly? If "Yes," describe who qualifies for your housing in terms of C. Yes ❑ No age, infirmity, or other criteria and explain how you select persons for your housing. b Do you provide housing for the handicapped? If "Yes," describe who qualifies for your housing in ❑ Yes ❑ No terms of disability, income levels, or other criteria and explain how you select persons for your housing. 2a Do you charge an entrance or founder's fee? If "Yes," describe what this charge covers, whether it is ❑ Yes ❑ No a one-time fee, how the fee is determined, whether it is payable in a lump sum or on an installment basis, whether it is refundable, and the circumstances, if any, under which it may be waived. b Do you charge periodic fees or maintenance charges? If "Yes," describe what these charges cover ❑ Yes ❑ No and how they are determined. c Is your housing affordable to a significant segment of the elderly or handicapped persons in the ❑ Yes ❑ No community? Identify your community. Also, if "Yes," explain how you determine your housing is affordable. 3a Do you have an established policy concerning residents who become unable to pay their regular ❑ Yes ❑ No charges? If "Yes," describe your established policy. b Do you have any arrangements with government welfare agencies or others to absorb all or part of ❑ Yes ❑ No the cost of maintaining residents who become unable to pay their regular charges? If "Yes," describe these arrangements. 4 Do you have arrangements for the healthcare needs of your residents? If "Yes," describe these ❑ Yes ❑ No arrangements. 5 Are your facilities designed to meet the physical, emotional, recreational, social, religious, and/or ❑ Yes ❑ No other similar needs of the elderly or handicapped? If "Yes," describe these design features. - low-Income Housing 1 Do you provide low-income housing? If "Yes," describe who qualifies for your housing in terms of ❑ Yes ❑ No income levels or other criteria, and describe how you select persons for your housing. 2 In addition to rent or mortgage payments, do residents pay periodic fees or maintenance charges? If ❑ Yes ❑ No "Yes," describe what these charges cover and how they are determined. 3a Is your housing affordable to low income residents? If "Yes," describe how your housing is made ❑ Yes ❑ No affordable to low-income residents. Note. Revenue Procedure 96-32, 1996-1 C.B. 717, provides guidelines for providing low-income housing that will be treated as charitable. (At least 76% of the units are occupied by low-income tenants or 40% are occupied by tenants earning not more than 120% of the very low-income levels for the area.) b Do you impose any restrictions to make sure that your housing remains affordable to low-income ❑ Yes ❑ No residents? If "Yes," describe these restrictions. 4 Do you provide social services to residents? If "Yes," describe these services. ❑ Yes ❑ No Form 1023 (Rev. 6-2006) Form 1023 (Rev. 6-2006) Name. EIN: — Page 24 Schedule G. Successors to Other Organizations 1a Are you a successor to a for-profit organization? If "Yes," explain the relationship with the ❑ Yes ❑ No predecessor organization that resulted in your creation and complete line 1 b. b Explain why you took over the activities or assets of a for-profit organization or converted from for-profit to nonprofit status. 2a Are you a successor to an organization other than a for-profit organization? Answer "Yes" if you have ❑ Yes ❑ No taken or will take over the activities of another organization; or you have taken or will take over 25% or more of the fair market value of the net assets of another organization. If "Yes," explain the relationship with the other organzation that resulted in your creation. b Provide the tax status of the predecessor organization. c Did you or did an organization to which you are a successor previously apply for tax exemption ❑ Yes ❑ No under section 501 (c)(3) or any other section of the Code? If "Yes," explain how the application was resolved. d Was your prior tax exemption or the tax exemption of an organization to which you are a successor ❑ Yes ❑ No revoked or suspended? If "Yes," explain. Include a description of the corrections you made to re-establish tax exemption. e Explain why you took over the activities or assets of another organization. 3 Provide the name, last address, and EIN of the predecessor organization and describe its activities. Name: EIN: — Address: 4 List the owners, partners, principal stockholders, officers, and governing board members of the predecessor organization. Attach a separate sheet if additional spa a Is needed. Name Address j Sharelimemst (ff a for-profit) i i --- ------ ---- -------- ---- ---- ---- ---- ---- ---- ---- -------- I 5 Do or will any of the persons listed in line 4, maintain a working relationship with you? If "Yes," ❑ Yes ❑ No describe the relationship in detail and include copes of any agreements with any of these persons or With any for-profit organizations in which these persons own more than a 35% interest. 6a Were any assets transferred, whether by gift or sale, from the predecessor organization to you? ❑ Yes ❑ No If "Yes," provide a list of assets, indicate the value of each asset, explain how the value was determined, and attach an appraisal, if available. For each asset listed, also explain If the transfer was by gift, sale, or combination thereof. b Were any restrictions placed on the use or sale of the assets? If "Yes," explain the restrictions. ❑ Yes ❑ No c Provide a copy of the agreement(s) of sale or transfer. 7 Were any debts or liabilities transferred from the predecessor for-profit organization to you? ❑ Yes ❑ No If "Yes," provide a list of the debts or liabilities that were transferred to you, indicating the amount of each, how the amount was determined, and the name of the person to whom the debt or liability is owed. 8 Will you lease or rent any property or equipment previously owned or used by the predecessor ❑ Yes ❑ No for-profit organization, or from persons listed in line 4, or from for-profit organizations in which these persons own more than a 35% interest? If "Yes," submit a copy of the lease or rental agreement(s). Indicate how the lease or rental value of the property or equipment was determined. 9 Will you lease or rent property or equipment to persons listed in line 4, or to for-profit organizations ❑ Yes ❑ No in which these persons own more than a 35% interest? If "Yes," attach a list of the property or equipment, provide a copy of the lease or rental agreement(s), and indicate how the lease or rental value of the property or equipment was determined. Form 1023 (Rev. 6-2006) Form 1023 (Rev. 6-2006) Name: EIN: — Page 25 Schedule H. Organizations Providing Scholarships, Fellowships, Educational Loans, or Other Educational Grants to Individuals and Private Foundations Requesting Advance Approval of Individual Grant Procedures EMMM Names of individual recipients are not required to be listed in Schedule H. Public charities and private foundations complete lines is through 7 of this section. See the instructions to Part X if you are not sure whether you are a public charity or a private foundation. la Describe the types of educational grants you provide to individuals, such as scholarships, fellowships, loans, etc. b Describe the purpose and amount of your scholarships, fellowships, and other educational grants and loans that you award. c If you award educational loans, explain the terms of the loans (interest rate, length, forgiveness, etc.). d Specify how your program is publicized. e Provide copies of any solicitation or announcement materials. f Provide a sample copy of the application used. 2 Do you maintain case histories showing recipients of your scholarships, fellowships, educational ❑ Yes ❑ No loans, or other educational grants, including names, addresses, purposes of awards, amount of each grant, manner of selection, and relationship (if any) to officers, trustees, or donors of funds to you? If "No," refer to the instructions. 3 Describe the specific criteria you use to determine who is eligible for your program. (For example, eligibility selection criteria could consist of graduating high school students from a particular high school who will attend college, writers of scholarly works about American history, etc.) 4a Describe the specific criteria you use to select recipients. (For example, specific selection criteria could consist of prior academic performance, financial need, etc.) b Describe how you determine the number of grants that will be made annually. c Describe how you determine the amount of each of your grants. d Describe any requirement or condition that you impose on recipients to obtain, maintain, or qualify for renewal of a grant. (For example, specific requirements or conditions could consist of attendance at a four-year college, maintaining a certain grade point average, teaching in public school after graduation from college, etc.) 5 Describe your procedures for supervising the scholarships, fellowships, educational loans, or other educational grants. Describe whether you obtain reports and grade transcripts from recipients, or you pay grants directly to a school under an arrangement whereby the school will apply the grant funds only for enrolled students who are in good standing. Also, describe your procedures for taking action If the terms of the award are violated. 6 Who is on the selection committee for the awards made under your program, including names of current committee members, criteria for committee membership, and the method of replacing committee members? 7 Are relatives of members of the selection committee, or of your officers, directors, or substantial ❑ Yes ❑ No contributors eligible for awards made under your program? If "Yes," what measures are taken to ensure unbiased selections? Note. If you are a private foundation, you are not permitted to provide educational grants to disqualified persons. Disqualified persons include your substantial contributors and foundation managers and certain family members of disqualified persons. Private foundations complete lines is through 4f of this section. Public charities do not complete this section. Is If we determine that you are a private foundation, do you want this application to be ❑ Yes ❑ No ❑ NIA considered as a request for advance approval of grant making procedures? b For which section(s) do you wish to be considered? • 4945(g)(i)—Scholarship or fellowship grant to an individual for study at an educational institution ❑ • 4945(g)(3)—Other grants, including loans, to an individual for travel, study, or other similar ❑ purposes, to enhance a particular skill of the grantee or to produce a specific product 2 Do you represent that you will (1) arrange to receive and review grantee reports annually ❑ Yes ❑ No and upon completion of the purpose for which the grant was awarded, (2) investigate diversions of funds from their intended purposes, and (3) take all reasonable and appropriate steps to recover diverted funds, ensure other grant funds held by a grantee are used for their intended purposes, and withhold further payments to grantees until you obtain grantees' assurances that future diversions will not occur and that grantees will take extraordinary precautions to prevent future diversions from occurring? 3 Do you represent that you will maintain all records relating to individual grants, including ❑ Yes ❑ No information obtained to evaluate grantees, identify whether a grantee is a disqualified person, establish the amount and purpose of each grant, and establish that you undertook the supervision and investigation of grants described in line 2? Form 1023 (Rev. 6-2006) Forth 1023 (Rev. 6-2006) Name: EIN: — Page 26 Schedule H. Organizations Providing Scholarships, Fellowships, Educational Loans, or Other Educational Grants to Individuals and Private Foundations Requesting Advance Approval of Individual Grant Procedures (Continued) Private foundations complete lines 1a through 4f of this section. Public charities do not complete this section. (Continued) 4a Do you or will you award scholarships, fellowships, and educational loans to attend an ❑ Yes ❑ No educational institution based on the status of an individual being an employee of a particular employer? If "Yes," complete lines 4b through 4f. b Will you comply with the seven conditions and either the percentage tests or facts and ❑ Yes ❑ No circumstances test for scholarships, fellowships, and educational loans to attend an educational institution as set forth in Revenue Procedures 76-47, 1976-2 G.B. 670, and 80-39, 1980-2 C.B. 772, which apply to inducement, selection committee, eligibility requirements, objective basis of selection, employment, course of study, and other objectives? (See lines 4c, 4d, and 4e, regarding the percentage tests.) c Do you or will you provide scholarships, fellowships, or educational loans to attend an ❑ Yes ❑ No ❑ N!A educational institution to employees of a particular employer? If "Yes," will you award grants to 10% or fewer of the eligible applicants who were ❑ Yes ❑ No actually considered by the selection committee in selecting recipients of grants in that year as provided by Revenue Procedures 76-47 and 80-39? d Do you provide scholarships, fellowships, or educational loans to attend an educational ❑ Yes ❑ No ❑ N/A institution to children of employees of a particular employer? If "Yes," will you award grants to 25% or fewer of the eligible applicants who were ❑ Yes ❑ No actually considered by the selection committee in selecting recipients of grants in that year as provided by Revenue Procedures 76-47 and 80-39? If "No," go to line 4e. e If you provide scholarships, fellowships, or educational loans to attend an educational ❑ Yes ❑ No ❑ N/A institution to children of employees of a particular employer, will you award grants to 10% or fewer of the number of employees' children who can be shown to be eligible for grants (whether or not they submitted an application) in that year, as provided by Revenue Procedures 76-47 and 80-39? If "Yes," describe how you will determine who can be shown to be eligible for grants without submitting an application, such as by obtaining written statements or other information about the expectations of employees' children to attend an educational institution. If "No," go to line 4f. Note. Statistical or sampling techniques are not acceptable. See Revenue Procedure 85-51 , 1985-2 C.B. 717, for additional information. f If you provide scholarships, fellowships, or educational loans to attend an educational ❑ Yes ❑ No institution to children of employees of a particular employer without regard to either the 25% limitation described in line 4d, or the 10% limitation described in line 4e, will you award grants based on facts and circumstances that demonstrate that the grants will not be considered compensation for past, present, or future services or otherwise provide a significant benefit to the particular employer? If "Yes," describe the facts and circumstances that you believe will demonstrate that the grants are neither compensatory nor a significant benefit to the particular employer. In your explanation, describe why you cannot satisfy either the 25% test described in line 4d or the 10% test described in line 4e. Form 102$ (Rev. 6-2006) Form 1023 Checklist (Revised June 2006) Application for Recognition of Exemption under Section 501 (c)(3) of the Internal Revenue Code Note. Retain a copy of the completed Form 1023 in your permanent records. Refer to the General Instructions regarding Public Inspection of approved applications. Check each box to finish your application (Form 1023). Send this completed Checklist with your filled-in application If you have not answered all the items below, your application may be returned to you as incomplete. El Assemble the application and materials in this order: • Form 1023 Checklist • Form 2848, Power of Attorney and Declaration of Representative (if filing) • Form 8821 , Tax Information Authorization (if filing) • Expedite request (if requesting) • Application (Form 1023 and Schedules A through H, as required) • Articles of organization • Amendments to articles of organization in chronological order • Bylaws or other rules of operation and amendments • Documentation of nondiscriminatory policy for schools, as required by Schedule B • Form 5768, Election/Revocation of Election by an Eligible Section 501 (c)(3) Organization To Make Expenditures To Influence Legislation (if filing) • All other attachments, including explanations, financial data, and printed materials or publications. Label each page with name and EIN. User fee payment placed in envelope on top of checklist. DO NOT STAPLE or otherwise attach your check or money order to your application. Instead, just place it in the envelope. Employer Identification Number (EIN) Completed Parts I through XI of the application, including any requested information and any required Schedules A through H. • You must provide specific details about your past, present, and planned activities. • Generalizations or failure to answer questions in the Form 1023 application will prevent us from recognizing you as tax exempt. • Describe your purposes and proposed activities in specific easily understood terms. • Financial information should correspond with proposed activities. Schedules. Submit only those schedules that apply to you and check either "Yes" or "No" below. Schedule A Yes _ No _ Schedule E Yes _ No Schedule B Yes _ No _ Schedule F Yes _ No Schedule C Yes_ No _ Schedule G Yes_ No_ Schedule D Yes _ No _ Schedule H Yes_ No_ An exact copy of your complete articles of organization (creating document). Absence of the proper purpose and dissolution clauses is the number one reason for delays in the issuance of determination letters. • Location of Purpose Clause from Part III, line 1 (Page, Article and Paragraph Number) • Location of Dissolution Clause from Part III, line 2b or 2c (Page, Article and Paragraph Number) or by operation of state law Signature of an officer, director, trustee, or other official who is authorized to sign the application. s Signature at Part A of Form 1023. El Your name on the application must be the same as your legal name as it appears in your articles of organization. Send completed Form 1023, user fee payment, and all other required information, to: Internal Revenue Service P.O. Box 192 Covington, KY 41012-0192 If you are using express mail or a delivery service, send Form 1023, user fee payment, and attachments to: Internal Revenue Service 201 West Rivercenter Blvd. Attn: Extracting Stop 312 Covington, KY 41011 ('� ramie oR �xa '�1/S11 Publication 557 The information requested on the (Rev. March 2005) revised Form 1023 has substantially Cat. No. 46573C increased, thereby minimizing the need Department for additional information from the filer of the during the approval process. Specific Treasury ® ® changes to the form include the following: Internal e • Form 8718, User Fee for Exempt Revenue Organization Determination Letter Service Request, has been incorporated into Par[ X of Form 1023. Therefore, when filing the new Form 1023 you will not need to Organization file Form 8718 to determine the correct userfee. • The automatic 27-month retroactive exemption rule pursuant to Rev. Proc. 92-85, 1992-2 C.B. 490 has been Form 1023, Application for Exemption incorporated into the application. pp /� • You can no longer submit Form SS-4, Under Section 501(c) (3) of the Internal Application for Employer Identification Revenue Code (Rev. October 2004), Number, with the application. You must has been substantial) revised. Changes to have an Employer Identification Number Y g (EIN) prior to fling Form 1023. Form 1023 are not reflected in the text of this • Limited liability companies have been publication. However, the major changes to added as a type of organization eligible to Form 1023 are brief) discussed on this cover apply for tax-exempt status under section Y 501 (c)(3) of the code. page. • Questions about compensation and other financial arrangements with officers, directors, trustees, highly compensated employees, and highly compensated independent contractors aimed at determining whether benefits are appropriate have been added to Part V. a Form 872-C, Consent Fixing Period of Limitation Upon Assessment of Tax Under Section 4940 of the Internal Revenue Code, has been obsoleted and the required information has been •., " ;y�< � :_ incorporated into Part X. Therefore, when film the new Form 1023, you will not g Y 4 need to submit Form 872-C. �s • A new Schedule E. Organizations Not sx+< Filing Form 1023 Within 27 Months of - Formation was created to consolidate questions and financial data in one place that relates to whether an exemption can - be made retroactive to the organization's _ date of formation. • Schedule H incorporates advance ruling procedures for private foundations requesting advance approval of individual a.. grant procedures. Caution. Organizations that have begun completing the prior revision (Rev. September 1998) may file rt until April 30, 2005. Beginning May 1, 2005, only the Form 1023 (Rev. October 2004) will be accepted, h fi. Get forms and other information Item to note. Section 317 of the faster and easier b American Jobs Creation Act of 2004, Y provides that a farmer's cooperative is eligible for declaratory judgment relief Internet • www.irs.gov with respect to the initial classification or continuing classification as an FAX • 703-368-9694 (from your fax machine) organization exempt under section 521 (a) of the Code, Chapter 4. Other Section 501(c) Chapter 1 provides general information Contents Organizations . . . . . . . . . . . . . . . . 47 about the procedures for obtaining recognition 501 (c)(4) — Civic Leagues and of tax-exempt status. Social Welfare Organizations . . . . 47 Chapter 2 contains information about annual Introduction . . . . . . . . . . . . . . . . . . . . . 2 501 (c)(5) — Labor, fling requirements and other matters that may Chapter 1. Application, Approval, Agricultural, and Horticultural affect your organization's tax-exempt status. and Appeal Procedures . . . . . . . . . . 3 Organizations . . . . . . . . . . . . . . 48 Chapter 3 contains detailed information on Application Procedures . . . . . . . . 501 (c)(6) — Business Leagues, various matters affecting section 501 (c)(3) orga- ' ' 3 Etc. . . . . . . . . . . . . . . . . . . . . . 48 nizations, including a section on the determina- Forms Required . s . . . . . . . . . . 3 501 (c)(7) — Social and tion of private foundation status. Required Inclusions Procedures . . . . . . 3 Miscellaneous Procedures . . . . . . 4 Recreation Clubs . . . . . . . . . . . . 49 Chapter 4 includes separate sections for Rulings and Determination 501 (c)(8) and 501 (c)(10) — specific types of organizations described in sec- Letters Fraternal Beneficiary tion 501 (c). . - ' ' ' 4 Societies and Domestic Effective Date of Exemption . . . . . 5 Fraternal Societies 50 Organizations not discussed in this publica- Revocempti n . . .Modification. . . tion, Certain organizations that may qualify for Exemption 501 (c)(4), 501 (c) Employees'p ' ' � ' S 501(c)(17) — Employees' exemption are not discussed in this publication, Appeal Procedures onside . . . . . . . . 5 although they are included in the Organization Appeals Office Consideration . . . . 5 Associations al Benevolent. . . . . . . . . 51 Reference Chart . These organizations (and the Headquarters 501 (Life Insurance Associations,Benevolent Code sections that apply to them) are as follows. Consideration 6 Life Insurance Associations, Administrative Remedies . . . . . . . 6 Mutual Irrigation and Corporations organized under Acts Appeal to Courts . . . . . . . . . . . . 6 Telephone Companies, and of Congress . . . . . . . . . . . . . . . . 501 (c)(1 ) Like Organizations . . . . . . . . . . . 52 Teachers' retirement fund Group Exemption Letter . . - . . . . . . . 6 501 (c)(13) — Cemetery associations . . . . . . . . . . . . . . . . 501 (c)(11) Central Organization Application Procedure . . . . . . 6 Companies . . . . . . . . . . . . . . . . 54 Mutual insurance companies . . . . . 501 (c)(15) Keeping the Group - 501 (c)(14) — Credit Unions Corporations organized to finance Exemption Letter in and Other Mutual Financial crop operations . . . . . . . . . . . . . . 501 (c)(16) Force . . . . . . . . . . . . . . . . . 7 Organizations . . . . . . . . . . . . . . 55 Employee funded pension trusts Events Cousin Loss of 501 (Organ a Veterans' created before June 25, 1959 . . . 501 c 18 9 Organizations . . . . . . . . . . . . . . 55 Withdrawal liability payment fund . . 501 (c)(22) Group Exemption . . . . . . . . . 8 Veterans' organizations (created Services before 1880) . . . . . . . . . . . . . . . . 501 (c)(23) 501( — Group Legal Chapter 2. Filing Requirements Services Plan Organizations . . . . . 56 Religious and apostolic associations 501 (d) and Required Disclosures . . . . . . . . 8 501 (c)(21) — Black Lung Cooperative hospital service Annual Information Returns . . . . . . . . 8 Benefit Trusts . . . . . . . . . . . . . . 56 organizations . . . . . . . . . . . . . . . 501 (a) Unrelated Business Income Tax 501 (c)(2) — Title-Holding Cooperative service organizations of Return . . . . . . . . . . . . . . . . . . . 9 Corporations for Single operating educational organizations 501 (f) Employment Tax Returns . . . . . . . . . 10 Parents . . . . . . . . . . . . . . . . . . 56 501 c 25 — Title-Holding Section trusts) organizations (section Political Organization Income Tax ( )( ) 9 4049 ERISA trusts) are neither discussed in the Return . . . . . . . . . . . . . 10 Corporations for Multiple text nor listed in the Organization Reference Reporting Requirements ements fora Parents . . . . . . . . . . . . . . . . . . 57 Political Organization . . . . . . . . . 11 501 (c)(26) — State-Sponsored Chart. Donee Information Return . . . . . . . . . 12 High-Risk Health Coverage Likewise, farmers' cooperative associations Information Provided to Donors . . . . . 12 Organizations . . . . . . . . . . . . . . 58 that qualify for exemption under section 521 , 501 c 27 — State-S State-Sponsored qualified state tuition programs described in sec- Report of Cash Received . . . . . . . . . . 13 ( )( ) P tion 529, and pension, profit-sharing, and stock Public Inspection of Exemption Workers' Compensation bonus plans described in section 401(a) are not Applications, Annual Returns, - Reinsurance Organizations : . . . . 58 discussed in this publication. If you think your and Political Organization organization falls within one of these categories, Reporting Forms 13 Chapter 5. How To Get Tax Help . . . . . . 58 contact the Internal Revenue Service (IRS) for Required Disclosures . . . . . . . . . . . . 15 any additional information you need. For tele- Solicitation of Nondeductible Organization Reference Chart . . . . . . . . 60 phone assistance, call 1-877-829-5500. Contributions . . . . . . . . . . . . 15 Check the Table of Contents at the be in Sales of Information or Index . . . . . . . . . . . . . . . . . . . . . . 62 t - ServicesAvailableFree your of this publication cr determine whether From Government . . . . . . . . 15 your organization h described it this on) that Used for Lobbying or lion. If it is, read the chapter llo section) that y . Introduction applies to your type mustgivewen for the spe- PoliticalActivities . . . . . 15 cific information you must give when applying for Miscellaneous Rules . . . . . . . . . . . . . 16 This publication discusses the rules and proce- recognition of exemption. dures for organizations that seek recognition of Chapter 3. Section 501(c)(3) exemption from federal income tax under sec- Organization Reference Chart. This chart Organizations . . . . . . . . . . . . . . . . 16 tion 501 (a) of the Internal Revenue Code (the enables you to locate at a glance the section of Contributions . . . . . . . . . . . . . . . . . . 16 Code). It explains the procedure's you must fol- the Code under which your organization might Application for Recognition of low to obtain an appropriate ruling or determina- qualify for exemption. It also shows the required Exemption . . . . . . . . . . . . . . . . . 17 tion letter recognizing your organization's application form and, if your organization meets Articles of Organization . . . . . . . . . . . 19 exemption, as well as certain other information the exemption requirements, the annual return Educational Organizations and that applies generally to all exempt organiza- to be filed (if any), and whether or not a contribu- Private Schools . . . . . . . . . . . . . 22 tions. To qualify for exemption under the Code, tion to your organization will be deductible by a Organizations Providing your organization must be organized for one or donor. It also describes each type of qualifying Insurance . . . . . . . . . . . . . . . . . 24 more of the purposes specifically designated in organization and the general nature of its activi- Other Section 501 (c)(3) the Code. Organizations that are exempt under ties. Organizations . . . . . . . . . . . . . . 24 section 501(a) of the Code include those organi- You may use this chart to determine the Private Foundations and Public zations described in section 501(c). Section Code section that you think applies to your or- Charities . . . . . . . . . . . . . . . . . . 26 501 (c) organizations are covered in this publica- ganization. Any correspondence with the IRS (in Lobbying Expenditures . . . . . . . . . . . 45 tion. requesting forms or otherwise) will be expedited Page2 if you indicate in your correspondence the ap- lion, if available), Articles of Association, Trust propriate Code section. Application Indenture, Constitution, or other enabling docu- ment. If the organization does not have an or- Comments and suggestions. We welcome procedures ganizing document, it will not qualify for exempt your comments about this publication and your status. suggestions for future editions. Oral requests for recognition of exemption will Bylaws. Bylaws alone are not organizing You can write to us at the following address: not be considered by the IRS. Your application documents. However, if your organization has for tax-exempt status must be in writing using adopted bylaws, include a current copy. The Internal Revenue Service the appropriate forms as discussed below. bylaws need not be signed if submitted as an TEGE and Specialty Forms and attachment. Publications Branch Forms Required q If your organization's name has been offi- 1111 C AR:Mtion Ave.P cially changed by an amendment to your or- 1111 Constitution A NW, IR-6406 Most organizations seeking recognition of ex- ganizing instruments, you should also attach a Washington, DC 20224 emption from federal income tax must use spe- conformed copy of that amendment to your ap- cific application forms prescribed by the IRS. plication. We respond to many letters by telephone. Two forms currently required by the IRS are Therefore, it would be helpful if you would in- Form 1023, Application for Recognition of Ex- Conformed copy. A conformed copy is a clude your daytime phone number, including the emption Under Section 501(c)(3) of the Internal copy that agrees with the original and all amend- area code, in your correspondence. Revenue Code, and Form 1024, Application for ments to it. If the original document required a Recognition of Exemption Under Section signature, the copy should either be signed by a You can email us at *taxforms @irs.gov. (The 501(a). For information about how to obtain the principal officer or, if not signed, be accompa- asterisk must be included in the address.) latest revision, see chapter 5. nied by a written declaration signed by an au- Please put "Publications Comment" on the sub- Forms 1023 and 1024 contain instructions thorized officer of the organization. With either ject line. Although we cannot respond individu- and checklists to help you provide the informa- option, the officer must certify that the document ally to each email, we do appreciate your tion required to process your application. Incom- is a complete and accurate copy of the original. feedback and will consider your comments as plete applications will not be processed. Acertificate of incorporation should be approved we revise our tax products. Some organizations do not have to use spe- and dated by an appropriate state official. cifc application forms. The application your or- Every attachment should show your ganization must use is specified in the chapter in organization's name, address, and EIN. It this publication dealing with your kind of organi- should also state that it is an attachment to your zation. It is also shown in the Organization Ref- application form and identify the part and line erence Chart. item number to which it applies. •� When no specific application form is pre- scribed for your organization, application for ex- Do not submit original documents be- scribed is by letter to the IRS. Send the cause they become part of the IRS file and application to the appropriate address shown on cannot be returned. AppliCq Form 8718, User Fee for Exempt Organization cation , Determination Letter Request. The letter must Description of activities. Your application Approval , be signed by an authorized individual such as an must include a full description of the purposes W roval and officer of the organization are person authorized and the activities of your organization. When �� by a power of attorney. (See Power of attorney describing the activities in which your organiza- under Miscellaneous Procedures, later.) Send tion expects to engage, you must include the Appeal the power of attorney with the application letter standards, criteria, procedures, or other means when you file it. The letter should also contain that your organization adopted or planned for ProceProcedures the name and telephone number of the person carrying out those activities. dures to contact. The information described below To determine the information you need to under Required Inclusions must be sent with the provide, you should study the part of this publi- letter. cation that applies to your organization. The Introduction appropriate chapter will describe the purposes User fee. The law requires the payment of a and activities that your organization must pur- If your organization is one of the organizations user fee for determination letter requests such sue, engage in, and include in your application in described in this publication and is seeking rec- as your application for recognition of tax-exempt order to achieve exempt status. ognition of tax-exempt status from the IRS, you status. You should use Form 8718 to figure the Often your organization's articles of organi- should follow the procedures described in this amount of your fee and to pay it. Your payment zation (or other organizing instruments) contain chapter and the instructions that accompanythe must accompany your request. The IRS will not descriptions of your organization's purposes appropriate application forms. process a request unless the fee has been paid: and activities. For information on section 501 (c)(3) organi- To rind the correct amounts for user zations, see chapter 3. If your organization is TIP J fees andthe length of time toprocess a Financial data. You must include in your ap- seeking exemption under one of the other request, call 1 .877-829-5500 for assis- plication financial statements showing your re- paragraphs of section 501 (c), see chapter 4. tance. ceipts and expenditures for the current year and the 3 preceding years (or for the number of Topics Required Inclusions years your organization was in existence, if less This chapter discusses: than 4 years). For each accounting period, you Every exempt organization must have an em- must describe the sources of your receipts and • Application procedures that generally ap- ployer identification number(EIN), whether or the nature of your expenditures. You must also ply to all organizations discussed in this not it has any employees. include a balance sheet for the current year. publication, including the application If your organization does not have an EIN, If you have not yet begun operations, or have forms, your application for recognition of exemption operated for less than 1 year, a proposed budget should include a completed Form SS-4, Appli- for 2 full accounting periods and a current state- • Rulings and determination letters (approv- cation for Employer Identification Number. ment of assets and liabilities will be acceptable. alsldisapprovals), • Appeal procedures available if an adverse Organizing documents. Each application for Other information. The IRS may require you determination letter is proposed, and exemption must be accompanied by a con- to provide additional information necessary to formed copy of your organization's Articles of clarify the nature of your organization. Some • Group exemption letters. Incorporation (and the Certificate of Incorpora- examples are: Chapter 1 Application, Approval, and Appeal Procedures Page 3 • Representative copies of advertising an incomplete application. Applicants also will Internal Revenue Service placed, be notified if the application is forwarded to the Attention: EO Letter Rulings Headquarters of the IRS for consideration. P.O. Box 27720, McPherson Station • Copies of publications, such as These letters will be sent out as soon as possi- Washington, DC 20038 magazines, ble after receipt of the organization's application. • Distributed written material used for ex- These requests, like applications for recogni- pressing views on proposed legislation, Withdrawal of application. An application tion of exemption, must be accompanied by the and may be withdrawn at any time before the issu- appropriate user fee. once of a ruling or determination letter upon the • Copies of leases, contracts, or agree- written request of a principal officer or author- Referral to Headquarters, EO Examinations merits into which your organization has ized representative of your organization. How- Area Manager, EO Determinations Area Man- entered. ever, the withdrawal will not prevent the ager, or Appeals Area Director, SB/SE - TE/GE, information contained in the application from will referto Headquarters any exempt organiza- Miscellaneous Procedures being used bythe IRS in any subsequent exami- Pion issue concerning qualification forexemption nation of your organization's returns. The infor- or foundation status for which there is no pub- lished precedent or for which there is reason to For prompt action on your application, be sure to mation forwarded with an application will not be believe that nonuniformity exists. An EO Exami- attach all schedules, statements, and otherdoc- returned to your organization and, generally, nations, an EO Determinations, or an Appeals uments required by the application form. If you when an application is withdrawn, the user fee Office may request technical advice on any do not attach them, you may have to resubmit paid will not be refunded, technical or procedural question that cannot be your application or you may otherwise encoun- resolved on the basis of law, regulations, or a tera delay in obtaining recognition of exemption. Requests for withholding of information clearly applicable revenue ruling or other pub- Incomplete application. If the application from the public. The law requires many ex- lished precedent. An organization may request does not contain the required information, c may be returned with a letter of explanation without empt organizations and private foundations to that an issue be referred to EO Technical, Head- maketheirapplicationformsandannualinfor- quarters, for technical advice if it feels that a lack being considered on its merits. If the completed mation returns available for public inspection. of uniformity exists as to the disposition of the application is resubmitted within the time period The law also requires the IRS to make available issue or if an issue is so unusual or complex as indicated in the letter from the IRS, it will be for public inspection, in accordance with section to warrant consideration by Headquarters. If a considered received on the original submission 6104 of the Code and the related regulations, determination letter is issued based on technical date. In that case, if the original submission was your approved application for recognition of ex- advice from Headquarters regarding qualifies- timely, the application will be considered timely emption (including any papers submitted in sup- lion for exemption or foundation status, no fur- fled as discussed in chapter 3, under Applica- port of the application) and the ruling or ther administrative appeal is available on the tion for Recognition of Exemption, determination letter (discussed later, under Rul- issue that was the subject of technical advice. ings and Determination Letters). Power of attorne a y y g If our organization ex- Application made under wrong paragraph of Any information submitted in the application y section 501(c). Occasionally, an organization pes to be represented by an agent or attorney,or may appear to qualify for exemption under a paten ,support of it relates woranytradparatu secret, whether is person or by correspondence, you paragraph of section 501 (a) that is different from Patent, process, style of work, or apparatus, must file li power of attorney with your ng the the one for which the organization applied. If the upon request, may m withheld from public in- lion application specifically authorizing the application was made on Form 1024, which ap- the disc if the Commissioner determines that agent or attorney to represent your organization. Iles to more than one the disclosure of such information would ad- Form 2848, Power of Attorney and Declaration p paragraph of section verse) affect the organization. Your request 501 (c), the organization may be recognized as y g q of Representative, may be used for this pur- exempt under any paragraph to which the form must: pose. applies if the organization has agreed to have its the 1 Identify the material to be withheld application considered under that paragraph. It ( Reminder. The law requires payment of e must also su I an additional information re- pp document, page, paragraph, and line) by user fee for determination letter requests. Use y y clearly marking it, "Not Subject To Public Form 8718 to figure the amount and pay the fee. graced for the application under the new para- graph. Inspection." Payment must accompany each request. Different application form needed. Itself- 2. Include the reasons for your organization's ferent application form is required for your or- position that the information is of the type ,.1 ganization, the IRS will so advise your that may be withheld from publicinspec- Rulings and organization and will provide the appropriate tion. application form for your convenience in reapp- 3. Be filed with the documents in which the Determination Letters lying under that paragraph, If you wish to do so. material to be withheld is contained. Although supporting information previously fur- A ruling or determination letter will be issued to nished need not be duplicated, you must provide your organization if its application and support- any necessary additional information required Whereto tile. Your application for recognition ing documents establish that it meets the partic- for the application. If your reply is not received of tax-exempt status must be filed with the IRS ular requirements of the section underwhich it is within a limited time, your application will be at the address shown on Form 8718. claiming exemption. However, the IRS will not processed only for the paragraph under which Your application will be considered by the ordinarily issue rulings or determination letters you originally applied. Manager, EO Determinations, who will either recognizing exemption if an issue involving the When a specific application form is needed issue a favorable determination letter to your organization's exempt status is pending in litiga- for the paragraph under which your organization organization, issue an adverse determination tion or is under consideration within the IRS. qualifies, that form is required before a letter letter denying the exempt status claimed in the recognizing exemption can be issued- This in- application, or refer the case to the Exempt Advance ruling. A ruling or determination let- cludes cases in which an exemption letter is Organizations Technical Office (ED Technical) ter may be issued in advance of operations if modified to recognize an organization's exempt in the Headquarters of the IRS for a ruling. your organization can describe its proposed op- status under a paragraph other than the para- erations in enough detail to permit a conclusion graph under which it originally established ex- Requests other than applications. that it will clearly meet the particular require- emption. M • Requests other than applications for ments of the section under which it is claiming recognition of exemption (for example, exemption. A restatement of the organization's IRS responses. Organizations that submit a requests for rulings involving feeder organize- purpose or a statement that it will be operated in complete application will receive an acknowl- tions, application of excise taxes to activities of furtherance of that purpose will not satisfy this edgment from the IRS. Others will receive a private foundations, taxation of unrelated busi- requirement. The organization must describe letter requesting more Information or returning ness income, etc.) should be sent to: fully the activities in which it expects to engage. Page 4 Chapter 1 Application, Approval, and Appeal Procedures This includes standards, procedures, or other the Internal Revenue Bulletin or Cumula- tion), maybe used for this purpose. These forms means adopted or planned by the organization tive Bulletin. may be obtained from the IRS. For more infor- for carrying out its activities, expected sources mation, get Publication 947, Practice Before the of funds, and the nature of its contemplated When revocation takes effect. If the organi- IRS and Power of Attorney. expenses. zation omitted or misstated a material fact, oper- When an organization does not supply the ated in a manner materially different from that Appeals Office information previously mentioned under Appli- originally represented, or, with regard to organi- Consideration cation Procedures, or fails to furnish a suffi- nations to which section 503 applies, engaged in ciently detailed description of its proposed a prohibited transaction (such as diverting The protest to the Appeals Office should be filed activities to permit a conclusion that itwill clearly corpus or income from its exempt purpose), the with the local Appeals Office considering the be exempt, a record of actual operations may be revocation or modification may be retroactive. application and contain all of the following infor- required before a ruling or determination letter is Material change in organization. If there is a mation. issued. material change, inconsistent with exemption, in the character, purpose, or method of operation 1 . The organization's name, address, and Adverse determination. If an organization is of the organization, revocation or modification employer identification number. unable to describe fully its purposes and activi- will ordinarily take effect as of the date of that 2. A statement that the organization wants to ties, resulting in a refusal by the IRS to issue a material change. protest the determination. ruling or determination letter, that refusal is con- sidered an adverse determination, which the Relief from retroactivity. If a ruling or de- 3. The date and symbols on the determina- organization can appeal. See Appeal Prose- termination letter was issued in error or is no tion letter. dures, later. longer in accord with the holding of the IRS, and q A statement of facts supporting the if section 7805(b) relief is granted, retroactivity organization's position in any contested Effective Date of Exemption of the revocation or modification ordinarily will factual issue. be limited to a date not eadierthan that on which A ruling or determination letter recognizing ex- the original ruling or determination letter was 5. A statement outlining the law or other au- emption is usually effective as of the data of modified or revoked. For more information on thority the organization is relying on. formation of an organization if, during the pe- requesting section 7805(b) relief, see Revenue 6. A statement as to whether a conference at riod before the date of the ruling or determina- Procedure 2003-4 (or later update). the Appeals Office is desired. lion letter, its purposes and activities were those Foundations. The determination of the ef- The statement of facts (item 4) must be de- required by the law. (See Application for Recog- festive date is the same for the revocation or stared true under penalties of perjury. This may ninon of Exemption in chapter 3 for the special modification of foundation status or operating be done by adding to the protest the following rule for organizations applying for recognition of foundation status unless the effective date is signed declaration: exemption under section 501(c)(3).) Upon ob- expressly covered by statute or regulations. taining recognition of exemption, the organiza- tion may file a claim fora refund of income taxes Written notice. If an EO area manager con- "Under penalties of perjury, I declare paid for the period for which its exempt status is cludes, as a result of examining an information that I have examined the statement of recognized. return or considering information from any other facts presented in this protest and in source, that a ruling or determination letter any accompanying schedules and If an organization is required to alter its activi- g statements and, to the best of my ties or substantially amend its charter to qualify, should be revoked or modified, the organization knowledge and belief, it is true, correct, the ruling or determination letter recognizing ex- will be advised in writing of the proposed action and complete." emption will be effective as of the date speci- and the reasons for it. fied in the letter. If a nonsubstantive The organization will also be advised of its Signature. amendment is made, such as correction of a right to protest the proposed action by request- clerical error in the enabling instrument or the ing Appeals Office consideration. The appeal If the organization's representative submits the addition of a dissolution clause, exemption will procedures are discussed next, protest, a substitute declaration must be in- ordinarily be recognized as of the date of forma- cluded, stating: tion if the activities of the organization before the 1 . That the representative prepared the pro- ruling or determination are consistent with the Appeal Procedures test and accompanying documents, and exemption requirements. pp A ruling or determination letter recognizing 2. Whether the representative knows person- exemption may not be relied upon if there is a If an organization applies for tax-exempt status ally that the statements of fact contained in material change, inconsistentwith exemption, in and receives an adverse determination letter, the protest and accompanying documents the character, the purpose, or the method of the organization will be advised of its right to are true and correct. operation of the organization. protest the determination by requesting Appeals Be sure the protest contains all of the infor- Office consideration. The organization must motion requested. Incomplete protests will be Revocation or Modification send its protest to the EO area manager of the returned for completion. office issuing the adverse letter. The letter must requested, itwill be held at of Exemption be sent within 30 days from the date of the If a conference is re q adverse determination letter and must state the Appeals Office, unless the organization re- A ruling or determination letter recognizing ex- whether it wishes an Appeals Office conference. quests that the meeting be held at a field office emption may be revoked or modified by: convenient to both parties. Representation. A principal officer or trustee The Appeals Office, after considering the 1. A notice to the organization to which the may represent an organization at any level of organization's protest as well as information ruling or determination letter originally was appeal within the IRS. Or, the organization may presented in any conference held, will notify the issued, be represented by an attorney, certified public organization of its decision and issue an sppro- 2. Enactment of legislation or ratification of a accountant, or individual enrolled to practice priate determination letter. An adverse decision tax treaty, before the IRS. may be appealed to the courts (discussed later). If the organization's representative attends a Appeals offices must request technical ad. 1 A decision of the United States Supreme conference without a principal officer or trustee, vice from EO Technical, IRS Headquarters, on Court, the representative must file a proper power of any exempt organization issue concerning qual- 4. Issuance of temporary or final regulations, attorney or a tax information authorization - ification for exemption or foundation status for or before receiving or inspecting confidential infor- which there is no published precedent or for mation. Form 2848, or Form 8821, Tax informs- which there is reason to believe that 5. Issuance of a revenue ruling, a revenue tion Authorization, as appropriate (or any other nonuniformity exists. If an organization believes procedure, or other statement published in properly written power of attorney or authorize- that its case involves such an issue, it should Chapter 1 Application, Approval, and Appeal Procedures Page 5 ask the Appeals Office to request technical ad- If the application does not contain all of the lion for exemption and submitted a statement vice, required items, it will not be further processed that the underlying facts and applicable law are Any determination letter issued on the basis and may be returned to the applicant for comple- the same as in the period considered by the of technical advice from Headquarters may not tion. The 270-day period, in this event, will not court. be appealed to the Appeals Office for those be considered as starting until the date the appli- issues that were the subject of the technical cation is remailed to the IRS with the requested advice, information, or, if a postmark is not evident, on the date the IRS receives a substantially com- Group Exemption Headquarters Consideration plated application. Letter If an application is referred to IRS Headquarters Appeal to Courts for issuance of a ruling and an adverse ruling is A group exemption letter is a ruling or detenni- issued, the organization will be informed of the If the IRS issues an unfavorable determination nation letter issued to a central organization basis for the conclusion, its right to file a protest letter or ruling to your organization and you have recognizing on a group basis the exemption within 30 days, and its righlto have a conference exhausted all the administrative remedies just under section 501 (c) of subordinate organiza- at Headquarters. discussed, your organization can seek judicial tions on whose behalf the central organization remedies. has applied for recognition of exemption. Administrative Remedies For example, if your organization has paid A central organization is an organization the tax resulting from the unfavorable deteml that has one or more subordinates under its In the case of an application under section nation and met all other statutory prerequisites, general supervision or control. 501 (c)(3) of the Code, all of the following ac- it can file suit for a refund in a United States A subordinate organization is a chapter, tions, called administrative remedies, must be District Court or the U.S. Court of Federal local, post, or unit of a central organization. A completed by your organization before an unfa- Claims. Or, if your organization elected not to central organization may be a subordinate itself, vorable ruling or determination letter from the pay the tax deficiency resulting from the unfa- such as a state organization that has IRS can be appealed to the courts. vorable determination and metall otherstatutory subordinate units and is itself affiliated with a prerequisites, it can file suit for a redetermina- national (central) organization. 1 . The fling of a substantially completed ap- tion of the tax deficiencies in the United States A subordinate organization may or may not plication Form 1023 (described earlier in Tax Court. For more information on these types be incorporated, but it must have an organizing this chapter) or the filing of a request for a of suits, get Publication 556, Examination of document. A subordinate that is organized and determination of foundation status (see Returns, Appeal Rights, and Claims for Refund. operated in a foreign country may not be in- Private Foundations and Public Charities In certain situations, your organization can cluded in a group exemption letter. A in chapter 3). file suit for a declaratoryjudgment in the U.S. subordinate described in section 501(c)(3) may 2. In the case of a late-filed application, re- District Court for the District of Columbia, the not be included in a group exemption letter if it is questing relief under section 301 .9100 of U.S. Court of Federal Claims, or the U.S. Tax a private foundation described in section 509(a). the Income Tax Regulations regarding of Court. This remedy is available if your organiza- If your organization is a subordinate one con- the Income r extensions of time for regarding ap tion received an adverse notice of final deter- trolled by a central organization (for example, a making mination, or if the IRS failed to make a timely church, the Boy Scouts, or a fraternal organiza- an election or application for relief from tax determination on your initial orcontinuing qualifi- tion). you should check with the central organi- ton in Application for Recognition of Exemp- cation or classification as an exempt organiza- zation to see if it has been issued a group lion. However, your exempt status claim must exemption letter that covers your organization. If 3. The timely submission of all additional in- be as: it has, you do not have to file a separate applica- formation requested to perfect an exemp- • An organization qualifying under section tion unless your organization no longer wants to tion application or request for 501 (c)(3), be included in the group exemption letter, determination of private foundation status. If the group exemption letter does not cover • An organization to which a deduction for a your organization, ask your central organization 4. Exhaustion of all administrative appeals contribution is allowed under section about being included in the next annual group available within the IRS, including protest c _ of an adverse ruling in the Headquarters 170(c)(2), ruling update that it submits to the IRS. original jurisdiction exemption application • An organization that is a private founda- cases. tion under section 509, or Central Organization The actions just described will not be consid- • A private operating foundation under sec- Application Procedure ered completed until the IRS has had a reasona- tion 49420)(3), if your organization is a central organization with ble time to act upon the appeal or protest, as the affiliated subordinates under its control, it case may be. may Adverse notice of final determination. The apply for agroup exemption letterfor its subordi- An organization will not be considered to adverse notice of final determination referred to nates, provided it has obtained recognition of its have exhausted its administrative remedies above is a ruling or determination letter sent by own exemption. You should make the applica- before the earlier of: certified or registered mail, holding that your tion for such subordinates by letter instead of organization: submitting either Form 1023 or 1024. This pro- 1 . The completion of the steps just listed and cedure relieves each of the subordinates cov- the sending by certified or registered mail • Is not described in section 501 (c)(3) or ered by a group exemption letter from filing its of a notice of final determination, or section 170(c)(2) of the Code, own application. A central organization obtains 2. The expiration of the 270-day period in • Is a private foundation as defined in sec- its own recognition of exemption by sending its which the IRS has not issued a notice of tion 49420)(3), or application to the IRS address shown on Form final determination and the organization • Is a public charity described in a part of 8718 for the area in which the central has taken, in a timely manner, all reasona- organization's principal place of business or bie steps to secure a ruling or determina- section 509 or section 170(b)(1 )(A) other principal office is located. lion. than the part under which your organiza- If the central organization has previously ob- lion requested classification, tained recognition of its own exemption, it must indicate its employer identification number, the 270-day period. The 270-day period will be Favorable court rulings - IRS procedure. If date of the letter recognizing its exemption, and considered by the IRS to begin on the date a a suit results in a final determination that your the IRS office that issued it. It need not forward substantially completed Form 1023 is sent to the organization is exempt from tax, the IRS will documents already submitted. However, if it has IRS. See Application Procedures, earlier, for issue a favorable ruling or determination letter, not already done so, the central organization information needed to complete Form 1023. provided your organization has filed an applica- must submit a copy of any amendment to its Page 6 Chapter 1 Application, Approval, and Appeal Procedures governing instruments or internal regulations as 5. A statement that each subordinate to be scribed below under Information Required well as any information about changes in its included in the group exemption letter has Annually). character, purposes, or method of operation, given written authorization to that effect, signed by an authorized officer of the 4. The annual filing of an information return Employer identification number. If the subordinate to the central organization (Form 990, for example) by the central or- tral organization does not have an employer oyer , (see also New 501(,)(3) organizations that ganization if required. identification number (EW), it must send a com- pleted Form SS-4 with its exemption applica- want to be included, later in this section). The continued effectiveness of a group exemp- tion. Each subordinate must have its own FIN 6. A list of subordinates to be included in the don letter as to a particular subordinate is even if it has no employees. The central organi- group exemption letter to which the IRS based on these four conditions, as well as on the zation must send with the group exemption ap- has issued an outstanding ruling or deter- continued conformity by the subordinate to the plication a completed Form SS-4 on behalf of mination letter relating to exemption. requirements for inclusion in a group exemption each subordinate not having an FIN. letter, the authorization for inclusion, and the 7. If the application for a group exemption annual fling of any required information return Information required for subordinate letter involves section 501(,)(3) and is sub- for the subordinate. organizations. In addition to the information ject to the provisions of the Code requiring required to obtain recognition of its own exemp- that it give timely notice that it is not a tion, the central organization must submit infor- private foundation (see Private Founda- Information Required Annually mation for those subordinates to be included in tions in chapter 3), an affirmation to the the group exemption letter. The information effect that, to the best of the officer's To maintain a group exemption letter, the central should be forwarded in a letter signed by a knowledge and belief, no subordinate to be organization must submit annually, at least 90 principal officer of the central organization set- included in the group exemption letter is a days before the close of its annual accounting ling forth or including as attachments the follow- private foundation as defined in section period, all of the following information. ing. 509(a). 1 . Information about all changes in the pur- l . Information verifying that the subordinates: 8. For each subordinate that is a school poses, character, or method of operation claiming exemption under section of the subordinates included in the group a. Are affiliated with the central organiza- 501 (,)(3), the information required by Rev- exemption letter. tion, enue Ruling 71 -447 and Revenue Proce- dure 75-50 (these requirements are fully 2. A separate list (that includes the names, b. Are subject to its general supervision or mailing addresses, actual addresses if dif- control, described in chapter 3, under Private Schools; see also Schedule B, Form ferent, and EINs of the affected subordi- c. Are all eligible to qualify for exemption 1023), nates) for each of the three following under the same paragraph of section categories. 501(c), though not necessarily the para- 9. For any school affiliated with a church, the graph under which the central organiza- information to show that the provisions of a. Subordinates that have changed their tion is exempt, Revenue Ruling 75-231 have been met. names or addresses during the year. d. Are not private foundations if the appli- 10. A list of the names, mailing addresses, ac- b. Subordinates no longer to be included cation for a group exemption letter in- tual addresses if different, and EINs of in the group exemption letter because volves section 501(,)(3), subordinates to be included in the group they no longer exist or have disaffiliated exemption letter. A current directory of or withdrawn their authorization to the e. Are all on the same accounting period subordinates may be furnished instead of central organization. as the central organization if they are to the list if it includes the required informa- c. Subordinates to be added to the group be included in group returns, and tion and if the subordinates not to be in- exemption letter because they are f. Are organizations that have been cluded in the group exemption letter are newly organized or affiliated or because formed within the 15-month period pre- identified. they have recently authorized the con- ceding the date of submission of the lmI organization to include them. group exemption application if they are New 501 (,)(3) organizations that want to be claiming section 501 (,)(3) status and included. A new organization, described in An annotated directory of subordinates will are subject to the requirements of sec- section 501(c)(3), that wants to be included in a not be accepted for this purpose. If there tion 508(a) and wish to be recognized group exemption letter, must submit its authori- were none of the above changes, the central as exempt from their dates of creation zation (as explained in item number 5 above, organization must submit a statement to that (a group exemption letter may be is- under Information requiredforsubordinate orga- effect. sued covering subordinates, one or nizations) to the central organization before the 3. The information required to be submitted more of which have not been organized end of the 15th month after it was formed in by a central organization on behalf of sub- within the 15-month period preceding order to satisfy the requirement of section ordinates to be included in the group ex- the date of submission, if all subordi- 508(a). The central organization must also in- emption letter is required for subordinates nates are willing to be recognized as clude this subordinate in its next annual submis- to be added to the letter. (This information exempt only from the date of applies- sion of information as discussed below under is listed in items 1 through 9, under Infor- tion). Information Required Annually. mation required for subordinate organiza- tions, earlier. However, if the information 2. A detailed description of the purposes and Keeping the Group upon which the group exemption letter was activities of the subordinates, including the Exemption Letter in Force based applies in all material respects to sources of receipts and the nature of ex- these subordinates, a statement to this ef- penditures. Continued effectiveness of a group exemption fect may be submitted instead of the infor- 3. A sample copy of a uniform governing in- letter is based on the following conditions. motion required by items 1 through 4 of strument (such as a charter or articles of that list.) association) adopted by the subordinates, 1 . The continued existence of the central or- or, in its absence, copies of representative ganization. The organization should send this in- instruments. 2. The continued qualification of the central s formation to: 4. An affirmation to the effect that, to the best organization for exemption under section Ogden Service Center of the officer's knowledge, the purposes 501 (c). Mail Stop 6271 and activities of the subordinates are as 3. The submission by the central organization 1000 South 1200 West stated in (2) and (3), above. of the information required annually (de- Ogden, UT 84404-4749 Chapter 1 Application, Approval, and Appeal Procedures Page 7 Submitting the required information an- Topics A I nually does not relieve the Central Or- This chapter discusses: Annual Information ganization or any of its subordinates of the duty to submit any other information that . Annual information returns that must be Returns may be required by an EO area manager to fled determine whether the conditions for continued Every organization exempt from federal income exemption are being met. • The unrelated business income tax return tax under section 501 (a) must file an annual • Employment tax returns information return except: Events Causing • A return to report taxable income from po- Loss of Group Exemption fitical organizations 1 . A church, an interchurch organization of local units of a church, a convention or A group exemption fetter no longer has effect, • Reporting requirements for certain political association of churches, or an integrated for either a particular subordinate or the group organizations auxiliary of a church (as defined later as a whole, when: • A return to report the sale of certain under Religious Organizations in chapter 1 , The central organization notifies the IRS donated property 3)'2. A church-affiliated organization that is that it is going out of existence, • Information to provide to donors ex- clusively engaged in managing funds or 2. The central organization notifies the IRS, • A report of cash received maintaining retirement programs, by its annual submission or otherwise, that o Public inspection of certain documents 3. A school below college level affiliated with any of its subordinates will no longer fulfill a church or operated by a religious order, the conditions for continued effectiveness, • Certain required disclosures and the pen- even though it is not an integrated auxiliary explained earlier, or alties for not making them of a church, 3. The IRS notifies the central organization or 4. A mission society sponsored by or affili- the affected subordinate that the group ex- Useful Items ated with one or more churches or church emption letter will no longer have effect for You may want to see: denominations, more than half of the some or all of the group because the con- society's activities are conducted in, or di- ditions for continued effectiveness of a Publication rected at, persons in foreign countries, group exemption letter have not been ful- filled. 0 15 Circular E, Employer's Tax Guide 5. An exclusively religious activity of any re- When notice is given under any of these three 0 598 Tax on Unrelated Business Income ligious order, conditions, the IRS will no longer recognize the of Exempt Organizations 6. A slate institution, the income of which is exempt status of the affected subordinates until excluded from gross income under section they file separate applications on their own be- Form (and Instructions) 115, - half or the central organization files complete supporting information for their reinclusion in the O 990 Return of Organization Exempt 7 5 corporation described in section group exemption at the time of its annual sub- From Income Tax under an [a corporation that is organized under an Act of Congress and is: mission. However, when the notice is given by ❑ 990—EZ Short Form Return of the IRS and the withdrawal of recognition is Organization Exempt From Income a. an instrumentality of the United States, based on the failure of the organization to com- Tax and ply with the requirements for recognition of tax-exempt status under the particular subsec- 0 Schedule A (Form 990 or 990—EZ) b. exempt from federal income taxes], tion of section 501(c), the revocation will ordinar- Organization Exempt Under Section ily take effect as of the date of that failure. The 501 (c)(3) 8. A black lung benefit trust described in sec- notice, however, will be given only after the tion 501 (c)(21 ) [Required to file Form appeal procedures described earlier in this 0 Schedule B (Form 990 or 990—EZ) 990—BL, Information and Initial Excise Tax chapter are completed. Schedule of Contributors Return for Black Lung Benefit Trusts and 0 990—PF Return of Private Foundation or Certain Related Persons. See chapter 4 Section 4947(a)(1 ) Nonexempt for more information.), Charitable Trust Treated as a 9. A stock bonus, pension, or profit-sharing Private Foundation trust that qualifies under section 401 . [re- 0 990—T Exempt Organization Business cured to file Form 5500, Annual Return/ Income Tax Return Report of Employee Benefit Plan], 0 1120—POL U.S. Income Tax Return for 10. A religious or apostolic organization de- scribed in section 501 (d) [required to file p Certain Political Organizations Form 1065, U.S. Return of Partnership In- F i 1 i ng 0 8300 Report of Cash Payments Over come], $10,000 Received in a Trade or 11 . A foreign organization described in section Requirements Business 501 (a) (other than a private foundation) 0 8868 Application for Extension of Time to that normally does not have more than andRequired File an Exempt Organization Return $25,000 in annual gross receipts from Required within the United States and has 0 8870 Information Return for Transfers no significant activity in the United States. Associated with Certain Personal For further information, see Revenue Pro- Disclosures Benefits Contracts cedure 94- 17, 1994- 1 C.B. 579, 0 8871 Political Organization Notice of 12. A governmental unit or an affiliate of a gov- Section 527 Status ernmental unit that meets the requirements Introduction 08872 Political Organization Report of of Revenue Procedure 95-48, 1995-2 Most exempt organizations (including private Contributions and Expenditures C.B. 418, foundations) must file various returns and re- 13. An exempt organization (other than a pri- ports at some time during (or following the close See chapter 5 for information about getting vale foundation, discussed in chapter 3) of) their accounting period. these publications and forms. having gross receipts in each tax year that Page 8 Chapter 2 Filing Requirements and Required Disclosures normally are not more than $25,000. In any year that an organization is Organization with gross receipts over $1 the instructions for Form 990 for more properly included as a subordinate or- million. For an organization that has gross information about what constitutes annual ganization on a group return, it should receipts of over $1 million for the year, the pen- gross receipts that are normally not more not file its own Form 990. alty is $100 a day up to a maximum of $50,000. than $25,000.), Schedule A (Form 990 or 990—EZ). Orga- Managers. If the organization is subject to 14. A private foundation exempt under section nizations' other than private foundations, that this penalty, the IRS may specify a date by 501(c)(3) and described in section 509(a). are described in section 501 (c)(3) and that are which the return or correct information must be (Required to file Form 990—PF), or otherwise required to file Form 990 or 990—EZ supplied by the organization. Failure to comply 15. A United States possession organization must also complete Schedule A of that form. with this demand will result in a penalty imposed described in section 501 (a) other than a upon the manager of the organization, or upon ( ) ( Schedule B (Form 990 or 990—EZ). Orga- any other person responsible for filing a correct private foundation] that normally does not nizations that file Form 990 or 990—EZ use this return. The penalty is $10 a day for each day have more than $25,000 in annual gross - schedule to provide required information regard- that a return is not fled after the period given for receipts from sources within the United ing their contributors. filing. The maximum penalty imposed on all per- States and has no significant activity in the sons with respect to any one return is $5,000. United States. For further information, see Form 990— PF. All private foundations exempt Revenue Procedure 2003-21 , Internal under section 501 (c)(3) must file Form 990—PF. Exception for reasonable cause. No pen- Revenue Bulletin 2003-6. These organizations are discussed in chapter- 3. ally will be imposed if reasonable cause for failure to file timely can be shown. Due date. Form 990, 990—EZ, or 990—PF Forms 990 and 990—EZ. Exempt organiza- must be fled by the 15th day of the 5th month tions, other than private foundations, must file after the end of your organization's accounting their annual information returns on Form 990, or period. Thus, for a calendar year taxpayer, Form Unrelated Business Form 990—EZ. 990, 990—EZ, or 990—PF is due May 15 of the Generally, political organizations with gross following year. Income Tax Return receipts of $25,000 ($100,000 for a qualified state or local political organization (QSLPO)) or ® Use Form 8868 to request an auto- more for the lax year are required to file Form TIP matic 3-month extension of time to fife Even though an organization is recognized as 990 (990—EZ) unless specifically excepted from Form 990, 990—EZ, or 990—PF and tax exempt, it still may be liable for tax on its fling the annual return. The following political also to apply for an additional (not automatic) unrelated business income. Unrelated business organizations are not required to file Form 990 3-month extension if needed. income is income from a trade or business, (Form 990—EZ). Do not apply for both the automatic 3-month regularly carried on, that is not substantially re- extension and the additional 3-month extension lated to the charitable, educational, or other pur- • A state or local committee of a political at the same time. For more information, see pose that is the basis for the organization's party' Form 8868 and its instructions. exemption. An exempt organization that has • A political committee of a state or local $1 ,000 or more of gross income from an unre- candidate. Application for exemption pending. An or- lated business must file Form 990—T. ganization that claims to be exempt under sec- The obligation to file Form 990—T is in addi- • A caucus or association of state or local tion 501(a) of the Code but has not established tion to the obligation to file the annual informs- officials. its exempt status by the due date for filing an tion return, Form 990, 990—EZ, or 990—PF. • A political organization that is required to information return should complete and file Estimated tax. Exempt organizations must report as a political committee under the Form 990 or 990—EZ (or Form 990—PF if it make quarterly payments of estimated tax on Federal Election Campaign Act. considers itself a private foundation). If the unrelated business income. An organization • A 501 (c) organization that has expendi- organization's application is pending with the must make estimated tax payments if it expects tunes for influencing or attempting to influ- IRS, it must so indicate on Form 990, 990—EZ, its tax for the year to be $500 or more. ence the selection, nomination, election or or 990—PF (whichever applies) by checking the appointment of any individual for a federal, application pending block at the top of page 1 that are a trade ors business are tour activities f the return. an unrelated state or local public office, o p For more information on the filing require- trade or business if the activities are not sub- Form 990—EZ This is a shortened version ments, see the instructions for Forms 990, stantially related to the purpose to which tax of Form 990. It is designed for use b small 990—EZ, and 990—Pp. exemption was granted to the organization. 9 y Whether travel tour activities conducted by exempt organizations and nonexempt charitable State reporting requirements. Copies of an organization are substantially related to the trusts. Form 990, 990—EZ, or 990—PF maybe used to organization's tax exempt purpose is deter- An organization may file Form 990—EZ, in- satisfy state reporting requirements. See the mined by looking at all the relevant facts and stead of Form 990, if it meets both of the follow- instructions for those forms. circumstances, including, but not limited to, how ing requirements. a travel tour is developed, promoted, and oper- Form 8870. Organizations that filed a Form ated. 1 . Its gross receipts during the yearwere less 990, 990—EZ, or 990— PF, and paid premiums than $100,000. or received transfers on certain life insurance, Example. ABC, a university alumni associa- 2. Its total assets ( line 25, column (B) of annuity, and endowment contracts (persona[ tion, is tax exempt as an educational Organize- Form 990—EZ) at the end of the year were benefit contracts), must file Form 8870. For tion under section 501 (c)(3) of the Code. As part less than $250,000. more information, see Form 8870 and its in- of its activities, ABC operates a travel tour pro- structions. gram. The program is open to all current mem- If your organization does not meet either of bers of ABC and their guests. ABC works with these conditions, you cannot file Form 990—EZ. Penalties for failure to file. Anexemptorgan- travel agents to schedule approximately ten Instead you must file Form 990. ization that fails to file a required return must pay tours annually to various destinations around Group return. A group return on Form 990 a penalty of $20 a day for each day the failure the world: Members of ABC pay $1 ,000 to XYZ continues. The same penalty will apply if the may be filed by a central, parent, or like , none organization does not give all the information Travel Agency to participate in a tour. XYZ pays Al- of which for two or more local organizations, none required on the return or does not give the cor- ABC a per person fee for each participant. n- otwhich is a private foundation. This return is in though the literature advertising the tours en- addition to the central organization's separate rect information. courages ABC members to continue their annual return if it must file a return. It cannot be Maximum penalty. The maximum penalty lifelong learning by joining the tours, and a included in the group return. See the instructions for any one return is the smaller of $10,000 or faculty member of ABC's related university fre- for Form 990 for the conditions underwhich this 5% of the organization's gross receipts for the quently joins the tour as a guest of the alumni procedure may be used. year. association, none of the tours include any Chapter 2 Filing Requirements and Required Disclosures Page 9 scheduled instruction or curriculum related to by filing Form 8274, Certification by Churches year they have political organization taxable in- the destinations being visited. The travel tours and Qualified Church-Controlled Organizations come in excess of the $100 specific deduction made available to ABC's members do not con- Electing Exemption from Employer Social Se- allowed under section 527 of the Code. tribute importantly to the accomplishment of curity and Medicare Taxes. A political organization that has ABC's educational purpose. Rather, ABC's pro- To elect exemption, Form 8274 must be filed TIP $25,000 ($100,000 fora qualified state gram is designed to generate revenues for ABC before the first date on which a quarterly em- or local political organization) or more by regularly offering its members travel services. ployment tax return would otherwise be due in gross receipts for the tax year most file Form Therefore, ABC's tour program is an unrelated from the electing organization. The organization 990 or 990—EZ (and Schedule B of the form), trade or business, may make the election only if it is opposed for unless excepted. See Forms 990 and 990—EZ, For additional information on unrelated busi- religious reasons to the payment of FICA taxes. earlier. ness income, see Publication 598. The election applies to payments for serv- ices of current and future employees otherthan political organization. A political organiza- services performed in an unrelated trade or tion is a party, committee, association, fund, or Employment business. other organization (whetheror not incorporated) Revoking the election. The election can be organized and operated primarily for the pur- Tax Returns revoked bythe IRS ifthe organization fails tofile pose of directly or indirectly accepting contribu- Form W-2, Wage and Tax Statement, for 2 lions or making expenditures, or both, for an Every employer, including an organization ex- years and fails to furnish certain information exempt function. empt from federal income tax, who pays wages upon request by the IRS. Such revocation will Exempt function. An exempt function to employees is responsible for withholding, de- apply retroactively to the beginning of the 2-year means influencing or attempting to influence the positing, paying, and reporting federal income period. selection, nomination, election, or appointment tax, social security and Medicare (FICA) taxes, of an individual to an federal, state, local pub- that federal unemployment tax (FUTA), unless Definitions. For purposes of this election, Y Y P that employer is specifically excepted by law the term church means a church, a convention lic office or office in a political organization, or from those requirements or if the taxes clearly or association of churches, or an elementary or the election of the Presidential or Vice Presiden- do not a secondary school that is controlled, operated, or tial electors, whether or not such individual or apply.For more information, get a copy of Publics- Principally supported by a church or by a con- electors are selected, nominated, elected, or vention or association of churches. appointed. It also includes certain office ex- penses of a holder of public office or an office in summarizes the responsibilities of an employer, The term qualified church-controlled or- a political organization. Publication 15—A, Employer's Supplemental ganization means any church-controlled sec- Tax Guide, Publication 15-13, Employer's Tax tion 501 (c)(3) tax-exempt organization, other Certain political organizations are re- Guide to Fringe Benefits, and Form 941 , than an organization that both: l quired to notify the IRS that they are Employer's Quarterly Federal Tax Return. section 527 organizations. These orga- Penalt If 1 . Offers goods, services, or facilities for sale, nizations must use Form 8871. Some of these Penalty. any person required to collect, other than on an incidental basis, to the section 527 organizations must use Form 8872 truthfully account for, and pay over any of these general public at other than a nominal to file periodic reports with the IRS disclosing taxes willfully fails to satisfy any of these require- charge that is substantially less than the their contributions and expenditures. For a dis- ments or willfully tries in any way to evade or cost of providing such goods, services, or cussion on these forms, see Reporting Require- defeat any of them, that person will be subject to facilities, and ments for a Political Organization, later. a penalty. The penalty, often called the trust fund recovery penalty is equal to the tax 2. Normally receives more than 25% of its Political organization taxable income. evaded, not collected, or not accounted for and support from the sum of governmental Political organization taxable income is the ex- paid over. The term person includes: sources and receipts from admissions, cess of: • An officer or employee of a corporation, or sales of merchandise, performance of services, or furnishing of facilities, in activi- 1 . Gross income for the tax year (excluding • A member or employee of a partnership, ties that are not unrelated trades or busi- exempt function income) minus nesses. Exception. The penalty is not imposed on 2. Deductions directly connected with the any unpaid volunteer director or member of a Effect on employees. If a church or quali- earning of gross income. board of trustees of an exempt organization if tied church-controlled organization has made an To figure taxable income, allow for a $100 spe- the unpaid volunteer serves solely in an honor- election, payment for services performed for that cific deduction, but do not allow forthe net oper- ary capacity, does not participate in the church or organization, other than in an unre- ating loss deduction, the dividends-received day-to-day or financial operations of the organi- lated trade or business, will not be subject to deduction, and other special deductions for cor- zation, and does not have actual knowledge of FICAtaxes. However, the employee, unless oth- porations. the failure on which the penalty is imposed. erwise exempt, will be subject to self-employ- This exception does not apply if it results in ment tax on the income. The tax applies to Exempt organization not a political organi- no one being liable for the penalty, income of $108.28 or more for the tax year from zation. FICA and FUTA tax exceptions. Payments that church or organization, and no deductions An organization exempt under section for services performed by a minister of a church for trade or business expenses are allowed 501 (c) of the Code that spends any amount for in the exercise of the ministry, or a member of a against this self-employment income, an exempt function must file Form 1120—POL religious orderperforming duties required bythe Schedule SE (Form 1040), Self-Employment for any year which it has political taxable in- order, are generally notsubjectto FICA or FUTA Tax, should be attached to the employee's in- come. These organizations must include in taxes, come tax return. gross income the lesser of: FUTA tax exception. Payments for serv- 1 . The total amount of its exempt function ices performed by an employee of a religious, expenditures, or charitable, educational, or other organization described in section 501(c)(3) that are generally Political Organization 2. The organization's net investment income, subject to FICA taxes if the payments are $100 Income Tax Return Separate fund. A section 501(c) organize- or more for the year, are not subject to FUTA ta xes. - tion can set up a separate segregated fund that taxes. Generally, a political organization is treated as will be treated as an independent political organ- FICA tax exemption election. Churches an organization exempt from tax. Certain politi- ization. The earnings and expenditures made by and qualified church-controlled organizations cal organizations, however, must file an annual the separate fund will not be attributed to the can elect exemption from employer FICA taxes income tax return, Form 1120—POL, for any section 501 (c) organization. Page 10 Chapter 2 Filing Requirements and Required Disclosures Section 501(c)(3) organizations are • It is a state or local candidate committee. Fraudulent returns- Any individual or cor- precluded from, and suffer loss of ex- poration that willfully delivers or discloses to the emotion for, engaging in any political • It is a state or local committee of a politi- IRS any list, return, account, statement or other campaign on behalf of, or in o osition to, an cal PP Y party, document known to be fraudulent or false as to candidate forpublic office. • It is a section 501(c) organization that has any material matter will be fined not more than made an "exempt function expenditure'. $10,000 ($50,000 in the case of a corporation) Due date. Form 1120— POL is due by the 15th All other political organizations are required to or imprisoned not more than 1 year or both, day of the 3rd month after the end of the tax file Form 8871 . Waiver of penalties. The IRS may waive year. Thus, for a calendar year taxpayer, Form any additional tax assessed on an organization 1120—POL is due on March 15 of the following An organization must provide on Form 8871 : for failure to file Form assessed if the failure was due year. If any due dale falls on a Saturday, Sun- day, or legal holiday, the organization may file 1. Its name and address (including any busi- to reasonable cause and not willful neglect, the return on the next business day. ness address, if different) and its electronic Additional information. For more information Form 1120—POL is not required of an mailing address, on Form 8871, see the form and its instructions. exempt organization that makes ex- 2. Its purpose, For a discussion on the public inspection penditures s for political purposes if its 3. The names and addresses of its officers, quirements for the form, see Public Inspection of gross income does not exceed its directly con- highly compensated employees, contact Exemption Applications, Annual Returns, and nected deductions bymore than $100 forthe tax person, custodian of records, and mem- bers Political Organization Reporting Forms, later. year. of its Board of Directors, Form 8872. Every tax-exempt section 527 po- Failure to file. A political organization that 4. The name and address of, and relationship litical organization that accepts a contribution or fails to file Form 1120— POL, or fails to include to, any related entities (within the meaning makes an expenditure, for an exempt function the required information on the form, is subject of section 168(h)(4) of the Code), and during the calendar year, must file Form 8872 to a penalty of $20 per day for each day such 5. Whether it intends to claim an exemption except., failure continues. The maximum penalty im- from filing Form 8872 or Form 990 (Form • A political organization that is not required posed on failures regarding any one return is the 990—EZ . lesser of $10,000 or 5% of the gross receipts of ) to file Form 8871 (discussed earlier). the organization for the year. In the case of an • A political organization that is subject to organization having Before filing Form 8871, the political 9 g grass receipts exceeding TIP organization must have its own EIN tax on its income because it did not file or $1 ,000,000 for any year, the penalty is in even if it has no employees. To get an amend Form 8871 . creased to $100 per day with a maximum pen- EIN, file Form SS-4 with the IRS. Form SS-4 can • A qualified state or local political organiza- alty of $50,000. be obtained by downloading it from the IRS tion (QSLPO), discussed below. For more information about filing Form Internet web site at www.irs.gov or by calling 1120— POL, refer to the instructions accompa- 1 -800—TAX—FORM. All other tax-exempt section 527 organizations nying the form. that accept contributions or make expenditures Due dates. The initial Form 8871 must be for an exempt function are required to file Form Failure to pay on time. An organization that fled within 24 hours of the date on which the 8872. does not pay the tax when due generally may organization was established. If there is a mate- have to pay a penalty of 1/2 of 1 % of the unpaid rial change an amended Form 8871 must be Qualified state or local political organization. tax for each month or part of a month the tax is filed within 30 days of the material change. A state or local political organization may be a not paid, up to a maximum of 25% of the unpaid When the organization terminates its existence, QSLPO if: tax. The penalty will not be imposed if the organ- it must file a final Form 8871 within 30 days of ization can show that the failure to pay on time termination. 1 . All of its political activities relate solely to was due to reasonable cause. If the due date falls on a Saturday, Sunday, state or local public office (or office in a or legal holiday, the organization may file on the stale or local political organization), next business day. 2. It is subject to a state law that requires it to Reporting How to file. An organization must file Form report (and it does report) to a state 8871 electronically via the IRS Internet web site agency information about contributions Requirements for a at www.irs.gov/polorgs (Keyword: political orgs). and expenditures that is similar to the in- formation that the organization would oth- Political Organization Failure to file. An organization that is re- erwise be required to report to the IRS. quired to file Form 8871 , but fails to do so on a 3. The state agency and the organization Certain political organizations are required to timely basis, will not be treated as a tax-exempt q section 527 organization for any period before make the reports publicly available, notify the IRS that the organization is to be the date Form 8871 is filed. Also, the taxable 4. No federal candidate or office holder: treated as a section 527 political organization. income of the organization for that period will The organization is also required to periodically a. Controls or material) report certain contributions received and expen- ditures made by the organization. To notify the contributions received, membership dues, and direction of the organization, IRS of section 527 treatment, an organization Political fund-raising receipts) minus any deduc- b. Solicits contributions for the organize- must file Form 8871 . To report contributions and tons directly connected with the production of tion, or expenditures, certain tax-exempt political orga- that income. Failure to file an amended Form 8871 will c. Directs the disbursements of the organi- nizations must file Form 8872, zation, cause the organization not to be treated as a Form 8871. A political organization must elec- tax-exempt section 527 organization. If an or- tronicallyfile Form 8871 to notify the IRS that it is ganization is treated as not being a tax-exempt Information required on Form 8872. If an to be treated as a section 527 organization. section 527 organization, the taxable income of organization pays an individual $500 or more for However, an organization is not required to file the organization will be determined by consider- the calendar year, the organization is required to Form 8871 if: ing any exempt function income and deductions disclose the individual's name, address, occu- • It reasonably expects its gross receipts to during the period beginning on the date of the pation, employer, amount of the expense, the always be less than $25,000. material change and ending on the date.that the date the expense was paid, and the purpose of amended Form 8871 is filed. the expense on Form 8872. • It is a political committee required to report The tax is computed by multiplying the If an organization receives contributions of under the Federal Election Campaign Act organization's taxable income by the highest $200 or more from one contributor for the calen- of 1971 (FECA) (2 U.S.C. 431(4). corporate tax rate. dar year, the organization must disclose the Chapter 2 Filing Requirements and Required Disclosures Page 11 donor's name, address, occupation, employer, for failure to file Form 8872 if the failure was due ble contribution of $250 or more unless the and the date the contributions were made. to reasonable cause and not willful neglect. donor has a written acknowledgement from the For additional information that is required, charitable organization. see Form 8872. In certain circumstances, an organization Due dates. The due dates for filing Form may be able to meet both of these requirements 8872 vary depending on whether the form is due Donee Information with the same written document. for a reporting period that occurs during a calen- dar year in which a regularly scheduled election is held, or any other calendar year ( a non-elec- Quid Pro QUO Contributions tion year). Dispositions of donated property. If an or- In election years, Form 8872 must be filed ganization receives charitable deduction A charitable organization must provide a written on either a quarterly or a monthly basis. Both a propertyand within 2years sells, exchanges, or disclosure statement to donors of a quid pro pre-election report and a post-election report are disposes of the property, the organization must quo contribution over $75. also required to be filed in an election years. file Form 8282, Donee Information Return. Quid pro quo contribution. This is a pay- In non-election years, the form must be filed However, an organization is not required to file ment a donor makes to a charity partly as a on a semiannual or monthly basis. A complete Form 82821f : contribution and partly for goods or services. For listing of these fling periods are in the Form example, if a donor gives a charity $100 and 8872 instructions. • The property is valued at $500 or less, or receives a concert ticket valued at $40, the do- An election year is any year in which a • The property is distributed for charitable nor has made a quid pro quo contribution. In this regularly scheduled general election for federal purposes. example, the charitable contribution part of the office is held (an even-numbered year). A payment is $60. Even though the deductible part non-election year is any odd-numbered year. Form 8282 must be filed within 125 days after of the payment is not more than $75, a disclo- Now to file. For Forms 6872 filed before the disposition. A copy of Form 8282 must be sure statement must be filed because the June 30, 2003, complete and file Form 8872 in given to the previous donor. If the organization donor's payment (quid pro quo contribution) is one of two ways: fails to file the required information return, penal- more than $75. ties may apply. Disclosure statement. The required written 1 . Electronically via the IRS Internet web site Charitable deduction property. This is disclosure statement must: at wwmirs.gov/polorgs, or any property (other than money or publicly 2. By sending a signed copy of the form to traded securities) for which the donee organi- 1 . Inform the donor that the amount of the the Internal Revenue Service Center, zation signed an appraisal summary or Form contribution that is deductible for federal Ogden, UT 84201 . 8283, Noncash Charitable Contributions. income tax purposes is limited to the ex- The form must be signed by an official author- Publicly traded securities. These a cess of any money (and the value of any re se- property other than money) contributed by ized by the organization to sign Form 8872. curities for which market quotations are readily the donor over the fair market value of An organization that files Form 8871 elec- available on an established securities market as goods or services provided by the charity, tronically will receive a user ID and a password of the date of the contribution. and needed to file Form 8872 electronically. If an Appraisal summary. If the value of the 2. Provide the donor with a good faith esti- organization does not receive its user ID and donated property exceeds $5,000, the donor mate of the fair market value of the goods password, it may request one by writing to the must get a qualified appraisal for contributions of or services that the donor received. following address: property (other than money or publicly traded Internal Revenue Service securities). The donee organization is not a The charity must furnish the statement in con- Room 4010 qualified appraiser forthe purpose of valuing the nection with either the solicitation or the receipt P.O. Box 2508 donated properly. For more information, get of the quid pro quo contribution. lithe disclosure Cincinnati, OH 45201 Publication 561 , Determining the Value of statement is furnished in connection with a par- Donated Property. ticular solicitation, it is not necessary for the ® Form 8283. For noncesh donations over organization to provide another statement when DUE 8872 Organizations or required , file Form it actually receives the contribution. 8872 on or after June 30, 2003, must $5,000, the donor must attach Form 8283 to the No disclosure statement is required if any of file the form electronically if the organ!- tax return to support the charitable deduction. the following are true. zation expects to have contributions or expendi- The donee must sign Part IV of Section B, Form lures exceeding $50,000. 8283 unless publicly traded securities are 1 . The goods or services given to a donor donated. The person who signs for the donee have insubstantial value as described in Penalty for failure to file. A penalty will be must be an official authorized to sign the Revenue Procedure 90-12, in Cumulative imposed if the organization is required to file donee's tax or information returns, or a person Bulletin 1990- 1, and Revenue Procedure Form 8872 and it: specifically authorized to sign by that official. 92-49, in Cumulative Bulletin 1992-1 . • Fails to file the form by the due date, or The signature does not represent concurrence in the appraised value of the contributed prop- 2. There is no donative element involved in a • Files the form but fails to report all of the arty. A signed acknowledgement represents re- particular transaction with a charity (for ex- information required or reports incorrect celpt of the property described on Form 8283 on ample, there is generally no donative ele- information. the date specified on the form. The signature ment involved in a visitor's purchase from also indicates knowledge of the information re- a museum gift shop). The penalty is 35% of the total amount of porting requirements on dispositions, as previ- 3. There is only an intangible religious benefit contributions and expenditures to which a failure ously discussed. A copy of Form 8283 must be provided to the donor. The intangible relig- relates. given to the donee. ious benefit must be provided to the donor Fraudulent returns. Any individual or cor- by an organization organized exclusively poration that willfully delivers or discloses any for religious purposes, and must be of a list, return, account, statement or other docu- type that generally is not sold in a commer- ment known to be fraudulent or false as to any Information Provided cial transaction outside the donative con- material matter, will be fined not more than to Donors text. For example, a donor who, fora $10,000 ($50,000 in the case of a corporation), payment, is granted admission to a relig- or imprisoned not more than 1 year, or both. ious ceremony for which there is no admis- A charitable organization must give a donor a sion charge is provided an intangible Waiver of penalties. The IRS may waive disclosure statement for a quid pro quo contribu- religious benefit. A donor is not provided any additional tax assessed on an organization tion over $75. A donor cannot deduct a charita- intangible religious benefits for payments Page 12 Chapter 2 Filing Requirements and Required Disclosures made for tuition for education leading to a Acknowledgement of information return must be made available from recognized degree, travel services, or con- Charitable Contributions of the date it is required to be filed (determined sumer goods. without regard to any extensions), or is actually 4. The donor makes a payment of $75 or less $250 or More fled, whichever is later. An original return does per year and receives only annual mem- A donor can deduct a chartable contrib not have to be made available if more than 3 ution of years have passed from the date the return was bership benefits that consist of $250 or more only if the donor has a written required to be fled (including any extensions) or acknowledgement from the charitable organiza- a. Any rights or privileges (other than the tion. The donor must get the acknowledgement was filed, whichever is later. An amended return right to purchase tickets for college ath- by the earlier of: does not have to be made available if more than letic events) that the taxpayer can exer- 3 years have passed from the date it was filed. cise often during the membership 1 . The date the donor files the original return An annual information return includes an ex- period, such as free or discounted ad- for the year the contribution is made, or act copy of the return (Form 990, 990—EZ, missions or parking or preferred access 2. The due date, including extensions, for fl- 990— BL, 990—PF, or 1065), and amended re- turn if any, and all schedules, attachments, and to goods or services, or ing the return. supporting documents fled with the IRS. It does b. Admission to events that are open only The donor is responsible for requesting and ob- not include Schedule A of Form 990— BL, Form to members and the cost per person of taining the written acknowledgement from the 990—T, Schedule K- 1 of Form 1065, or Form which is within the limits for low-cost donee. 1120—POL. In the case of a tax-exempt organi- articles described in Revenue Proce- zation other than a private foundation, an annual dure 90-12 (as adjusted for inflation). Quid pro quo contribution. If the donee pro- information return does not include the names vides goods or services to the donor in ex- and addresses of contributors to the organize- change for the contribution (a quid pro quo lion. Good faith estimate of fair market value. contribution), the acknowledgement must in- An organization may use any reasonable clude a good faith estimate of the value of the Exemption application. An exempt organiza- method to estimate the fair market value (FMV) goods or services. See Disclosure of Quid Pro lion must also make available for public inspec- of goods or services it provided to a donor, as Quo Contributions, earlier. tion without charge its application fortax-exempt long as it applies the method in good faith. Form of acknowledgement. Although there status. An application fortax exemption includes The organization may estimate the FMV of is no prescribed format for the written acknowl- the application form (such as Form 1023 or goods or services that generally are not com- edgement, it must provide enough information to 1024), all documents and statements the IRS mercially available by using the FMV of similar substantiate the amount of the contribution. For requires the organization to file with the form, or comparable goods or services. Goods or more information, get IRS Publication 1771 , any statement or other supporting document services may be similar or comparable even if Charitable Contributions — Substantiation and submitted by an organization in support of its they do not have the unique qualities of the Disclosure Requirements. application, and any letter or other document goods or services being valued. issued by the IRS concerning the application. The application for exemption does not in- Example 1. A charity provides a one-hour clude: tennis lesson with a tennis professional for the Report of Cash first $500 payment it receives. The tennis pro- • Any application from an organization that fessional provides one-hour lessons on a com- Received is not yet recognized as exempt, manual basis for $100. A good faith estimate of • Any material that is required to be withheld the lesson's FMV is $100. An exempt organization that receives, in the from public inspection, see Material re- course of its activities, more than $10,000 cash quired to be withheld from public inspec- Example 2, For a payment of $50,000, a in one transaction (or 2 or more related transac- tion, next, museum allows a donor to hold a private event Dons) that is not a charitable contribution, must in a room of the museum. A good faith estimate report the transaction to the IRS on Form 8300, • In the case of a tax-exempt organization Report of Cash Payments Over $10,000 Re- other than a private foundation, the names museum can be made by using the cost the FMV of the right to hold the event in the ceived in a Trade or Business. and addresses of contributors to the or- renting a hotel ballroom with a capacity, - ties, and atmosphere comparable to the a mu-mu- • Any applications filed before July 15,1987, if the organization did not have a seum room, even though the hotel ballroom Public Inspection copy of the application on July 15, 1987. lacks the unique art displayed in the museum room. If the hotel ballroom rents for $2,500, a of Exemption good faith estimate of the FMV of the right to p If there is no prescribed application form, see section a list of the 1ocumen of the must be the event in the museum is $2,500. Applications, Annual tions for a list of the documents that must be Returns,Example 3. For a payment of $1 ,000, a Re , and Political made available. charity provides an evening lour of a museum Material required to be withheld from pub- conducted by a well-known artist. The artist Organization Reporting lic inspection. Material that is required to be does not provide tours on a commercial basis. Forms withheld from public inspection includes: Tours of the museum normally are free to the Trade secrets, patents, processes, styles public. A good faith estimate of the FMV of the The following rules apply to private foundations of work, or apparatus for which withhold- evening museum tour is $0 even though it is as well as other tax-exempt organizations. Pri- ing was requested and granted, conducted bythe artist, vate foundations filing annual returns are sub- a National defense material, ject to the public disclosure requirements under Penalty for failure to disclose. A penalty is section 6104(d) of the Code. • Unfavorable rulings or determination let- imposed on a charity that does not make the Included in this section is a discussion on the ters issued in response to applications for required disclosure of a quid pro quo conlribu- public inspection requirements for political orga- ax exemption, tion of more than $75. The penalty is $10 per nizations fling Forms 8871 and 8872. _ • Rulings or determination letters revoking contribution, notto exceed $5,000 per fund-rais- Annual return. An exempt organization must or modifying a favorable determination let- ing event or mailing. The charity can avoid the make available for public inspection, upon re- ter, penalty if it can show that the failure was due to quest and without charge, a copy of its original • Technical advice memoranda relating to a reasonable cause. and amended annual information returns. Each disapproved application for tax exemption Chapter 2 Filing Requirements and Required Disclosures Page 13 or the revocation or modification of a be disclosed. However, this rule only applies if postage costs only if the requester consents to favorable determination letter, the request: the charge. If the local or subordinate organiza- • Any letter or document fled with or issued • Is addressed to the exempt organization's tion receives a written request for a copy of its b the IRS relating to whether a proposed application for exemption, it must fulfill the re- or 9 P P principal, regional, or district office, quest in the time and manner specified earlier. or accomplished transaction is a prohib- ited transaction under section 503, • Is sent to that address by mail, electronic The requester has the option of requesting mail (e-mail), facsimile (fax), or a private from the central or parent organization, at its • Any letter or document filed with or issued delivery service approved by the IRS, and principal office, inspection or copies of the appli- by the IRS relating to an organization's cation for group exemption and the material sub- status as an organization described in • Gives the address to where the copy of mitted by the central or parent organization to section 509(a) or 49420)(3), unless the let- the document should be sent. include a local orsubordinate organization in the ter or document relates to the group ruling. If the central or parent organization organization's application for lax exemp- The organization must mail the copy within 30 submits to the IRS a list or directory of local or lion, and days from the date it receives the request. The subordinate organizations covered by the group Any organization may request payment in advance exemption letter, it must make the list or direc- • sued b other the IRS or document which, although h with or and must then provide the copies within 30 days tory available for public inspection, but it is re- issued 9 from the date it receives payment. lates to an organization's tax-exempt sta- quired to provide copies only of those pages of tus as an organization described in section Fees for copies. The organization may the list or directory that refer to particular local or 501 (c) or 501 (d), does not relate to that charge a reasonable fee for providing copies. It subordinate organizations specified by the re- organization's application for tax exemp- can charge no more for the copies than the per quester. The central or parent organization must tion. page rate the IRS charges for providing copies, fulfill such requests in the time and manner That rate is stated in section 601 .702(f)(5)(iv)(B) specified earlier. of the regulations. (As of June 2001 , the rate A local or subordinate organization that does Time, place, and manner restrictions. The was $1 .00 for the first page and 15 cents for not file its own annual information return (be- annual returns and exemption application must each additional page.) The organization can cause it is affiliated with a central or parent be made available for inspection, without also charge the actual postage costs it pays to organization that files a group return) must, charge, at the organization's principal, regional, provide the copies. upon request, make available for public inspec- and district offices during regular business tion, or provide copies of, the group returns filed hours. The organization may have an employee Regional and district offices. Generally, present during inspection, but must allow the the same rules regarding public inspection and by the central or parent organization. However, if the group return includes separate schedules individual to take notes freely and to photocopy providing copies of applications and annual re- at no charge if the individual provides the photo- turns that applyto a principal office of an exempt for each local or subordinate organization in- copying equipment. Generally, regional and dis- organization also apply to its regional and cluded in the group return, the local or trict offices. However, a regional or district office subordinate organization receiving the request who offices are those that have paid employees g may omit any schedules relating only to other who together are normally paid at least 120 is not required to make its annual information organizations included in the group return. The hours a week. return available for inspection or to e cop- local or subordinate organization must permit If the organization does not maintain aper- ies until 30 days after the date the he return is public inspection, or comply with a request for exempt office, it must make its applicationeturns required y le filed (including any extensions) or copies made in person, within a reasonable exemption and its annual information returns Is actually filed, whichever is later. amount of time (normally not more than 2 available for inspection at a reasonable location Local and subordinate organizations. A weeks) after receiving a request made in person of its choice. It must permit public inspection local or subordinate organization is an exempt for public inspection or copies and at a reasona- within a reasonable amount of time after receiv- organization that did not file its own application ble time of day. ing a request for inspection (normally not more for tax exemption because it is covered by a In lieu of allowing an inspection, the local or than 2 weeks) and at a reasonable time of day. group exemption letter. Generally, a local or subordinate organization may mail a copy of the At its option, it may mail, within 2 weeks of subordinate organization of an exempt organi- applicable documents to the person requesting receiving the request, a copy of its application zation must, upon request, make available for inspection within the same time period. In this for tax exemption and annual information re- public inspection, or provide copies of: case, the organization can charge the requester turns to the requester in lieu of allowing an for copying and actual postage costs only if the inspection. The organization may charge the 1 . The application submitted to the IRS by requester consents to the charge. If the local or requester for copying and actual postage costs the central or parent organization to obtain subordinate organization receives a written re- only if the requester consents to the charge. the group exemption letter, and quest for a copy of its annual information return, An organization that has a permanent office, 2. Those documents which were submitted it must fulfill the request by providing a copy of but has no office hours or very limited hours by the central or parent organization to in- the group return in the time and manner speci- during certain times of the year, must make its clude the local or subordinate organization fied earlier. The requester has the option of documents available during those periods when in the group exemption letter. requesting from the central or parent organize- office hours are limited or not available as lion, at its principal office, inspection or copies of though it were an organization without a perms- However, if the central or parent organization group returns fled by the central or parent or- rent office. submits to the IRS a list or directory of local or ganization. The central or parent organization subordinate organizations covered by the group must fulfill such requests in the time and manner Furnishing copies. An exempt organization exemption letter, the local orsubordinate organi- specified earlier. also must provide a copy of all, or any specific zation is required to provide only the application If an organization fails to comply, it may be part or schedule, of its three most recent annual for the group exemption ruling and the pages of liable for a penalty. See Penalties, later. information returns and/or exemption applica- the list or directory that specifically refer to it. tion to anyone who requests a copy either in The local or subordinate organization must Making applications and returns widely person or in writing at its principal, regional or permit public inspection or comply with a re- available. An exempt organization does not district office during regular business hours. If quest for copies made in person, within a rea- have to comply with requests for copies of its the individual made the request in person, the sonable amount of time (normally not more than annual returns or exemption application if it copy must be provided on the same business 2 weeks) after receiving a request made in per- makes them widely available. However, making day the request is made unless there are unu- son for public inspection or copies and at a these documents widely available does not re- sual circumstances. Unusual circumstances are reasonable time of day. In lieu of allowing an lieve the organization from making its docu- defined in section 301 .6104(d)— 1 (d)(1)(ii) of the inspection, the local or subordinate organization ments available for public inspection. regulations, may mail a copy of the applicable documents to The organization can make its application The organization must honor a written re- the person requesting inspection within the and returns widely available by posting the ap- quest for a copy of documents or specific parts same time period. In that case, the organization plication and returns on a World Wide Web or schedules of documents that are required to may charge the requester for copying and actual page. For the rules to follow so that the Internet Page 14 Chapter 2 Filing Requirements and Required Disclosures posting will be considered widely available, see and expenditures report (Form 8872) is $20 for Fund-raising solicitation. This disclosure re- section 301 .6104(d)-2(b) of the regulations, each day the failure continues. The maximum quirement applies to a fund-raising solicitation if If the organization has made its application penalty on all persons for failures involving any all of the following are true. for tax exemption and/or annual returns widely one report is $10,000. available, it must inform any individual request- 1 . The organization soliciting the funds por- ing a copy where the documents are available, mally has gross receipts over $100,000 including the address on the World Wide Web, if per year. applicable. If the request is made in person, the Re/� u fired Disclosures 2. The solicitation is part of a coordinated notice must be provided immediately. If the re- `1 fund-raising campaign that is soliciting quest is made in writing, the notice must be provided within 7 days. Certain exempt organizations must disclose to more than 10 persons during the year. the IRS or the public certain information about 3. The solicitation is made in written or Harassment campaign. If the lax-exempt or- their activities. Generally, an organization dis- printed form, by television or radio, or by ganization is the subject of a harassment cam- closes this information by entering it on the ap- telephone, paign, the organization may not have to fulfill propriate lines of its annual return. In addition, requests for information. For more information, there are disclosure requirements for: Penalties. Failure by an organization to make see section 301 .6104(d)-3 of the regulations. the required statement will result in a penalty of • Solicitation of nondeductible contributions, Political organization reporting forms. $1 ,000 for each day the failure occurred, up toa Forms 8871 and 8872 (discussed earlier under • Sales of information or services that are maximum penalty of $10,000 for a calendar Reporting Requirements for a Political Organi- available free from the government, and year. No penalty will be imposed if it is shown zation) are open to public inspection. • Dues paid to the organization that are not that the failure was due to reasonable cause. If deductible because the thefailurewas due to intentional disregard ofthe Form 8871. Form B871 (including any sup- y are used for lob- requirements, the penalty may be higher and is porting papers) and any letter or other document hying or political activities. not subject to a maximum amount. the IRS issues with regard to Form 8871 is open to public Inspection at the IRS in Washington, DC. Solicitation of Nondeductible Sales of Information or Copies of Form 8871 that have been filed will Contributions Services Available Free From be made available on the IRS Internet web site Government (www.irs.gov/polorgs) 48 hours after the notice Solicitations for contributions or other payments has been filed and are considered widely avail- by certain exempt organizations (including lob- Certain organizations that offer to sell to individ- able as long as the organization provides the bying groups and political action committees) uals (or solicit money for) information or routine IRS web site address to the person making the must include a statement that payments to those services that could be readily obtained free (or request. In addition, the organization must make organizations are not deductible as charitable for a nominal fee) from the federal government a copy of these materials available for public contributions for federal income tax purposes. must include a statement that the information or inspection during regular business hours at the The statement must be included in the fund-rais- service can be so obtained. The statement must organization's principal office and at each of its ing solicitation and be conspicuous and easily be made in a conspicuous and easily recog- regional or district offices having at least 3 paid recognizable. nized format when the organization makes an employees. offer or solicitation to sell the information or Form 8872. Form 8872 (including Sched- Organizations subject to requirements, An service. Organizations affected are those ex- ules A and B) is open to public inspection. Cop- organization must follow these disclosure re- empt under section 501 (c) or 501 (d) and political ies of Form 8872 that are required to be filed organizations defined in section 527(e). q quirements if it is exempt under section 501 (c), electronically will be made available on the In- other than section 501(c)(1 ), or under section Penalty. A penalty is provided for failure to ternet web site (www.irs.gov/polorgs) within 48 501 (d), unless the organization is eligible to re- comply with this requirement if the failure is due hours after it has been filed. ceive tax deductible charitable contributions to intentional disregard of the requirement. The An organization is required to file Form 8872 under section 170(c). These requirements must penalty is the greater of $1 ,000 for each day the electronically if it has, or has reason to expect to be followed by, among others: failure occurred, or 50% of the total cost of all have, contributions or expenditures exceeding offers and solicitations that were made by the $50,000 for the tax year. 1 . Social welfare organizations (section organization the same day that it fails to meet In addition, the organization is required to 501 (c)(4)), the requirement. make a copy of this form available for public inspection during regular business hours at the 2. Labor unions (section 501 (c)(5)), DUBS Used for Lobbying organization's principal office and at each of its 3. Trade associations (section 501 (c)(6)), regional or district offices having at least 3 paid or Political Activities employees. 4. Social clubs (section 501(c)(7)), Penalties. The penalty for failure to allow pub- 5. Fraternal organizations (section 50 Certain exempt organizations must notify any- 1 (c)(8) one paying dues to the organization whether tic inspection of annual returns is $20 for each and 501 (c)(10)) (however, fraternal orga- any part of the dues is not deductible because it day the failure continues. The maximum penalty nizations described in section 170(c)(4) is related to lobbying or political activities, on all persons for failures involving any one must follow these requirements only for so- An organization must provide the notice if it is return is $10,000. licitations for funds that are to be used for exempt from tax under section 501 (a) and is one The penalty for failure to allow public inspec- noncharitable purposes not described in of the following, tion of exemption applications is $20 for each section 170(c)(4)), day the failure continues. 1. A social welfare organization described in 6. Any political organization described in sec- section 501 (c)(4) that is not a veterans' The penalty for willful failure to allow public tion 527(e), including political campaign inspection of a return or exemption application is organization. $5,000 for each return or application. The pen- committees and political action commit- ally also applies to a willful failure to provide lees, and 2. An agricultural or horticultural organization P described in section 501 (c)(5). copies. 7. Any organization not eligible to receive The penalty for failure to allow public inspec- tax-deductible contributions if the organiza- 3. A business league, chamber of commerce, lion of a political organization's section 527 no- tion or a predecessor organization was at real estate board, or other organization de- tice (Form 8871 ) is $20 for each day the failure any time during the 5-year period ending scribed in section 501 (c)(6). continues. on the date of the fund-raising solicitation, However, an organization described in (1 ), (2), The penalty for failure to allow public inspec- an organization of the type to which this or (3) does not have to provide the notice if it tion of a section 527 organization's contributions disclosure requirement applies. establishes that substantially all the dues paid to Chapter 2 Filing Requirements and Required Disclosures Page 15 it are not deductible anyway or if certain other Form 1128 must be fled by the 15th day of is organized as a separate entity from the gov- conditions are met. For more information, see the 5th month following the close of the short ernmental unit that created it and if it otherwise Revenue Procedure 98-19 in Cumulative Bulle- period, meets the organizational and operational tests tin 1998- 1 or later update, of section 501 (c)(3). Examples of a qualifying If the organization does not provide the instrumentality might include state schools, uni- required notice, it may have to pay a tax that is versities, or hospitals. However, if an organiza- reported on Form 990–T. But the tax does not tion is an integral part of the local government or apply to any amount on which the section 527 possesses governmental powers, it does not tax has been paid on Form 1120–POL. See q qualify for exemption. A state or municipality Political Organization Income Tax Return, ear- 3 • itself does not qualify for exemption. lier. For more information about nondeductible Payments made as a result of September 11, dues, see Deduction not allowed for dues used Sect f ® � 2001, Terroristic Attacks. Payments made Q,�-, on or after September 11 , 2001 by a 501(c)(3) for political or legislative activities under (, organization to individuals and their families be- 501(c)(6) — Business Leagues, Etc. 5 � 1 � c � �3 � cause of death, injury, wounding, or illness of an 7 individual as a result of the terrorist attacks /� } against the United States on September 11 , Miscellaneous Rules Organizations 2001 , or for an attack involving anthrax, occur- ring on or after September 11 , 2001 , and before January 1 , 2002, are treated as related to the Organizational changes and exempt status. Introduction charity's exempt purpose provided thatthepay- If your exempt organization changes its legal pay- ments are consistently applied and are made structure, such as from a trust to a corporation, An organization may qualify for exemption from using a reasonable and objective formula. you must file a new exemption application to federal income tax if it is organized and operated establish that the new legal entity qualifies for exclusively for one or more of the following pur- Topics exemption. If your organization becomes inac- poses. This chapter discusses: tive for a period of time but does not cease Charitable. being an entity under the laws of the state in Contributions to 501(c)(3) organizations which it was formed, its exemption will not be Religious. • Applications for recognition of exemption terminated. However, unless you are covered by Educational. • Educational organizations and certain one of the filing exceptions, you will have to continue to file an annual information return dur- Scientific. other 501 (c)(3) organizations ing the period of inactivity. If your organization Literary. • Private foundations and public charities has been liquidated, dissolved, terminated, • Lobbying expenditures or substantially contracted, you should file Testing for public safety. your annual return of information by the 15th day Fostering national or international amateur of the 5th month after the change and follow the sports competition (but only if none of its activi- Useful Items applicable instructions to the form. ties involve providing athletic facilities or equip- You may want to see: If your organization amends its articles of ment; however, see Amateur Athletic organization or its internal regulations (bylaws), Organizations, later in this chapter). Forms (and Instructions) you should send a conformed copy of these changes to the appropriate EO area manager. The prevention of cruelty to children or ani- O 1023 Application for Recognition of (An organization that is covered by a group mals. Exemption Under Section 501 (c)(3) exemption letter should send two copies of of the Internal Revenue Code these changes.) If you did not give the IRS a To qualify, the organization must be a corpo- 0 8718 User Fee for Exempt Organization copy of the amendments previously, you may ration, community chest, fund, or foundation. A Determination Letter Request include it when you file Form 990 (or 990–EZ or trust is a fund or foundation and will qualify. Form 990–PF), if that return is required. However, an individual or a partnership will not See chapter 5 for information about getting Change in accounting period. The proce- qualify, publications and forms. dures that an organization mustfollowto change Examples. Qualifying organizations include: its accounting period differ for an individual or- Nonprofit old-age homes, ganization and for a central organization that Contributions seeks agroup change forits subordinate organi- Parent-teacher associations, zations. Charitable hospitals or other charitable or ani- P 9 Contributions to domestic organizations de- Individual organizations that wish to zations, scribed in this chapter, except organizations change annual accounting periods generally Alumni associations, testing for public safety, are deductible as char- need only file an information return for the short table contributions on the donor's federal in- period indicating that a change is being made. Schools, come tax return. However, if the organization has changed its Chapters of the Red Cross or Salvation Army, accounting period within the previous 10 years, Y Fund-raising events. If the donor receives it must file Form 1128, Application to Adopt, Boys' or Girls' clubs, and something of value in return for the contribution, - Change, or Retain a Tax Year. Form 1128 is a common occurrence with fund-raising efforts, attached to the short period return. See Reve- Churches. part or all of the contribution may not be deducti- nue Procedure 85-58. ble. This may apply to fund-raising activities Central organizations may obtain approval Child care organizations. The term edu- such as charity balls, bazaars, banquets, auc- cational purposes includes providing for care tions, concerts, athletic events, and solicitations for group change i an annual accounting of children away from their homes if substan- for membership or contributions when merchan- perio d for their subordi nate organizations one tially all the care provided is to enable individuals dise or benefits are given in return for payment group basis only by filing Form 1128 with the (the parents) to be gainfully employed and the of a specified minimum contribution. Service Center where it files its annual informa- services are available to the general public. If the donor receives or expects to receive tion return. For more information, see Revenue goods or services in return for a contribution to Procedure 76- 10, as modified by Revenue Pro- Instrumentalities. A state or municipal instru- your organization, the donor cannot deduct any cedure 79-3 or later update. mentality may qualify under section 501 (c)(3) if it part of the contribution unless the donor intends Page 16 Chapter 3 Section 501(c)(3) Organizations to, and does, make a payment greater than the by charitable remainder annuity trust or a char- penditures) or participate to any extent in a fair market value of the goods or services. If a itable remainder unitrust solely by reason of political campaign for or against any candi- deduction is allowed, the donor can deduct only being entitled to the payment if the trust owns all date for public office. See Political activity, the part of the contribution, if any, that is more ofthe incidents of ownership under the contract, next, and Lobbying Expenditures, near the than the fair market value of the goods or serv- and the trust is entitled to all payments underthe end of this chapter. ices received. You should determine in advance contract. the fair market value of any goods or services to Political activity. If any of the activities be given to contributors and tell them, when you Excise tax. If the premiums are paid in con- (whether or not substantial) of your organization publicize the fund-raising event or solicit their nection with a transfer for which a deduction is consist of participating in, or intervening in, any contributions, how much is deductible and how not allowable under the deduction denial rule, political campaign on behalf of (or in opposition much is for the goods or services. See Disclo- without regard to when the transfer to the chari- to) any candidate for public office, your organi- sureofQuidPro Quo Contributions inchapler2. table organization was made, an excise tax zation will not qualify for tax-exempt status equal tothe amountofthe premiums paid bythe under section 501 (c)(3). Such participation or Exemption application not filed. Donors organization on any life insurance, annuity, or intervention includes the publishing or distribut- may not deductany charitable contribution to an endowment contract. The excise tax does not ing of statements. organization that is required to apply for recogni- apply if all of the direct and indirect beneficiaries tion of exemption but has not done so. Whether your organization is participating or P under the contract are organizations. intervening, directly or indirectly, in any political Separate fund—contributions to which are A charitable organization liable for excise campaign on behalf of (or in opposition to) any deductible. An organization that is exempt taxes must file Form 4720, Return of Certain candidate for public office depends upon all of from federal income tax other than as an organ:- Excise Tax on Charities and Other Persons the facts and circumstances of each case. Cer- zation described in section 501 (c)(3) may, if it Under Chapters 41 and 42 ofthe Internal Reve- tain voter education activities or public forums desires, establish a fund, separate and apart nue Code. Generally, the due date for filing conducted in a non-partisan manner may not be from its other funds, exclusively for religious, Form 4720 occurs on the fifteenth day of the fifth prohibited political activity under section charitable, scientific, literary, or educational pur- month following the close of the organization's 501(c)(3), while other so-called voter education poses, fostering national or international Me- taxable year. activities may be prohibited. teur sports competition, or for the prevention of If our organization is uncertain as to cruelty to children or animals. Y 9 � the effect of its voter education activi- If the fund is organized and y quality or ex- Application for ties, you should request a letter ruling empti for these purposes, it may quali for ex- from the Internal Revenue Service. Send the 501 (c)(3), and an organization described in section Recognition of request to: 501 (c)(3), and contributions made to it will be deductible as provided by section 170. A fund Internal Revenue Service with these characteristics must be organized in Exemption Attention: ED Letter Rulings such a manner as to prohibit the use of its funds P.O. Box 27720, McPherson Station upon dissolution, or otherwise, for the general This discussion describes certain information to Washington, DC 20038 purposes of the organization creating it, be provided upon application for recognition of Requests may also be hand delivered be- exemption by all organizations created forany of twee, the hours of 8:00 a.m. and 4:00 p.m. to: Personal benefit contracts. Generally, no the purposes described earlier in this chapter. Courier's Desk charitable deduction will be allowed for a trans- For example, the application must include a con- Internal Revenue Service fer to, or for the use of, a 501(c)(3) or (c)(4) formed copy of the organization's articles of in- Attention: T:EO organization if in connection with the transfer: corporation, as discussed under Articles of 1111 Constitution Avenue, N.W. • The organization directly or indirectly Organization later in this chapter. See the or- Washington, DC 20224 pays, or previously paid, a premium on a ganization headings that follow for specific infor- personal benefit contract for the transferor, mation your organization may need to provide. or A receipt will be given of the courier's desk. Form 1023. Your organization must file its ap- The package should be marked: RULING • There is an understanding or expectation plication for recognition of exemption on Form REQUEST SUBMISSION. that anyone will directly or indirectly pay a 1023. See chapter 1 and the instructions accom- premium on a personal benefit contract for panying Form 1023 for the procedures to follow Effective date of exemption. Most organiza- the transferor, in applying. Some organizations are not re- tions described in this chapter that were organ- quired to file Form 1023. These are discussed ized after October 9, 1969, will not be treated as A personal benefit contract with respect to later in this section. tax exempt unless they apply for recognition of the transferor is any life insurance, annuity, or Form 1023 and accompanying statements exemption by filing Form 1023. These organiza- endowment contract, if any direct or indirect must show that all of the following are true. tions will not be treated as lax exempt for any beneficiary under the contract is the transferor, period before they file Form 1023, unless they any member of the transferors family, or any 1 . The organization is organized exclusively file the form within 15 months from the end ofthe other person designated by the transferor. for, and will be operated exclusively for, month in which they were organized. If the or- Certain annuity ontracts. If an or gam one or more of the purposes (charitable, y g religious, etc.) specified in the introduction ganization files the application within this lion incurs an obligation to pay charitable gift 15-month period, the organization's exemption annuity, and the organization purr chases an an- to this chapter. will be recognized retroactively to the date it was nutty contract to fund the obligation, individuals 2. No part of the organization's net earnings organized. Otherwise, exemption will be recog- receiving payments under the charitable gift an- will inure to the benefit of private share- nized only for the period after the IRS receives nuity will not be treated as indirect beneficiaries holders or individuals. You must establish the application. The date of receipt is the date of if the organization owns all of the incidents of that your organization will not be organized the U.S. postmark on the cover in which an ownership under the contract, is entitled to all or operated for the benefit of private inter- exemption application is mailed or, if no post- payments under the contract, and the timing and ests, such as the creator or the creator's mark appears on the cover, the date the applies- amount of the payments are substantially the family, shareholders of the organization, tion is stamped as received by the IRS. same as the timing and amount of payments to other designated individuals, or persons Private delivery service. If a private deliv- each person under the obligation ( as such obli- controlled directly or indirectly by such pri- ery service designated by the IRS, rather than gation is in effect at the time of the transfer). vate interests. the U.S. Postal Service, is used to deliver the Certain contracts held by a charitable re- 3. The organization will not, as a substantial application, the date of receipt is the date re- mainder trust. An individual will not be con- part of its activities, attempt to influence corded or marked by the private delivery serv- sidered an indirect beneficiary under a life legislation (unless it elects to come under ice. The following private delivery services have insurance, annuity, or endowment contract held the provisions allowing certain lobbying ex- been designated by the IRS. Chapter 3 Section 501(c)(3) Organizations Page 17 • Airborne Express (Airborne): Overnight Air to file Form 1023. An organization cannot the request, and such facts are true, cor- Express Service, Next Afternoon Service, rely on the advice of a tax professional if it rect, and complete." and Second Da Service. knows or should know that he or she is not Day competent to render advice on filing ex- ' Detailed affidavits from individuals having • DHL Worldwide Express (DHL): DHL emption applications or is not aware of all knowledge or information about the events "Same Day" Service, and DHL USA Over- the relevant facts. that led to the failure to make the applica- night. tion and to the discovery of that failure. • Federal Express (FedEx): FedEx Priority Not acting reasonably and in good faith. This includes the organization's return Overnight, FedEx Standard Overnight, An organization has not acted reasonably and in preparer, and any accountant or attorney, FedEx 2Day, FedEx International Priority, good faith under the following circumstances. knowledgeable in tax matters, who ad- and FedEx International First. vised the taxpayer on the application. The 1 . It seeks to change a return position for affidavits must describe the engagement • United Parcel Service (UPS): UPS Next which an accuracy-related penalty has and responsibilities of the individual and Day Air, UPS Next Day Air Saver, UPS been or could be imposed at the time the the advice that he or she provided. 2nd Day Air, and UPS 2nd Day Air A.M. relief is requested. • These affidavits must include the name, Amendments to enabling instrument re- 2. It was informed of the requirement to file current address, and taxpayer identifica- quired. If an organization is required to alter and related tax consequences, but chose tion number of the individual, and be ac- its activities or to make substantive amend- not to file. compar ied by a dated declaration, signed ments to its enabling instrument, the ruling or 3. It uses hindsight in requesting relief. The by the individual, which slates: "Under determination letter recognizing its exempt sta- IRS will not ordinarily grant an extension if penalties of perjury, I declare that I have tus will be effective as of the date the changes specific facts have changed since the due examined this request, including accom- are made. If only a nonsubstantive amend- date that makes filing an application ad- ponying documents, and, to the best of my ment is made, exempt status will be effective as vantageous to an organization. knowledge and belief, the request con- of the date it was organized, if the application tains all the relevant facts relating to the was fled within the 15-month period, or the date Prejudicing the interest of the govern- request, and such facts are true, correct, the application was filed, ment. Prejudice to the interest of the govern- and complete." Extensions of time for filing. There are two ment results if granting an extension of time to • The organization must stale whether the ways organizations seeking exemption can re- file to an organization results in. a lower total tax returns for the tax year in which the appli- ceive an extension of time for fling Form 1023. liability for the years to which the filing applies cation should have been fled or any tax than would have been the case if the organiza- years that would have been affected by 1 . Automatic 12-month extension. Organi- tion had filed on time. Before granting an exlen- the application had been timely made is zations will receive an automatic 12-month sion, the IRS may require the organization being examined by the IRS, an appeals extension if they file an application for rec- requesting it to submit a statement from an inde- ognition of exemption with the IRS within pendent auditor certifying that no prejudice will office, or a federal court. The organization 12 months of the original deadline. To get result if the extension is granted. must notify the IRS office considering the this extension, an organization must add The interests ofthe Government are ordinar- request for relief if the IRS starts an exam- the following statement at the top of its ily prejudiced if the tax year in which the applica- ination of any such return while the application: "Filed Pursuant to Section tion should have been filed (or any tax year that organization's request for relief is pending. 301 .9100-2." would have been affected had the filing been • The organization, it requested, has to sub- 2. Discretionary extensions. An organize- timely) are closed by the statute of limitations mit copies of its tax returns, and copies of lion that fails to file a Form 1023 within the before relief is granted. The IRS may condition a the returns of other affected taxpayers. extended 12-month period will be granted grant of relief on the organization providing the an extension to file if it submits evidence IRS with a statement from an independent audi- A request for this relief is a request that must (including affidavits) to establish that: for certifying that the interests of the Govern- be submitted as a request for a letter ruling and ment are not prejudiced. be accompanied by the applicable user fee. a. It acted reasonably and in good faith, Procedure for requesting extension. To More information. For more information and request a discretionary extension, an organiza- about these procedures, see sections b. Granting a discretionary extension will tion must submit (to the IRS address shown on 301.9100-1 , 301 .9100-2, and 301 .9100-3 of not prejudice the interests of the gov- Form 8718) the following, the regulations. emment. • A statement showing the date Form 1023 Notification from IRS. Organizations filing was required to have been filed and the How to show reasonable action and good date it was actually filed. Form 1023 and satisfying all requirements of faith. An organization acted reasonably and section 501 (c)(3) will be notified of their exempt showed good faith if at least one of the following • Any documents relevant to the application. status in writing. is true. • An affidavit describing in detail the events 1 . The organization requests relief before its that led to the failure to apply and to the Organizations Not Required failure to file is discovered by the IRS. discovery of that failure. If the organization To File Form 1023 relied on a tax professional's advice, the 2. The organization failed to file because of affidavit must describe the engagement Some organizations are not required to file Form intervening events beyond its control. and responsibilities of the professional and 1023. 3. The organization exercised reasonable dili- the extent to which the organization relied These include: gence (taking into account the complexity on him or her. • Churches, interchurch organizations of Io- of the z return or issue and the • This affidavit must signed accompanied id a cal units of a church, conventions or as- organization's experience in these matters) dated declaration, slowed g an individual sociations of churches, or integrated but was not aware of the filing require- who has personal knowledge of the facts auxiliaries of a church, such as a men's or mewl. and circumstances, who is authorized to women's organization, religious school, 4. The organization reasonably elied upon act for the organization, which states, y p "Under penalties of perjury, I declare that I mission society, or youth group. the written advice of the IRS. have examined this request, including ac- • Any organization (other than a private 5. The organization reasonably relied upon companying documents, and, to the best foundation) normally having annual gross the advice of a qualified tax professional of my knowledge and belief, the request receipts of not more than $5,000 (see who failed to file or advise the organization contains all the relevant facts relating to Gross receipts test, later). Page 18 Chapter 3 Section 501 (c)(3) Organizations These organizations are exempt automati- The organization's total gross receipts for cles appropriately limit the organization's cally if they meet the requirements of section 1999, 2000, and 2001 were $6,900. Therefore, it purposes. The organization meets the organiza- 501 (c)(3). did not have to file Form 1023 and is exempt for tional test. Filing Form 1023 to establish exemption. If those years. However, for 2000, 2001 , and 2002 the organization wants to establish its exemp- the total gross receipts were $15,900. There- Example2. An organization, by the terms of tion with the IRS and receive a ruling or determi- fore, the organization must file Form 1023 within its articles, is formed to engage in research nation letter recognizing its exempt status, it 90 days after the end of its 2002 tax year. If it without any further description or limitation. The should file Form 1023. By establishing its ex- does not file within this time period, it will not be organization will not be properly limited as to its emption, potential contributors are assured x- exempt under section 501 (c)(3) for the period purposes since all research is not scientific. The the IRS that contributions will be deductible. A beginning with tax year 2002 ending when the organization does not meet the organizational subordinate organization (other than a private Form 1023 is received bythe IRS. The organiza- test. foundation) covered by a group exemption letter lion, however, will not lose its exempt status for does not have to submit a Form 1023 for itself. the tax years ending before January 1 , 2002. Example 3. An organization's articles state The IRS will consider applying the that its purpose is to receive contributions and Private foundations. See Private Founda- Commissioner's discretionary authority to ex- pay them over to organizations that are de- tions and Public Charities, later, in this chapter, tend the time for filing Form 1023. See the pro- scribed in section 501 (c)(3) and exempt from for more information about the additional notice cedures for this extension discussed earlier. taxation under section 501 (a). The organization required from an organization in order for it not meets the organizational test. to be presumed to be a private foundation and for the additional information required from a Example 4. If a stated purpose in the arti- private foundation claiming to be an operating Articles of cles is the conductof a school of adult education foundation. and its manner of operation is described in de- Gross receipts test. For purposes of the Organization tail, such a purpose will be satisfactorily limited. gross receipts test, an organization normally Exam 1e 5. If the articles state the organize- gross not have more than $5,000 annually in Your organization must include a conformed P 9 gross receipts if: copy of its articles of organization with the appli- lion is formed for charitable purposes, without cation for recognition of exemption. This may be any further description, such language ordinarily 1 . During its first tax year the organization its trust instrument, corporate charter, articles of will be sufficient since the term charitable has a received gross receipts of $7,500 or less, association, or any other written instrument by generally accepted legal meaning. On the other 2. During its first 2 years the organization had which it is created. hand, if the purposes are stated to be charitable, a total of $12,000 or less in gross receipts, philanthropic, and benevolent, the organiza- and Organizational Test tional requirement will not be met since the terms philanthropic and benevolent have no 3. In the case of an organization that has The articles of organization must limit the generally accepted legal meaning and, there- been in existence for at least 3 years, the organization's purposes to one or more of those fore, the stated purposes may, under the laws of total gross receipts received by the organi- described at the beginning of this chapter and the state, permit activities that are broader than zation during the immediately preceding 2 must notexpressly empowerit to engage, other those intended by the exemption law. years, plus the current year, are $15,000 than as an insubstantial part of its activities, in or less. activities that do not further one or more of those Example 6. If the articles state an organiza- An organization with gross receipts more purposes. These conditions for exemption are lion is formed to promote American ideals, or to than the amounts in the gross receipts test, referred to as the organizational test, foster the best interests of the people, or to unless otherwise exempt from filing Form 1023, Section 501 (c)(3) is the provision of law that further the common welfare and well-being of must file a Form 1023 within 90 days after the grants exemption to the organizations described the community, without any limitation or provi- end of the period in which the amounts are in this chapter. Therefore, the organizational test sion restricting such purposes to accomplish- exceeded. For example, an organization's gross may be met if the purposes stated in the articles ment only in a charitable manner, the purposes receipts for its first tax year were less than of organization are limited in some way by refer- will not be sufficiently limited. Such purposes $7,500, but at the end of its second tax year its ence to section 501 (c)(3). are vague and may be accomplished other than gross receipts for the 2—year period were more The requirement that your organization's in an exempt manner. than $12,000. The organization must file Form purposes and powers must be limited by the 1023 within 90 days after the end of its second articles of organization is not satisfied if the Example 7. A stated purpose to operate a tax year. limit is contained only in the bylaws or other hospital does not meet the organizational test If the organization had existed for at least 3 miss or regulations. Moreover, the organiza- since it is not necessarily charitable. A hospital tax years and had met the gross receipts test for tional test is not satisfiedby statements of your may or may not be exempt depending on the all prior tax years but fails to meet the require- organization's officers that you intend to operate manner in which it is operated. ment for the current tax year, its tax-exempt only for exempt purposes. Also, the test is not status for the prior years will not be lost even if satisfied by the fact that your actual operations Example 8. An organization that is ex- Form 1023 is not filed within 90 days after the are for exempt purposes. pressly empowered by its articles to carry on close of the current tax year. However, the or- In interpreting an organization's articles, the social activities will not be sufficiently limited as ganizalion will not be treated as a section law of the state where the organization was to its power, even if its articles state that it is 501 (c)(3) organization for the period beginning created is controlling. If an organization con- organized and will be operated exclusively for with the current tax year and ending with the tends that the terms of its articles have a differ- charitable purposes. filing of Form 1023. ent meaning under state law than their generally Example. An organization is organized and accepted meaning, such meaning must bass- Dedication and operated exclusively for charitable purposes tablished by a clear and convincing reference to Distribution of Assets and is not a private foundation. It was incorpo- relevant court decisions, opinions of the state rated on January 1 , 1999, and files returns on a attorney general, or other appropriate state au- Assets of an organization must be permanently calendar-year basis. It did not file a Form 1023. thorifies, dedicated to an exempt purpose. This means The organization's gross receipts during the The following are examples illustrating the that should an organization dissolve, its assets years 1999 through 2002 were as follows: organizational test. must be distributed for an exempt purpose de- scribed in this chapter, or to the federal govern- 1999 . . . . . . . . . . . . . . . . . . . . . . $3,600 Example 1. Articles of organization state ment or to a state or local government for a 2000 2,900 that an organization is formed exclusively for public purpose. If the assets could be distributed 2001 . . . . . . . . . . . . . . . . . . . . . . 400 literary and scientific purposes within the mean- to members or private individuals or for any 2002 . . . . . . . . . . . . . . . . . . . . . . 12,600 ing of section 501(c)(3) of the Code. These artt- other purpose, the organizational testis not met. Chapter 3 Section 501 (c)(3) Organizations Page 19 Dedication. To establish that your Fourth: The names and addresses of the Second: The trustees may receive and ac- organization's assets will be permanently dedi- persons who are the initial trustees of the corpo- cept property, whether real, personal, or mixed, sated to an exempt purpose, the articles of or- ration are as follows: by way of gift, bequest, or devise, from any ganization should contain a provision insuring Name Address person, firm, trust, or corporation, to be held, their distribution for an exempt purpose in the administered, and disposed of in accordance event of dissolution. Although reliance may be Fifth: No part of the net earnings of the with and pursuant to the provisions of this Decla- placed upon state law to establish permanent corporation shall inure to the benefit of, or be ration of Trust; but no gift, bequest or devise of dedication of assets for exempt purposes, your distributable to its members, trustees, officers, any such property shall be received and ac- organization's application probably can be or other private persons, except that the corpo- cepted if it is conditioned or limited in such man- processed much more rapidly if its articles of ration shall be authorized and empowered to ner as to require the disposition of the income or organization include a provision insuring perma- pay reasonable compensation for services ren- its principal to any person or organization other nent dedication of assets for exempt purposes, dered and to make payments and distributions than a "charitable organization' or for other than in furtherance of the purposes set forth in Article "charitable purposes" within the meaning of Distribution. Revenue Procedure 82-2, Third hereof. No substantial part of the activities such terms as defined in Article Third of this 1982- 1 C.B. 367, identifies the states and cir- of the corporation shall be the carrying on of Declaration of Trust, or as shall in the opinion of cumstances in which the IRS will not require an propaganda, or otherwise attempting to influ- the trustees, jeopardize the federal income tax express provision for the distribution of assets ence legislation, and the corporation shall not exemption of this trust pursuant to section upon dissolution in the articles of organization. participate in, or intervene in (including the pub- 501 (c)(3) of the Internal Revenue Code, or the The procedure also provides a sample of an lishing or distribution of statements) any political corresponding section of any future federal tax acceptable dissolution provision for organiza- campaign on behalf of or in opposition to any code, tions required to have one. candidate for public office. Notwithstanding any Third., A. The principal and income of all If a named beneficiary is to be the distribu- other provision of these articles, the corporation property received and accepted by the trustees tee, it must be one that would qualify and would shall not carry on any other activities not permit- to be administered under this Declaration of be exempt within the meaning of section ted to be carried on (a) by a corporation exempt Trust shall be held in trust by them, and the 501 (c)(3) at the time the dissolution takes place. from federal income tax under section 501 (c)(3) trustees may make payments or distributions Since the named beneficiary at the time ofdisso- of the Internal Revenue Code, or the corre- from income or principal, or both, to or for the sponding section of any future federal tax code, use of such charitable or anizations, within the lution may not be qualified, may not be in exis- or (b) by a corporation, contributions to which 9 tence, or may be unwilling or unable to accept meaning of that term as defined in paragraph C, Y 9 P are deductible under section 170(c)(2) of the in such amounts and for such charitable pur- the assets of the dissolving organization, a pro- Internal Revenue Code, or the corresponding poses of the trust as the trustees shall from time vision should be made for distribution of the section of any future federal tax code. to time select and determine; and the trustees assets for one or more of the purposes specified in this chapter in the event of any such contin- If reference to federal law in articles of incor- may make payments or distributions from in- gency. poration imposes a limitation that is invalid in come orprincipal, orboth, direcllyforsuchchari- your state, you may wish to substitute the follow- table purposes, within the meaning of that term Sample Articles ing for the last sentence of the preceding para- as defined in paragraph D, in such amounts as p graph: "Notwithstanding any other provision of the trustees shall from time to time select and of Organization these articles, this corporation shall not, except determine without making use of any other char- to an insubstantial degree, engage in any activi- itable organization. The trustees may also make The following are examples of a charter (Draft A) ties or exercise any powers that are not in fur- payments or distributions of all or any part of the and a declaration of trust (Draft B) that contain therance of the purposes of this corporation." income or principal to states, territories, or pos- the required information as to purposes and sessions of the United States, any political sub- powers of an organization and disposition of its Sixth: Upon the dissolution of the corpora- division of any of the foregoing, or to the United assets upon dissolution. You should bear in tion, assets shall be distributed for one or more States or the District of Columbia but only for exempt purposes within the meaning of section charitable purposes within the meaning mind that requirements for these instruments 501 (c)(3) of the Internal Revenue Code, or the P P of that may vary under applicable state law. term as defined m paragraph D. Income ra ions corresponding section of any future federal tax cipal derived from contributions by corporations See Private Foundations and Public Chari- code, or shall be distributed to the federal gov- shall be distributed by the trustees for use solely ties, later, forthe special provisions required in a emment, or to a state or local government, for a within the United States or its possessions. No private foundation's governing instrument in or- public purpose. Any such assets not so dis- part of the net earnings of this trust shall inure or der for it to qualify for exemption. posed of shall be disposed of by a Court of be payable to or for the benefit of any private Competent Jurisdiction of the county in which shareholder or individual, and no substantial the principal office of the corporation is then part of the activities of this trust shall be the Draft located, exclusively for such purposes or to such carrying on of propaganda, or otherwise at- Articles of Incorporation of the under- organization or organizations, as said Court tempting, to influence legislation. No part of the signed, a majority of whom are citizens of the shall determine, which are organized and oper- activities of this trust shall be the participation in, ated exclusively for such purposes. or intervention in (including the g United Stales, desiring to form allon-Profit the ( 9 publishing or poration under the Non-Profit Corporation Law In witness whereof, we have hereunto sub- distributing of statements), any political cam- Of—, do hereby certify: scribed our names this _day of paign on behalf of or in opposition to any candi- date for public office. First: The name of the Corporation shall be B. The trust shall continue forever unless the p Draft B trustees terminate it and distribute all of the Second: The lace in this state where the principaland income, which action maybe taken principal office of the Corporation is to be lo- - The Charitable Trust. Declaration by the trustees in their discretion at any time. On cated is the City of of Trust made as of the _day of such termination, assets shall be distributed for County. 20 , of and one or more exempt purposes within the mean- Third: Said corporation is organized exclu- , of., who hereby de- ing of section 501 (c)(3) of the Internal Revenue sively for charitable, religious, educational, and clare and agree that they have received this day Code, or the corresponding section of any future from as Donor, the sum of Ten federal tax code, or shall be distributed to the scientific purposes, including, for such pur- federal government, ortoastateorlocalgovem- poses, the making of distributions to organiza- Dollars ($10) and that they will the and manage the same, and an additions to il, in trust, as rant, for a public purpose. The donor autho- tions that qualify as exempt organizations under Y rues and empowers the trustees to form and section 501 (c)(3) of the Internal Revenue Code, follows: organize a nonprofit corporation limited to the or the corresponding section of any future fed- First: This trust shall be called "The uses and purposes provided for in this Declara- eral tax code. Charitable Trust" tion of Trust, such corporation to be organized Page 20 Chapter 3 Section 501 (c)(3) Organizations under the laws of any state or under the laws of and whenever for any reason the number is c) TO borrow money for such periods, at such the United States as may be determined by the reduced to one, there shall be, and at any other rates of interest, and upon such terms as the trustees; such corporation when organized to time there may be, appointed one or more addi- trustees consider advisable, and as security for have power to administer and control the affairs tional trustees. Appointments shall be made by such loans to mortgage or pledge any real or and property and to carry out the uses, objects, the trustee or trustees for the time in office by personal property with or without power of sale; and purposes ofthis trust. Uponthe creation and written instruments signed and acknowledged. to acquire or hold any real or personal property, organization of such corporation, the trustees Any succeeding or additional trustee shall, upon subject to any mortgage or pledge on or of are authorized and empowered to convey, his or her acceptance of the office by written property acquired or held by this trust. transfer, and deliver to such corporation all the instrument signed and acknowledged, have the d) To execute and deliver deeds, assign- property and assets to which this trust may be or same powers, rights and duties, and the same become entitled. The charter, bylaws, and other title to the trust estalejointly with the surviving or ments. transfers, mortgages, pledges, leases, provisions for the organization and manage- remaining trustee or trustees as if originally ap- covenants, contracts, promissory notes, re- ment of such corporation and its affairs and pointed, leases, and other instruments, sealed or un- property shall be such as the trustees shall de- sealed, incident to any transaction in which they termine, consistent with the provisions of this None of the trustees shall be required to engage. paragraph. furnish any bond or surety. None of them shall be responsible or liable forthe acts or omissions e) To vote, to give proxies, to participate in C. In this Declaration of Trust and in any of any other of the trustees or of any predeces- the reorganization, merger or consolidation of amendments to it, references to "charitable or- sor or of a custodian, agent, depositary or coun- any concern, or in the sale, lease, disposition, or ganizations" or "charitable organization' mean sel selected with reasonable care, distribution of its assets; to join with other secur- corporations, trusts, funds, foundations, or com- ity holders in acting through a committee, de- munity chests created or organized intheUnited The one or more trustees, whether original or positary, voting trustees, or otherwise, and in States or in any of its possessions, whether successor, for the time being in office, shall have this connection to delegate authority to such underthe laws of the United States, an state or full authority to act even though one or more committee, depositary,y p ry, or trustees and to de- territory, the District of Columbia, or an vacancies may exist. A trustee may, by appro- yposses- priale written instrument, delegate all or any part Posit securities with them or transfer securities acedof the United States, organized and opart to them; to pay assessments levied on securities aled exclusive) for charitable purposes, no art of his or her powers to another or others of the y p p part for such periods and subject to such or to exercise subscription rights in respect of of the net earnings of which inures or is payable conditions as such delegating trustee may de- securities, to individual, benefit of any tial art of the or termine. f) To employ a bank or trust company as individual, and no substantial part of the r oth- custodian of any funds or securities and to dele- ties of which is carrying on propaganda, or oth- The trustees serving under this Declaration gate to it such powers as theydeem appropriate; erwise attempting to influence legislation, and of Trust are authorized to pay to themselves to hold trust property without indication offiduci- which do not participate in or intervene in (in- amounts for reasonable expenses incurred and ary capacity but only in the name of a registered cluding the publishing or distributing of state- reasonable compensation for services rendered ments) any political campaign on behalf of or in in the administration of this trust, but in no event nominee, provided the trust property is at all opposition to any candidate for public office. It is shall any trustee who has made a contribution to times identified as such on the books of the trust; intended that the organization described in this this trust ever receive any compensation there- to keep any or all of the trust property orfunds in paragraph C shall be entitled to exemption from after, any place or places in the United States of federal income tax under section 501 (c)(3) of America; to employ clerks, accountants, invest- the Internal Revenue Code, c the correspond- Sixth , In extension and not in limitation of ment counsel, investment agents, and any spa- the section of any future federal tax code. the common law and statutory powers of trust- cial services, and to pay the reasonable ees and other powers granted in this Declaration compensation and expenses of all such services D. In this Declaration of Trust and in any of Trust, the trustees shall have the following in addition to the compensation of the trustees. amendments to it, the term "charitable pur- discretionary powers. - poses" shall be limited to and shall include only a) To invest and reinvest the principal and Seventh: The trustees' powers are exercis- religious, charitable, scientific, literary, oreduca- tional purposes within the meaning of those income of the trust in such property, real, per- able solely in the fiduciary capacity consistent with and in furtherance of the charitable pur- terms as used in section 501 (c)f3) of the Internal sonal, or mixed, and in such manner as they ( )( ) shall deem proper, and from time to time to Poses of this trust as specified in Article Third Revenue Code, or the corresponding section change investments as they shall deem advisa- and not otherwise. any future federal tax code, but only such pur-r- ble, to invest in or retain any stocks, shares, Eighth: In this Declaration of Trust and in poses as also constitute public charitable pur- bonds, notes, obligations, or personal or real poses under the law of trusts of the State g P any amendment to it, references to "trustees" of property (including without limitation any inter- mean the one or more trustees, whether original ests in or obligations of any corporation, associ- or successor, for the time being in office. Fourth: This Declaration of Trust may be ation, business trust, investment trust, common amended at any time or times by written instru- trust fund, or investment company) although Ninth: Any person may rely on a copy, certi- ment or instruments signed and sealed by the some or all of the property so acquired or re- Fled by a notary public, of the executed original trustees, and acknowledged by any of the trust- tained is of a kind or size which but for this of this Declaration of Trust held by the trustees, ees, provided that no amendment shall author- express authority would not be considered and of any of the notations on it and writings ize the trustees to conduct the affairs of this trust proper and although all of the trust funds are allached to It, as fully as he might rely on the in any manner offer any purpose contrarytothe invested in the securities. of one company. No original documents themselves. Any such per- provisions of section 501 (c)(3) of the Internal principal or income, however, shall be loaned, son may rely fully on any statements of fact Revenue Code, or the corresponding section of directly or indirectly, to any trustee or to anyone certified by anyone who appears from such Ong- any future federal tax code. An amendment of else, corporate or otherwise, who has at any !net documents or from such certified copy to be the provisions of this Article Fourth (or any time made a contribution to this trust, nor to a trustee under this Declaration of Trust, No one amendment to it) shall be valid only if and to the anyone except on the basis of an adequate dealing with the trustees need inquire concern- extent that such amendment further restricts the interest charge and with adequate security. - ing the validity of anything the trustees purport to trustees' amending power. All instruments b To sell, lease, or exchange an do. No one dealing with the trustees need see to amending this Declaration of Trust shall be ) 9 y personal, 9 noted upon or kept attached to the executed mixed, or real property, at public auction or by the application of anything paid or transferred to original of this Declaration of Trust held by the private contract, for such consideration and on or upon the order of the trustees of the trust. trustees. such terms as to credit or otherwise, and to Tenth: This Declaration of Trust is to be make such contracts and enter into such under- governed in all respects by the laws of the State Fifth: Any trustee under this Declaration of takings relating to the trust property, as they of Trust may, by written instrument, signed and consider advisable, whether or not such leases acknowledged, resign his office. The number of or contracts may extend beyond the duration of Trustee trustees shall be at all times not less than two, the trust. Trustee Chapter 3 Section 501(c)(3) Organizations Page 21 Qualifying organizations. The following the racial composition of students who Educational types of organizations may qualify as educa- have received the awards. Organizations tional: 3. A list of the school's incorporators, foun- 1 . An organization, such as a primary or sec- ders, board members, and donors of land and Private Schools ondary school, a college, or a professional or buildings, whether individuals or organi- or trade school, that has a regularly sched- zations. If your organization wants to obtain recognition uled curriculum, a regular faculty, and a 4. A statement indicating whether any of the of exemption as an educational organization, regularly enrolled student body in attend- organizations described in item (3) above you must submit complete information as to how ance at a place where the educational ac- have an objective of maintaining segre- your organization carries on or plans to carry on tivities are regularly carried on, gated public or private school education at its educational activities, such as by conducting 2. An organization whose activities consist of the time the application is fled and, if so, a school, by panels, discussions, lectures, fo- conducting public discussion groups, fo- whether any of the individuals described in rums, radio and television programs, or through rums, panels, lectures, or other similar pro- item (3) are officers or active members of various cultural media such as museums, sym- grams, those organizations at the time the applica- phony orchestras, or art exhibits. In each in- lion is filed, stance, you must explain by whom and where 3. An organization that presents a course of these activities are or will be conducted and the instruction by correspondence or through 5. The public school district and county in amount of admission fees, if any. You must the use of television or radio, which the school is located, submit a copy of the pertinent contracts, agree- 4. A museum, zoo, planetarium, symphony ments, publications, programs, etc. orchestra, or other similar organization, How to determine racial composition. The If you are organized to conduct a school, you and racial composition of the student body, faculty, must submit full information regarding your tui- and administrative staff may be an estimate tion charges, number of faculty members, num- 5. A nonprofit children's day-care center, based on the best information readily available ber of full-time and part-time students enrolled, to the school, without requiring student a li courses of study and degrees conferred, to- College book stores, cafeterias, restau- q 9 pP - gether with a copy of your school catalog. See rants, etc. These and other on-campus orga- cants, students, faculty, or administrative staff to nizations should submit information to show that submit to the school information that the school also Private Schools, discussed later. q uire. Nevertheless, a they are controlled by and operated for the con- otherwise does not re variance of the faculty and student body or by statement of the method by which the racial Educational Organizations whom they are controlled and whom they serve. composition was determined must be supplied. The identity of individual students or members of The term educational relates to Alumni association. An alumni association the faculty and administrative staff should not be should establish that it is organized to promote included with this information. 1 . The instruction or training of individuals for the welfare of the university with which it is the purpose of improving or developing affiliated, is subject to the control of the univer- A school that is a state or municipal instru- their capabilities, or sity as to its policies and destination of funds, mentality (see Instrumentalities, near the begin- 2. The instruction of the public on subjects and is operated as an integral part of the univer- ning of this chapter), whether or not it qualifies useful to individuals and beneficial to the sity or is otherwise organized to promote the for exemption under section 501(c)(3), is not community. welfare of the college or university. If your asso- considered to be a private school for purposes of ciation does not have these characteristics, it the following discussion. may still be exempt as a social club if it meets Advocacy io a position. Advocacy of a par- the requirements described in chapter 4, under titular position civiewpoint may be educational 501(c)(7) — Social and Recreation Clubs. R8CI811y Nondiscriminatory Policy if there is a sufficiently full and fair exposition of pertinent facts to permit an individual or the Athletic organization. This type of organi- To qualify as an organization exempt from fed- public to form an independent opinion or conclu- zation must submit evidence that it is engaged in eral income tax, a private school must include a sion. The mere presentation of unsupported activities such as directing and controlling inter- statement in its charter, bylaws, or other govern- opinion is not educational. scholastic athletic competitions, conducting ing instrument, or in a resolution of its governing Method not educational. The method used tournaments, and prescribing eligibility rules for body, that it has a racially nondiscriminatory b an organization to develop and contestants. If it is not so engaged, your organk policy as to students and that it does not discrim- Y 9 p present its zation may be exempt as a social club described irate against applicants and students on the views is a factor in determining if an organization in chapter 4. Raising funds to be used for travel basis of race, color, or national or ethnic origin, qualifies as educational within the meaning of and other activities to interview and persuade Also, the school must circulate information that section (m). The following factors may in- prospective students with outstanding athletic clearly states the school's admission policies. A dicate that at the the method is not educational. ability o attend a articular university does not racial) nondiscriminatory ty p y y policy toward stu- 1 . The presentation of viewpoints unsup- show an exempt purpose. If your organization is dents means that the school admits the students ported by facts is a significant part of the not exempt as an educational organization, see of any race to all the rights, privileges, programs, organization's communications. Amateur Athletic Organizations, later in this and activities generally accorded or made avail- chapter. able to students at that school and that the 2. The facts that purport to support the view- school does not discriminate on the basis of race point are distorted. Private Schools in administering its educational policies, admis- 3. The organization's presentations make sion policies, scholarship and loan programs, substantial use of inflammatory and dispar- Every private school filing an application for rec- and athletic and other school-administered pro- aging terms and express conclusions more ognition of tax-exempt status must supply the grams. on the basis of emotion than of objective IRS (on Schedule B, Form 1023) with the follow- The IRS considers discrimination on the ba- evaluations. ing information. sis of race to include discrimination on the basis 4. The approach used is not aimed p The existence of a racially discriminatory pol- of, color or national or ethnic origin. at Bevel- 1 . The racial composition of the student body, oping an understanding on the part of the and of the faculty and administrative staff, icy with respect to the employment of faculty audience because it does not consider as of the current academic year. (This in- and administrative staff is indicative of a ra- their background or training. formation also must be projected, so far as atoll discriminatory administrative may be feasible, for the next academic y policy as to students. Con- Exceptional circumstances, however, may versely, the absence of racial discrimination in exist where an organization's advocacy may be year.) the employment of faculty and administrative educational even if one or more of the factors 2. The amount of scholarship and loan funds, staff is indicative of a racially nondiscriminatory listed above are present. if any, awarded to students enrolled and policy as to students. Page 22 Chapter 3 Section 501 (c)(3) Organizations A policy of a school that favors racial minor- criminatory policy if this use makes the policy not necessarily indicate the absence of a racially fly groups with respect to admissions, facilities known toall segments ofthe general community nondiscriminatory policy when there are rela- and programs, and financial assistance is not the school serves. If the school uses this tivelyfeworno such students inthese communi- discrimination on the basis of race when the method, it must provide documentation showing ties. Actual enrollment is, however, a meaningful purpose and effect of this policy is to promote thatthe means bywhich this policy was commu- indication of a racially nondiscriminatory policy establishing and maintaining the school's non- nicated to all segments of the general commu- in a community in which a public school or discriminatory policy. - nity was reasonably expected to be effective. In schools became subject to a desegregation or- A school that selects students on the basis of this case, appropriate documentation would in- der of a federal court or are otherwise expressly membership in a religious denomination or clude copies of the tapes or scripts used and obligated to implement a desegregation plan unit is not discriminating if membership in the records showing that there was an adequate under the terms of any written contract or other denomination or unit is open to all on a racially number of announcements. The documentation commitment to which any federal agency was a nondiscriminatory basis. also would include proof that these announce- party. Policy statement. The school must include a ments were made during hours when they were The IRS encourages schools to satisfy the statement of its racially nondiscriminatory policy likely to be communicated to all segments of the publicity requirement by using either of the in all its brochures and catalogs dealing with general community, that they were long enough methods described earlier, even though a student admissions, programs, and scholar- to convey the message clearly, and that they school considers itself to be within one of the ships. Also, the school must include a reference were broadcast on radio or television stations Exceptions. The IRS believes that these public- s its racially nondiscriminatory policy f other likely to be listened to by substantial numbers of ity requirements are the most effective methods writtenadvertisingthatituses nondiscriminatory policy pr other members of ail racial segments of the general to make known a school's racially nondiscrimi- writ students of its programs. community. Announcements must be made dur- nalory policy. In this regard, it is each school's tive ing the period of the school's solicitation for responsibility to determine whether either of the Publicity requirement, The school must students or, in the absence of solicitation pro- exceptions apply. Such responsibility will pre- make its racially nondiscriminatory policy known gram, during the school's registration period, pare the school, if it is audited by the IRS, to to all segments of the general community served Exceptions. The publicity requirements will demonstrate that the failure to publish its racially by the school. Selective communication of not apply in the following situations. nondiscriminatory policy in accordance with Bi- racially nondiscriminatory policy that a school ther one of the publicity requirements was justi- provides solely to leaders of racial groups will First, if for the preceding 3 years the enroll- fed by one of the exceptions. Also, a school not be considered an effective means of com- ment of a parochial must be prepared to demonstrate that it has munication to make the policy known to all seg- school consists of students other church-related dents at least 75% of Publicly disavowed or repudiated any state- ments of the community. To satisfy this whom are members of the sponsoring religious ments purported to have been made on its be- requirement, the school must use one of the denomination or unit, the school may make half (after November 6, 1975) that are contrary following two methods. known its racially nondiscriminatory policy in to its publicity of a racially nondiscriminatory Method one. The school may publish a no- whatever newspapers or circulars the religious policy as to students, to the extent that the tice of its racially nondiscriminatory policy in a denomination or unit uses in the communities school or its principal official was aware of these newspaper of general circulation that serves all from which the students are drawn. These statements. racial segments of the community. Such publi- newspapers and circulars may be distributed Facilities and programs. A school must be cation must be repeated at least once annually by a particular religious denomination or unit or able to show that all of its programs and facilities during the period of the school's solicitation for by an association that represents a number of are operated in a racially nondiscriminatory students or, in the absence of a solicitation pro- religious organizations of the same denomina- manner. gram, during the school's registration period. tion. If, however, the school advertises in When more than one community is served by a newspapers of general circulation in the com- Scholarship and loan programs. As a gen- school, the school may publish the notice in munity or communities from which its students eral rule, all scholarship or other comparable those newspapers that are reasonably likely to are drawn and the second exception (dis- benefits obtainable at the school must be of- be read by all racial segments in the communi- cussed next) does not apply to the school, then fared on a racially nondiscriminatory basis. This ties that the school serves. it must comply with either of the publicity re- must be known throughout the general commu- If this method is used, the notice must meet quirements explained earlier. nity being served by the school and should be the following printing requirements, referred to in its publicity. Financial assistance Second, if a school customarily draws a programs, as well as scholarships and loans 1 . It must appear in a section of the newspa- substantial percentage of its students nation- made under financial assistance programs, that per likely to be read by prospective stu- wide, worldwide, from a large geographic sec- favor members of one or more racial minority dents and their families. tion or sections of the United States, or from groups and that do not significantly detract from local communities, and if the school follows a or are designed to promote a school's racially 2. It must occupy at least 3 column inches. racially nondiscriminatory policy as to its stu- nondiscriminatory policy will not adversely affect 3. It must have its title printed in at least 12 dents, the school may satisfy the publicity re- the school's exempt status. point bold face type. quirement by complying with the instructions explained, earlier, under Policy statement. Certification. An individual authorized to take 4. It must have the remaining text printed in official action on behalf of a school that claims to at least 8 point type. The school may demonstrate that it follows a be racially nondiscriminatory as to students The following is an acceptable example of racially nondiscriminatory policy either by show- must certify annually, under penalties of per- the notice, ing that it currently enrolls students of racial jury, on Schedule A (Form 990) or Form 5578, minority groups in meaningful numbers or ex- Annual Certification of Racial Nondiscrimination NOTICE OF cept for local community schools, when minority for a Private School Exempt From Federal In- NONDISCRIMINATORY POLICY students are not enrolled in meaningful num- come Tax, whichever applies, that to the best of AS TO STUDENTS bers, that its promotional activities and recruiting his or her knowledge and belief the school has The M School admits students of any race, color, efforts In each geographic area were reasonably satisfied all requirements that apply, as previ- natlonal and ethnic origin to all the rights, oUSI lamed. privileges, programs, and activities generally designed to inform students of all racial seg- y explained. accorded or made available to students at the ments in the general communities within the Failure to comply with the guidelines ordinar- school. It does not discriminate on the basis of area of the availability of the school. The ques- ily will result in the proposed revocation of the race, color, national and ethnic origin in tion as to whethera school demonstrates such a exempt status of a school. administration of its educational policies, policy satisfactorily will be determined on the ® Recordkee admissions policies, scholarship and loan rm ping requirements. With t f f th i ass of acs and circumstances of each programs , and athletic and other b certain exceptions, given later, each school-administered programs, case. exempt private school must maintain The IRS recognizes that the failure by a the following records for a minimum period of 3 Method two. The school may use the school drawing its students from local communi- years, beginning with the year after the year of broadcastmedia to publicize its racially nondis- ties to enroll racial minority group students may compilation or acquisition. Chapter 3 Section 501 (c)(3) Organizations Page 23 1 . Records indicating the racial composi- However, this rule does not apply to • Erection or maintenance of public build- tion of the student body, faculty, and ad- state-sponsored organizations described in sec- ings, monuments, or works, ministrative staff for each academic tions 501 (c)(26) or 501 (c)(27), which are dis- . Lessening the burdens of government, year, cussed in chapter 4, or to charitable risk pools, 2. Records sufficient to document that discussed next. • Lessening of neighborhood tensions, scholarship and other financial assis- • Elimination of prejudice and discrimina- tance is awarded on a racially nondis- Charitable Risk Pools tion, criminatory basis. A charitable risk pool is treated as organized and • Defense of human and civil rights secured 3. Copies of all materials used by or on operated exclusively for charitable purposes if it by law, and tb If of the school to solicit contribu- ions • Combating community deterioration and 1 . Is organized and operated only to pool in- juvenile delinquency. 4. Copies of all brochures, catalogs, and surable risks of its members (not including advertising dealing with student admis- risks related to medical malpractice) and to The rest of this section contains a description of sions, programs, and scholarships. provide information to its members about the information to be provided by certain specific (Schools advertising nationally or in a loss control and risk management, organizations. This information is in addition to large geographic segment or segments the required inclusions described in chapter 1 , of the United States need only maintain 2. Consists only of members that are section and other statements requested on Form 1023. a record sufficient to indicate when and 501(c)(3) organizations exempt from tax Each of the following organizations must submit in what publications their advertisements under section 501(a), the information described. were placed.) 3. Is organized under state law authorizing Charitable organization supporting educa. The racial composition of the student body, this type of risk pooling, tion. Submit information showing how your or- faculty, and administrative staff may be deter- 4. Is exempt from state income tax (or will be ganization supports education — for example, mined in the same manner as that described at after qualifying as a section 501 (c)(3) or- contributes to an existing educational institution, the beginning of this section. However, a school ganization), endows a professorial chair, contributes toward may not discontinue maintaining a system of paying teachers' salaries, or contributes to an records that reflects the racial composition of its 5. Has obtained at least $1 ,000,000 in startup educational institution to enable it to carry on students, faculty, and administrative staff used capital from nonmember charitable organi- research. on November 6, 1975, unless it substitutes a zations, Scholarships. If the organization awards or different system that compiles substantially the 6. Is controlled by a board of directors plans to award scholarships, complete Sched- same information, without advance approval of elected by its members, and ule H of Form 1023. Submit the following also. the IRS. 0 7. Is organized under documents requiring The IRS does not require that a school re- that: 1 . Criteria used for selecting recipients, in- lease any personally identifiable records or per- cluding the rules of eligibility, sonal information except in accordance with the a. Each member be a section 501 (c)(3) 2. How and by whom the recipients are or will requirements of the Family Educational Rights organization exempt from tax under be selected. and Pnvacy Act of 1974. Similarly, the IRS does section 501(a), not require a school to keep records prohibited 3. If awards are or will be made directly to under state or federal law. b. Each member that receives a final de- individuals, whether information is required termination that it no longer qualifies assuring that the student remains in Exceptions. The school does not have to under section 501 (c)(3) notify the pool school. independently maintain these records for IRS immediately, and 4. If awards are or will be made to recipients use if both of the following are true. c. Each insurance policy issued by the of a particular class, for example, children 1 . Substantially the same information has pool provide that it will not cover events of employees of a particular employer— been included in a report or reports filed occurring after a final determination de- scribed in (b). a. Whether any preference is or will be with an agency or agencies of federal, accorded an applicant by reason of the state, or local governments, and this infor- parent's position, length of employment, mation is current within 1 year. or salary, 2. The school maintains copies of these re- b. Whether as a condition of the award the ports from which this information is readily Other Section 501 (c) (3) recipient must upon graduation accept obtainable, employment with the company, and If these reports do not include all of the informa- Organizations c. Whether tion required, as discussed earlier, records pro- the award will be continued even h the parent's employment ends. viding such remaining information must be In addition to the information required for all maintained by the school for IRS use. organizations, as described earlier, you should 5. A copy of the scholarship application form Failure to maintain records. Failure to include any other information described in this and any brochures or literature describing maintain or to produce the required records and section. the scholarship program, information, upon proper request, will create a an Charitable Organizations presumption that the organization has failed to g comply with these guidelines. Hospital. If you are organized to operate a If your organization is applying for recognition of charitable hospital, complete and attach Section exemption as a charitable organization, it must I of Schedule C, Form 1023. show that it is organized and operated for pur- If your hospital was transferred to you from Organizations poses that are beneficial to the public interest. proprietary ownership, complete and attach g Some examples of this type of organization are Schedule I of Form 1023. You must attach a list Providing Insurance those organized for: showing: • Relief of the poor, the distressed, or the 1 . The names of the active and courtesy staff An organization described in section 501(c)(3) underprivileged, members of the proprietary hospital, as or 501 (c)(4) may be exempt from tax only if no . Advancement of religion well as the names of your medical staff , substantial part of its activities consist of provid- members after the transfer to nonprofit ing commercial-type insurance. • Advancement of education or science, ownership, and Page 24 Chapter3 Section 501 (c)(3) Organizations - 2. The names of any doctors who continued 7. Copies in duplicate of the loan application Religious Organizations to lease office space in the hospital after and any brochures or literature describing its transfer to nonprofit ownership and the the loan program. To determine whether an organization meets amount of rent paid. Submit also an ap- the religious purposes test of section 501 (c)(3), praisal showing the fair rental value of the the IRS maintains two basic guidelines. rented space. Public-interest law firms. If your organiza- tion was formed to litigate in the public interest 1 . That the particular religious beliefs of the Clinic. If you are organized to operate a clinic, (as opposed to providing legal services to the organization are truly and sincerely held. attach a statement including: poor), such as in the area of protection of the 2. That the practices and rituals associated environment, you should submit the following with the organization's religious belief or 1 . A description of the facilities and services, information. creed are not illegal or contrary to clearly 2. To whom the services are offered, such as defined public policy, the public at large or a specific group, 1. How the litigation can reasonably be said to be representative of a broad public inter- Therefore, your group (or organization) may not 3. How charges are determined, such as on a qualify for treatment as an exempt religious rofit basis, to recover costs, or at less est rather than a private one. P or- ganization for tax purposes if its actions, as than cost, 2. Whether the organization will accept fees contrasted with its beliefs, are contrary to well 4. By whom administered and controlled, for its services. established and clearly defined public policy. If 3. A description of the cases litigated or to be there is a clear showing that the beliefs (or 5. Whether any perform or perform (that doctrines) are sincerely held by those professing is, those who perform e will perform the litigated and how they benefit the public clinical services) also serve or will serve in generally. them, the IRS will not question the religious an administrative capacity, and 4. Whether the policies and program of the nature of those beliefs. 6. How compensation paid the professional organization are the responsibility of a Churches. Although a church, its integrated staff is or will be determined. board or committee representative of the auxiliaries, or a convention or association of public interest, which is neither controlled churches is not required to file Form 1023 to be Home for the aged, If you are organized to by employees or persons who litigate on exempt from federal income tax or to receive tax operate a home for the aged, complete and behalf of the organization nor by any or- deductible contributions, the organization may attach Schedule F of Form 1023. Explain on ganization that is not itself an organization find it advantageous to obtain recognition of Schedule F: described in this chapter. exemption. In this event, you should submit in- s. Whether the organization is operated, formation showing that your organization is a 1 . How charges are or will be determined, throuh sharing of office space or other- church, synagogue, association or convention such as on a profit basis, to recover costs, of churches, religious order, or religious organi- or at less than cost, and whether the wig g se, in a way to create identification or zation that is an integral part of a church, and charges are based on providing service at confusion with a particular private law firm. that it is engaged in carrying out the function of a the lowest feasible cost to the residents, 6. Whether there is an arrangement to pro- church. 2. Whether all residents are or will be re- vide, directly or indirectly, a deduction for In determining whether an admittedly relig- quired to pay fees, the cost of litigation that is for the private ious organization is also a church, the IRS does 3. Whether any residents are or will be ac- benefit of the donor. not accept any and every assertion that the cepted at lower rates or entirely without organization is a church. Because beliefs and pay and, if so, how many, and Acceptance of attorneys'fees. A nonprofit practices vary so widely, there is no single defi- public-interest law firm can accept attorneys' nition of the word church for tax purposes. The 4. Whether federal mortgage financing has fees in public interest cases if the fees are paid IRS considers the facts and circumstances of been applied for and if so, the type. directly by its clients and the fees are not more each organization applying for church status, than the actual costs incurred in the case. Once Community nursing bureau. If you provide a undertaking a representation, the organization Integrated auxiliaries. An organization is an nursing register or community nursing bureau, cannot withdraw from the case because the liti- integrated auxiliary of a church if all the fol- to provide information showing that your organza- gant is unable to pay the fee. . lowing are true. lion will be operated as a community project and Firms can accept fees awarded or ap- 1 . The organization is described both in sec- will receive its primary support from public con- proved by a court or an administrative tions 501 (c)(3) and 509(a)(1), 509(a)(2), or tributions to maintain a nonprofit register of qual- agency and paid by an opposing party if the 509(a)(3). ified nursing personnel, including graduate firms do not use the likelihood or probability of nurses, unregistered nursing school graduates, 2. It is affiliated with a church or a convention licensed attendants and practical nurses for the fee awards as a consideration in the selection of or association of churches. benefit of hospitals, health agencies, doctors, cases. Allfeeawardsmustbepaidtotheorgani- and individuals. zation and not to its individual staff attorneys. 3. It is internally supported. An organization is Instead, a public-interest law firm can reasona- internally supported unless both of the fol- Organization providing loans. If you make, bly compensate its staff attorneys, but only on a lowing are true. or will make loans for charitable and educational straight salary basis. Private attorneys, whose a. It offers admissions, goods, services or purposes, submit the following information, services are retained by the firm to assist it in facilities for sale, other than on an inci- particular cases, can be compensated by the dental basis, to the general public 1 . An explanation of the circumstances under firm, but only on a fixed fee or salary basis. 9 P old which such loans are, or will be, made. a no goods, services, or facilities sold at The total amount of all attorneys' fees (court a nominal charge or for a small part of 2. Criteria for selection, including the rules of awarded and those received from clients) must the cost). eligibility, not be more than 50% of the total cost of opera- 3. How and by whom the recipients are or will tions of the organization's legal functions, calcu- b. It normally gets more than 50% of its support from a combination of govern- be selected. toted over a 5-year period. mental sources, public solicitation of 4. Manner of repayment of the loan. If, in order to carry out its program, an organi- contributions, and receipts from the sale zation violates applicable canons of ethics, dis- of admissions, goods, performance of 5. Security required, if any. rupts the judicial system, or engages in any services, or furnishing of facilities in so- 6. Interest charged, if any, and when pay- illegal action, the organization will jeopardize its tivities that are not unrelated trades or able. exemption. businesses. Chapter 3 Section 501 (c)(3) Organizations Page 25 Special rule. Men's and women's organiza- 7. A copy of publications or other media ,.1 tions, seminaries, mission societies, and youth showing reports of your research activities. Private Foundations groups that satisfy (1) and (2) above are inte- Only reports of your research activities or ,.1 t,� t, grated auxiliaries of a church even if they are not those conducted in your behalf, as distin- and Public Charities internally supported. guished from those of your creators or Note. In order for an organization (including members conducted in their individual ca- It is important that you determine if your organi- acities, should be submitted. zation is a private foundation. Most organize- a church and religious organization) to qualify p lions exempt from income tax (as organizations for tax exemption, no part of its net earnings may described in section 501 (c)(3)) are presumed to inure to any individual. Literary Organizations be private foundations unless they notify the Although an individual is entitled to a charita- Internal Revenue Service within a specified pe- Me deduction for contributions to a church, the If your organization is established to operate a nod of time that they are not. This notice require- assignment or similar transfer of compensation book store or engage in publishing activities of ment applies to most section 501 (c)(3) for personal services to a church generally does an y (P rintin 9. publication, or distribution g y nature organizations regardless of when the were not relieve a taxpayer of federal income tax formed- liability on the compensation, regardless of the of your own material or that printed or published motivation behind the transfer. by others and distributed by you), explain fully Private Foundations the nature of the operations, including whether Scientific Organizations sales are or will be made to the general public, Every organization that qualifies for tax exemp- the type of literature involved, and how these lion as an organization described in section You must show that your organization's re- activities are related to your stated purposes. 501 (c)(3) is a private foundation unless it falls search will be carried on in the public interest, into one of the categories specifically excluded Scientific research will be considered to be in the Amateur Athletic from the definition of that term (referred to in public interest if the results of the research (in- Or anizations section 509(a)(1 ), 509(a)(2), 509(a)(3), or cluding any patents, copyrights, processes, or g 509(a)(4)). In effect, the definition divides these formulas) are made available to the public on a There are two types of amateur athletic organi- organizations into two classes, namely private nondiscriminatory basis; if the research is per- formed for the United States or a state, county, zations that can qualify for tax-exempt status. foundations and public charities. Public chari- or municipal government; or if the research is The first type is an organization that fosters ties are discussed later. carried on for one of the following purposes. national or international amateur sports compe- Organizations that fall into the excluded cat- tition but only if none of its activities involve agonies are generally those that either have 1 . Aiding n the scientific education of college broad public support or actively function in a 9 9 providing athletic facilities or equipment. The supporting relationship to those organizations, or university students. second type is a Qualified amateur sports or- Organizations that test for public safety also are 2. Obtaining scientific information that is pub- ganization (discussed below). The difference is excluded. lished in a treatise, thesis, trade publica- that a qualified amateur sports organization may tion, or in any other form that is available provide athletic facilities and equipment. Notice to IRS. Even if an organization falls to the interested public. Donations to either amateur athletic organi- within one of the categories excluded from the definition of private foundation, it will be pre- 3. Discovering a cure for a disease. zation are deductible as charitable contributions sumed to be a private foundation, with some 4. Aiding a community or geographical area on the donors federal income tax return. How- exceptions, unless it gives timely notice to the by attracting new industry to the commu- ever, no deduction is allowed if there is a direct IRS that it is not a private foundation. This notice nity or area, or by encouraging the devek personal benefit to the donor or any other per- requirement applies to an organization regard- opment or retention of an industry in the son other than the organization. less of when it was organized. The only excep- community or area. tions to this requirement are those organizations Scientific research, for exemption purposes, that are excepted from the requirement of fling P P P Qualified amateur sports organization. An Form 1023 as discussed, earlier, under Organi- does not include activities of a type ordinarily organization will be a qualified amateur sports zations Not Required To File Form 1023. incidental to commercial or industrial operations organization if it is organized and operated: such as the ordinary inspection or testing of When to file notice. If an organization has materials or products, or the designing or con- to file the notice, it must do so within 15 months structing of equipment, buildings, etc. 1 . Exclusively to foster national or interns- from the end of the month in which it was organ- If you engage or plan to engage in research, tional amateur sports competition, and ized. submit all of the following. 2. Primarily to conduct national or interns- If your organization is newly applying for rec- 1 . An explanation of the nature of the re- tional competition in sports or to support ognition of exemption as an organization de- search, and develop amateur athletes for that com- scribed in this chapter (a section 501 (c)(3) petition. organization) and you wish to establish that your 2. A brief description of research projects organization is a public charity rather than a completed or presently being engaged in. The organization's membership may be local or private foundation, you must complete the appli- 3. How and by whom research projects are regional in nature. cable lines of Part Ill of your exemption applica- determined and selected. tion (Form 1023). An extension of time for fling Prevention of Cruelty this application may be granted by the IRS if 4. Whether you have, or contemplate, con- to Children or Animals your request is timely and you demonstrate that tracted or sponsored research and, if so, additional time is needed. See Application for names of past sponsors or grantors, terms Examples of activities that may qualify this type Recognition of Exemption, earlier in this chap- of grants or contracts, together with copies of organization for exempt status are: ter, for more information. of any executed contracts or grants. In determining the date on which a corpora- 5. Disposition made or to be made of the 1 . Preventing children from working ion is organized for purposes of applying for ng in haz- recognition of section 501 (c)(3) status, the IRS results of your research, including whether ardous trades or occupations, looks to the date the corporation came into axis- preference has been or will be given to any organization or individual either as to re- 2. Promoting high standards of care for labo- fence under the law of the state in which it is sults or time of release. ratory animals, and incorporated. For example, where state law pro- vides that existence of a corporation begins on 6. Who will retain ownership or control of any 3, Providing funds to pet owners to have their the date its articles are filed by a certain state patents, copyrights, processes or formulas pets spayed or neutered to prevent over- official in the appropriate state office, the corpo- resulting from your research. breeding. ration is considered organized on that date. Page 26 Chapter 3 Section 501 (c)(3) Organizations Later nonsubstantive amendments to the ena- Sample governing instruments. The fol- bling instrument will not change the date of or- lowing samples of governing instrument provi- 1 . Require it to act or refrain from acting so ganization , for purposes of the notice sions illustrate the special charter requirements as not to subject the foundation to the requirement. that apply to private foundations. Draft A is a taxes imposed on prohibited transactions, Notice filed Tate. An organization that sample of provisions in articles of incorporation, or states it is a private foundation when it files its Draft B, a trust indenture. 2. Treat the required provisions as contained application for recognition of exemption after the in the foundation's governing instrument. 15-month period will be treated as a section The IRS has published a list of states with 501 c 3 organization and as a private founda- Draft A ( )( ) 9 P this type of law. The list is in Revenue Ruling tion only from the date it files its application. 75-38, 1975-1 CB 161 (or later update). An organization that states it is a publicly General supported charity when it files its application 1 . The corporation will distribute its income Public Charities for recognition of exemption after the 15-month for each tax year at a time and in a manner period cannot be treated as a section 501 (c)(3) as not to become subject to the tax on A private foundation is any organization de- organization before the date it files the applica- scribed in section 501 (c)(3), unless it falls into undistributed income imposed o section lion. Financial support received before that date one of the categories specifically excluded from may not be used for purposes of determining 4942 of the Internal Revenue Code, or the the definition of that term in section 509(a), whether the organization is publicly supported. corresponding section of any future federal which lists four basic categories of exclusions. However, an organization that can reasonably tax code. These categories are discussed under the Sec- be expected to meet the support requirements 2. The corporation will not engage in any act tion 509(aj heading that follow this introduction. (discussed later under Public Charities) can ob- of self-dealing as defined in section If your organization falls into one of these tain an advance ruling from the IRS that it is a 4941(d) of the Internal Revenue Code, or categories, it is not a private foundation and you publicly supported organization. the corresponding section of any future should state this in Part III of your application for federal tax code. recognition of exemption (Form 1023). Excise taxes on private foundations. There If your organization does not fall into one of is an excise tax on the net investment income of 3. The cuss holdings will not retain any excess these categories, it is a private foundation and is most domestic private foundations. This tax business holdings as defined in section subject to the applicable rules and restrictions must be reported on Form 990—PF and must be 4943(c) of the Internal Revenue Code, or until it terminates its private foundation status. paid annually at the time for filing that return or in the corresponding section of any future Some private erminates its ions also qualify as private quarterly estimated tax payments if the total tax federal tax code. operating foundations; these are discussed near for the year is $500 or more. In addition, there 4. The corporation will not make any invest- the end of this chapter. are several other rules that apply. These in- ments in a manner as to subject it to tax Generally speaking, a large class of organi- clude: under section 4944 of the Internal Reve- zations excluded undersection 509(a)(1 ) and all nue Code, or the corresponding section of organizations excluded under section 509(a)(2) 1 . Restrictions on self-dealing between pri- any future federal tax code. depend upon a support test. This test is used to vate foundations and their substantial con- assure a minimum percentage of broad-based tributors and other disqualified persons, 5. The corporation will not make any taxable public support in the organization's total support expenditures as defined in section 4945(d) pattern. Thus, in the following iscussions, when 2. Requirements that the foundation annually of the Internal Revenue Code, or the corre- 9 distribute income for charitable purposes, sponding section of any future federal tax the one-third support test (see Qualifying s Publicly Supported, later) is referred to, it means 3, limits on their holdings in private busi- code. the following fraction normally must equal at nesses, least one-third: 4. Provisions that investments must notjeop- ardize the carrying out of exempt put- Draft B Qualifying support poses, and Total support Any other provisions of this instrument not- 5. Provisions to assure that expenditures fur- withstanding, the trustees shall distribute its in- Including items of support in qualifying support ther the organization's exempt purposes. come for each tax year at a time and in a manner (the numerator of the fraction) or excluding Violations of these provisions give rise to as not to become subject to the tax on undistrib- items of support from total support (the denomi- taxes and penalties against the private founda- uted income imposed by section 4942 of the nator of the fraction) may decide whether an lion and, in some cases, its managers, its sub- Internal Revenue Code, or the corresponding organization is excluded from the definition of a stantial contributors, and certain related section of any future federal tax code. private foundation, and thus from the liability for certain excise taxes. So it is very important to persons. Any other provisions of this instrument not- classify items of support correctly. Payments made as a result of September withstanding, the trustees will not engage in any 11, 2001 Terrorist Attacks. Payments made act of self-dealing as defined in section 4941(d) Excise tax on excess benefit transactions. by a private foundation to individuals and their of the Internal Revenue Code, or the corre- A person who benefits from an excess benefit families because of death, injury, wounding, or sponding section of any future federal tax code; transaction such as compensation, fringe bene- illness of an individual paid as a result of the nor retain any excess business holdings as de- fits, or contract payments from a section terrorist attacks against the United States on fined in section 4943(c) of the Internal Revenue 501(c)(3) or 501 (c)(4) organization may have to September 11 , 2001 , or for an attack involving Code, orthe corresponding section of any future pay an excise tax under section 4958. A man- anthrax, occurring on or after September 11 , federal tax code; nor make any investments in a ager of the organization may also have to pay an 2001 , and before January 1 , 2002, will not be manner as to incur tax liability under section excise tax under section 4958 of the Code. treated as paid to a disqualified person for pur- 4944 of the Internal Revenue Code, orthe corre- These taxes are reported on Form 4720, Return poses of the excise tax on self-dealing. This rule sponding section of any future federal tax code; of Certain Excise Taxes on Charities and Other applies to payments made on or after Septem- normake anytaxable expenditures as defined in Persons Under Chapters 41 and 42 of the Inter- ber 11 , 2001 . section 4945 (d) of the Internal Revenue Code, nal Revenue Code. or the corresponding section of any future fed- The excise taxes are imposed if an applies- Governing instrument. A private foundation eral tax code. He tax-exempt organization provides an excess cannot be tax exempt nor will contributions to it benefitto a disqualified person and that bene- be deductible as charitable contributions unless Effect of state law. A private foundation's fit exceeds the value of the benefit an organiza- its governing instrument contains special provi- governing instrument will be considered to meet tion received in the exchange. sions in addition to those that apply to all organi- these charter requirements if valid provisions of There are three taxes under section 4958. zations described in section 501 (c)(3). state law have been enacted that Disqualified persons are liable for the first two Chapter 3 Section 501 (c)(3) Organizations Page 27 taxes and certain organization managers are opinion on matters within the professional's ex- scribed above, the organization may make a liable for the third tax. pertise or if the manager relied on the fact that cash paymentio the disqualified person equal to Taxes imposed on excess benefit transac- the requirements for the rebuttable presumption the difference. tions apply to transactions occurring on or after of reasonableness have been satisfied. Partici- Applicable tax-exempt organization. An September 14, 1995. However, these taxes do pation by an organization manager is willful if it is applicable tax-exempt organization is a section not apply to a transaction pursuant to a written voluntary, conscious, and intentional. An organi- 501 (cabl to exempt o organization that is contract that was binding on September 13, zation manager's participation is due to reason- 1995, and at all times thereafter before the able cause if the manager has exercised tax-exempt under section 501 (a), or was such transaction occurred. responsibility on behalf of the organization with an organization at any time during a five-year Tax on disqualified persons. An excise ordinary business care and prudence, period ti ding on the day of the excess benefit tax equal to 25% of the excess benefit is im- Excess benefit transaction. An excess An applicable tax-exempt organization does posed on each excess benefit transaction be- benefit transaction is a transaction in which an not include: tween an applicable tax-exempt organization economic benefit is provided by an applicable and a disqualified person. The disqualified per- tax-exempt organization, directly or indirectly, to 1 A private foundation as defined in section son who benefited from the transaction is liable or for the use of any disqualified person, and the 509(a), for the tax. If the 25% tax is imposed and the value of the economic benefit provided by the excess benefit transaction is not corrected organization exceeds the value of the consider- 2. A governmental entity that is: within the taxable period, an additional excise ation (including the performance of services) taxation ta )to x Exempt from (or not subject tax equal to 200% of the excess benefit is im- received for providing such benefit. a. without regard to section subject to) , x posed. To determine whether an excess benefit If a disqualified person makes a payment of transaction has occurred, all consideration and b. Not required to file an annual return less than the full correction amount, the 200% benefits exchanged between a disqualified per- tax is imposed only on the unpaid portion of the son and the applicable tax-exempt organization, 3. A foreign organization, recognized by the correction amount. If more than one disqualified and ail entities it controls, are taken into account. IRS or by treaty, that receives substantially person received an excess benefit from an ex- For purposes of determining the value of eco- all of its support (other than gross invest- cess benefit transaction, all such disqualified nomic benefits, the value of property, including ment income) from sources outside the persons are jointly and severally liable for the the right to use property, is the fair market value. United States. taxes. Fair market value is the price at which property, To avoid the 200% tax, a disqualified person or the right to use property, would change hands An organization is not treated as a section must correct the excess benefit transaction dur- between a willing buyer and a willing seller, 501 (c)(3) or 501(c)(4) organization for any pe- ing the taxable period. The taxable period be- neither being under any compulsion to buy, sell nod covered by a final determination that the gins on the date the transaction occurs and ends or transfer property or the right to use property, organization was not tax-exempt under section on the earlier of the date the statutory notice of and both having reasonable knowledge of rele- 501(a), but only if the determination was not deficiency is issued or the section 4958 taxes vant facts. based on private inurement or one or more ex- are assessed. The 200% tax is abated (re- Correcting the excess benefit. An excess cess benefit transactions. funded if collected) if the excess benefit transac- benefit transaction is corrected by undoing the Disqualified person. A disqualified person lion is corrected within a 90-day statr correction excess benefit to the extent possible, and by is any person, with respect to any transaction, in period beginning on the date a stutory notice taking any additional measures necessary to a position to exercise substantial influence over of deficiency is issued. place the organization in a financial position not the affairs of the applicable tax-exempt organi- Tax on organization managers. An excise worse than what it would have been if the dis- zation at any time during a five-year period end- tax equal to 10% of the excess benefit is im- qualified person were dealing under the highest ing on the date of the transaction. Persons who posed on an organization manager who know- fiduciary standards. hold certain powers, responsibilities, or interests ingly participated in an excess benefit A disqualified person corrects an excess are among those who are in a position to exer- transaction, unless such participation was not benefit by making a payment in cash or cash cise substantial influence over the affairs of the willful and was due to reasonable cause. This equivalents, excluding payment by a promissory organization. This includes, for example, voting tax may not exceed $10,000 with respect to any note, equal to the correction amount to the appli- members of the governing body, and persons single excess benefit transaction. There is also cable tax-exempt organization. The correction holding the power of: joint and several liability for this tax. A person amount equals the excess benefit plus the inter- may be liable for both the tax paid by the dis- est on the excess benefit. The interest rate may • Presidents, chief executives, or chief oper- qualified person and the organization manager be no lower than the applicable federal rate, ating officers. tax. compounded annually, for the month the trans- . Treasurers and chief financial officers. An organization manager is any officer, di- action occurred. rector, or trustee of an applicable tax-exempt A disqualified person may, with the agree- A disqualified person also includes certain organization, or any individual having powers or ment of the applicable tax-exempt organization, family members of a disqualified person, and responsibilities similar to officers, directors, or make a payment by returning the specific prop- 35% controlled entities of a disqualified person. trustees of the organization, regardless of title. erty previously transferred in the excess trans- An organization manager is not considered to action. In this case, the disqualified person is Family members. Family members of a have participated in an excess benefit transac- treated as making a payment equal to the lesser disqualified person include a disqualified lion where the manager has opposed the trans- of: person's spouse, brothers or sisters (whether by action in a manner consistent with the fulfillment whole or half-blood), spouses of brothers or sis- of the manager's responsibilities to the organi- ' The fair market value of the property on ters (whether by whole or half-blood), ancestors, is returned to the ert ropy zation. For example, a director who votes the date the p children (including a legally adopted child), againstgiving an excess benefitwould ordinarily rganization, or grandchildren, real y g g grandchildren , and not be subject to the 10% tax. • The fair market value of the property on spouses of children, grandchildren, and great A person participates in a transaction know- the date the excess benefit transaction oc- grandchildren (whether by whole or half-blood). ingly if the person has actual knowledge of suffi- curred. 35% controlled entity. The term 35% con- cient facts so that, based solely upon such facts, trolled entity means: the transaction would be an excess benefit If the payment resulting from the return of transaction. Knowing does not mean having rea- property is less than the correction amount, the 1 A corporation in which a disqualified per- . son to know. The organization manager ordinar- disqualified person must make an additional on owns more than 35% of the total com- ily will not be considered knowing if, after full cash payment to the organization equal to the son n o voting power, disclosure of the factual situation to an appropri- difference. ate professional, the organization manager re- If the payment resulting from the return of the 2. A partnership in which such persons own lied on the professional's reasoned written property exceeds the correction amount de- more than 35% of the profits interest, or Page 28 Chapter 3 Section 501(c)(3) Organizations 3. A trust or estate in which such persons • The person is an independent contractor change for performance of services are taken own more than 35% of the beneficial inter- whose sole relationship to the organization into account in determining the value of com- est. is providing professional advice (without pensation (except for economic benefits that are In determining the holdings of a business having decision-making authority) with re- disregarded under the discussion, Disregarded enterprise, any stock or other interest owned spect to transactions from which the inde- benefits, later). Items of compensation include: directly or indirectly shall apply, pendent contractor will not economically . All forms of cash and nvncash compensa- benefit either directly or indirectly aside Persons not considered to have substan- from customary fees received for the pro- lion, including salary, fees, bonuses, sev- tial influence. Persons who are not consid- fessional advice rendered. erance payments, and deferred noncash ered to be in a position to exercise substantial compensation. influence over the affairs of an organization in- ' Any preferential treatment the person re- dude: 9 ceives based on the size of the person's • The payment of liability insurance premi- donation is also offered to others making ums for, or the payment or reimbursement • An employee who receives benefits that comparable widely solicited donations. by the organization of penalties, taxes or total less than the highly compensated certain expenses under section 4958, un- amount in section 414(q)(1 )(B)(i) and who The direct supervisor of the person is not less excludable from income as a de does not hold the executive or voting pew- a disqualified person. minimis fringe benefit under section ers mentioned earlier in the discussion on The person does not participate in any 132(a)(4). Disqualified person, is not a family mem- management decisions affecting the or- • All other compensatory benefits, whether ber of a disqualified person, and is not a ganization as a whole or a discrete seg- or not included in gross income for income substantial contributor, ment of the organization that represents a tax purposes, substantial portion of the activities, assets, • Tax-exempt organizations described in • Taxable and nontaxable fringe benefits, section 501 (c)(3), and income, or expenses of the organization, except fringe benefits described in section as compared to the organization as a • Section 501 (c)(4) organizations with re- whole. 132 of the Code, and spect to transactions engaged in with • Foregone interest on loans. other section 501 (c)(4) organizations. In the case of multiple organizations affiliated by common control or governing documents, the An economic benefit is not treated as consid- Facts and circumstances. The determina- determination of whether a person does or does eration for the performance of services unless tion of whether a person has substantial influ- not have substantial influence is made sepa- the organization providing the benefit clearly in- ence over the affairs of an organization is based rately for each applicable tax-exempt organize- dicates Its intent to treat the benefit as dampen- on all the facts and circumstances. Facts and tion. A person may be a disqualified person with sation when the benefit is paid, circumstances that show a person has substan- respect to transactions with more than one or- An applicable tax-exempt organization (or tial influence over the affairs of an organization ganization. entity that it controls) is treated as clearly indicat- include, but are not limited to, the following, ing its intent to provide an economic benefit as Date excess benefit transaction occurs. compensation for services only if the organiza- da • The person founded the organization. excess benefit transaction occurs the tion provides written substantiation that is con- • The person is a substantial contributor to date the disqualified person receives the e eco- temporaneous with the transfer of the economic the organization under the section nomic benefit from the organization for federal benefits under consideration. Ways to provide 507 d 2 income tax purposes. However, when a single ( )( ntri definition, only taking into ac- contractual arrangement provides for a series of contemporaneous written substantiation c its count contributions to the organization for compensation payments or other payments to a intent to provide an economic benefit as com- the past 5 years. pensation include: disqualified person during the disqualified • The person's compensation is primarily person's tax year (or part of a tax year), any • The organization produces a signed writ- based on revenues derived from activities excess benefit transaction with respect to these ten employment contract, of the organization that the person con- payments occurs on the last day of the tax year , The organization reports the benefit as trols. (or if the payments continue for part of the year, compensation on an original Form it as the date of the last payment in the series). • The person has or shares authority to con- Form 1099 or Form 990, or on an trot or determine a substantial portion of In the case of benefits to a qualified amended form fled before starting an IRS the organization's capital expenditures, Pensi provided profit-sharing, or stock bonus plan, the examination, or operating budget, or compensation for em- transaction occurs on the date the benefit is ployees. vested. In the case of the transfer of property The disqualified person reports the benefit subjectto a substantial risk of forfeiture, or in the as income on the person's original Form • The person manages a discrete segment case of rights to future compensation or prop- 1040, or on an amended form filed before or activity of the organization that repre- erty, the transaction occurs on the date the prop- starting an IRS examination. sents a substantial portion of the activities, erly, or the rights to future compensation or assets, income, or expenses of the organi- property, is not subject to a substantial risk of Exception. If the economic benefit is excluded zation, as compared to the organization as forfeiture. Where the disqualified person elects from the disqualified person's gross income for a whole. to include an amount in gross income in the tax q P g income tax purposes, the applicable tax-exempt • The person owns a controlling interest Year of transfer under section 83(b), the excess organization is not required to indicate its intent (measured by either vote or value) in a benefit transaction occurs on the date the dis- to provide an economic benefit as compensation corporation, partnership, or trust that is a qualified person receives the economic benefit for services. disqualified person. for federal income tax purposes. Rebuttable ex es presumption theta transaction • The person is a non-stock or gam Reasonable compensation. Reasonable P g is not an excess benefit transaction. Pay- controlled directly or indirectly by one or compensation is the value that would ordinarily ments under a compensation arrangement are more disqualified persons. be paidforiike services by likeenterprises under presumed to be reasonable and the transfer of like circumstances. The section 162 standard property (orrightto use property) is presumed to Facts and circumstances tending to show that will apply in determining the reasonableness of be at fair market value, if the following three a person does not have substantial influence compensation. The fact that a bonus or conditions are met. over the affairs of an organization include, but revenue-sharing arrangementis subjecttoa cap are not limited to, the following. is a relevant factor in determining reasonable- 1 . The transaction is approved by an author- ness of compensation. ized body of the organization (or an entity • The person has taken a bona fide vow of To determine the reasonableness of com- it controls) which is composed of individu- poverty as an employee, agent, or on be- pensation, all items of compensation provided als who do not have a conflict of interest half of a religious organization. by an applicable tax-exempt organization in ex- concerning the transaction. Chapter Section 501 (c)(3) Organizations Page 29 2. Before making its determination, the au- exchange for the provision of specified services sarily qualify the museum as an educational thorized body obtained and relied upon ap- or property. organization. propriate data as to comparability. (There A fixed formula may, generally, incorporate An exempt organization that operates a is a special safe harbor for small organiza- an amount that depends upon future specified tutoring service for students on a one-to-one tions. If the organization has gross receipts events or contingencies, as long as no one has basis in their homes, maintains a small center to of less than $1 million, appropriate compa- discretion when calculating the amount of a pay- test students to determine their need for tutor- rability data includes data on compensa- ment or deciding whether to make a payment ing, and employs tutors on a part-time basis is tion paid by three comparable (such as a bonus), not an educational organization for these pur- organizations in the same or similar com- An initial contract is a binding written contract poses. Nor is an exempt organization that con- munities for similar services.) between an applicable tax-exempt organization ducts an internship program by placing college 3. The authorized body adequately docu- and a person who was not a disqualified person and university students with cooperating gov- ments the basis for its determination con- immediately before entering into the contract. ernment agencies an educational organization. currently with making that determination. A binding written contract providing it may be The documentation should include: terminated or cancelled by the applicable tax-exempt organization without the other Hospitals and medical research a. The terms of the approved transaction Party's consent (except as a result of substantial organizations. A hospital is an organization and the date approved, nonperformance) and without substantial pen- whose principal purpose orfunction is to provide b. The members of the authorized body alty, is treated as a new contract, as of the hospital or medical care or either medical edu- who were present during debate on the earliest date any termination or cancellation cation or medical research. A rehabilitation insti- would be effective. Also, if the parties make a tution, outpatient clinic, or community mental transaction that was approved and material change to a contract, which includes an health or drug treatment center may those who voted on it, g y qualify as extension or renewal of the contract (except for hospital if its principal purpose or function is c. The comparability data obtained and re- an extension or renewal resulting from the exer- providing hospital or medical care. If the accom- lied upon by the authorized body and cise of an option by the disqualified person), or a modations of an organization qualify as being how the data was obtained, more than incidental change to the amount pay- part of a skilled nursing facility, that organiza- able under the contract, it is treated as a new tion may qualify as a hospital if its principal d. Any actions by a member of the author- contract as of the effective date of the material purpose or function is providing hospital or med- ized body having conflict of interest, change, ical care. A cooperative hospital service or. and More information ganization that meets the requirements of e. Documentation of the basis of the de- . For more information, section 501(e) will qualify as a hospital. - termination before the later of the next see the instructions to Forms 990 and 4720. The term hospital does not include conva- meeting of the authorized body or 60 lescent homes, homes for children or the aged, days after the final actions of the au- Section 509(a)(1 ) Organizations or institutions whose principal purpose or func- thorized body are taken, and approval tion is to train handicapped individuals to pursue of records as reasonable, accurate and Section 509(a)(1) organizations include: a vocation. An organization that mainly provides complete within a reasonable time medical education or medical research will not thereafter. 1 . A church or a convention or association of be considered a hospital, unless it is also ac- churches, _ tively engaged in providing medical or hospital Disregarded benefits. The following eco- 2. An educational organization such as a care to patients on its premises or in its facilities, nomic benefits are disregarded for section 4958 school or college, on an in-patient or out-patient basis, as an inte- purposes. gral part of its medical education or medical 3. A hospital or medical research organiza- research functions. • Nontaxable fringe benefits that are ex- tion operated in conjunction with a hospi- tal, Hospitals participating in provider-spon- cluded from income under section 132. stored organizations. An organization can be • Benefits provided to a volunteer for the 4. Endowment funds operated for the benefit treated as organized and operated exclusively of certain state and municipal colleges and for a charitable purpose even if it owns and organization if the benefit is provided to universities, the general public in exchange for a mem- operates a hospital that participates in a bership fee or contribution of $75 or less. 5. A governmental unit, and provider-sponsored Organization, whelheror not the provider-sponsored organization is tax ex- • Benefits provided to a member of an or- 6. A publicly supported organization. empt. For section 501(c)(3) purposes, any per- ganization due to the payment of a mem- son with a material financial interest in the bership fee or to a donor as a result of a Church. The characteristics of a church are provider-sponsored organization is treated as a deductible contribution, if a significant discussed earlier in this chapter under Religious private shareholder or individual with respect to number of disqualified persons make simi - Organizations. the hospital. Jar payments or contributions and are of- fered asimilar economic benefit. Medical research organization. A medical Educational organizations. An educational research organization must be directly engaged • Benefits provided to a person solely as a organization is one whose primary function is to in the continuous active conduct of medical re- member of a charitable class that the ap- present formal instruction, that normally main- search in conjunction with a hospital, and that plicable tax-exempt organization intends tains a regular faculty and curriculum, and that activity must be the organization's principal pur- to benefit as part of the accomplishment of normally has a regularly enrolled body of pupils pose or function. its exempt purpose, or students in attendance at the place where it regularly carries on its educational activities. Publicly supported. A hospital or medical • A transfer of an economic benefit to or for research organization that wants the additional the use of a governmental unit, as defined The term includes institutions such as primary, classification of a publicly-supported or anize- in section 170(c)(1), if exclusive) for pub- secondary, preparatory, or high schools, and 9 y p colleges and universities. It includes federal, tion (described later in this chapter under Quali- licpurposes. fyin As Public) state, and other publicly supported schools that g Y Supported) may specifically otherwise come within the definition. It does not request that classification. The organization Section Special exception for initial an contracts.y flied pay- include organizations engaged in both educa- must establish that it meets the public support A ment madde e t t does not apply tto any a person under an initial contract. tional and noneducational activities, unless the requirements of section 170(b)(1 )( )(vi). latter are merely incidental to the educational A fixed payment is an amount of cash or activities. A recognized university that inciden- Endowment funds. Organizations operated other property specified inthecontract, ordeler- tally operates a museum or sponsors concerts is for the benefit of certain state and municipal mined by a fixed formula that is specified in the an educational organization. However, the oper- colleges and universities are endowment funds. contract, which is to be part of or transferred in ation of a school by a museum does not neces- They are organized and operated exclusively to: Page 30 Chapter 3 Section 501(c)(3) Organizations • Libraries, public or governmental support on a continuous 1 . Receive, hold, invest, and administer prop- basis. An organization will meetthis requirement erty for a college or university, and • Community centers to promote the arts, if it maintains a continuous and bona fide pro- 2. Make expenditures to or for the benefit of a • Organizations providing facilities for the gram for solicitation of funds from the general college or university. support of an opera, symphony orchestra, public, community, or membership group in- ballet, or repertory drama, or for some volved, or if it carries on activities designed to The college or university must be: other direct service to the general public, attract support from governmental units or other 1 . An agency or instrumentality of a state or and charitable organizations described in section political subdivision, or • Organizations such as the American Red 509(a)(1 ). In determining whether an organiza- Cross or the United Way. tion maintains a continuous and bona fide pro- 2. Owned or operated by: gram for solicitation of funds from the general a. A state or political subdivision, or public or community, consideration will be given Qualifying As Publicly Supported towhetherthe scope of its fund-raising activities b. An agency or instrumentality of one or is reasonable in light of its charitable activities. more states or political subdivisions. An organization will qualify as publicly supported Consideration also will he given to the fact that if it passes the one-third support test. If it fails an organization may, in its early years of exis- The phrase expenditures to or for the ben- that test, it may qualify under the facts and tence, limit the scope of its solicitation to per- efit of a college or university includes expen- circumstances test. sons who would be most likely to provide seed ditures made for any one or more of the normal money sufficient to enable it to begin its charita- functions of a college or university. These ex- One-third support test. An organization will ble activities and expand its solicitation program. penditures include those for qualify as publicly supported if it normally re- ceives at least one-third of its total support from Definition of normally forfacts andcircum- 1 . Acquiring and maintaining real property governmental units, from contributions made di- stances test. An organization will normally comprising part of the campus area, rectly or indirectly by the general public, or from meet the requirements of the facts and circum- a combination of these sources. For a definition stances test for its current tax year and the next 2. Erecting niv participating in erecting) col- tax year if, forthe 4 tax years immediately before le a or university buildings, of support, see Support, later,9 Y 9 the current tax year, the organization meets the Definition of normally for one-third sup- fen-percent-of-support and the attraction of pub- 3. Acquiring and maintaining equipment and port test. An organization will be considered furnishings used for, or in conjunction with, p 9 tic support requirements o bi aggregate basis as normally meeting the one-third support test and satisfies a sufficient combination of the fac- normal functions of colleges and universi- for its current tax year and the next tax year if, for tors discussed later. The combination of factors ties, the 4 tax years immediately before the current that an organization normally must meet does 4. Libraries, tax year, the organization meets the one-third not have to be the same for each 4-year period 5. Scholarships, and support test on an aggregate basis. See also as long as a sufficient combination of factors Special computation period for new organza- exists to show compliance. See also Special 6. Student loans. tions, later, in this discussion. computation period for new organizations, later, The organization must normally receive a in this discussion. substantial art of its support circa and circumstances test is for o gani The facts and p pport from the United circumstances test is for organizations failing to Special rule. The fact that an organization States or any state or political subdivision, or meet the one-third support test. if your organiza- has normally met the one-third support test re- from direct or indirect contributions from the tion fails to meet the one-third support test, it quirements for a current tax year, but is unable general public, or from a combination of these may still be treated as a publicly-supported or- normally to meet the requirements fora later tax sources. ganization if it normally receives a substantial year, will not in itself prevent the organization Support. Support does not include income part of its support from governmental units, from from meeting the requirements of the facts and received in the exercise or performance by the direct or indirect contributions from the general circumstances test for the later tax year. organization of its charitable, educational, or public, or from a combination of these sources, other purpose or function constituting the basis To qualify, an organization must meet the Example. X organization meets the for exemption. I ten-percent-of-support requirement and the one-third support test in its 2002 tax year on the In determining the amount of support re- attraction of public support requirement. basis of support received during 1998, 1999, ceived by an organization for a contribution of These requirements establish, under all the 2000, and 2001. It therefore normally meets the property when the value of the contribution by facts and circumstances, that an organization requirements for both 2002 and 2003. For the the donor is subject to reduction for certain ordi- normally. receives a substantial part of its sup- 2003 tax year, X is unable to meet the one-third nary income and capital gain property, the fair port from governmental units or from direct or support test on the basis of support received market value of the property is taken into ac- indirect contributions from the general public. during 1999, 2000, 2001 , and 2002. If X can count. The organization also must be in the nature of a meet the facts and circumstances test on the publicly-supported organization, taking into ac- basis of those years, X will normally meet the indirect contribution. An example of an m- count five different factors, See Additional re- requirements for 2004 (the tax year immediately direct contribution from the public is the receipt quirements (the five public support factors), after 2003). However, if on the basis of both by the organization of its share of the proceeds later. 4-year periods (1999 through 2002 and 2000 of an annual collection campaign of a commu- through 2003), X fails to meet both the one-third nity chest, community fund, or united fund. Ten-percent-of-support requirement. and the facts and circumstances tests, X will not The percentage of support normally received by be a publicly-supported organization for 2004. Governmental units. A governmental unit in- an organization from governmental units, from cludes a state, a possession of the United contributions made directly or indirectly by the However, X will not be disqualified as a States, or a political subdivision of either of the general public, or from a combination of these publicly-supported organization for the 2003 tax foregoing, or the United States or the District of sources must be substantial. An organization year because it normally met the one-third sup- Columbia. will not be treated as normally receiving a sub- port test requirements on the basis of the tax stantial amount of governmental or public sup- years 1998 through 2001 unless the provisions Publicly-supported organizations. An or- port unless the total amount of governmental - governing the Exception for material changes in ganization is a publicly-supported organization if and public support normally received is at least sources of support (discussed later) become it is one that normally receives a substantial part 10% of the total support normally received by applicable. of its support from a governmental unit or from that organization. Fora definition of support, see Additional requirements (the five public the general public. Support, later. Types of organizations that generally qualify support factors). In addition to the two re- are: Attraction of public support requirement quirements of the facts and circumstances test, An organization must be organized and oper- the following five public support factors will be • Museums of history, art, or science, ated in a manner to attract new and additional considered in determining whether an organize- - Chapter3 Section 501 (c)(3) Organizations Page 31 lion is publicly supported. However, an organi- 3. Persons having special knowledge or ex- to restrict membership to a limited number zation generally does not have to satisfy all of pertise in the particularfield or discipline in of persons, the factors. The factors relevant to each case which the organization is operating, and 3. Whether the activities of the organization and the weight accorded to any one of them may q Community leaders, such as elected or ap- will be likely to appeal to persons having differ depending upon the nature and purpose of pointed officials, members of the clergy, some broad common interest or purpose, the organization and the length of time it has educators, civic leaders, or other such per- such as educational activities in the case existed. The combination of factors that an or- sons representing a broad cross-section of of alumni associations, musical activities in ganization normally must meet does not have to the views and interests of the community. the case of symphony societies, or civic be the same for each 4-year period as long as a affairs in the case of parent-teacher as- sufficient combination of factors exists to show In a membership organization, the governing that the organization is publicly supported, body also should include individuals elected by sociations. a broadly based membership according to the 1. Percentage of financial support factor, organization's governing instrument or bylaws. Exception for material changes in sources of When an organization normally receives at least support. If for the current tax year substantial 10% but less than one-third of its total support 4. Availability of public facilities or sere- and material changes occur in an organization's from public or governmental sources, the per- ices factor. The fact that an organization gen- e 9 p tentage of support received from those sources eraily provides facilities or services directly for sources of support other than changes arising from unusual grants (discussed later, under Un- will ni considered in determining whether the the benefit of the general public on a continuing usual basis, is evidence that the organization is pub- grants), then in applying either the organization is publicly supported. As the per- licly supported. Examples are: one-third or the facts and circumstances test, centage of support from public or governmental the 4-year computation period applicable to that sources increases, the burden of establishing • A museum or library that is open to the year, either as an immediately following tax year the publicly supported nature of the organization public, or as a current tax year, will not apply. Instead of through other factors decreases, while the lower using these computation periods, a computation the percentage, the greater the burden. • A symphony orchestra that gives public period of 5 years will apply. The 5-year period If the percentage of the organization's sup- performances, consists of the current tax year and the 4 tax port from the general public or governmental • A conservation organization that provides years immediately before that year, sources is low because it receives a high per- educational services to the public through For example, if substantial and material centage of its total support from investment in- the distribution of educational materials, or changes occur in an organization's sources of come on its endowment funds, the organization support for the 2000 tax year, then, even though • An old-age home that provides domiciliary the organization meets the one-third or the facts will be treated as complying with this factor if the or nursing services for members of the and circumstances test using a computation pe- endowment fund was originally contributed by a general public. riod of tax years 1995-1998 or 1996- 1999, the governmental unit or by the general public. How- ever, if the endowment funds were originally The fact that an educational or research institu- organization will not meet either test unless it contributed by a few individuals or members of tion regularly publishes scholarly studies widely meets the test using a computation period of tax their families, this fact will increase the burden used by colleges and universities or by mem- years 1996-2000 (substituted period). on the organization of establishing compliance bers of the general public is also evidence that Substantial and material change. An ex- with other factors. Facts pertinent to years the organization is publicly supported. ample of a substantial and material change is before the 4 tax years immediately before the Similarly, the following factors are also evi- the receipt of an unusually large contribution or currenttax year also may be considered, dence thatan organization is publicly supported. bequest that does not qualify as an unusual grant. 2. Sources of support factor. 0 an organs- 1 participating in, or sponsoring of, the pro- thannormally receives at least from% but less grams of the organization by members of Effect on grantor or contributor. If as n than one-third of its total Support from public or the public having special knowledge or ex- result of this substituted the period, an organization governmental sources, the fact that it receives is not able to meet either the one-third support or the support from governmental units or directly pertise, public officials, or civic or commu- the facts and circumstances test for its current nity leaders. or indirectly from a representative number of tax year, its status with respect to a grantor or persons, rather than receiving almost all of its 2. Maintaining a definitive program by the or- contributor will not be affected until notice of support from the members of a single family, will ganization to accomplish its charitable change of status is made to the public (such as be considered in determining whether the or- work in the community, such as slum by publication in the Internal Revenue Bulletin). ganization is publicly supported. In determining clearance or developing employment op- This does not apply, however, if the grantor or what is a representative number of persons, portunities. contributor was responsible for or was aware of the substantial and material change or acquired consideration will be given to the type of organs- 3. Receiving a significant part of its funds knowledge that the IRS had given notice to the zation involved, the length of time it has existed, from a public charity or governmental organization that it would be deleted from classi- and whether it limits its activities to a particular agency to which it is in some way held fication as a publicly-supported organization. community or region or to a special field that can accountable as a condition of the grant, A grantor or contributor (otherthan one of the be expected to appeal to a limited number of contract, or contribution. persons. Facts pertinent to years before the 4 organization's founders, creators, or foundation considered responsible tax years immediately before the current tax 5. Additional factors pertinent to member- for, a aware of, the substantial and material year also may be considered. ship organizations. The following are addi- change, if the grantor or contributor made the tional factors in determining whether a 3. Representative governing body factor. grantor contribution relying upon a written state- The fact that an organization has a governing membership organization is publicly supported, ment by the grantee organization that the grant body that represents the broad interests of the 1 . Whether the solicitation for dues-paying or contribution would not result in the loss of the public rather than the personal or private interest organization's classification as a publicly-sup- members is designed to enroll a munitn- ofalimitednumberofdonorswillbeconsidered ported organization. The statement must be tir number of persons r the community of signed b a responsible officer of the in determining whether the organization is pub- area, or in a particular profession or Feld of 9 y P grantee licly supported, special interest (taking into account the organization and must give enough information, An organization will meet this requirement if size of the area and the nature of the including a summary of the pertinent financial it has a governing .body composed of: organization's activities). data for the 4 preceding years, to assure a reasonably prudent person that the grantor con- 1 . Public officials acting in their public capaci- 2. Whether membership dues for individual tribution would not result in the loss of the ties, (rather than institutional) members have grantee organization's classification as a been fixed at rates designed to make publicly-supported organization. If a reasonable 2. Individuals selected by public officials act- membership available to a broad cross doubt exists as to the effect of the grant or ing in their public capacities, section of the interested public, rather than contribution, or, if the grantor or contributor is Page 32 Chapter 3 Section 501 (c)(3) Organizations one of the organization's founders, creators, or 5. The value of services or facilities furnished support from a governmental unit includes foundation managers, the grantee organization by a governmental unit to an organization any amounts received from a governmental unit, may request a ruling from the ED area manager without charge (except services or facilities including donations or contributions and before accepting the grantor contribution forthe generally furnished to the public without amounts received on a contract entered into protection of the grantor or contributor. charge). with a governmental unit for the performance of If there is no written statement, a grantor or services, or from a government research grant. contributorwill not be considered responsible for Amounts that are not support. The term However, these amounts are not support from a a substantial and material change if the total support does not include: governmental unit for these purposes if they gifts, grants, or contributions received from that 1 A t received amounts received from the exercise grantor or contributor for a tax year are 25% or . Any amoun receved from the exercise or or performance of the organization's exempt less of the total support received by the organi- performance by an organization of the pur- functions. zation from all sources for the 4 tax ears imme- pose or function constituting the basis for y its exemption (in general,as no before the tax year. these amounts Any amount paid by a governmental unit to h the organization an or has not qualified as publicly supported organization will not be treated as received for those include amounts received from any activity 9 5 years, see Special computation period for new the conduct of which is substantially re- from the exercise or performance of its exempt function if the purpose of the organizations, next.) For this purpose, total sup- lated to the furtherance of the exempt pur- P P payment is prima- port does not include support received from that pose or function, other than through the rily to enable the organization to provide a serv- production of income), or ice to, or maintain a facility for, the direct benefit particular grantor or contributor. The grantor or of the public (regardless of whether part of the contributor cannot be a person who is in a posi- 2. Contributions of services for which a de- expense of providing the service or facility is tion of authority, such as a foundation manager, duction is not allowed, paid for by the public), rather than to serve the or who obtains a position of authority or the ability to exercise control over the organization These amounts are excluded from both the nu- direct and immediate needs of the payer. This because of the grant or contribution. mentor and the denominator of the fractions in includes: determining compliance with the one-third sup- Special computation period for new port test and tempercent-of-support require- 1 . Amounts paid to maintain library facilities organizations. Organizations that have been ment. The following discusses an exception to that are open to the public, in existence for at least 1 tax year consisting of this general rule. 2. Amounts paid under government programs at least months, but for fewer than 5 tax years, Organizations dependent primarily on to nursing homes or homes for the aged to can substitute the number oftax years they have gross receipts from re latedactivities. Orga- provide health care or domiciliary services been in existence before their current tax year to nizations will not satisfy the one-third support to residents of these facilities, and determine whether they meet the one-third sup- test or the ten-percent-of-support requirement if 3. Amounts paid to child placement or child port test or the facts and circumstances test, they receive: guidance organizations under government discussed earlier. 9 9 9 1. Almost all support from gross receipts from programs for services rendered to children First tax yeast least 8 months. The initial related activities, and in the community. status determination of a newly created organi- zation whose first tax year is at least 8 months is 2. An insignificant amount of support from These payments are mainly to enable the recipi- based on a computation period of either the first governmental units (without regard to ent organization to provide a service or maintain tax year or the first and second tax years. amounts referred to in (3) in the list of a facility for the direct benefit ofthe public, rather items included in support) and contribu- than to serve the direct and immediate needs of First shorter than months. The tions made directly or indirectly by the gen- the payer. Furthermore, any amount received .. initial staatus tus determination ermination of a a newly created eral public. from a governmental unit under circumstances organization whose first tax year is less than 8 in which the amount would be treated as a grant months is based on a computation period of will generally constitute support from a govern- either the first and second tax years or the first, Example. X, an organization described in mental unit. See the discussion of Grants , later, second, and third tax years. section 501 (c)(3), is controlled by Thomas Blue, under Section 509(a)(2) Organizations. its president. X received $500,000 during the 4 5-yearadvance ruling period. If an organi- tax years immediately before its current tax year Medicare and Medicaid payments, Medi- zation has received an advance ruling, the com- under a contract with the Department of Trans- care and Medicaid payments are received from potation is based on all the years in the 5-year portation, under which X engaged in research to contracts entered into with state and federal advance ruling period. Advance rulings are de- improve a particular vehicle used primarily by governmental units. However, payments are scribed later, under Advance rulings to newly the federal government. During the same pe- made for services already provided to eligible created organizations—Initial determination of riod, the only other support received by X was individuals, rather than to encourage or enable status. $5,000 in small contributions primarily from X's an organizationto provide services to the public. However, if the advance ruling period is ter- employees and business associates. The The individual patient, not a governmental unit, minated by the IRS, the computation period will $500,000 is support under (1) above. Under actually controls the ultimate recipient of these be based on the period described above under these circumstances, X meets the conditions of payments by selecting the health care organize- First taxyearat least 8months and Firsttaxyear (1 ) and (2) above and so does not meet the tion. Asa result, these paymentsarenotconsid- shorterfhan8months, orifthe period is greater, ane-third support test or the ten-percent-of-sup- ered support from a governmental unit. the number of years to which the advance ruling port requirement. Medicare and Medicaid payments are gross re- applies. For the rules that apply to organizations that ceipts derived from the exercise or performance fail to qualify as section 509(a)(1) publicly-sup- of exempt activities and, therefore, are not in- Support. For purposes of publicly-supported ported organizations because of these provi. cluded in the term support. organizations, the term support includes (but is sions, see Section 509(a)(2) Organizations, not limited to): later. See also Gross receipts from a related Support from the general public. In deter- activity in the discussion on section 509(a)(2) mining whether the one-third support test or the 1 . Gifts, grants, contributions, or membership organizations. ten-percent-of-support requirement is met, in- fees, Membership fees. Membership fees are i clude in your computation support from director 2. Net income from unrelated business re ca n- cu - lded in the term support if they are paid to indirect contributions from the general public. ties, whether or not those activities are car- provide support for the organization rather than This includes contributions from an individual, ried on regularly as a trade or business, to buy admissions, merchandise, services, or trust, or corporation but only to the extent that 3. Gross investment income, the use of facilities. the total contributions from the individual, trust, or corporation, during the 4-year period immedi- 4. Tax revenues levied for the benefit of an Support from a governmental unit. For pur- ately before the current tax year (or substituted organization and either paid to or spent on poses of the one-third support test and the computation period) are not more than 2% of the behalf of the organization, and ten-percent-of-support requirement, the term organization's total support for the same period. Chapter 3 Section 501(c)(3) Organizations Page 33 Thus, a contribution by any one individual publicly-supported organization, persuades C, a otherwise exercise control over the organi- will be included in full in the denominator of the private foundation, to make a grant of$25,000 to zation. fraction used in the one-third support test or the N. C is a disqualified person with respect to O. C 3. The grant or contribution is in the form of ten-percent-of-support requirement. However, makes the grant to N with the understanding that cash, readily marketable securities, oras- the contribution will be included in the numerator N would be bound to make a grant to O in the sets that directly further the organization's only to the extent that it is not more than 2% of sum of $25,000, in addition to a matching grant the denominator. In applying the 2% limit, all of N's funds to 0 in the sum of $25,000. Only the exempt purposes, such as a gift of a paint- contributions made by a donor and by any per- $25,000 received directlyfrom N is considered a ing to a museum. son in a special relationship to the donor (certain grant from N. The other $25,000 is an indirect 4. The donee-organization has received ei- Disqualified persons discussed under Absence contribution from C to O and is to be excluded ther an advance or final ruling or determi- of control by disqualified persons) are consid- from the numerator of O's support fraction to the nation letter classifying it as a ered made by one person. The 2% limit does not extent it exceeds the 2% limit. publicly-supported organization and, ex- apply to support received from governmental cept for an organization operating under units or to contributions from other publicly sup- Unusual grants. In applying the 2% limit to an advance ruling or determination letter, ported charities, except as provided under determine whether the one-third support test or the organization is actively engaged in a Grants from public charities, later. the ten-percent-of-support requirement is met, program of activities in furtherance of its Indirect contributions. The term indirect exclude contributions that are considered unu- exempt purpose. contributions from the general sdaf grants from both the numerator and denom- g public in- inator of the appropriate percent-of-support 5. No material restrictions or conditions have chides contributions received by the organiza- fraction. Generally, unusual grants are substan- been imposed by the grantor or contributor tion from organizations ( such as tial contributions or bequests from disinterested upon the organization in connection with publicly-supported organizations) that normally parties if the contributions: the grant or contribution. receive a substantial part of their support from direct contributions from the general public, ex- 1 . Are attracted by the publicly-supported na- 6. If the grant or contribution is intended for cept as provided under Grants from public chari- ture of the organization, operating expenses, rather than capital ties, next. items, the terms and amount of the grant 2. Are unusual or unexpected in amount, and or contribution are expressly limited to one Grants from public charities. Contribu- year's operating expenses. tions received from a governmental unit or from 3. Would adversely affect, because of the a publicly-supported organization (including a size, the status of the organization as nor- church that meets the requirements for being mally being publicly supported. (The or- Ruling request. Before any grant or contri- anization must otherwise meet the bution is made, a potential grantee organization publicly supported) are not subject to the 2% g may request a ruling as to whether the rant or limit unless the contributions represent amounts support test in that year without benefit of contribution may be excluded. This request may either expressly or impliedfy earmarked by a the grant or contribution.) be filed by the grantee organization with the EO donor to the governmental unit or publicly-sup- For a grant (see Grants, later) that meets the area manager for its area. The organization ported organization as being for, or for the bene- requirements for exclusion, if the terms of the must submit all information necessary to make a fit of, the particular organization claiming a granting instrument require that the funds be determination, including information relating to publicly-supported status. paid to the recipient organization over a period the factors and characteristics listed in the pre- of years, the amount received by the organiza- ceding paragraphs. If a favorable ruling is is- Example 1. M, a national foundation for the tion each year under the terms of the grant may sued, the ruling may be relied upon by the encouragement of the musical arts, is a be excluded for that year. However, no item of grantor or contributor of the particular contribu- publicly-supported organization. George Spruce gross investment income (defined under Sec- tion in question. The issuance of the ruling will gives M a donation of $5,000 without imposing tion 509(a)(2) Organizations, later) may be ex- be atthe sole discretion of the IRS. The potential any restrictions or conditions upon the gift. M cluded under this rule. These provisions allow grantee organization should follow the proce- later makes a $5,000 grant to X, an organization exclusion of unusual grants made during any of dures set out in Revenue Procedure 2003-4 (or devoted to giving public performances of cham- the applicable periods previously discussed later update) to request a ruling. ber music. Since the grant to X is treated as under Special computation periodfornew orga- Grants and contributions that result in sub- being received from M, it is fully includible in the nizations and to periods described in Advance stantial and material changes in the organization numerator of X's support fraction for the tax year rulings to newly created organizations—Initial and that fail to qualify for exclusion will affect the of receipt. determination of status, later. way the support tests are applied. See Excep- Example 2. Assume M is the same organi- Characteristics of an unusual grant. A tion for material changes in sources of support, zation described in Example 1. Tom Grove gives grant or contribution will be considered an unu- earlier. M a donation of $10,000, but requires that M coal grant if the above three factors apply and if If a ruling is requested, in addition to the spend the money to support organizations de- it has all of the following characteristics. If these characteristics listed earlier under Characts ris- voted to the advancement of contemporary factors and characteristics apply, then even tics of an unusual grant, the following factors American music. M has complete discretion as without the benefit of an advance ruling, grant- may be considered by the IRS in determining if to the organizations of the type described to ors or contributors have assurance that they will the grant or contribution is an unusual grant. which it will make a grant. M decides to make not be considered responsible for substantial grants of $5,000 each to Y and Z, both being and material changes in the organization's 1 . Whether the contribution was a bequest or organizations described in section 501 (c)(3) and sources of support. a transfer while living. A bequest will be devoted to furthering contemporary American given more favorable consideration than a music. Since the grants to Y and Z are treated as 1. The grant or contribution is not made by a transfer while living. having been received from M, Y, and Z, each person (or related person) who created the 2 Whether, before the i t of the contribu- tor include one of the $5,000 rants in the organization or was a substantial contribu- , recep g for to the organization before the grant or tion, the organization has carried on an numerator of its support fraction. Although the contribution active program of public solicitation and . donation to M was conditioned upon the use of exempt activities and has been able to at- the funds for a particular purpose, M was free to 2. The grant or contribution is not made by a tract a significant amount of public support. select the ultimate recipient. person (or related person) who is in a posi- tion 3. Whether, before the year of contribution, of authority, such as a foundation Example 3. N is a national foundation for manager, or who otherwise has the ability the organization met the one-third support the encouragement of art and is a publicly-sup- to exercise control over the organization. test without benefit of any exclusions of ported organization. Grants to N are permitted to Similarly, the grant or contribution is not unusual grants. be earmarked for particular purposes. O, which made by a person (or related person) who, 4. Whether the organization may reasonably is an art workshop devoted to training young because of the grant or contribution, ob- be expected to attract a significant amount artists and which is claiming status as a tains a position of authority or the ability to of public support after the contribution. Page 34 Chapter 3 Section 501(c)(3) Organizations Continued reliance on unusual grants to 170(b)(1 )(A)(vi) organization from its inception Total support . . . . . . . . . . . . . . . . $600.000 fund an organization's current operating and any private foundation taxthalwas imposed expenses (as opposed to providing new may be refunded. For 2002, the basis of the above support, M is endowment funds) may be evidence that considered to have normally received more than the organization cannot reasonably be ex- Reliance period. The newly created organi- one-third of its support from a governmental unit pected to attract future support from the zation will be treated as a publicly-supported and from direct and indirect contributions from general public. organization forall purposes otherthan sections the general public computed as follows. 507(d) (relating to total tax benefit resulting from 5. Whether the organization has a represen- exempt status) and 4940 (relating to tax on net One-third of total support . . . . . . . . $200,000 tative governing body, investment income) for the period beginning with its inception and ending 90 days after its Support from a governmental unit . . $40,000 Advance rulings to newly created organiza. advance ruling period expires. The period will be Indirect contributions from the tions — Initial determination of status. extended until a final determination is made of general public (United Way) . . . . . . 40,000 Many newly created organizations cannot meet an organization's status only if the organization Contributions by various donors (no either the 4-year normally publicly supported submits, within the 90-day period, information one having made contributions that total more than $12,000- 2% of total provisions or the provisions for newly created needed to determine whether it meets either of support) organizations to qualify as normally public) sup- the support tests for its advance ruling PP ) i ' ' ' " ' n � 50,000 y p- pp g period Six contributions (each in excess ported because they have not been in existence (even if the organization fails to meet either test). 812,000 -2% of total support) 6 x x long enough. However, a newly created organi- However, this reliance period does not apply to $12,000 . . . . . . . . . . . . . . . . . . . 72,000 zation may qualify for an advance ruling that it the excise tax imposed on net investment in- $202,000 will be treated as an organization described in come. If it is later determined that the organiza- seclion 170(b)(1 )(A)(vi) during an advance rul- lion was a private foundation from its inception, Since M's support from governmental units and ing period long enough to enable it to develop an that excise tax will be due without regard to the from direct and indirect contributions from the adequate support history on which to base an advance ruling or determination letter. Conse- general public normally is more than one-third of initial determination as to foundation status. quently, if any amount of the tax is not paid on or M's total support for the applicable period Generally, the type of newly created organi- before the last date prescribed for payment, the (1998-2001 ), M meets the one-third support zation that would qualify for an advance ruling is organization is liable for interest on the tax due test and satisfies the requirements for classifica- one that can show that its organizational struc- for years in the advance ruling period. However, lion as a publicly-supported organization for lure, proposed programs and activities, and in- since any failure to pay the tax during the period 2002 and 2003. (This remains in effect if no tended method of operation are likely to attract is due to reasonable cause, the penalty imposed substantial and material changes took place in the type of broadly based support from the gen- for failure to pay the tax will not apply. the organization's character, purposes, meth- eral public, public charities, and governmental If an advance ruling or determination ods of operation, or sources of support in these units that is necessary to meet the public sup- years.) port requirements discussed earlier, under isterminated by the IRS before the expiration Qualifying As Publicly Supported. of the reliance period, the status of grants or Example 2. N organization was created to An advance ruling r determination will pro- contributions with respect to grantors or contrib- 9 P maintain public gardens containing plant speci- vide that an organization will be treated as an Mors to the organization will not be affected until mens and displaying works of art. The facilities, organization described in section notice of change of status of the organization is art, and a large endowmentwere all contributed 170(b)(1)(A)(vi) for an advance ruling period of 5 made to the public (such as by publication in the by a single contributor. The members of the years. Internal Revenue Bulletin). However, this will not governing body of the organization are unre- y g apply if the grantor or contributor was responsi- laded to its creator. The gardens are open to the 5-year advance ruling period. A newly ble for, or aware of, the act or failure to act that public without charge and attract many visitors created organization may request a ruling or resulted in the organization's loss of classifca- determination letter that it will be treated as a each year. For the 4 tax years immediately lion as a publicly-supported organization. before the current tax ear, 95% of the section 170(b)(1 )(A)(vi) organization for its first 5 Also, it will not apply if the grantor or contrib- y tax years. The request must be accompanied by IRS 9 organization's total support was received from a consent to extend the statute (on Form udor knew that the IRS had given notice to the investment income from its original endowment. 872–C) that, in effect, states the organization organization that it would grant deleted from this N also maintains a membership society that is will be subject to the taxes imposed under sec- classification. Before any grantor contribution y supported o members of the general public tion 4940 if it fails to qualify as an organization made, a potential grantee organization may who wish [o contribute small the upkeep of the request a ruling on whether the grantor silica- gardens by paying a small annual membership excluded as a private foundation during the button may be made without loss of classifca- fee. Over the 4-year period in question, these 5-year advance ruling period . The tion as publicly-supported organization. y p q organization's first tax year, regardless of 9 fees from the general public constituted the re- length, will count as the first year in the 5-year The ruling request may be filed by the maining 5% of the organization's total support. period. The advance ruling period will end on the grantee organization with the EO area manager. Under these circumstances, N does not meet last day of the organization's 5th tax year. The issuance of the ruling will be at the sole the one-third support test for its current tax year. Between 30 and 45 days before the end of discretion of the IRS. The organization must Furthermore, since only 5% was received from the advance ruling period, the EO area manager submit all information necessary to make a de- the general public, N does not satisfy the will contact the organization and request the termination on the support factors previously ten-percent-of-support requirement of the facts financial support information necessary to make discussed. If a favorable ruling is issued, the and circumstances test. For its current tax year, a final determination of foundation status. In ruling may be relied upon by the grantor or N therefore is note publicly-supported organiza- general, this is the information requested in Part contributor of the particular contribution in ques- tion. Since N failed to satisfy the IV, A of Form 1023. tion. The grantee organization also may rely on ten-percent-of-support requirement, none of the the ruling for excluding unusual grants. other requirements or factors can be considered Failure to obtain advance ruling. If a in determining whether N qualifies as a newly created organization has not obtained an publicly-supported organization. advance ruling or determination letter, it cannot Comprehensive Examples rely upon the possibility that it will meet the Example 3, In 1980, O organization was public support requirements discussed earlier. Example 1. For the years 1998 through founded in Y City by the members of a single Thus, in order to avoid the risk of being classified 2001 , M organization received support of family to collect, preserve, interpret, and display as a private foundation, the organization may $600,000 from the following sources. to the public important works of art. O is gov- comply with the rules governing private founda- erned by a Board of Trustees that originally lions by paying any applicable private founda- Investment Income . . . . . . . . . . . . $300,000 consisted almost entirely of members of the tion taxes. If the organization later meets the City . . . . . . . . . . . . . . . . . . . . 40,000 founding family. public support requirements for the applicable United Way . . . . . . . . . . . . . . . . . 40,000 However, since 1990, members ofthe found- period, it will be treated as a section Contributions 220,000 ing family or persons related to members of the Chapter 3 Section 501 (c)(3) Organizations Page 35 family have annually been less than 20% of the For P's current tax year, its sources of sup- tionable whether Q satisfies the attraction of Board of Trustees. The remaining board mem- port are computed on the basis of the 4 immedi- public support requirement. Because of its bers are citizens of Y City from a variety of ately preceding years, as follows. method of operating, Q also has a greater bur- professions and occupations who represent the den of establishing its publicly supported nature interests and views of the people of City in the Contributions $520,000 under the percentage of financial support factor. activities carried on by the organization rather Receipts from performances . . . . 100.000 Based on these facts and on Q's failure to re- than the personal or private interests of the $620,000 ceive favorable consideration under the remain- founding family. Less: in factors, Q does not O solicits contributions from the general pub- Receipts from performances g qualify as a excluded, see Support) . . . . . . . . Publicly-supported organization. tic and for each o(its 4most recent tax years has ( PP rt) 100.000 received total contributions (in small sums of Total support . . . . . . . . . . . . . . $520,000 less than $100, none of which is more than 2% Z Community Chest (indirect support Community Trusts of O's total support for the period) of more than from the general public) . . . . . . . . $120,000 $10,000. These contributions from the general Two contributions (each over Community trusts are often established to at- public are 25% of the organization's total sup- $10,400-2% of total support) 2 x tract large contributions of a capital or endow- port for the 4-year period, For this same period, $10,400 . . . . . . . . . . . . . . . . . . . 20.800 ment nature for the benefit of a particular investment income from several large endow- Total support from general public . . $140.800 community or area. Often these contributions ment funds has been 75% of its total support. O come initially from a small number of donors. spends substantially all of its annual income for P's support from the general public, directly and While the community trust generally has a gov- its exempt purposes and thus depends upon the indirectly, does not meet the one-third support arning body composed of representatives of the funds it annually solicits from the public as well test ($140,600/$520,000 = 27% of total sup- particular community or area, its contributions as its investment income to carry out its activities port). However, it meets the ten-percent-of-sup- are often received and maintained in the form of on a normal and continuing basis and to acquire port requirement. P also meets the requirement separate trusts or funds that are subject to vary- new works of art. For the entire period of its of the attraction of public support. As a result of ing degrees of control by the governing body. existence, O has been open to the public and satisfying these requirements and the public To qualify as a publicly-supported organiza- more than 300,000 people (from Y City and support factors, P is considered to be a tion, a community trust must meet the one-third elsewhere) have visited the museum in each of publicly-supported organization. support test, explained earlier under Qualifying its 4 most recent tax years. If P were a newly created organization, it As Publicly Supported. if itcannot meet that test, Under these circumstances, O does not could obtain a ruling that it is a publicly-sup- it must be organized and operated so as to meet the one-third support test for its current ported organization by reason of its purposes, attract new and additional public or govemmen- year since it has received only 25% of its total organizational structure, and proposed method tal support on a continuous basis sufficient to support forthe applicable 4-year period from the of operation. Even if P had initially been founded meet the facts and circumstances test, also ex- general public. However, O has met the by the contributions of a few individuals, this plained earlier. Community trusts are generally ten-percent-of-support requirement as well as would not, in and of itself, disqualify P from able to satisfy the attraction of public support the attraction of public support requirement and receiving the ruling. requirement (as contained in the facts and cir- the factors to be considered, under the facts and cumstances test) if they seek gifts and bequests circumstances test, in determining whether an Example S. Q is a philanthropic organiza- from a wide range of potential donors in the organization is publicly supported. Therefore, O tion founded in 1985 by Anne Elm for the pur- community or area served, through banks or is cfassifed as a publicly-supported organiza- pose of making annual contributions to worthy trust companies, through attorneys or other pro. tion for its current tax year and the next tax year. charities. Anne created Q as a charitable trust by fessional persons, or in other appropriate ways transferring $500,000 worth of appreciated se- that call attention to the community trust as a Example 4. In 1990, the P Philharmonic curities to Q. potential recipient of gifts and bequests made Orchestra was organized in Z City by a local Under the trust agreement, Anne and two for the benefitof the community or area served. music society and a local women's club to pres- other family members are the sole trustees and A community trust, however, does not have to ent to the public a wide variety of musical pro- are vested with the right to appoint successor engage in periodic, community-wide, fund-pals- grams intended to foster music appreciation in trustees. In each of its 4 most recent tax years, Ing campaigns directed toward attracting a large the community. The orchestra is composed of Q received $15,000 in investment income from number of small contributions in a manner simi- professional musicians who are paid by the as- its original endowment. Each year Q solicits lar to campaigns conducted by a community sociation. Twelve performances, open to the funds by operating a charity ball at Anne's home, chest or a united fund. public, are scheduled each year. A small admis- Guests are invited and asked to make contribu- sion charge is made for each of these perform- tions of $100 per couple. During the 4-year pe- Separate trusts or funds. Any community antes. In addition, several performances are riod involved, $15,000 was received from the trust may be treated as a single entity, rather staged annually without charge. proceeds of these events. Anne and the family than as an aggregation of separate funds, in During its 4 most recent tax years, P re- have also made contributions to Q of $25,000 which case all qualifying funds associated with ceived separate contributions of $200,000 each over the course of the organization's 4 most that organization (whether a trust, not-for-profit from Amanda Green and Jackie White (not recent tax years. Q makes disbursements each corporation, unincorporated association, or a members of a single family) and support of year of substantially all of its net income to the combination thereof) will be treated as compo- $120,000 from the Z Community Chest, a public public charities chosen by the trustees. nent parts of the organization. federated fund-raising organization operating In For Q's current tax year, Q's sources of sup- Z City. P depends on these funds to carry out its port are computed on the basis of the 4 immedi- Single entity, To be treated as a single en- aclivities and will continue to depend on contri- ately preceding years as follows. tity, a community trust must meet all of the fol- butions of this type to be made in the future. P - lowing requirements. has also begun a fund-raising campaign in an Investment income . . . . . . . . . . . . . $60,000 attempt to expand its activities for the coming Contributions 40,_000 1 . The organization must be commonly years. Total support . . . . . . . . . . . . . . . $100,000 known as a community trust, fund, founda- P is governed by a Board of Directors com- Contributions from the general public $15,000 tion, or other similar name conveying the posed of five individuals. A faculty member of a concept of a capital or endowment fund to local college, the president of a local music soft- One contribution (over $2,000-2% support charitable activities in the commu- ety, the head of a local bank, a prominent doctor, of total support) 1 x $2,000 . . . . . . �D00 pity or area it serves. and a member of the governing body of the local Total support from general public . . . $1_y000 2. All funds of the organization must be sub- Chamber of Commerce currently serve on the Q's support from the general public does not ject to a common governing instrument (or Board and represent the interests and views of meet the one-third support test ($17,0001 a master trust or agency agreement) that the community in the activities carried on by P. -$100,000 = 17% of total support). Even though it may be embodied in a single (or several) does meet the ten-percent-of-support require- document(s) containing common lan- ment, its method of solicitation makes it goes- guage. Page 36 Chapter 3 Section 501(c)(3) Organizations 3. The organization must have a common private foundation status. Generally, an organi- 2. The excess (if any) of unrelated business governing body (or distribution committee) zation described in section 509(a)(2) may also ft taxable income from unrelated trades or that either directs or, in the case of a fund the description of a publicly-supported organiza- businesses acquired after June 30, 1975 designated for specified beneficiaries, tion under section 509(a)(1 ). There are, how- over the tax imposed on that income. monitors the distribution of all funds exclu- ever, two basic differences. sively for charitable purposes. The govern- Gross investment income. Gross invest- ing body must have the power in the 1 . For section 509(a)(2) organizations, the ment income means the gross amount of in- governing instrument, the instrument of term support includes items of support dis- come from interest, dividends, payments with transfer, the resolutions or bylaws of the cussed earlier (under Support, in the dis- respect to securities loans, rents, and royalties, governing body, a written agreement, or cussion of Section 509(a)(1) but it does not include any income that would be otherwise— Organizations) and income from activities included in computing tax on unrelated business directly related to their exempt function, income from trades or businesses. a. To modify any restriction or condition on This income is not included in meeting the the distribution of funds for any speci- support test for a publicly-supported organ- Definition of normally. Both support tests Led charitable purposes or to specified ization under section 509(a)(1 ). are computed on the basis of the nature of the organizations if in the sole judgment of organization's normal sources of support. An the governing body (without the neces- 2. Section 509(a)(2) places a limit on the total organization will be considered to have normally sity of the approval of any participating gross investment income and unrelated met both tests for its current tax year and the tax trustee, custodian, or agent), the restric- business taxable income (in excess of the year immediately following, if it meets those tion or condition becomes, in effect, un- unrelated business tax) an organization tests on the basis of the total support received necessary, incapable of fulfillment, or may have, while section 509(a)(1 ) does for the 4 tax years immediately before the cur- inconsistent with the charitable needs of not' rent tax year. the community or area served, To be excluded from private foundation treat- Exception for material changes in sources of b. To replace any participating trustee, ment under section 509(a)(2), an organization support. If during the current tax year there custodian, or agent for breach of fiduci- must meet two support tests. 9 are substantial and material changes it an ary duty under state law, and 1 . The one-third support test. organization's sources of support other than c. To replace an participating trustee, changes arising from unusual grants (dis- etc., Y P P 9 2. The not-more-than-one-third support test. cussed, later, under Unusual grants), neitherthe etc., for failure to produce a reasonable return of net income over a reasonable Both these tests are designed to insure that 4-year computation period for the current year period of time. (The governing body will an organization excluded from private founda- as an immediately following tax year, nor the determine what is reasonable.) tion treatment is responsive to the general pub- 4-year computation period for that year as a lic, ratherthan to the private interests of a limited current tax year applies. Instead, the normal 4. The organization must prepare periodic f- number of donors or other persons. sources of support will be determined on the nancial reports treating all of the funds that basis of a 5-year period consisting of the current are held by the community trust, either di- One-third support test. The one-third sup- tax year and the 4 preceding tax years. rectly or in component parts, as funds of port test will be met if an organization normally For example, if material changes occur in the organization. receives more than one-third of its support in support for the year 2002, then even though the each tax year from any combination of: organization meets the requirements of the sup- A community trust can meet the requirement port tests based on the years 1997-2000 or in (3) above even if its exercise of the powers in 1 . Gifts, grants, contributions, or membership 1998-2000, it does not meet these tests unless (3)(a), (b), or (c) is reviewable by an appropriate fees, and it meets the requirements based on the 5-year state authority. 2. Gross receipts from admissions, sales of computation period of 1998-2002. An example Component part. To be treated as a com- merchandise, performance of services, or of a substantial and material change is the re- ponent part of a community trust (rather than as furnishing facilities in an activity that is not ceipt of an unusually large contribution that does a separate trust or a not-for-profit corporation), a an unrelated trade or business, subject to not qualify as an unusual grant. trust or fund: certain limits, discussed below under Limit Effect on grantor or contributor. if an or- 1 . Must be created gift, bequest, legacy, on gross receipts, ganization is not able to meet either of the sup- devise, or other transfer to a community For this purpose, the support must be from port tests because of a substantial or material trust that is treated as a single entity (de- Permitted sources, which include: change in the sources of support, its status with respect to a grantor or contributor will not be scribed above), and • Section 509(a)(1 ) organizations, described affected until notice of a change in status is 2. May not be directly subjected by the trans- earlier, made to the public (such as by publication in the feror to any material restriction or condition • Governmental units, described under Sec- Internal Revenue Bulletin). with respect to the transferred assets. tion 509(a)(1) Organizations, and However, this rule does not apply to any • Persons other than Disqualified persons grantor or contributor who: Grantors and contributors. Grantors, con- (defined under Section 509(e)(3) Organi- 1 . Was responsible for the substantial or ma- tributors, or distributors to a community trust zations). terial change, may rely on the public charity status, which the 2. Was aware of it, or organization has claimed in a timely filed notice, Limit on gross receipts. In computing the on or before the date the IRS informs the public amount of support received from gross receipts 3. Has acquired knowledge that the IRS gave (through such means as publication in the Inter- under (2) above, gross receipts from related notice to the organization that it would no nal Revenue Bulletin) that such reliance has activities received from any person or from any longer be classified as a section 509(a)(2) expired. However, if the grantor, contributor, or bureau or similar agency of a governmental unit organization. distributor acquires knowledge that the IRS has are includible in any tax year only to the extent notified the community trust that it has failed to the gross receipts are not more than the greater Agrantoror contributor (otherthan one ofthe establish that it is a public charity, then reliance of $5,000 or I % of the organization's total sup- organization's founders, creators, or foundation on the claimed status expires at the time such port in that year. managers) is not considered responsible for, or knowledge is acquired. aware of, the substantial and material change if Not-more-than-one-third support test. This the grantor or contributor made the grant or test will be met if an organization normally re- contribution relying upon a written statement by Section 509(a)(2) Organizations calves no more than one-third of its support in the grantee organization that the grantorcontri- each tax year from the total of: bution would not result in the loss of the Section 509(a)(2) excludes certain types of organization's classification as an organization broadly, publicly-supported organizations from 1 . Gross investment income, and that is not a private foundation. The statement Chapter 3 Section 501 (c)(3) Organizations Page 37 must be signed by a responsible officer of the Characteristics of an unusual grant. A narily be given more favorable considera- grantee organization and must give enough in- grant or contribution will be considered an unu- tion than a transfer while living. formation, including a summary of the pertinent sual grant if the above 3 factors apply and it has 2 Whether, before the contribution, the or- financial data for the 4 preceding years, to as- all of the following characteristics. if these fac- ganization carried on an actual program of sure a reasonably prudent person that the grant tors and characteristics apply, [hen even without public solicitation and exempt activities or contribution would not result in the loss of the the benefit of an advance ruling, grantors or and was able to attract a significant grantee organization's classification as not a contributors have assurance that they will not be amount of public support. private foundation. If a reasonable doubt exists considered responsible for substantial and ma- as to the effect of the grant or contribution, or if terial changes in the organization's sources of 1 Whether the organization may reasonably the grantor or contributor is one of the support. be expected to attract a significant amount organization's founders, creators, or foundation of public support after the contribution, managers, the grantee organization may re- 1. The grant or contribution is not made by a Continued reliance on unusual grants to quest a ruling from its EO area manager for the person (or related person) who created the fund an organization's current operating protection of the grantor or contributor.. organization or was a substantial contribu- expenses may be evidence that the organ- if there is no written statement, a grantor or for to the organization before the grant or ization cannot attract future support from contributorwill not be considered responsible for contribution. the general public, a substantial and material change if the total 2. The grant or contribution is not made by a 4. Whether the organization met the one-third gifts, grants, or contributions received from that person (or related person) who is in a posi- support test in the past without the benefit grantor or contributor for a tax year are '25% or tion of authority, such as a foundation of any exclusions of unusual grants. less of the total support received by the organi- manager, or who otherwise has the ability 5. Whether the organization has a represen- zation from all sources for the 4 tax years imme- to exercise control over the organization tative governing body. diately before the tax year. (If the organization Similarly, the grant or contribution is not has not qualified as publicly supported for made by a person (or related person) who, those 5 years, see Special computation period because of the grant or contribution, ob- Example 1. In 1998, Y, an organization de- for new organizations, next.) For this purpose, tains a position of authority or the ability to scribed in section 501(c)(3), was created by total support does not include support received otherwise exercise control over the organi- Marshall Pine, the holder of all the common from that particular grantor or contributor. The zation. stock in M corporation, Lisa, Marshall's wife, and grantor or contributor cannot be a person who is Edward Forest, Marshall's business associate. in a position of authority, such as a foundation 3. The grant or contribution is in the form of Each of the three creators made small cash manager, or who obtains a position of authority cash, readily marketable securities, or as- contributions to Y to enable it to begin opera- or the ability to exercise control over the organ i- sets that directly further the organization's tions. The purpose of Y was to sponsor and zation because of the grant or contribution. exempt purposes, such as a gift of a paint- equip athletic teams composed of underprivi- ing to a museum. leged children of the community. Between 1998 Special computation period for new 4. The donee organization has received ei- and 2001 , Y was able to raise small amounts of organizations. A newly created organization ther an advance or final ruling or determi- contributions through fund-raising drives and may need several years to establish its normal nation letter classifying it as a selling admission to some of the sponsored - sources of support. Organizations generally are publicly-supported organization and, ex- sporting events, allowed a 5-year period to establish that they cept for an organization operating under For its first year of operations, it was deter- meet the section 509(a)(2) support lest. This is an advance ruling or determination letter, mined that Y was excluded from the definition of called the advance ruling period. if an organiza- the organization is actively engaged in a private foundation under the provisions of sec- tion can reasonably be expected to meet the program of activities in furtherance of its tion 509(a)(2). Marshall made small contribu- support test by the end of its advance ruling exempt purpose, lions to Y from time to time. At all times, the period, the IRS may issue it an advance ruling or operations of Y were carried out on a small determination letter. See Advance rulings for 5. No material restrictions or conditions have scale, usual) being restricted to the s onsor- newl created organizations, later. This will per- been imposed by the grantor or contributor y 9 P y p upon the organization in connection with ship of two to four baseball teams of underprivi- mit the organization to be treated as r section leged children. 509(a)(2) organization for its advance ruling pe- the grant or contribution. riod. 6. If the grant or contribution is intended for In 2002, M recapitalized and created a first operating expenses, than capital and second class of 6% nonvoting preferred An advance ruling or determination is not a P 9 enses,P p stock, most of which was held by Marshall and ruling that the organization will meet the require- items, the terms and amount of the grant Lisa. Marshall then contributed 49% of his com- ments of section 509(a)(2) during the advance or contribution are expressly limited to one men stock in M to Y. Marshall, Lisa, and Edward ruling period. An organization that receives an year's operating expenses. continued to be active participants in the affairs advance ruling or determination letter must, at of Y from its creation through 2002. Marshall's the expiration of the advance ruling period, es- Ruling request. If there is any doubt that a contribution of M's common stock was 90% of tablish that it satisfies the section 509(a)(2) sup- grant or contribution may be excluded as an Y's total support for 2002. Although Y could port requirements for the years covered by the unusual grant, the grantee organization may re- satisfy the one-third support test on the basis of advance ruling, or the organization will be pre- quest a ruling, submitting all of the necessary the 4 tax years before 2002, a combination of sumed to be a private foundation under section information for making a determination to its EO the facts and circumstances preclude Marshall's 508(b). area manager. The IRS has the sole discretion contribution of M's common stock in 2002 from of issuing a ruling, but if a favorable ruling is being excluded as an unusual grant. Marshall's Unusual grants. An unusual grant may be issued, it may be relied on by the grantor or contributionin 2002 was a substantial and mate- excluded from the support test computation if it: contributorfor purposes of a charitable contribu- riai change in Y's sources of support and on the bons deduction and by the organization for pur- basis of the 5-year period (1998 to 2002), Y 1. Was attracted by the publicly supported poses of the exclusion for unusual grants. The would not be considered as normally meeting nature of the organization, organization should follow the procedures set the one-third support test for the tax years 2002 out in Revenue Procedure 2003-4 (or later up- (the current tax year) and 2003 (the immediately 2. Was unusual or unexpected in amount, date). following tax year). and In addition to the characteristics listed above, 3. Would, because of its size, adversely ef- the following factors may be considered by the Example 2. M, an organization described in fect the status of the organization as nor- IRS in determining if the grant or contribution is section 501 (c)(3), was organized to promote the mally meeting the one-third support test. an unusual grant. appreciation of ballet in a particular region of the (The organization must otherwise meet the United States. Its principal activities will consist test in that year without benefit of the grant 1. Whether the contribution was a bequest or of erecting a theater for the performance of bal- or contribution.) a transfer while living. A bequest will ordi- let and the organization and operation of a ballet Page 38 Chapter3 Section 501 (c)(3) brganizatlons company. The governing body of M consists of sons having special knowledge in the par- charitable contribution deduction of a grantor or nine prominent unrelated citizens living in the ticular field in which the organization is contributor will not be affected until notice of region who have either an expertise in ballet or a operating or of community leaders, such change of status is made public (such as by strong interest in encouraging appreciation of as elected officials, members of the clergy, publication in the Internal Revenue Bulletin). ballet. To provide sufficient capital for M to begin and educators, or, in the case of a mem- However, this rule will notapply if the grantor its activities, X, a private foundation, makes a bership organization, of individuals elected or contributor is responsible for, or aware of, the grant of $500,000 in cash to M. Although Albert under the organization's governing instru- act or failure to act that resulted in the Cedar, the creator of X, is one of the nine mem- ment or bylaws by a broadly based mem- organization's loss of section 509(a)(2) status, bers of M's governing body, was one of M's bership, or if a grantor or contributor acquires knowledge original founders, and continues to lend his 2. Whetherasubstantial part of the thatthe IRS had given notice of the loss of status prestige to M's activities and fund-raising efforts, to the organization. Albert does not, directly or indirectly, exercise organization's initial funding is to be pro- any control over M. By the close of its first tax vided by the general public, by public char- Failure to obtain advance ruling. See the year, M also has received a significant amount ities, or by government grants rather than corresponding discussion under Failure to ob- of support from a number of smaller contribu- by a limited number of grantors or contrib- tain advance ruling under Qualifying As Publicly tions and pledges from members of the general utors who are disqualified persons with re- Supported. public. Upon the opening of its first season of spect to the organization, Gifts, contributions, and grants distin- ballet performances, M expects to charge ad- 3. Whether a substantial proportion of the guished from gross receipts. In determining mission to the general public. Under these cir- organization's initial funds are placed, or whether an organization normally receives more cumstances, the grant by X to M may be will remain, in an endowment and whether than one-third of its support from permitted excluded as an unusual grant. the investment of those funds is unlikely to sources, include all gifts, contributions, and result in more than one-third of its total grants received from permitted sources in the Advance rulings for newly created support being received from gross invest- numerator of the support fraction in each tax organizations. Newly created organizations ment income and from unrelated business year. However, gross receipts from admissions, generally are allowed an advance ruling period taxable income in excess of the tax im- sales of merchandise, performance of services, of 5 years. posed on that income, or furnishing facilities, in an activity that is not an An organization that is claiming on its Form unrelated trade or business, are includible in the 1023 (or other section 508(b) notice) to be de- 4. Whether an organization that carries on numerator of the support fraction in any tax year scribed under section 509(a)(2) must have oper- fund-raising activities has developed a only to the extent that the amounts received ated for at least 1 tax year consisting of at least 8 concrete plan for solicitation of funds on a Y 9 from any person or from any bureau or similar months before the IRS will make a final determi- community or area-wide basis, agency of a governmental unitare not more than nation of its status. However, if an organization 5. Whether an organization that carries on the greater of $5,000 or 1% of support. can show that it can reasonably be expected to community service activities has a con- Gifts and contributions. Any payment of qualify under section 509(a)(2), the IRS will is- Crete program to carry out its work in the money or transfer of property without adequate sue an advance ruling or determination letter on community, consideration is considered gift or contribution. the organization's private foundation status. Generally, an advance ruling or determination 6. Whether membership dues for individual When payment is made or property is trans- provides that an organization will be treated as (rather than institutional) members of an ferred as consideration for admissions, sales of an organization described in section 509(a)(2) organization that carries on education or merchandise, performance of services, or fur- for an advance ruling period of 5 years. other exempt activities for or on behalf of nishing facilities to the donor, the status of the A newly created organization may request a members have been fixed at rates de- payment or transfer under section 170(c) deter- ruling or determination that it will be treated as a signed to make membership available to a mines whether and to what extent the payment section 509(a)(2) organization for its first 5 tax broad cross section of the public rather or transfer is a gift or contribution as distin- years. This request must be filed with a consent than to restrict membership to a limited guished from gross receipts from related activi- to extend the statute (Form 872—C) that in effect number of persons, and ties. The amount includible in computing support states the organization will be subject to private 7. Whether an organization that provides from gifts, grants, or contributions of property or foundation taxes (undersection 4940) if itfails to goods, services, or facilities is or will be use of property is the fair market or rental value qualify as not a private foundation during the required to make its services, facilities, of the property at the date of the gift or contribu- 5-year advance ruling period. performances, or products available (re- tion. In determining whether an organization can gardless of whether a fee is charged) to meet the support tests, the basic consideration the general public, public charities, or gov- Example. P is a local agricultural club and is is whether its organizational structure, proposed ernmental units rather than to a limited an organization described in section 501(c)(3). It programs or activities, and intended method of number of persons or organizations. makes awards at its annual fair for outstanding operation will attract the type of broadly based from the general public, public charities, specimens of produce and livestock to en- support Reliance period. The reliance period for courage interest and proficiency by young peo- and governmental. units that is necessary to ruling or determination letter begins with the ple in farming and raising livestock. Most of meet the tests. The facts that are relevant to this Inception of the organization and ends 90 days these awards are cash or other property determination and the weight accorded each after the advance ruling period. The reliance donated by local businessmen. When the fact may differ from case to case. A favorable period will be extended until a final determina- awards are made, the donors are given recogni- determination will not be made when the facts tion is made of the organization's status only if tion for their donations by being identified as the indicate that an organization is likely to receive the organization submits, within the 90-day pe- donor of the award. The recognition given to less than one-third of its support from permitted riod, the necessary information to determine donors is merely incidental to the making of the sources or to receive more than one-third of its whether it meets the requirements for a section award to worthy youngsters. For these reasons, support from gross investment income and un- 509(a)(2) organization. the donations are contributions. The amount in- related business taxable income. However, this reliance period does not apply cludible in computing support is equal to the All pertinent facts and circumstances are to the section 4940 excise tax on net investment cash contributed orthe fair market value of other taken into account in determining whether the income. Therefore, if it is later determined that property on the dates contributed. organizational structure, programs or activities, the organization was a private foundation from and method of operation of an organization will its inception, the tax on net investment income Grants. Grants often contain certain terms enable it to meet the tests for its advance ruling will be due without regard to the ruling or deter- and conditions imposed by the grantor. Because period (discussed earlier). Some pertinent fac- mination letter. of the imposition of terms and conditions, the - tors considered are: frequent similarity of public purposes of grantor Grantors or contributors. If a ruling or de- and grantee, and the possibility of benefit to the 1 . Whether the organization has or will have termination letter is terminated before the expi- grantor, amounts received as grants for carrying a governing body that is composed of per- ration of the reliance period, the status of a on exempt activities are sometimes difficult to Chapter 3 Section 501 (c)(3) Organizations Page 39 distinguish from amounts received as gross re- ment that are basically policy-making or admin- through furnishing facilities for a rental fee or ceipts from carrying on exempt activities. istrative, such as the office of the Secretary or loans to a particular class of persons, such as In distinguishing the term gross receipts Assistant Secretary of a department, but would aged, sick, or needy persons, the support re- from the term grants, the term gross receipts consistofthe highest operational level underthe ceived from those persons will be considered means amounts received from an activity that is policy-making or administrative levels. gross receipts from a related exempt activity not an unrelated trade or business, if a specific Amounts received from a unit functioning at rather than gross investment income or unre- service, facility, or product is provided to serve the policy-making or administrative level of gov- lated business taxable income. the direct and immediate needs of the payer ernment are treated as received from one bu- However, if the organization also furnishes rather than primarily to confer a direct benefit on reau or similar agency of the unit. Units of a facilities or loans to persons who are not mem- the general public. In general, payments made governmental agency above the operating level bars of a particular class and furnishing the primanlyto enable the payorto realize or receive are combined and considered a separate bu- facilities or funds does notcontrihute importantly some economic or physical benefit as a result of reau for this purpose. Thus, an organization that to accomplishing the organization's exempt pur- the service, facility, or product obtained will be has gross receipts from both a policy-making or poses, the support received from furnishing the treated as gross receipts by the payee. administrative unit and an operational unit of a facilities or funds will be considered rents or For example, a profit making organization, department will be treated as having gross re- interest and will be treated as gross investment primarily for its own betterment, send acts with a ceipts from two bureaus. For this purpose, the income or unrelated business taxable income. nonprofit organization for a service from that Departments of Air Force, Army, and Navy are organization. Any payments received by the separate departments and each has its own Example. X, an organization described in nonprofit organization (whether from the policy-making, administrative, and operating section 501 (c)(3), is organized and operated to profit-making organization or from another non- units. provide living facilities for needy widows of de- profit) for similar services are primarily for the ceased servicemen. X charges the widows a benefit of the payor and are therefore gross Example 1. The Bureau for Africa and the small rental fee for the use of the facilities. Since receipts, rather than grants. Bureau for Latin America are considered sepa- X is accomplishing its exempt purpose through Research leading to the development of tan- rate bureaus. Each is an operating unit under the rental of the facilities, the support received gible products for the use or benefit of a payer the Administrator of the Agency for International generally will be treated as a service provided to Development, a policy-making official. If an or- from the widows considered gross receipts serve the direct and immediate needs of the ganization had gross receipts from both of these from a related exempt activity. However, if X payer, while basic research or studies carried on bureaus, the amount of gross receipts from each rents part of its facilities to persons having no in the physical or social sciences generally will would be subject to the greater of $5,000 or the relationship to X's exempt purpose, the support be treated as primarily to confer a direct benefit 1 % limit. received from these rentals will be considered upon the general public. gross investment income or unrelated business Medicare and Medicaid payments are gross Example 2. A bureau is an operating unit taxable income. receipts from the exercise or performance of an under the administrative office of the Executive exempt function. The individual patient, not a Director. The subdivisions of the bureau are governmental unit, actually controls the ultimate Geographic Areas and Project Development Section 509(x)(3) Organizations recipient of these payments. Therefore, Medi- Staff. If an organization had gross receipts from Section 509(a)(3) excludes from the definition of care and Medicaid receipts forservices provided these subdivisions, the total gross receipts from private foundation those organizations that meet each patient are included as gross receipts to these subdivisions would be considered gross all of the three following requirements. the extent they are not more than the greater of receipts from the same bureau and would be $5,000 or 1 % of the organization's total support subject to the greater of $5,000 or the 1 % limit. 1 . The organization must be organized and at for the tax year, all times thereafter operated exclusively for Grants from public charities. For purposes Membership fees distinguished from gross of the one-third support test, grants received the benefit of, to perform the functions of, receipts. The fact that a membership organi- from a section 509(a)(1) organization (public or to carry out the purposes of one or more zation provides services, admissions, facilities, charity) are generally includible in full in comput- specified organizations (which can be ei- or merchandise to its members as part of its ing the numerator of the support fraction for that ther domestic or foreign) as described in overall activities will not, in itself, result in the tax year. - section 509(2)(1) or 509(a)(2). These sec- classification of fees received from members as However, if the amount received is consid- tion 509(a)(1 ) and 509(a)(2) organizations gross receipts subject to the $5,000 or 1 % limit ered an indirect contribution from one of the are commonly called publicly-supported rather than membership fees. However, if an public charity's donors, it will retain its character organizations. organization uses membership fees as a means as a contribution from the donor, and if, for 2. The organization must be operated, super- of selling admissions, merchandise, services, or example, the donor is a substantial contributor vised, or controlled by or in connection the use of facilities to members of the general to the ultimate recipient, the amount is excluded with one or more of the organizations de- public who have no common goal or interest from the numerator of the support fraction. If a scribed in section 509(a)(1 ) or 509(a)(2). (other than the desire to buy the admissions, public charity makes both an indirect contribu- merchandise, services, or use of facilities), the tion from its donor and an additional grant to the 3. The organization must not be controlled fees are not membership fees but are gross ultimate recipient, the indirect contribution is directly or indirectly by disqualified persons receipts. treated as made first. (defined later) other than foundation man- On the other hand, to the extent the basic An indirect contribution is one that Is ex- agers and other than one or more organi- purpose of the payment is to provide support for pressly or impliedly earmarked by the donor as zations described in section 509(a)(1 ) or the organization rather than to buy admissions, being for, or for the benefit of, a particular recipi- 509(a)(2). merchandise, services, or the use of facilities, ent rather than for a particular purpose. Section 509(a)(3) differs from the other pro- the payment is a membership fee. visions of section 509 that describe a Bureau defined. The term any bureau or Method of accounting. An organization's publicly-supported organization. Instead of support is determined solely on the cash re- similar agency of a governmental unit for ceipts and disbursements method of account- describing an organization that conducts apar- determining amounts subject to the $5,000 or ing. For example, if a grantor makes a grant to ticular kind of activity or that receives financial 1% limit means a specialized operating unit of support from the general public, section an organization payable over a term of years, the executive, judicial, or legislative branch of the grantwill be includible in the support fraction 509(2)(3) describes organizations that have es- government in which business is conducted of the grantee organization only when and to the tablished certain relationships in support of sec- under certain rules and regulations. Since the extent amounts payable under the grant are tion 509(a)(1) or 509(a)(2) organizations. Thus, term bureau refers to a unit functioning at the received by the grantee. an organization may qualify as other than a operating, as distinct from the policy-making, private foundation even though it may be funded level of government, it normally means a subdi- Gross receipts from a related activity. by a single donor, family, or corporation. This vision of a department of government. The term When the charitable purpose of an organization kind of funding ordinarily would indicate private would not usually include those levels of govern- described in section 501 (c)(3) is accomplished foundation status, but a section 509(a)(3) organ- Page 40 Chapter 3 Section 501 (c)(3) Organizations ization has limited purposes and activities and ship of one ormore publicly-supported organiza- Organizations. Therefore, an organization that gives up a significant degree of independence. tions. by the terms of its articles is formed for the The requirement in (2) above provides that a A supporting organization may be operated, benefit of one or more specified publicly-sup- supporting (section 509(a)(3)) organization supervised, or controlled by one or more ported organizations will, if it otherwise meets have one of three types of relationships with one publicly-supported organizations even though the other requirements, be considered to have ormore publicly- supported (section 509(a)(1 ) or its governing body is not made up of representa- met the organizational test. 509(a)(2)) organizations. It must be: tives of the specified publicly-supported organi- For example, articles stating that an organi- zations for whose benefit it is operated. This zation is formed to perform the publishing func- 1 . Operated, supervised, or controlled by a occurs only if it can be demonstrated that the tions of a specified university are enough to publicly-supported organization, purposes of the publicly-supported organiza- comply with the organizational test. An organi- 2. Supervised or controlled in connection with tions are carried out by benefiting the specified zation operated, supervised, or controlled by, or a publicly-supported organization, or publicly-supported organizations (discussed, supervised or controlled in connection with, one later, under Specified organizations). or more publicly-supported organizations to 3. Operated in connection with one or more Suervised or controlled in connection carry out the purposes of those organizations, publicly-supported organizations. p will be considered to have met these require- with. The control or management of the sup- ments if the purposes set forth in its articles are More than one type of relationship may exist porting organization must be vested in the same similar to but no broader than the purposes set between a supporting organization and a persons that control or manage the publicly-sup- forth in the articles of its controlling organiza- publicly-supported organization. Any relation- ported organization. In order for an organization tions. If, however, the organization by which it is ship, however, must insure that the supporting to be supervised or controlled in connection with operated, supervised, or controlled is a organization will be responsive to the needs or a publicly-supported organization, common so- publicly-supported section 501(c)(4), 501(c)(5), demands of, and will be an integral part of or pervision or control by the persons supervising or 501 (c)(6) organization, the supporting organi- maintain a significant involvement in, the opera- or controlling both organizations must exist to zation will be considered to have met these tions of one or more publicly-supported organi- insure that the supporting organization will be requirements if its articles require it to carry on zations. responsive to the needs and requirements of the charitable, etc., activities within the meaning of The first two relationships, operated, super- Publicly-supported organization. section 170(c)(2). vised, or controlled by and supervised or An organization will not be considered super- controlled in connection with, are based on vised or controlled in connection with one or Limits. An organization is not organized ex- an existence of majority control of the governing more publicly-supported organizations if it clusively for the purposes specified in require- body of the supporting organization by the merely makes payments (mandatory or discre- ment (1 ) if its articles expressly permit it to publicly-supported organization. They have the tionary) to the publicly-supported organizations. operate, to support, or to benefit any organiza- same rules for meeting the tests under require- This is true even if the obligation to make pay- tion other than the specified publicly-supported ment (1) and are discussed as Category one in ments is legally enforceable and the organizations. It will not meet the organizational the following discussion. The operated in con- organization's governing instrument contains test even though the actual operations of the nection with relationship requires that the sup- provisions requiring the distribution. These ar- organization have been exclusively forthe bene- porting organization be responsive to and have rangemenls do not provide a sufficient connec- fit of the specified publicly-supported organiza- operational relationships with publicly-sup- tion between the payer organization and the tions. ported organizations. This third relationship has needs and requirements of the publicly-sup- Specified organizations. In order to meet different rules for meeting the requirement (1) ported organizations to constitute supervision or requirement (1 ), an organization must be organ- tests and is discussed separately as Category control in connection with the organizations. ized and operated exclusively to support or ben- two, later. efit one or more specified publicly-supported Organizational and operational tests. To organizations. The manner in which the Category one. This category includes organi- qualify as a section 509(a)(3) organization (sup- publicly-supported organizations must be speci- zations either operated, supervised, or con- porting organization), the organization must be fed in the articles will depend on whether the trolled by or supervised or controlled in both organized and operated exclusively for supporting organization is operated,Y or supervised super- the purposes set out in requirement (1 ) at the vised, or controlled b ervised or con- connection with organizations described in P section 509(a)(1 ) or 509(a)(2). beginning of this section. If an organization fails trolled in connection with the organizations or to meet either the organizational or the opera- whether it is operated in connection with the These kinds of organizations have a govern- tional test, it cannot qualify as a supporting or- organizations. bebody that either includes a majority of mem- ganization. Generally, the articles of the supporting or- brs elected or appointed by one more publicly-supported organizations or that con- Organizational test. An organization is or- ganization must designate each of the specified sists ofthe same persons that control or manage ganized exclusively for one or more of the pur- organizations by name, unless: the publicly-supported organizations. If an or- poses specified in requirement (1) only if its ganization is to qualify under this category, it articles of organization: 1 . The supporting organization is operated, supervised, or controlled by or super. also must meet an organizational test, an opera- tional test, and not be controlled by disqualified 1. Limit the purposes of the organization to vised or controlled in connection with one or more of those purposes, one or more publicly-supported organiza- persons. These requirements are covered later tions and the articles of organization of the in this discussion. 2. Do not expressly empower the organiza- supporting organization require that it be Operated, supervised, or controlled by. tion to engage in activities that are not in operated to support or benefit one or more Each of these terms, as used for supporting furtherance of those purposes, beneficiary organizations that are desig- organizations, presupposes a substantial de- 3. Specify (as explained, later, under Speci- nated by class or purpose and include: gree of direction over the policies, programs, fied organizations ) the publicly-supported a. The publicly-supported organizations and activities of a supporting organization by organizations on whose behalf the organi- w referred to above (without designating one or more publicly-supported organizations. zation is operated, and the organizations (w name), or The relationship required under any one of 4 Do not expressly empower the organiza- these terms is comparable to that of parent . tion to operate to support or benefit any b. Publicly-supported organizations that i and subsidiary, in which the subsidiary s under organization other than the ones specified are closely related in purpose the direction of and is accountable or responsi- tier to those publicly-supported organi- be organ rgani- ble to the parent organization. This relationship in item (3). zations, or is established when a majority of the officers, In meeting the organizational test, the directors, or trustees of the supporting organiza- organization's purposes as stated in its articles 2. A historic and continuing relationship ex- tion are appointed or elected by the governing may be as broad as, or more specific than, the ists between the supporting organization body, members of the governing body, officers purposes set forth in requirement (1) at the be- and the publicly-supported organizations, acting in their official capacity, or the member- ginning of the discussion of Section 509(a)(3) and because of this relationship, a sub- Chapter 3 Section 5U1(c)(3) Organizations Page 41 stantial identity of interests has developed tations, fund-raising dinners, and unrelated porting organization will be considered to be between the organizations, trade or business, to raise funds for the controlled directly or indirectly by one or more If a supporting organization is operated, su- Publicly-supported organizations or for the per- disqualified persons if the voting power of those pervised, or controlled by, or is supervised or missible beneficiaries. persons is 50% or more of the total voting power controlled in connection with, one or more of the organization's governing body, or if one or publicly-supported organizations, it will not fail Absence of control by disqualified persons. more of those persons have the right to exercise the test of being organized for the benefit of The third requirement an organization must veto power over the actions of the organization, specified organizations solely because its arti- meet to qualify as a supporting organization Thus, if the governing body of a foundation is cles' requires that the organization not be controlled composed of five trustees, none of whom has a directly or indirectly by one or more disqualified veto power over the actions of the foundation, 1 . Permit the substitution of one publicly-sup- Persons (other than foundation managers or one and no more than two trustees are at any time ported organization within a designated or more publicly-supported organizations). disqualified persons, the foundation is not con- class for another publicly-supported organ- Disqualified persons. For the purposes of sidered controlled directly or indirectly by one or ization either in the same or a different the rules discussed in this publication, the fol- more disqualified persons by reason of this fact class designated in the articles, lowing persons are considered disqualified per- alone. However, all pertinent facts and circum- sons: stances (including the nature, diversity, and in- g. Permit the supporting organization to oper- come yield of an organization's holdings, the ate for the benefit of new or additional 1. All substantial contributors to the founda- length of time particular stocks, securities, or publicly-supported organizations of the lion. other assets are retained, and its manner of same or a different class designated in the exercising its voting rights with respect to stocks articles, or 2. All foundation managers of the foundation. in which members of its governing body also 1 Permit the supporting organization to vary 3. An owner of more than 20% of: have some interest) are considered in determin- the amount of its support among different ing whether a disqualified person does in fact publicly-supported organizations within the a. The total combined voting power of a indirectly control an organization. class or classes of organizations desi _ corporation that is (during such owner- g g ship) a substantial contributor to the proof of independent control. An organi- nated by the articles. foundation, zation is permitted to establish to the satisfaction See also the rules considered under the Organi- of the IRS that disqualified persons do not di- zational test, in the later discussion for organiza- b. The profits interest of a partnership that rectly or indirectly control it. For example, in the tions in Category two. is (during such ownership) a substantial case of a religious organization operated in con- contributor to the foundation, or nection with a church, the fact that the majority Operational test — permissible beneficia- c. The beneficial interest of atrust or unto- of the organization's governing body is com- ries. A supporting organization will be re- The be [efi enterprise that is (during posed of lay persons who are substantial con- garded as operated exclusively to support one or more specified publicly-supported organize- such ownership) a substantial contribu- tributors to the organization will not disqualify g for to the foundation. the organization under section 509(a)(3) if a tions only if it engages solely in activities that representative of the church, such as a bishop or support or benefit the specified organizations. other official, has control over the policies and These activities may include making payments 4. A member of the family of any of the indi- decisions of the organization. to or for the use of, or providing services or viduals just listed. g facilities for, individual members of the charita- 5. A corporation of which more than 35% of Category two. This category includes organi- ble class benefited by the specified publicly-sup- the total combined voting power is owned zations operated in connection with one or ported organization. by persons just listed. more organizations described in section For example, a supporting organization may 6. A partnership of which more than 35% of 509(a)(1) or 509(a)(2). make a payment indirectly through another un- This kind of section 509(a)(3) organization is related organization to a member of a charitable the profits interest is owned by persons one that has certain types of operational rela- class benefited b a specified described in (1 ), (2), (3), or (4). y p publicly-sup- tionships. If an organization is to qualify as a ported organization, but only if the payment is a 7. A trust, or estate, of which more than 35% section 509(a)(3) organization because it is op- grant to an individual rather than a grant to an - of the beneficial interest is owned by per- erated in connection with one or more organization. Similarly, an organization will be sons described in (1), (2), (3), or (4). publicly-supported organizations, it must not be regarded as operated exclusively to support or Remember, however, that foundation manag- controlled by disqualified persons (as described benefit one or more specified publicly-supported ers and publicly-supported organizations are earlier) and it must meet an organizational test, organizations if it supports or benefits a section not disqualified persons for purposes of the a responsiveness test, an integral-part test, and 501 (c)(3) organization, other than a private third requirement under section 509(a)(3). an operational test. foundation, that is operated, supervised, or con- If a person who is a disqualified person with trolled directly by or in connection with a Organizational test. This test requires that publicly-supported organization, or an organiza- respect to a supporting organization, such as a the organization, in its governing instrument: substantial contributor, is appointed or desig- tion that is a publicly-owned college or univer- nated as a foundation manager of the support- 1 . Limit its purposes to supporting one or sity. However, an organization will not be ing organization by a public) -su orted y PP more publicly-supported organizations, regarded as one that is operated exclusively to su ort or benefit a publicly-supported beneficiary organization to serve as the repre- PP p ti sported organi- sentative of the publicly-supported organization, 2 Designate the organizations operated, su- zation if any part of its activities is in furtherance that person is still a disqualified person, rather pervfsed, or controlled by, and of a purpose other t an supporting or benefiting than a representative of the publicly-supported 3. Not have express powers inconsistent with one or more specified publicly-supported orga- nizations. organization, these purposes. An organization is considered controlled for These tests apply to all supporting organiza- Operational test — permissible activities, this purpose if the disqualified persons, by co m- A supporting organization does not have to pay bining their votes or positions of authority, may lions. its income to the publicly-supported In the case of an organization that is oper- p y sported organiza- require the organization to perform any act that lions to meet the operational test. It may satisfy significantly affects its operations or may p ated in connection with one or more re- ublicl su the test by using its income to carry on an inde- vent the organization from performing the act. PPorted organizations, however, the d Y- pendent activity or program that supports or This includes, but is not limited to, the right of designation requirement under the organiza- benefits the specified publicly-supported organi- any substantial contributor or spouse to desig- tionai test can be satisfied using either of the zations, All such support, however, must be lim- nate annually the - recipients from among the following two methods. fled to permissible beneficiaries described publicly-supported organizations of the income Methodone. If an organization is organized earlier. The supporting organization also may from his or her contribution. Except as explained and operated to support one or more engage in fund-raising activities, such as solick under Proofof independent control, next, a sup- publicly-supported organizations and it is oper- Page 42 Chapter 3 Section SD1(c)(3) Organizations aced in connection with that type of organiza- 2. The supporting organization is a charitable put, will be considered in determining whether tion or organizations, then, its articles of trust under state law, each specified the amount of support received by a organization must designate the specified orga- publicly-supported organization is a named publicly-supported beneficiary organization is nizations by name to satisfy the test. But a sup- beneficiary under the trust's governing in- large enough to insure the attentiveness of the porting organization that has one or more strument, and the beneficiary organization organization to the operations of the supporting specified organizations designated by name in has the power to enforce the trust and organization. its articles will not fail the organizational test compel an accounting under state law. Normally, the attentiveness of a beneficiary solely because its articles: organization is motivated by the amounts re- f . Permit a publicly-supported organization, Integral-part test. The organization will meet ceived from the supporting organization. Thus, that is designated by class or purpose this test if it maintains a significant involvement the more substantial the amount involved, in rather than by name, to be substituted for in the operations of one or more publicly-sup- terms of a percentage of the publicly-supported the publicly-supported organization or or- ported organizations and these organizations organization's total support, the greater the like- ganizations designated by name in the arti- are in turn dependent upon the supporting or- lihood that the required degree of attentiveness ties, but only if the substitution is ganization forthe type of support that it provides. will be present. However, in determining conditioned upon the occurrence of an To meet this test, eitherof the following must be whether the amount received from the support- event that is beyond the control of the sup- satisfied. ing organization is large enough to insure the porting organization, such as loss of ex- attentiveness of the beneficiary organization to 1 . The activities engaged in for, or on behalf the operations of the supporting organization emption, substantial failure or of, the publicly-supported organizations (including attentiveness to the nature and yield abandonment of operations, or dissolution are activities to perform the functions of or of the supporting organization's investments), of the organization or organizations desig- to carry out the purposes of the organiza- evidence of actual attentiveness by the benefi- nated in the articles, tions, and, but for the involvement of the ciary organization is of almost equal importance. 2. Permit the supporting organization to oper- supporting organization, would normally be Imposing this requirement is merely one of ate for the benefit of an organization that is engaged in by the publicly-supported orga- the factors in determining whether a supporting not a publicly-supported organization, but nizations themselves, or organization is complying with the attentiveness only if the supporting organization is cur- 2. The supporting organization makes pay- test. The absence of this requirement will not rently operating for the benefit of a ments of substantially all of its income to, preclude an organization from classification as a publicly-supported organization and the orfor the use of, publicly-supported organi- supporting organization if it complies with the possibility of its operating for the benefit of zations, and the amount of support re- other factors. other than a publicly-supported organiza- ceived by one or more of these However, when none of the beneficiary orga- tion is remote, or publicly-supported organizations is enough nizations are dependent upon the supporting 3. Permit the supporting organization to vary to insure the attentiveness of these organi- organization for a large enough amount of their the amount of its support between different zations to the operations of the supporting support, the requirements of item (2) of the designated organizations, as long as it organization. integral-part test will not be satisfied, even meets the requirements of the integral-part If item (2) is being relied on, a substantial though the beneficiary organizations have en- test (discussed later) with respect to at amount of the total support of the supporting forceable rights against the supporting organi- least one beneficiary organization. organization also must go to those publicly-sup- zation under state law. If the beneficiary organization referred to in ported organizations that meetthe attentiveness If an organization cannot meet the require- (2) is not a publicly-supported organization, the requirement with respect to the supporting or- ments of item (2) of the integral-part test for its supporting organization will not meet the opera- ganization. Except as explained in the next par- current tax year solely because the amount re- tional test. Therefore, if a supporting organiza- agraph, the amount of support received by a ceived by one or more of the beneficiaries from lion substituted a beneficiary other than a publicly-supported organization must represent the supporting organization is no longer large publicly-supported organization and operated in a large enough part of the organization's total enough, it can still qualify under the integral-part support of that beneficiary, the supporting or- support to insure such attentiveness. In applying test if it can establish that it has met the require- ganization would not be one described in sec- this, if the supporting organization makes pay- ments of item (2) of the integral-part test for any lion 509(a)(3). ments to, or for the use of, .a particular depart- 5-year period and that there has been an historic ment or school of a university, hospital, or and continuing relationship of support between Method two. If a historic and continuing re- church, the total support of the department or the organizations between the end of the 5-year lationship exists between the supporting organi- school must be substituted for the total support period and the tax year in question. zation and the publicly-supported organizations, of the beneficiary organization. and because of this relationship, a substantial Even when the amount of support received Operational test. The requirements for meet- identity of interests has developed between the by a publicly-supported beneficiary organization ing the operational test for organizations oper- organizations, then the articles of organization does not represent a large enough part of the ated, supervised, or controlled by will not have to designate the specified organi- beneficiary organization's total support, the publicly-supported organizations (discussed zation by name. amount of support received from a supporting earlier, under Qualifying As Publicly Supported) Responsiveness test. An organization will organization may be large enough to meet the have limited applicability to organizations oper- meet this test if it is responsive to the needs or requirements of item (2) of the integral-part test ated in connection with one or more demands of the publicly-supported organiza- if it can be demonstrated that, in order to avoid publicly-supported organizations. This is be- tions. To meet this test, either of the following the interruption of a particular function or activ- cause the operational requirements of the must be satisfied. ity, the beneficiary organization will be suffi- integral-part test, just discussed, generally are ciently attentive to the operations of the more specific than the general rules found for 1 . The publicly-supported organizations must supporting organization. This may occur when the operational test in the preceding category. elect, appoint, or maintain a close and con- either the supporting organization or the bereft- However, a supporting organization can fail both tinuous working relationship with the of- ciary organization earmarks the support re- the integral-part test and the operational test if it ficers, directors, or trustees of the ceived from the supporting organization for a conducts activities of its own that do not consti- supporting organization, (Consequently, particular program or activity, even if the pro- lute activities or programs that would, but forthe the officers, directors, or trustees of the gram or activity is not the beneficiary supporting organization, have been conducted publicly-supported organizations have a organization's primary program or activity, as by any publicly-supported organization named significant voice in the investment policies long as the program or activity is a substantial in the supporting organization's governing in- of the supporting organization, the timing one. - _ _ strument. A similar result occurs for such activi- of grants and the manner of making them, All factors, including the numberof benefiicia- ties or programs that would not have been the selection of recipients, and generally ries, the length and nature of the relationship conducted by an organization with which the the use of the income or assets of the between the beneficiary and supporting organi- supporting organization has established an his- supporting organization.), or zation, and the purpose to which the funds are toric and continuing relationship. Chapter 3 Section 501(c)(3) Organizations Page 43 An organization operated in conjunction with zation, then the character and amount of sup- nizabons and therefore would not qualify for a social welfare organization, labor or agricul- port received by the section 509(a )(3) section 509(a)(3) status. tural organization, business league, chamber of organization will be attributed to the section Classification under section 509(a). If an or- commerce, or other organization described in 509(a)(2) organization for purposes of determin- ganization is described in section 509(a)(1 ), and section 501 (c)(4), 501 (c)(5), or 501 (c)(6), may ing whether the latter meets the support tests is also described in either section 509(a)(2) or qualify as a supporting organization under sec- under section 509(a)(2). If this type of relation- 509(a)(3), itwill be treated as a section 509(a)(1 ) tion 509(a)(3) and therefore not be classified as ship is established or used between an organi- organization. a private foundation if both the following condi- zation seeking 509(a)(3) status and two or more tions are met. organizations seeking 509(a)(2) status, the Reliance by grantors and contributors. amountand characterof support received bythe Once an organization has received a final ruling 1 . The supporting organization must meet all former organization will be prorated among the or determination letter classifying it as an organi- the requirements previously specified (the latter organizations. zation described in section 509(a)(1 ), 509(a)(2), organizational tests, the operational test, In determining whether a relationship exists or 509(a)(3), the treatment of grants and contri- and the requirement that it be operated, between an organization seeking 509(a)(3) sta- butions and the status of grantors and contribu- supervised, or controlled by or in connec- tus (supporting organization) and one or more tors to the organization will generally not be tion with one or more specified organiza- organizations seeking 509(a)(2) status (benefi- affected by reason of a later revocation by the tions, and not be controlled by disqualified ciary organizations) for the purpose of avoiding IRS of the organization's classification until the persons). private foundation status, all pertinent facts and date on which notice of change of status is made 2. The section 501 (c)(4), 501(c)(5), or circumstances will be taken into account. The to the public (generally by publication in the 501 (c)(6) organization would be described following facts may be used as evidence that Internal Revenue Bulletin) or another applicable in section 509(a)(2) if it was a charitable such a relationship was not established or date, if any, specified in the public notice. In organization described in section availed of to avoid classification as a private appropriate cases, however, the treatment of 501 (c)(3). This provision allows separate foundation. grants and contributions and the status of grant- charitable funds of certain noncharitable ors and contributors to an organization de- organizations to be described in section 1 . The supporting organization is operated to scribed in section 509(a)(1 ), 509(a)(2), or 509(a)(3) if the noncharitable organizations supper[ or benefit several specified benefl- 509(a)(3) may be affected pending verification receive their support and otherwise oper- ciary organizations. of the continued classification of the organiza- ate in the manner specified by section 2. The beneficiary organization has a sub- lion. Notice to this effect will be made in a public 509(a)(2). stantial number of dues-paying members announcement by the IRS. In these cases, the who have an effective voice in the man- effect of grants and contributions made after the Special rules of attribution. To determine agement of both the supporting and the date of the announcement will depend on the whether an organization meets the beneficiary organizations. statutory qualification of the organization as an not-more-than-one-third supped test in section organization described in section 509(a)(1), 3. The beneficiary organization is composed 509(a)(2), or 509(a)(3). 509(a)(2), amounts received by the organization of several membership organizations, each from an organization that seeks to be a section of which has a substantial number of mem- The preceding paragraph shall not ap- 509(a)(3) organization because of its support of tiers, and the membership organizations ( ply if the grantor or contributor. the organization are gross investment income have an effective voice in the management (rather than gifts or contributions) to the extent of the supporting and beneficiary organize- they are gross investment income of the distrib- lions. 1. Had knowledge of the revocation of the uting organization. (This rule also applies to ruling or determination letter classifying amounts received from a charitable trust, corpo- 4. The beneficiary organization receives a the organization as an organization de. ration, fund, association, or similar organization substantial amount of support from the scribed in section 509(a)(1), 509(a)(2), that is required by its governing instrument or general public, public charities, or govern- or 509(a)(3), or otherwise to distribute, or that normally does mental grants. 2. Was in part responsible for, or was distribute, at least 25% of its adjusted net in- 5. The supporting organization uses its funds aware of, the act, the failure to act, or come to the organization, and whose distribution to carry on a meaningful program of activi- the substantial and material change on normally comprises at least 5% of its adjusted ties to support or benefit the beneficiary the part of the organization that gave net income.) All income that is gross investment organization and, if the supporting organi- rise to the revocation. income of the distributing organization will be zation were a private foundation, this use considered distributed first by that organization. would be sufficient to avoid the imposition If the supporting organization makes distribu- of the tax on failure to distribute income. Section 509(a)(4) Organizations tions to more than one organization, the amount of gross investment income considered distrib- 6. The operations of the beneficiary and sup- Section 509(a)(4) excludes from classification uted will be prorated among the distributees. porting organizations are managed by dif- as private foundations those organizations that Also, treat amounts paid by an organization ferent persons, and each organization qualify under section 501 (c)(3) as organized and to provide goods, services, or facilities for the performs a different function. operated for the purpose of testing products direct benefit of an organization seeking section 7. The supporting organization is not able to for public safety. Generally, these organiza- 509(a)(2) status (rather than for the direct bene- exercise substantial control or influence lions test consumer products to determine their fit of the general public) in the same manner as over the beneficiary organization because acceptability for use by the general public. amounts received by the latter organization. the beneficiary organization receives sup- These amounts will be treated as gross invest- port or holds assets that are disproportion- Private Operating ment income to the extent they are gross invest- ately large in comparison with the support ment income of the organization spending the received or assets held by the supporting Foundations amounts. An organization seeking section organization. Some private foundations qualify as private op- 509(a)(2) status must file a separate statement with its annual information return, Form 990 or foaling foundations. These are types general private 990—EZ, listing all amounts received from sup- Effect on 5nizati n organizations. If a bene- foundations that, although lacking butio pub- porting organizations. suppo organization fails to meet either of the tic support, make qualifying distributions al, support tests of section 509(a)(2) due to these rectly for the active conduct of their educational, Relationships created for avoidance pur- provisions, and the beneficiary organization is charitable, and religious purposes, as distinct poses. If a relationship between an organiza- one for whose support the organization seeking from merely making grants to other organiza- tion seeking section 509(a)(3) status and an section 509(a)(3) status is operated, then the tions for these purposes. organization seeking section 509(a)(2) status is supporting organization will not be considered to Most of the restrictions and requirements established or used to avoid classification as a be operated exclusively to support or benefit that apply to private foundations also apply to private foundation with respect to either organi- one or more section 509(a)(1) or 509(a)(2) orga- private operating foundations. However, there Page 44 Chapter 3 section Sol (c)(3) Organizations are advantages to being classified as a private the amount of indebtedness incurred to acquire must be signed and postmarked before the first operating foundation. For example, a private those assets, day of the tax year to which it applies. operating foundation (as compared to a private In determining whether the amount of quali- Eligible section 501 (c)(3) organizations that foundation) can be the recipient of grants from a fying distributions is at least two-thirds of the have made the election to be subject to the limits private foundation without having to distribute organization's minimum investment return, the on lobbying expenditures must use Part VI — A the funds received currently within 1 year, and organization is not required to trace the source of Schedule A (Form 990) to figure these limits. the funds nevertheless may be treated as quali- of the expenditures to determine whether they fying distributions by the donating private foun- were derived from investment income or from Attempting to influence legislation. At- dation; charitable contributions to a private contributions. tempting to influence legislation, for this pur- operating (oundation qualify for a higher charita- This test is intended to applyto organizations pose, means: ble deduction limit on the donor's tax return; and such as research organizations that actively the excise tax on net investment income does conduct charitable activities but whose personal 1 . Any attempt to influence any legislation not apply to an exempt operating foundation. services are so great in relationship to charitable through an effort to affect the opinions of assets that the cost of those services cannot be the general public or any segment thereof Private operating foundation means anyten- met out of small endowments. (grass roots lobbying), and vate foundation that meets the assets test, the support test, or the endowment test, and makes Exempt operating foundations. The ex- 2. Any attempt to influence any legislation qualifying distributions directly, for the active cise tax on net investment income does not through communication with any member conduct of its activities for which it was organ- apply to an exempt operating foundation. An or employee of a legislative body or with !zed, of substantially all (85% or more) of the exempt operating foundation for the tax year is any government official or employee who lesser of its: any private foundation that: may participate in the formulation of legis- lation (direct lobbying). 1 . Adjusted net income, or 1 . Is an operating foundation, as described However, the term attempting to influence 2. Minimum investment return. previously, legislation does not include the following activi- 2. Has been publicly supported for at least 10 ties. Assets test. A private foundation will meet tax years or was an operating foundation the assets test if substantially more than half on January 1 , 1983, or for its last taxable 1 . Making available the results of nonpartisan (65% or more) of its assets are: year ending before January 1 , 1963, analysis, study, or research. 3. Has a governing body that, at all times 2. Examining and discussing broad social, 1 . Devoted directly the active conduct of its during the tax year, is broadly representa- economic, and similar problems. exempt activity, to o a functionally related business, or to a combination of the two, five of the general public and consists of 3. Providing technical advice or assistance individuals no more than 25% of whom are (where the advice would otherwise consti- 2. Stock of a corporation that is controlled by disqualified individuals, and tute the influencing of legislation) to a gov- the foundation (by ownership of at least ernmental body or to a committee or other 80% of the total voting power of all classes 4. Does not have any officer, is any time dur- subdivision thereof in response to a written of stock entitled to vote and at least 80% of ing the tax year, who is a disqualified indi- the total shares of all other classes of vidual. request by that body or subdivision. stock) and substantially all (at least 85%) The foundation must obtain a ruling letter from 4. Appearing before, or communicating with, the assets of which are devoted as pro- the IRS recognizing this special status. any legislative body about a possible deci- vided above, or sion of that body that might affect the exis- New organization. If you are applying for rec- tence of the organization, its powers and 3. Any combination of (1 ) and (2). duties, its tax-exempt status, or the deduc- ognilion of exemption as an organization de- This test is intended to apply to organizations scribed in section 501 (c)(3) and you wish to tion of contributions to the organization. such as museums and libraries. establish that your organization is a private op- 5. Communicating with a government official Support test. A private foundation will meet erating foundation, you should complete Sched- or employee, other than: the support test if. ule E of your exemption application (Form 1023). a. A communication with a member or em- 1 . Substantially all (at least 85%) of its sup- ployee of a legislative body (when the port (other than gross investment income) communication would otherwise consti- is normally received from the general pub- tute the influencing of legislation), or tic and five or more unrelated exempt orga- Lobbying Expenditures b. A communication with the principal pur- nizalions, pose of influencing legislation. 2. Not more than 25% of its support (other In general, if a substantial part of the activities of than gross investment income) is normally your organization consists of carrying on propa- Also excluded are communications between an received from any one exempt organiza- Banda or otherwise attempting to influence organization and its bona fide members about lion, and legislation, your organization's exemption from legislation or proposed legislation of direct in- federal income tax will be denied. However, a terest to the organization and the members, 1 Not more than 50% of its support is nor- public charity (otherthan a church, an integrated unless these communications directly en- mally received from gross investment in- auxiliary of a church or of a convention or asso- courage the members to attempt to influence come. ciation of churches, or a member of an affiliated legislation or directly encourage the members This test is intended to apply to special-purpose group of organizations that includes a church, to urge nonmembers to attempt to influence foundations, such as learned societies and as- etc.) may avoid this result. Such a charity can legislation, as explained earlier. sociations of libraries, elect to replace the substantial part of activities test with a limit defined in terms of expenditures Lobbying expenditures limits. If a public Endowment test. A foundation will meet for influencing legislation. Private foundations charitable organization makes the election to be the endowment test if it normally makes qualify- cannot make this election. subject to the lobbying expenditures limits rules ing distributions directly for the active conduct of (instead of the substantial part of activities test), its exempt function of at least two-thirds of its Making the election. Use Form 5768, Bed- it will not lose its tax-exempt status under sec- minimum investment return. tion/Revocation of Election By an Eligible Sec- tion 501 (c)(3), unless it normally makes: The minimum investment return for any tion 501 (c) (3) Organization To Make private foundation for any tax year is 5% of the Expenditures To Influence Legislation, to make Lobbying expenditures that are more excess of the total fair market value of all assets the election. The form must be signed and post- than 150% of the lobbying nontaxable of the foundation (other than those used directly marked within the first tax year to which it ap- amount for the organization for each tax in the active conduct of its exempt purpose) over plies. If the form is used to revoke the election, it year, or Chapter 3 Section 501(c)(3) Organizations Page 45 • Normally makes grass roots expendi. begin before the organization revokes this elec- roots nontaxable amount for the organiza- tures that are more than 150% of the lion. tion for that tax year. grass roots nontaxable amount for the Eligible organizations that have made the elec- organization for each tax year. Note. These elective provisions for lobbying lion to be subject to the limits v pen- lobbying ex See Tax on excess expenditures to influence activities by public charities do not apply to a ditures and that owe the tax on excess g ex in church, an integrated auxiliary of a church or ofa y g legislation, later, in this section. convention or association of churches, or a expenditures (as computed in Part VI — A of Lobbying expenditures. These are any member of an affiliated group of organizations Schedule A (Form 990)) must file Form 4720, expenditures that are made for the purpose of that includes a church, etc., or a private founda- Return of Certain Excise Taxes on Charities and attempting to influence legislation, as discussed tion. Moreover, these provisions will not apply to Other Persons Under Chapters 41 and 42 of the an or Internal Revenue Code, to report and pay the organization for which an election is not in earlier under Attempting to influence legislation, 9 effee ct. tax. Grass roots expenditures. This term re- Organization that no longer qualifies. An fers only to those lobbying expenditures that are Expenditures of affiliated organizations. If organization that no longer qualifies for exemp- made to influence legislation by attempting to two or more section 501 (c)(3) organizations are tion under section 501 (c)(3) because of sub- affect the opinions of the general public or any members of an affiliated group of organizations stantial lobbying activities will not at any time segment thereof. and at least one of these organizations has thereafter be treated as an organization de- Lobbying nontaxable amount The lobby- made the election regarding the treatment of scribed in section 501 (c)(4). This provision, ing nontaxable amount for any organization for certain lobbying expenditures, then the determi- however, does not applyto certain organizations any tax year is the lesser of $1 ,000,000 or: nation as to whether excess lobbying expendi- (churches, etc.) that cannot make the election tures have been made and the determination as discussed earlier. 1 . 20°/ of the exempt purpose expendi- to whether the expenditure limits, described ear- tures if the exempt purpose expenditures Iler, have been exceeded by more than 150% Tax on disqualifying lobbying expenditures. are not over $500,000, will be made as though the affiliated group is one The law imposes a tax on certain organizations if organization. they no longer qualify under section 501(c)(3) by 2. $100,000 plus 15% of the excess of the If the group has excess lobbying expendi- reason of having made disqualifying lobbying exempt purpose expenditures over expenditures. An additional tax may be imposed $500,000 if the exempt purpose expendi- lures, each organization for which the election is on the managers of those organizations. tures are over $500,000 but not over effective fortheyearwillbe treated asanorgani- $1 ,000,000, zation that has excess lobbying expenditures in Tax on organization. Organizations that an amount that equals the organization's pro- lose their exemption under section 501 (c)(3) 3. $175,000 plus 10% of the excess of the portionate share of the group's excess lobbying due to lobbying activities generally will be sub- exempt purpose expenditures over expenditures. Further, if the expenditure limits, ject to an excise tax of 5% of the lobbying expen- $1 ,000,000 if the exempt purpose expendi- described in this section, are exceeded by more ditures. The tax does not apply to private tures are over $1 ,000,000 but not over than 150%, each organization for which the foundations. Also, the tax does not apply to $1 ,500,000, or election is effective for that year will lose its organizations that have elected the lobbying lim- tax-exempt status under section 501 (c)(3). its of section 501 (h) or to churches or church-re- 4. $225,000 plus 5% of the excess of the Two organizations will be considered mem- fated organizations that cannot elect these exempt purpose expenditures over bets of an affiliated group of organizations if: limits. This tax must be paid by the organization. $1 ,500,000 if the exempt purpose expendi- tures are over $1 ,500,000. 1 . The governing instrument of one of the or- Tax on managers. Managers may also be anizations requires it to be bound b liable for a 5% tax on the lobbying expenditures The term exempt purpose expenditures g q y deci- that result in the disqualification of the organiza- means the total of the amounts paid or incurred sions of the other organization on tion. For the tax to apply, a manager would have (including depreciation and amortization, but not legislative issues, or to agree to the expenditures knowing that the capital expenditures) by an organization for the 2. The governing board of one of the organi- expenditures were likely to result in the tax year to accomplish its exempt purposes. In zations includes persons who: organization's not being described in section addition, it includes: 501 (c)(3). No tax will be imposed if the a. Are specifically designated representa- manager's agreement is not willful and is due to 1 . Administrative expenses paid or incurred lives of the other organization or are reasonable cause. for the organization's exempt purposes, members of the governing board, of- and ficers, or paid executive staff members Excise taxes on political expenditures. The 2. Amounts aid or incurred for the purpose of the other organization, and law imposes an excise tax on the political expen- ditures of section 501(c)(3) organizations. A of influencing legislation, whether or not b. Have enough voting power to cause or two-tiertax is imposed on both the organizations the legislation promotes the organization's prevent action on legislative issues by and the managers of those organizations. exempt purposes. the controlled organization by combin- ingtheirvotes. Taxes on organizations. An initial tax of Exempt purpose expenditures do not include 10% of certain political expenditures is imposed amounts paid or incurred to or for: on a charitable organization. A second tax of 1 . A separate fund-raising unit of the organi- Tax on excess expenditures to influence 100% of the expenditure is imposed if the politi- zation, or legislation. If an election for a tax year is in cal expenditure that resulted in the imposition of effect for an organization and that organization the initial (first-tier) tax is not corrected within a 2. One or more other organizations, H the exceeds the lobbying expenditures limits, an specified period. These taxes must be paid by amounts are paid or incurred primarily for excise tax of 25% of the excess lobbying expen- the organization. fund-raising. - ditures for the tax year will be imposed. Excess Taxes on managers. An initial tax of 21h% lobbying expenditures for a tax year, in this of the amount of certain political expenditures Grass roots nontaxable amount. The case, means the greater of: (up to $5,000 for each expenditure) is imposed grass roots nontaxable amount for any organ- on a manager of an organization who agrees to zation for any tax year is 25% of the lobbying 1 . The amount by which the lobbying expen- ditures made b the organization during such expenditures knowing that they are politi- tax ye able amount for the organization for that y g cal expenditures. No tax will be imposed if the tax year. the tax year are more than the lobbying manager's agreement was not willful and was nontaxable amount for the organization for due to reasonable cause. A second tax of 50% Years for which election is effective. Once that tax year, or of the expenditures (up to $10,000 for each an organization elects to come under these pro 2. The amount by which the grass roots ex- expenditure) is imposed on a manager if he or visions, the election will be in effect for all tax penditures made by the organization dur- she refuses to agree to a correction of the ex- years that end after the date of the election and ing the tax year are more than the grass penditures that resulted in the imposition of the Page 46 Chapter 3 Section 501 (c)(3) Organizations initial (first-tier) tax. For purposes of these taxes, Social activity. If social activities will be the 4.an organization manager is generally an officer, 50 'I (CI ( ) — primary purpose of your organization, you director, trustee, or any employee having au- thority or responsibility concerning the Civic Leagues and social welfare organization but should file for organization's political expenditures. These exemption as a social club described in section taxes must be paid bythe managerof the organ- Social Welfare 501(c)(7). ization. Organizations Retirement benefit program. An organiza- g lion established by its members that has as its Political expenditures. Generally, political primary activity providing supplemental retire- expenditures that will trigger these taxes are If your organization is not organized for profit ment benefits to its members or death benefits amounts paid or incurred by a section 501 (,)(3) and will be operated only to promote social wel- to their beneficiaries does not qualify as an ex- organization in any participation or intervention fare, you should file Form 1024 to apply for empt social welfare organization. It may qualify recognition of exemption from federal income under another paragraph of section 501(c) de- diany political campaign for or against any can- tax under section 501(c)(4). The discussion that g ra p ( ) didate for public office. Political expenditures pending on all the facts. follows describes the information you must pro- However, a nonprofit association that is es- include publication or distribution of statements vide when applying. For application procedures, for these purposes. Political expenditures also see chapter 1 . government maintained, and funded by a local include certain expenditures by organizations To qualify for exemption under section fits to a class provide the only retirement bas a 9 Y P its to a class of employees may qualify as a that are formed primarily to promote the candi- 501 (,)(4), the organization's net earnings must social welfare organization under section dacy (or prospective candidacy) of an individual be devoted only to charitable, educational, or 501 (c)(4). for public office and by organizations that are recreational purposes. In addition, no part of the effectively controlled by a candidate and are organization's net earnings may benefit any pri- Tax treatment of donations. Donations to used primarily to promote that candidate. vate shareholder or individual. If the organiza- tion provides an excess benefit to certain donor's federal income tax return, but only if Correction of expenditure. A correction of persons, an excise tax may be imposed. See made for exclusively public purposes. Contribu- a political expenditure is the recovery, if possi- Excise tax on excess benefit transactions under bons to civic leagues or other section 501(c)(4) ble, of all or part of the expenditure and the public Charities in chapter 3 for more informs- organizations generally are not deductible as establishment of safeguards to prevent future tion about this tax. charitable contributions for federal income tax political expenditures. purposes. They may be deductible as trade or Examples. Types of organizations that are business expenses, if ordinary and necessary in considered to be social welfare organizations the conduct of the taxpayer's business. How- Status after loss of exemption for lobbying are civic associations and volunteer fire comps- ever, see Deduction not allowed for dues used or political activities. As explained earlier, an vies. for political or legislative activities under organization can lose its tax-exempt status 501(c)(6) — Business Leagues, Etc. for more under section 501 (c)(3) of the Code because of Nonprofit operation. You must submit evi- information. lobbying activities or participation or intervention dence that your organization is organized and in a political campaign on behalf of or in appear.- will be operated on a nonprofit basis. However, Specific Organizations tion to a candidate for public office. If this hap- such evidence, including the fad that your or- ganization is organized under a state law relat- The following information should be contained in pens to an organization, it cannot laterqualify for ing to nonprofit corporations, will not in itself the application form and accompanying state- exemption under section 501 (c)(4) of the Code. establish a social welfare purpose. ments of certain types of civic leagues or social welfare organizations. Social welfare. To establish that your orgam. Volunteer fire companies. If your organiza- zation is organized exclusively to promote social tion wishes to obtain exemption as a volunteer mammemmmmmmum welfare, you should submit evidence with your fire company or similar organization, you should application showing that your organization will submit evidence that its members are actively 4q operate primarily to further (in some way) the engaged in fire fighting and similar disaster as- . common good and general welfare of the people sistance, whether it actually owns the fire fight- of the community (such as by bringing about civic betterment and social improvements). as equipment, ancef r its and whether it provides any assistance for its members, such as death and Section organization that restricts the use of its medical benefits in case of injury to them. Otheraff ect ton facilities to employees of selected corporations If your organization does not have an inde- and their guests is primarily benefiting a private pendent social purpose, such as providing rec- group rather than the community. It therefore reational facilities for members, it may be 501 (c ) does not qualify as a section 501 (c)(4) organiza- exempt under section 501(c)(3). In this event, tion. Similarly, an organization formed to repre- your organization should f le Form 1023, sent member-tenants of an apartment complex Organizations does not qualify, since its activities benefit the Homeowners' associations, A membership member-tenants and not all tenants in the com- organization formed by a real estate developer munity. However, an organization formed to pro- to own and maintain common green areas, mote the legal rights of all tenants in a particular streets, and sidewalks and to enforce covenants Introduction community may qualify under section 501 (c)(4) to preserve the appearance of the development This chapter contains specific information for as a social welfare organization. should show that it is operated for the benefit of all the residents of the community. The term certain organizations described in section Political activity. Promoting social welfare community generally refers to a geographical 501(c), other than those organizations that are does not include direct or indirect participation or unit recognizable as a governmental subdivi- described in section 501 (c)(3). Section intervention in political campaigns on behalf of sion, unit, or district thereof. Whether a particu- 501 (c)(3) organizations are covered in chapter 3 or in opposition to any candidate for public of- lar association meets the requirement of of this publication. fice. However, if you submit proof that your or- benefiting a community depends on the fads The Table of Contents at the beginning of ganization is organized exclusively to promote and circumstances of each case. Even if an area social welfare, it may still obtain exemption even represented by an association is not a commu- this publication,as well as the Organization Ref- if it participates legally in some political activity nity, the association can still qualify for exemp- erence Chart, may help you locate at a glance on behalf of or in opposition to candidates for tion if its activities benefit a community. the type of organization discussed in this chap- public office. See the discussion in chapter 2 The association should submit evidence that ter. under Political Organization Income Tax Retum, areas such as roadways and park land that it Chapter 4 Other Section 501(c) Organizations Page 47 owns and maintains are open to the general essary in the conduct of the taxpayer's trade or of marketing or other business conditions in one public and notjust its own members. It also must business. For more information about certain or more lines of business, rather than the im- show that it does not engage in exterior mainte- limits affecting the deductibility of these busi- provement of production techniques or the bet- nance of private homes. ness expenses, see Deduction not allowed for ferment of the conditions of persons engaged in A homeowners' association that is not ex- dues used for political or legislative activities agriculture, the organization must qualify for ex- empt under section 501 (x)(4) and that is a con- under 501(x)(6) — Business Leagues, Etc. emotion as a business league, board of trade, or dominium management association, a other organization, as discussed next in the sec- residential real estate management association, Labor Organizations tion on 501(x)(6) organizations. or a timeshare association generally may elect The primary purpose of exempt agricultural under the provisions of section 528 to receive A labor organization is an association of workers and horticultural organizations must be to better certain tax benefits that, in effect, permit it to who have combined to protect and promote the the conditions of those engaged in agriculture or exclude its exempt function income from its interests of the members by bargaining collec- horticulture, develop more efficiency in agricul- gross income. tively with their employers to secure better work- ture or horticulture, or improve the products. ing conditions. The following list contains some examples Other organizations. Other nonprofit organi- To show that your organization has the pur- of activities that show an agricultural or horticul- zations that qualify as social welfare organiza- pose of a labor organization, you should include tural purpose. tions include: in the articles of organization or accompanying • An organization operating an airport that statements (submitted with your exemption ap- 1 . Promoting various cooperative agricultural, is on land owned by a local government, plication) information establishing that the or- horticultural, and civic activities among ru- which supervises the airport's operation, ganization is organized to better the conditions rat residents by a state and county farm and that serves the general public in an of workers, improve the grade of their products, and home bureau. area with no other airport, and develop a higher degree of efficiency in their respective occupations. In addition, no net earn- 2. Exhibiting livestock, farm products, and • A community association that works to Ings of the organization may benefit any mem- other characteristic features of agriculture improve public services, housing and resi- ber. and horticulture. dential parking, publishes a free commu- nity newspaper, sponsors a community Composition of membership. While a labor 3. Testing soil for members and nonmembers sports league, holiday programs and organization generally is composed of employ- of the farm bureau on a cost basis, the meetings, and contracts with a private se- ees or representatives of the employees (in the results of the tests and other community service to patrol the community, form of collective bargaining agents) and similar members being furnished to the community members to educate them in soil treat- • A community association devoted to employee groups , evidence that an ment. preserving the community's traditions, ar- organization's membership consists mainly of chitecture, and appearance by represent- workers does not in itself indicate an exempt 4. Guarding the purity of a specific breed of ing it before the local legislature and purpose. You must show in your application that livestock. administrative agencies in zoning, traffic, your organization has the purposes described in 5. Encouraging improvements in the produc- and parking matters, the preceding paragraph. These purposes may tion of fish on privately-owned fish farms. be accomplished by a single labor organization • An organization that tries to encourage in- acting alone or by several organizations acting 6. Negotiating with processors for the price to dustrial development and relieve unem- together through a separate organization. be paid to members for their crops-. ployment in an area by making loans to businesses so they will relocate to the Benefits to members. The payment by a la- area, and bor organization of death, sick, accident, and C • An organization that holds an annual festi- similar benefits to its individual members with 501 val of regional customs and traditions. funds contributed by its members, if made under a plan to better the conditions of the members, U2S BUSIneSS Lea Etc. does not preclude exemption as a labor organi- Leagues , zation. However, an organization does not qual- ify for exemption as a labor organization if It has If your association wants to apply for recognition 501 (c) (5) no authority to represent members in job-related of exemption from federal income lax as a non- matters, even if it provides weekly income to its profit business league, chamber of commerce, Labor, Agricultural , members in the event of a lawful strike by the real estate board, board oftrade, orprofessional members' union, in return for an annual pay- football league (whether or not administering a and Horticultural ment by the member. pension fund for football players), it should file Form 1024. For a discussion ofthe procedure to Organizations Agricultural and follow, see chapter 1 . Horticultural Organizations Your organization must indicate in its appli- cation form and attached statements that no part wants to obtain recognition of exemption from of its net earnings will benefit any private share- federal income tax as a labor, agricultural, or Agricultural and horticultural organizations are holder or individual and that it is not organized horticultural organization, you should submit an connected with raising livestock, forestry, culti- g y vating land, raising and harvesting crops or for profit or organized to engage in an activity application ti Form xem You must indicate in ordinarily earned on for profit (even if the busi- your application for exemption and accompany- aquatic resources, cultivating useful or orna- ness is operated on a cooperative basis or pro- in statements that our e organization will not mental plants, and similar pursuits. g your For the purpose of these provisions, aquatic duxes only sufficient income to be have any net earnings benefiting any member. In addition, you should follow the procedure for resources include only animal or vegetable life, self-sustaining). obtaining recognition of exempt status de- but not mineral resources. The term harvesting, In addition, your organization must be prima- scribed in chapter 1 . Submit any additional infor- in this case, includes fishing and related pur- My engaged in activities or functions that are the mation that may be required, as described in this suits. basis for its exemption. It must be primarily sup- section. Agricultural may be quasi-pub- ported by membership dues and other income section. from activities substantial) related to its exempt tic in character and are often designed to en- Y P Tax treatment of donations. Contributions to courage the development of better agricultural . purpose. labor, agricultural., and horticultural organiza- and horticultural products through a system of A business league, in general, is an associa- tions are not deductible as charitable contribu- awards, using income from entry fees, gate re- tion of persons having some common business tions on the donor's federal income tax return. ceipts, and donations to meet the necessary interest, the purpose of which is to promote that However, such payments may be deductible as expenses of upkeep and operation. When the common interest and not to engage in a regular business expenses if they are ordinary and nec- activities are directed toward the improvement business of a kind ordinarily carried on for profit. Page 48 Chapter Other Section 501 (x) Organizations Trade associations and professional associa- Improvement of business conditions dying if itcontacts prospective members orcalls tions are considered business leagues. Generally, this must be shown to be the purpose upon its own members to contact their employ- of the organization. This is not established by ees and customers for the purpose of urging Chamber of commerce. A chamber of com- evidence of particular services that provide a such persons to communicate with their elected merce usually is composed of the merchants convenience or economy to individual members state or Congressional representatives to sup- and traders of a city. in their businesses, such as advertising that port the promotion, defeat, or repeal of legisla- carries the name of members, interest-free tion that is of direct interest to the organization. Board of trade. A board of trade often con- loans, assigning exclusive franchise areas, op- Any dues or assessments directly related to sists of persons engaged in similar lines of busi- oration of a real estate multiple listing system, or such activities are not deductible by the Lax- ness. For example, a nonprofit organization operation of a credit reporting agency. payer, since the individuals being contacted, formedto regulate the sale ofa specified agricul- who are not members of the organization, are a tural commodity to assure equal treatment of Stock or commodity exchange. A stock or segment of the general public. producers, warehouse workers, and buyers is a commodity exchange is not a business league, board of trade. chamber of commerce, real estate board, or Tax treatment of donations. Contributions to Chambers of commerce and boards of trade board of trade and is not exempt under section organizations described in this section are not usually promote the common economic inter- 501 (c)(6). deductible as charitable contributions on the ests of all the commercial enterprises in a given Leislative activit An or donor's federal income tax return. They may be trade community. gy. ganization that is deductible astrade orbusiness expenses if ordi- exempt under section 501(c)(6) may work for nary and necessary in the conduct of the Real estate board. A real estate board con- the enactment of laws to advance the common taxpayer's business. sists of members interested in improving the business interests of the organization's mem- business conditions in the real estate field. It is bers. not organized for profit and no part of the net Deduction not allowed for dues used for po- 5U .1 1 �C) �7� earnings benefits any private shareholder or in- litical or legislative activities. A taxpayer dividual. cannot deduct the part of dues or other pay- ,.1 ments to a business league, trade association, Social and General purpose. You must indicate in the labor union, or similar organization that is for any material submitted with your application that of the following activities. Recreation Clubs your organization will be devoted to the improve- mentof business conditions of oneor more lines 1 . Influencing legislation. If yourclub is organized for pleasure, recreation, of business as distinguished from the perform- and other similar nonproftable purposes and ance of particular services for individual per- 2. Participating or intervening in a political substantially all of its activities are for these sons. It must be shown that the conditions of a campaign for, or against, any candidate for purposes, it should file Form 1024 to apply for particulartrade orthe interests of the community public office. recognition of exemption from federal income Will be advanced. Merely indicating the name of 3. Trying to influence the general public, or tax, the organization or the object of the local statute part of the general public, with respect to In applying for recognition of exemption, you under which it is created is not enough to elections, legislative matters, or referen- should submit the information described in this demonstrate the required general purpose. dums (also known as grassroots lobby- section. Also see chapter 1 forthe procedures to follow. Line or business. This tern generally re- ing). Typical organizations that should file for rec- fers either to an entire industry or to all compo- 4. Communicating directly with certain execu- ognition of exemption as social clubs include: rents of an industry within a geographic area. It five branch officials to try to influence their does not include a group composed of busi- official actions or positions. • College alumni associations that are not nesses that market a particular brand within an described in chapter 3 under Alumni asso- industry. See Dues Used for Lobbying s Political r 2for ciation, ties under Required Disclosures in chapter 2 for • College fraternities or sororities operating more information. Common business interest. A common chapter houses for students, business interest of all members of the organi- Exception for local legislation. Members zation must be established by the application may deduct dues (or assessments) to an organi- • Country clubs, documents, zation that are for expenses of: a Amateur hunting, fishing, tennis, swim- Examples. Activities that would tend to il- 1 Appearing before, submitting statements ming, and other sport clubs, lustrate a common business interest are: to, or sending communications to mem- • Dinner clubs that provide a meeting place, 1 . Promotion of higher business standards bers of a local council or similar governing library, and dining room for members, and better business methods and encour- body with respect to legislation or pro- e Hobby clubs, reettail ail merchants association, posed legislation of direct interest to the a r a of uniformity and cooperation by member, or a Garden clubs, and 2. Education of the public in the use of credit, 2. Communicating information between the • Variety clubs. member and the organization with respect 3. Establishment of uniform casualty rates to local legislation or proposed legislation Discrimination prohibited. Your organiza- and compilation of statistical information by of direct interest to the organization or the tion will not be recognized as tax exempt if its an insurance rating bureau operated by member. casualty insurance companies, charter, bylaws, or other governing instrument, Legislation or proposed legislation is of direct or any written policy statement provides for dis- 4. Establishment and maintenance of the in- interest to a taxpayer if it will, or may reasonably crimination against any person on the basis of tegrity of a local commercial market, be expected to, affect the taxpayer's trade or race, color, or religion. 5. Operation of a trade publication primarily business. However, a club that in good faith limits its -. intended to benefit an entire industry, and De mimmis exception. In-house expendi- membership to the members of a particular re- 6. of $2,000 or less for the year for activities ligion tofurtherthe teachings or principles ofthat Encouragement of the use of goods and (1 ) — (4) listed earlier will not prevent a deduc- religion and notto exclude individuals of a parl services of an entire industry (such as a tion for dues, if the dues meet all other tests to ular race or color will not be considered as dis- lawyer referral service whose main pur- criminating on the basis of religion. Also, the pose is to introduce individuals to the use be deductible as a business expense. restriction on religious discrimination does not of the legal profession in the hope that Grassroots lobbying. A tax-exempt trade apply to a club that is an auxiliary of a fraternal they will enter into lawyer-client relation- association, labor union, or similar organization beneficiary society (discussed later) if that soci- ships on a paying basis as a result). is considered to be engaging in grassroots lob- ety is described in section 501 (c)(8) and exempt Chapter4 Other Section 501(c) Organizations Page 49 from tax under section 501 (a) and limits its and assessments. However, if otherwise enti- membership to the members of a particular re- tled to exemption, your club will not be disquali- 501 (c) (8) and 501 (c)(10) ligion. fed because it raises revenue from members Private benefit prohibited. No part of the through the use of clubfacilities orin connection Fraternal organization's net earnings may benefit any per- with club activities. son having a personal and private interest in the Business activities. If your club will engage Beneficiary Societies activities of the organization. For purposes of in business, such as selling real estate, timber, and Domestic Fraternal this requirement, it is not necessary that net or other products or services, it generally will be earnings be actually distributed. Even undistrib- denied exemption. However, evidence submit- Societies uted earnings can benefit members. Examples ted with your application form that your organi- of this include a decrease in membership dues zation will provide meals, refreshments, or This section describes the information to be pro- or an increase in the services the club provides services related to its exempt purposes only to vided upon application for recognition of exemp- to its members without a corresponding in- its own members or their dependents or guests tion by two types of fraternal societies: crease in dues or other fees paid for club sup- will not cause denial of exemption. beneficiary and domestic. The major distinction port. However, fixed-fee payments to members Facilities open to public. Evidence that is that fraternal beneficiary societies provide for who bring new members into the club are not an your club's facilities will be open to the general the payment of life, sick, accident, or other bene- inurement of the club's net earnings, if the pay- public (persons other than members or their fits to their members or their dependents, while ments are reasonable compensation for per- dependents or guests) may cause denial of ex- domestic fraternal societies do not provide these formance of a necessary administrative service. emption. This does not mean, however, that any benefits but rather devote their earnings to fra- Purposes. To show that your organization dealing with outsiders will automatically deprive ternal, religious, charitable, etc., purposes. The possesses the characteristics of a club within a club of exemption. procedures to follow in applying for recognition the meaning of the exemption law, you should of exemption are described in chapter 1 . submit evidence with your application that per- Gross receipts from nonmembership If your organization is controlled by a central sources, A section SD1 ( its g organization organization, you should check with your con- may receive commingling, and fellowship exist may receive up to 35% of its gross receipts, among members. You must show that members trolling organization to determine whether your are bound together by a common objective of including investment income, from sources unit has been included f , group exemption outside its membership without losing its letter or may apply added. dso your organization pleasure, recreation, and other nonprofitable tax-exempt status. Of the 35%, up to 15% of the purposes. gross receipts may be derived from the use of need not apply for individual recognition of ex- Fellowship need not be present between the club's facilities or services by the general emption. For more information see Group Ex- each member and every other member of a club emption Letter in chapter 1 of this publication. if it is a material part in the life of the organiza- public re from other activities not furthering so- cial or recreational purposes for members. If an Tax treatment of donations. Donations by an tion. A statewide or nationwide organization that organization has outside income that is more individual to a domestic fraternal beneficiary so is made up of individual members, but is divided than these limits, all the facts and circumstances into local groups, satisfies this requirement if ciety or a domestic fraternal society operating will be taken into account in determining under the lodge system are deductible as chari- fellowship is a material part of the life of each whether the organization qualifies for exempt table contributions only if used exclusively for local group. status. The term other nonprofitable purposes religious, charitable, scientific, literary, or educa- means other purposes similar to pleasure and Grossreceipts. Gross receipts, for this pur- tional purposes or for the prevention of cruelty to recreation. For example, a club that, in addition pose, are receipts from the normal and usual children or animals. to its social activities, has a plan forthe payment (traditionally conducted) activities of the club. of sick and death benefits is not operating exclu- These receipts include charges, admissions, Fraternal Beneficiary sively for pleasure, recreation, and other non- membership fees, dues, assessments, invest- societies (5O1 (c)(8)) profitable purposes. ment income, and normal recurring capital gains on investments. Receipts do not include initia- A fraternal beneficiary society, order, or associa- Limited membership. The membership in tion fees and capital contributions. Unusual tion should file an application for recognition of a social club must be limited. To show that your amounts of income, such as from the sale of a exemption from federal income tax on Form organization has a purpose that would charac- clubhouse or similar facility, are not included in 1024. The application and accompanying state- terize it as a club, you should submit evidence gross receipts or in figuring the percentage lim- ments should establish that the organization: with your application that there are limits on its, admission to membership consistent with the 1 . Is a fraternal organization, character of the club. Fraternity foundations. if your organization A social club that issues corporate mem- is a foundation formed forthe exclusive purpose 2. Operates under the lodge system or for the bership is dealing with the general public in the of acquiring and leasing a chapter house to a exclusive benefit of the members of a fra- form of the corporation's employees. Corporate local fraternity chapter or sorority chapter main- ternal organization itself operating under members of a club are not the kind of members tained at an educational institution and does not the lodge system, and contemplated by the law. Gross receipts from engage in any social activities, it may be a title 3. Provides for the payment of life, sick, acci- these members would be a factor in determining holding corporation (discussed, later, under sec- dent, or other benefits to the members of whether the club qualifies as a social club. See tion 501(c)(2) organizations and under section the society, order, or association or their Gross receipts from nonmembership sources, 501(c)(25) organizations) rather than a social dependents. later. Bona fide individual memberships paid for club. by a corporation would not have an effect on the Tax treatment of donations. Donations to Lodge system. Operating under the lodge gross receipts source. exempt social and recreation clubs are not de- system means carrying on activities under a The fact that a social club may have an ductible as charitable contributions on the form of organization that comprises local associate (nonvoting) class of membership donor's federal income tax return. will not be, in and of itself, a cause for nonrecog- nition of exemption. However, if one member- and largely self-governing, called lodges, chap- ship class pays substantially lower dues and ters, or the like. fees than another membership class, although Payment of benefits. It is not essential that both classes enjoy the same rights and privi- leges in using the club facilities, there maybe an gram of sick, accident, or death benefits. An inurement of income to the benefited class, re- organization can qualify for exemption if most of sulting in a denial of the club's exemption. its members are eligible for benefits, and the Support. In general, your club should be benefits are paid from contributions or dues paid supported solely by membership fees, dues, by those members. Page 50 Chapter 4 Other Section 501(c) Organizations The benefits must be limited to members and for payment of supplemental unemploy- organizations in chapter 3 under Application for their dependents. If members will have the abil- ment benefits. Recognition of Exemption. ity to confer benefits to other than themselves Both the application form to file and the infor- Membership. Membership of a section and their dependents, exemption will not be rec- motion to provide are discussed later under the 501 (c)(9) organization must consist of individu- ognized. section that describes your employee associa- als who are employees and have an Whole-life insurance. Whole-life insurance tion. Chapter 1 describes the procedures to fol- employment-related common bond. This com- constitules a life benefit under section 501 (c)(8) low in applying for exemption, mon bond may be a common employer (or affili- even though the policy may contain investment Tax treatment of donations. Donations to ated employers), coverage under one or more features such as a cash surrender value or a these organizations are not deductible as chari- collective bargaining agreements, membership policy loan. table contributions on the donors federal in- in a labor union, or membership in one or more locals of a national or international labor union. Reinsurance pool. Payments by a fraternal come tax return. The membership of an association may in- beneficiary society into a state-sponsored rein- clude some individuals who are not employees, surance pool that protects participating insurers Local Employees' provided they have an employment-related against excessive losses on major medical Associations (501 (c) (4)) bond with the employee-members. For exam- health and accident insurance will not preclude ple, the owner of a business whose employees exemption as a fraternal beneficiary society. A local employees' association may apply for are members of the association may be a mem- recognition of exemption by fling Form 1024. ber. An association will be considered com- Domestic Fraternal Societies The organization must submit evidence that: posed of employees if 90% of its total (501 (c)(1 0)) 1 . It is of a purely local character, membership on one day of each quarter of its tax year consists of employees. A domestic fraternal society, order, or associa- 2. Its membership is limited to employees of Employees. Employees include individuals tion may file an application for recognition of a designated person or persons in a panic- who became entitled to membership because exemption from federal income tax on Form ular locality, and they are or were employees. For example, an 1024. The application and accompanying state- 3. Its net earnings will be devoted exclusively individual will qualify as an employee even ments should establish that the organization: to charitable, educational, or recreational though the individual is on a leave of absence or 1 . Is a domestic fraternal organization, Purposes. has been terminated due to retirement, disabil- A local association of employees that has ity, or layoff. 2. Operates under the lodge system, established a system of paying retirement or Generally, membership is voluntary if an 3. Devotes its net earnings exclusively to re- death benefits, or both, to its members will not affirmative act is required on the panel an em- 3. Devotes scientific, literary, edu- qualifyfor exemption since the payment of these bershitobecomeamember Conversely, as cational, and fraternal purposes, and benefits is not considered as being for charita- be member is involuntary if the designation as n ble, educational, or recreational purposes. Simi- member o due to employee status. However, an 4. Does not provide for the payment of life, association will be considered voluntary if em- larly, alocal association of employees that is Io ees are required to be members of the or- sick, accident, or other benefits to its mem- P Y tiers. operated primarily as a cooperative buying saw- ganization as a condition of their employment ice for its members in order to obtain discount and they do not incur a detriment (such as a The organization may arrange with insur- prices on merchandise, services, and activities payroll deduction) as a result of their member- ance companies to provide optional insurance to does not qualify for exemption. ship. An employer has not imposed involuntary its members without jeopardizing its exempt sta- membership on the employee if membership is tus. Voluntary Employees required as the result of a collective bargaining Beneficiary Associations agreement or as an incident of membership in a (501 (c)(9)) labor organization. 501 (c) (4) , 501 (c) (9) , and An application for recognition of exemption as a Payment of benefits. The information submit- voluntary employees' beneficiary association led with your application must show that your 5501 (c) ( 1 7) — must be filed on Form 1024. The material sub- organization will pay life, sick, accident, ene is- mitted with the application must show that your mental unemployment, ro other similar benefits- Employees The benefits may it provided directly by your organization: association or indirectly by your association Associations 1 . Is a voluntary association of employees, through the payments of premiums to an insur- ance company (or fees to a medical clinic). Ben- This section describes the information to be pro- 2. Will provide for payment of life, sick, acci- efts may be in the form of medical, clinical, or vided upon application for recognition of exemp- . dent, or other benefits to members or their hospital services, transportation furnished for lion by the following types of employees' dependents or designated beneficiaries medical care, or money payments. associations: and substantially all of its operations are for this purpose, and Nondiscrimination requirements, An organ- 1 . A local association of employees whose 3. Will not allow any of its earnings to benefit unless that is part of a plan will not ri exempt membership s limited to employees of a unless the plan meets certain nondiscrimination P � any private individual or shareholder ex- requirements. However, if the organization is designated person or persons in a particu- cept in the form of scheduled benefit pay- part of a plan that is a collective bargaining lar municipality, and whose income will be ments. agreement that was the subject of good faith devoted exclusively to charitable, educa- bargaining between employee organizations tional, or recreational purposes, Notice requirement. An organization will not and employers, the plan need not meet these 2. A voluntary employees' beneficiary as- be considered tax exempt under this section requirements for the organization to qualify as sociation (including federal employees' unless the organization gives notice to the IRS tax exempt, associations) organized to pay life, sick, that it is applying for recognition of exempt sta- A plan meets the nondiscrimination require- accident, and similar benefits to members tus. The organization gives notice by fling Form ments only if both of the following statements or their dependents, or designated benef- 1024. If the notice is not given by 15 months are true. ciaries, if no part of the net earnings of the after the end of the month in which the organiza- association benefits any private share- tion was created, the organization will not be 1 . Each class of benefits under the plan is holder or individual, and exempt for any period before notice is given. provided under a classification of employ- The ED area manager may grant an extension sea that is set forth in the plan and does 3. A supplemental unemployment benefit of time for filing the notice under the same pro- not discriminate in favor of employees who trustwhose primary purpose is providing cedures as those described for section 501 (c)(3) are highly compensated individuals. Chapter 4 Other Section 501(c) Organizations Page 51 2. The benefits provided under each class of man control, or members of an affiliated service for exemption in any tax year following the lax benefits do not discriminate in favor of group, are treated as employees of a single year in which the notice of denial was issued. It highly compensated individuals. employer. Leased employees are treated as must file the claim on Form 1024. The organiza- A life insurance, disability, severance pay, or employees of the recipient. lion must include a written declaration that it will not knowingly again engage in a prohibited supplemental unemployment compensation One employee. p trust created a provide transaction. An authorized principal officer of benefit does not discriminate in favor u highly benefits y one employee will not qualify ci a your organization must make this declaration compensated individuals merely because the voluntary employees' beneficiary associa- under the penalties of perjury. benefits available bear a uniform relationship to tion under section 501(c)(9). If your organization has satisfied all require- the total compensation, or the basic or regular rate of compensation, of employees covered by menu s supplemental unemployment benefit the plan. Supplemental trust described ibed in section 501 (c)(17), it will be For purposes of determining whether a plan Unemployment Benefit notified in writing that it has been recognized as Trusts (501 (c) (17)) exempt. However, the organization will be ex- meets the nondiscrimination requirements, the empt only for those tax years afterthe taxyearin employer may elect to exclude all disability or A trust or trusts forming part of a written plan which the claim for exemption (Form 1024) is severance payments payable to individuals who fled. Tax year in this case means the estab- are in pay status as of January 1 , 1985. This will (established and maintained by an employer, his Y not apply to any increase in such payment by or her employees, or both) providing solely for fished annual accounting period of the lishedan any plan amendment adopted after June 22, the payment of supplemental unemployment lion or, if the organization has not established an 1984 compensation benefits must file the application annual accounting period, the calendar year. for recognition of exemption on Form 1024. The For more information about the requirements for If a plan provides a benefit forwhich there is trust must be a valid, existing trust under local reestablishing an exemption previously denied, a nondiscrimination provision provided under law and must be evidenced by an executed contact the IRS. Chapter 1 of the Internal Revenue Code as a document. A conformed copy of the plan of condition of that benefit being excluded from which the trust is a part should be attached to gross income, these nondiscrimination require- the application. .1 ments do not apply. The benefit will be consid- 50 1 (c)( 1 2) ered nondiscriminatory only if it meets the Notice requirement. An organization will not nondiscrimination provision of the applicable be considered tax exempt under this section Local Benevolent Code section. For example, benefits provided unless the organization gives notice to the IRS under a medical reimbursement plan would that it is applying for recognition of exempt sta- Life Insurance meet the nondiscrimination requirements for an tus. The organization gives notice by filing Form association, ifthe benefits meet the nondiscrimi- 1024. If the notice is not given by 15 months Associations, nation requirements of Code section 105(h)(3) afterthe end ofthe month in whichthe organiza- and 105(h)(4). tion was created, the organization will not be Mutual Irrigation Excluded employees. Certain employees exempt for any period before such notice is who are not covered by a plan may be excluded given. The EO area manager may grant an ex- and Telephone e- tension of time Companies ,for filing the notice under the from consideration in applying these recur same procedures as those described for section p s and ments. These include employees: 501 (c)(3) organizations in chapter 3 underAppli- Like Organizations 1 . Who have not completed 3 years of saw- cation for Recognition of Exemption. n ice, Types of payments. You must show that the Each of the following organizations may apply 2. Who have not attained age 21 , supplemental unemployment compensation for recognition ofexemption fromfederal income benefits will be benefits paid to an employee tax by fling Form 1024. 3. Who are seasonal or less than half-time because of the employee's involuntary separa- employees, tion from employment (whether or not the sepa- 1. Benevolent life insurance associations 4. Who are not in the plan and who are in- ration is temporary) resulting directly from a of a purely local character and like organi- cluded in a unit of employees covered by a reduction-in-force, discontinuance of a plant or zations. collective bargaining agreement if the operation, or other similar conditions. In addi- 2. Mutual ditch or irrigation companies class of benefits involved was the subject tion, sickness and accident benefits (but not and like organizations. of good faith bargaining, or vacation, retirement, or death benefits) may be included in the plan if these are subordinate to 3. Mutual or cooperative telephone com- 5. Who are nonresident aliens and who re- the unemployment compensation benefits. panics and like organizations. ceive no earned income from the employer Alike organization is an organization that per- under has United States source income. Diversion of funds. It must be impossible g g P under the plan (at any time before the satisfac- forms a service comparable to that performed by Highly compensated individual. A highly tion of all liabilities with respect to employees any one of the above organizations. compensated individual is one who: under the plan) to use or to divert any of the The information to be provided upon applica- corpus or income of the trust to any purpose tion by each of these organizations is described 1 . Owned 5 percent or more of the employer other than the payment of supplemental unem- in this section. For information as to the proce- at any time during the current year or the ployment compensation benefits (or sickness or dures to follow in applying for exemption, see preceding year, accident benefits to the extent just explained). chapter 1. 2. Received more than $90,000 for 2002 (ad- Discrimination in benefits, Neitherthe terms General requirements. These organizations justed for inflation) in compensation from of the plan nor the actual payment of benefits must use their income solelyto cover losses and the employer for the preceding year, and may be discriminatory in favor of the company's expenses, with any excess being returned to 1 Was among the top 20% of employees by officers, stockholders, supervisors, or highly members or retained for future losses and ex- compensation for the preceding year. paid employees. However, a plan is not discrimi- penses. The must collect at least 85% of their natory merely because benefits bear a uniform income from members for the sole purpose of But the employer can choose not to have (3) relationship to compensation or the rate of com- meeting losses and expenses. apply. pensation. Mutual character. These organizations, Aggregation rules. The employer may Reestablishing exemption. If your organiza- other than benevolent life insurance associa- chooseto treat two ormoreplansas one planfor tion is a supplemental unemployment benefit dons, must be organized and operated on a purposes of meeting the nondiscrimination re- trust and has received a denial of exemption mutual or cooperative basis. They are associa- quirements. Employees of controlled groups of because it engaged in a prohibited transaction, tions of persons and organizations, or both, corporations, trades or businesses under com- as defined by section 503(b), it may file a claim banded together to provide themselves a mutu- Page 52 Chapter 4 Other Section 501 (c) Organizations ally desirable service approximately at cost and A mutual or cooperative telephone company Other tax-exempt income besides gifts is on a mutual basis. To maintain the mutual char- will exclude from the computation of the 85% considered as income received from other than acteristic of democratic ownership and control, requirement any income received or accrued members in applying the 85% test. they must be so organized and operated that from: If the 85% test is not met, your organization, their members have the right to choose the man- if classifiable under this section, will not qualify agement, to receive services substantially at 1 . A nonmember telephone company for the cost, to receive a return of any excess of pay- performance of communication services in- for exemption as any other type of organization ments over losses and expenses, and to share volving the completion of long distance described in this publication. in any assets upon dissolution. calls to, from, or between members of the The rights and interests of members in the mutual or cooperative telephone company, Tax treatment of donations. Donations to an annual savings of the organization must be de- 2. Qualified pole rentals, organization described in this section are not termined in proportion to their business with the deductible as charitable contributions on the organization. Upon dissolution, gains from the 3. The sale of display listings in a directory donor's federal income tax return. sale of appreciated assets must be distributed to furnished to its members, or all persons who were members during the pe- 4. The prepayment of a loan created in 1987, Local Life Insurance riod the assets were owned by the organization 1988, or 1989, under section 306A, 306B, Associations in proportion to the amount of business done or 311 of the Rural Electrification Act of during that period. The bylaws must not provide 1936. A benevolent life insurance association or an for forfeiture of a members rights and interest upon withdrawal or termination. A mutual or cooperative electric company organization seeking recognition of exemption will exclude from the computation any income on grounds of similarity to a benevolent life in- Membership. Membership of a mutual or- received or accrued from qualified pole rentals surance association must submit evidence upon ganization consists of those who join the organi- and from the prepayment of loans described in applying for recognition of exemption that it will zation to obtain its services, acquire an interest (4) above. An electric cooperative's sale of ex- be of a purely local character, that its excess in its assets, and have a voice in its manage- cess fuel at cost in the year of purchase is not funds will be refunded to members or retained in ment. In a stock company, the stockholders are income for purposes of determining compliance reasonable reserves to meet future losses and members. Membership may include distributors with the 85% requirement. expenses, and that it meets the 85% income who furnish service to individual consumers. The term qualified pole rental means any requirement. If an organization issues policies However, it does not include the individual con- rental of a pole (or other structure used to sup- for stipulated cash premiums, or if it requires sumers served by the distributor, A mutual serv- port wires) ifthe pole (orother structure) is used: advance deposits to cover the cost of the insur- ice organization may serve nonmembers as Ion as at least 85% of its gross income is more and maintains investments from which 9 9 1 . By the telephone or electric company to more than 15% of its income is derived, it will not collected from members. However, a mutual life support one or more wires that are used by be entitled to exemption. insurance organization may have no policyhold- the company in providing telephone or ers other than its members. electric services to its members, and To establish that your organization is of a purely local character, it should show that its Losses and expenses. In furnishing serv- 2. Pursuant to the rental to support one or activities will be confined to a particular commu- ices substantially at cost, an organization must more wires (in addition to wires described nity, place, ordistrict irrespective of political sub- use its income solely for paying losses and ex- in (1 )) for use in connection with the trans- divisions. If the activities of an organization are penses. Any excess income not retained in rea- mission by wire of electricity or of tele- limited only by the borders of a slate, it cannot sonable reserves for future losses and phone or other communications. expenses belongs to members in proportion to be purely local in character. A benevolent life their patronage or business done with the organ- The term rental, for this purpose, includes any insurance association that does not terminate ization. If such patronage refunds are retained in sale of the right to use the pole (or other stmc- membership when a member moves from the reasonable amounts for purposes of expanding ture). local area in which the association operates will facilities, retiring capital indebtedness, acquiring The 85% requirement is applied on the basis qualify for exemption if it meets the other re- other assets, etc., the organization must main- of an annual accounting period. Failure of an quirements. tain records sufficient to reflect the equity of organization to meet the requirement in a partic- A copy of each type of policy issued by your each member in the assets acquired with the ular year precludes exemption for that year, but organization should be included with the appli- funds. has no effect upon exemption for years in which cation for recognition of exemption. the 85% requirement is met. Dividends. Dividends paid to stockholders Gain from the sale or conversion of the on stock or the value of a capital equity interest organization's property is not considered an Organizations similarto local benevolent life constitute a distribution of profits and are amount received from members in determining insurance companies, These organizations not an expense within the term losses and whether the organization's income consists of include those that in addition to paying death expenses. Therefore, a mutual or cooperative amounts collected from members. benefits also provide for the payment of sick, association whose shares carry the right to divi- Because the 85% income test is based on accident, or health benefits. However, an organ- dends will not qualify for exemption. However, this prohibition does not apply to the distribution gross income, capital losses cannot be used to ization that pays only sick, accident, or health of the unexpended balance of collections or as- reduce capital gains for purposes of this test. benefits, but not life insurance benefits, is not an organization similar to a benevolent life insur- year to ms remaining at hand at the end of the Example. The books of an organization re- ance association and should not apply for recog- fund to members as patronage dividends or re- flect the following for the calendar year. funds prorated to each on the basis of their nition of exemption as described in this section. patronage or business done with the organiza- Collections from members . . . . . . . . $2,400 Burial and funeral benefit insurance lion. Such distribution represents a reduction in Short-term capital gains . . . . . . . . . 600 organization. This type of organization can the cost of services rendered to the member. Short-term capital losses . . . . . . . . . 400 apply for recognition of exemption as an organk The 85% requirement. All of the organiza- Other income . . . . . . . . . . . . . None zation similar to a benevolent life insurance tions discussed in this section must submit evi- Gross income ($2,400 + $600 =$3000) 100% company if it establishes that the benefits are Collected from members ($2,400) . . . BO% aid in cash and if it is not engaged directly the Bence with their application that they receive P Y 85% or more of their gross income from their Since amounts collected from members do manufacture of funeral supplies or the perform- members for the sole purpose of meeting losses not constitute at least 85% of gross income, the ance of funeral services. An organization that and expenses. Nevertheless, certain items of organization is not entitled to exemption from provides its benefits in the form of supplies and income are excluded from the computation of federal income tax for the year, service is not a life insurance company. Such an the 85% requirement if the organization is a Voluntary contributions in the nature of gifts organization may seek recognition of exemption mutual or cooperative telephone or electric com- are not taken into account for purposes of the from federal income tax, however, as a mutual pany. 85% computation. insurance company other than life. Chapter 4 Other Section 501 (c) Organizations Page 53 Mutual or Cooperative cemetery is permitted if the profits from these enterprise to maintain and administer funds, the Associations sales are used to maintain the cemetery as a income of which is devoted exclusively to the whole, perpetual care and maintenance of an aban- doned ditch or irrigation companies, mutual or cemetery as a whole, may qualify for How income maybe used. You should show exem tion. cooperative telephone companies, and like or- that your organization's earnings are or will be p ganizations need not establish that they are of a used only in one or more of the following ways. Care of individual plots. When funds are purely local character. They may serve noncon- received by a cemetery company for the perpet- liguous areas. 1 . To pay the ordinary and necessary ex- ual care of an individual lot or crypt, a trust is Like organization. This is a term generally penses of operating, maintaining, and im- created that is subject to federal income tax. Any restricted to organizations thatperform a service proving the cemetery orcrematorium. trust income that is used or permanently set comparable to mutual ditch, irrigation, and tele- 2. To buy cemetery property. aside for the care, maintenance, or beautifica- phone companies such as mutual water, com- tion of a particular family burial lot or mausoleum munications, electric power, or gas companies 3. To create a fund that will provide a source crypt is not deductible in computing the trust's all of which satisfy the 85% test. Examples are of income for the perpetual care of the taxable income. an organization structured for the protection of cemetery or a reasonable reserve for any Civet banks against erosion whose only income ordinary or necessary purpose. Common and preferred stock. A cemetery consists of assessments against the property No part of the net earnings of your organiza- company that issues common stock may qual- owners concerned, a nonprofit organization pro- tion may benefit an ify for exemption only if no dividends may be P g p y y private shareholder or tort- firing and maintaining a two-way radio system vidual. paid. The payment of dividends must be legally prohibited either by the corporation's charter or for its members on a mutual or cooperative ba- Ordinary and necessary expenses in con- by applicable state law. toor local light and water company organized ection with the operation, management, main- Generally, a cemetery company or crematc- o furnish light and water to its members. A enance, and improvement of the cemetery are cooperative organization providing cable televi- permitted, as are reasonable fees for the saw- rium is not exempt if it issues preferred stock. stop service to its members may qualify for ex- ices of a manager. However, it can still be exempt if the preferred stock was issued before November 28, 1978, or e requirements is s like organization if the Buying cemetery property. Payments was issued after that date under a written Ian requirements discussed in this section are met. p Associations operating a bus for their mem- may be made to amortize debt incurred to buy adopted before that date. The adoption of the bers' convenience, providing and maintaining land, but may not us in the nature of profit plan must be shown appear the acts of the records of cooperative housing facilities for the personal distributions. You must show the method used the officers and appear on the official records of benefit of individuals, or furnishing a financing to finance the purchase of the cemetery property the organization. service for purchases made by members of co- and that the purchase price of the land at the The preferred stock issued either before No- operative organizations are not like organiza- time of its sale to the cemetery was not unrea- vember 28, 1978, or under a plan adopted tions. sonable. before that date, must meet all the following Except for holders of preferred stock (dis- requirements. cussed later), no person may have any interest in the net earnings of a tax-exempt cemetery 1 . The preferred stock entitles the holders to 50 .1 1 �C� .1 1 3� — company or crematorium. Therefore, if property dividends at a fixed rate that is not more is transferred to the organization in exchange for than the greater of the legal rate of interest Cemetery Companies an interest in the organization's net earnings, in the slate of incorporation or 8% a year the organization will not be exempt so long as on the value of the consideration for which If your organization wishes to obtain recognition that interest remains outstanding, the stock was issued. of exemption from federal income tax as a cem- An equity interest in the organization is an 2 The organization's articles of incorporation interest in the net earnings of the organization. etery company or a corporation chartered solely require: for the purpose of the disposal of human bodies However, an interest in the organization that is by burial or cremation, it should file an applica- not an equity interest may still be an interest in a. That the preferred stock be retired at ion on Form 1024. the organization's net earnings. For example, a rapidly s funds become avail- file to follow to p y f file an application, see chaptter er 1 1 . re. bond issued by a cemetery company that pro- able from operations, and A non rofit mutual cemete corn an vides for a fixed rate of interest and also pro- p ry p y vides for additional interest payments based on b. That all funds not required for the pay- that seeks recognition of exemption should sub- the income of the organization is considered an a ment of dividends on or for the retire- nevidence with its application that it is owned interest in the net earnings of the organization. ment of preferred stock be used by the and operated exclusively for the benefit of its lot Similarly, a convertible debt obligation issued company for the care and improvement owners who hold lots for bona fide burial pur- of the cemetery property. poses and not for purposes of resale. A mutual after July 7, 1975, is considered an interest in cemetery company that also engages in chants- the net earnings of the organization, ble activities, such as the burial of paupers, will Perpetual care organization. A perpetual Tax treatment of donations. Donations to be regarded as operating within this standard. care organization, including, for example, a trust exempt cemetery companies, corporations The fact that a mutual cemetery company limits organized to receive, maintain, and administer chartered solely for human burial purposes, and its membership to a particular class of individu- funds that it receives from a nonprofit tax-ex- perpetual care funds (operated in connection als, such as members of a family, will not affect empt cemetery pursuant to state law and con- with such exempt organizations) are deductible its status as mutual so long as all the other tracts, may apply for recognition or exemption as charitable contributions on the donors fed- requirements of section 501(c)(13) are met. on Form 1024, even though it does not own the eral income tax return. However, a donor may If your organization is a nonprofit corporation land used for burial. However, the income from not deduct a contribution made for the perpetual chartered solely for the purpose of the disposal these funds must be devoted exclusively to the care of a particular lot or crypt. Payments made of human bodies by burial or cremation, you perpetual care and maintenance of the nonprofit to a cemetery company or corporation as part of should show that it is not permitted by its charter cemetery as a whole. Also, no part of the net the purchase price of a burial lot or crypt, to engage in any business not necessarily inci- earnings may benefit any private shareholder or whether irrevocably dedicated to the perpetual dent to that purpose. Operating a mortuary is not individual. care of the cemetery as a whole or earmarked permitted. However, selling monuments, mark- In addition, a perpetual care organization not for the care of a particular lot, are also not ers, vaults, and flowers solely for use in the operated for profit, but established as a civic deductible. Page 54 Chapter 4 Other Section 501(c) Organizations State-Chartered investments. There should be attached a con- 501 (C) (14) Credit Unions formed copy of the articles of incorporation or other document setting forth the permitted pow- Credit Unions Your organization must show on its application ers or activities of the organization; the bylaws or that it is formed under a state credit union law, other similar code of regulations; and the latest and Other the state and date of incorporation, and that the annual financial statement showing the receipts, Mutual Financial state credit union law with respect to loans, disbursements, assets, and liabilities of the or- investments, and dividends, if any, is being com- ganization. plied Organizations d with. g A form of statement furnished to applicants by the Credit Union National Association is ac- If your organization wants to obtain recognition ceptable in meeting the application require- 501 (c) ( 19) of exemption as a credit union without capital ments for credit unions, and may be used stock, organized and operated under state law instead of the statement form of application just Veterans for mutual purposes and without profit, it should described. The following is a reproduction ofthat file an application including the facts, informa- form. Organizations tion, and attachments described in this section. Claim for Exemption from Federal Income In addition, it should follow the procedures for Tax (Date) A post or organization of past or present mem- fling an application described in chapter 1 . The undersigned (Complete bers of the Armed Forces of the United States Federal credit unions organized and oper- name) Credit Union, Inc., (Com- may file Form 1024 to apply for recognition of ated in accordance with the Federal Credit plete address, including street and number), a exemption from federal income tax. You should Union Act, as amended, are instrumentalities of credit union operating underthe credit union law follow the general procedures outlined in chap- the United States, and therefore, are exempt of the State of , claims exemption ter 1 . The organization must also meetthe quali- under section 501 (c)(1 ). They are included in a from federal income tax and supplies the follow- fications described in this section. group exemption letter issued to the National ing information relative to its operation. Examples of groups that would qualify for Credit Union Administration. They are not dis- 1 Date of incorporation exemption are posts or auxiliaries of the Ameri- cussed in this publication. . p can Legion, Veterans of Foreign Wars, and simi- State chartered credit unions and other mu- 2. It was incorporated under the credit union larorganizations. tual financial organizations may file applications law of the State of , and is To qualify for recognition of exemption, your for recognition of exemption from federal income being operated under uniform bylaws application should show: tax under section 501 (c)(14). The othermutual adopted by said state. financial organizations must be corporations 3. In making loans, the state credit union law 1 . That the post or organization is organized or associations without capital stock organized requirements, including their purposes, se- in the United States or any of its posses- before September 1 , 1957, and operated for curity, and rate of interest charged sions, mutual purposes and without profit to provide thereon, are complied with. 2. That at least 75% of the members are past reserve funds for, and insurance of, shares or or present members of the U.S. Armed deposits in: 4. Its investments are limited to securities which are legal investments for credit un- Forces and that at least 97.5% of all ions under the state credit union law. bets res- the organization are past or 1 . Domestic building and loan associations, ent members of the U.S. Armed Forces, 2. Cooperative banks (without capital stock) 5. Its dividends on shares, if any, are distrib- cadets (including only students in college Y programs or at armed uted as prescribed by the state credit or university ROTC organized and operated for mutual put- P 9 poses and without profit, union law, services academies) or spouses, widows, 3. Mutual savings banks (not having capital I the undersigned, a duly authorized officer of and dowers of any of those listed here, stock represented by shares), or the Credit Union, Inc., declare that the above information is a true statement of 3. That no part of net earnings benefit any 4. Mutual savings banks described in section facts concerning the credit union. private shareholder or individual. 591 (b). S i g n a t u r e o f Officer Title In addition to these requirements, a veter- ans' organization also must be operated exclu- 1 , 1957, that provide reserve funds for (but not sively for one or more of the following purposes. insurance of shares or deposits in) one of the Other Mutual types of savings institutions described in (1 ), (2), Financial Organizations 1 . To promote the social welfare of the com- or (3) above may be exempt from tax if 85% or munity (that is, to promote in some way the more of the organization's income is from pro- Every other organization included in this section common good and general welfare of the viding reserve funds and from investments. must show in its application the state in which people of the community). There is no specific restriction against the issu- the organization is incorporated and the date of ance of capital stock for these organizations. incorporation; the character of the organization; 2. To assist disabled and needy war veterans. Building and loan associations, savings and the purpose for which it was organized; its actual and members of the U.S. Armed Forces loan associations, mutual savings banks, and activities; the sources of its receipts and the and their dependents and the widows and disposition thereof; whether any of its income orphans of deceased veterans. cooperative banks, other than those described may be credited to surplus or in this section, are not exempt from tax. How- may benefit any private shareholder or individ ual; whether the 3. To provide entertainment, care, and assis- d tance to hospitalized veterans or members ever, certain corporations organized and oper- law relating to loans, investments, and dividends p ated in conjunction with farmers' cooperatives of the U.S. Armed Forces. is being complied with; and, in general, all facts can be exempt. relating to its operations that affect its right to 4. To carry on programs to perpetuate the exemption. memory of deceased veterans and mem- Application form. The Internal Revenue The application must include detailed infor- bers of the Armed Forces and to comfort Service does not provide a printed application mation showing either that the organization pro- their survivors. form for the use of organizations described in vides both reserve funds for and insurance of this section. Any form of written application is shares and deposits of its member financial or- 5. To conduct programs for religious,acceptable as long as it shows the information ganizations or that the organization provides scientific, literary, or educational pur- indicated in this section and includes a declara- reserve funds for shares or deposits of its mem- Poses. tion that it is made underthe penalties of perjury. bers and 85% or more of the organization's 6. To sponsor or participate in activities of a The application must be submitted in duplicate. income is from providing reserve funds and from patriotic nature. Chapter 4 Other Section 501(c) Organizations Page 55 7. To provide insurance benefits for its mem- organization's membership must consist of war nal liability of the person who bers or dependents of its members or veterans. The term war veterans means per- established or contributed to the trust), both. sons, whether or not present members of the U.S. Armed Forces, who have served in the U.S. c. Investment in public debt securities of 8. To provide social and recreational activi- the U.S., obligations of a state or local al ties for its members. Armed Forces during a period of war (including government that are not in default as to the Korean and Vietnam conflicts, the Persian principal or interest, or time or demand Gulf war, and later declared wars). deposits in a bank or an insured credit Auxiliary unit. An auxiliary unit or society of veterans' organization may apply for recognition n union located in the U.S. (These invest- of exemption provided that the veterans' organi- the tru are restricted to the extent that zation (parent organization) meets the require- 501 (c) (20) — the trustee determines that portion of ments explained earlier in this section. The the assets is not currently nee eded for auxiliary unit or society must also meet all the Group Legal Services the purposes described in (1 ), above), following additional requirements. or Plan Organizations d. Accident and health benefits orinsur- 1 . It is affiliated with, and organized in accor- ance premiums and other administra- dance with, the bylaws and regulations for- An organization or trust created in the U.S. for tive expenses for retired coal miners mulated by the parent organization. the exclusive function of forming a part of a and their spouses. The amount of as- 2. At least 75% of its members are either qualified group legal services plan or plans can- sets available for such use is generally past or present members of the U.S. not be exempt under section 501(c)(20) after limited to 110% of the present value of Armed Forces, spouses of those mem- June 30, 1992. However, it may qualify for ex- the liability for black lung benefits. bers, or related to those members within emption under section 501 (c)(9). two degrees of kinship (grandparent, brother, sister, and grandchild represent An annual information return is required of the most distant allowable relationship). exempt trusts described in section 501 (c)(21). 3. All of its members either are members of 501 (c) (2 1 ) Form 990-BL, Information and Initial Excise the parent organization, spouses b r Black Return for Black Lung Benefit Trusts and member of the Arentn, spouses of or re- Black Lung Certain Related Persons, must be used for this P 9 purpose. However, a trust that normally has lated to a member of such organization Benefit Trusts gross receipts in each tax year of not more than within two degrees of kinship. $25,000 is excepted from this filing requirement. 4. No part of its net earnings benefit any pri- If your organization wishes to obtain recognition Excise taxes. If your organization makes vate shareholder or individual, of exemption as a black lung benefttrust, it must any expenditures, payments, or investments file its application by letter and include a copy of otherthan those described earlier in this section, Trusts or foundations. Trusts or foundations its trust instrument. The general procedures to atax equal to 10% of the amount of such expen- for a veterans' organization also may apply for follow for obtaining recognition are discussed in chapter 1 of this publication. This section de- dilures is imposed on the trust. If there are any recognition of exemption provided that the par- scribes the additional (or specific) information to acts of self-dealing between the trust and a ent organization meets the requirements ex- be rovided u lication disqualified person, a tax equal to 10% of the plained earlier. The trust or foundation must also ppon app . amount involved is imposed on the disqualified meet all the following qualifications. Requirements. A black lung benefit trust that person. Both of these excise taxes are reported is established in writing, created or organized in on Schedule A (Form 990-BL). See the Form 1. The trust or foundation is in existence the United States, and contributed to by any 990-BL instructions for more information on under local law and, if it is organized for person (except an insurance company) will qual- these taxes and what has to be filed, even if the charitable purposes, has a dissolution pro- ify for tax-exempt status if it meets both of the trust is excepted from filing. vision similar to charitable organizations. following requirements. (See Articles of Organization in chapter 3 Tax treatment of donations. Contributions of this publication.) 1 . Its only purpose is: bya taxpayer (generally, the coal mine operator) 2. The corpus or income cannot be diverted a. To satisfy in whole or in part the liability to a black lung benefit trust are deductible for or used other than for: of that person (generall federal income tax purposes under section 192 y, the coal mine of the Code. The deduction is limited, and any a. The funding of a veterans' organization, operator contributing to the trust) for, or excess contributions are subject to an excise tax with respect to, claims for compensa- described in this section, of es Form 6069, Return of Excise Tax on lion arising under federal or state slat- Excess Contributions to Black Lung Benefit b. Religious, charitable, scientific, literary, utes for disability or death due to Trust Under Section 4953 and Computation of or educational purposes or for the pre- pneumoconiosis, vention of cruelty to children or animals, Section 192 Deduction, is used to compute the or b. To pay the premiums for insurance that allowable deduction and any excise tax liability. covers only that liability, and The form does not have to be filed if there is no c. An insurance set aside. excise tax liability. For more information about c. To pay the administrative and other in- these contributions, see Form 6069 and its in- 3. The trust income is not unreasonably ac- cidental expenses of that trust (includ- structions. cumulated and, if the trust or foundation is ing legal, accounting, actuarial, and not an insurance set aside, a substantial trustee expenses) in connection with portion of the income is in fact distributed the operation of the trust and process- to the parent organization or for the pur- ing of black lung claims against such 501 (c) (2) — poses described in item (2)(b). person arising under federal or state 4. It is organized exclusively for one or more statutes. Title -Holding of the purposes listed earlier in this section 2. No part of its assets may be used for, or Corporations that are specifically applicable to the par- diverted to, any purposes other than: ent organization. for Single Parents a. The purposes described in (1), above, Tax treatment of donations. Donations to b. Payments into the Black Lung Disability If your organization wants to obtain recognition war veterans' organizations are deductible as Trust Fund or into the general fund of of exemption from federal income tax as a cor- charitable contributions on the donor's federal the U.S. Treasury (other than in satis- poration organized to hold title to property, col- income tax return. At least 90% of the faction of any tax or other civil or crimi- ]act income from that property, and turn over the Page 56 Chapter 4 Other Section 501(c) Organizations entire amount less expenses to a single parent If that organization has not been specifically The organizing document must permit the Organization that is exempt from income tax, it notified in writing by the IRS that it is exempt, the shareholders or beneficiaries to terminate their should file its application on Form 1024. The title-holding corporation must submit the neces- interests by at least one of the following meth- information to submit upon application is de- sary application and supporting documents to ods, scribed in this section. For a discussion of the enable the IRS to determine whethertheorgani- procedures for obtaining recognition of exemp- zation for which title is held qualifies for exemp- 1 . By selling or exchanging their stock or tion, see chapter 1 . tion. A copy of a ruling or determination letter beneficial interest to any organization de- You must show that your organization is a issued to the organization for which title is held scribed in IRC 501(c)(25)(C), provided that corporation. If you are in doubt as to whether will be proof that it qualifies for exemption. How- the sale or exchange does not cause the your organization qualifies as a corporation for ever, until the organization for which title is held number of shareholders or beneficiaries to this purpose, contact your IRS office, obtains recognition of exempt status or proof is exceed 35. A title-holding corporation will qualify for ex- submitted to show that it qualifies, the title-hold- 2 By having their stock or beneficial interest emption only if there is effective ownership and ing corporation cannot obtain recognition of ex- redeemed by the 501 (c)(25) organization control over it by the distributes exempt organi- emption. upon 90 days notice. zation. For example, the distributes organization may control the title-holding corporation by own- Tax treatment of donations. Donations to an If state law prevents a corporation from including ing its voting stock or possessing the power to exempt title-holding corporation generally are in its articles of incorporation the above provi- select nominees to hold its voting stock. not deductible as charitable contributions on the sions, such provisions must instead be included donor's federal income tax return. in the bylaws of the corporation. Corporate charter. The corporate charter that A 501 (c)(25) organization maybe organized you submit upon application must confine the purposes and powers of your organization to as a i on orb corporation if its articles with h the holding title to property, collecting income from `/ _ poration or bylaws provide members with the the property, and turning the income over to an 501 C 25 same rights as described above. exempt organization. If the charter authorizes Title -Holding Subsidiaries. A wholly-owned subsidiary will your organization to engage in activities that go beyond these limits, its exemption may not be Corporations or Trusts not be treated as a separate corporation, and all recognized even if its actual operations are so assets, liabilities, and items of income, deduc- limited. If your organization's original charter for the and credit will be treated as belonging to does not limit its powers, you may amend the the section not se organization. S recognition charter to conform to the required limits and Multiple Parents ins should not apply separately for recognition of exemption. submit evidence with your application that the charter has been so amended. If your organization wants to obtain recognition of exemption from federal income tax as an Tax treatment of donations. Donations to an Payment of income. You urn over owthatyour exempt title-holding corporation generally are corporation is required to turn over the entire organization organized for the exclusive our- not deductible as charitable contributions on the Income from the organdy, less expenses, to one pose of acquiring, holding title to, and collecting donor's federal income tax return. - or more exempt organizations, income from real property, and turning over the Actual payment of the income is required. A entire amount less expenses to member organi- Unrelated BUSIn2$$ Income obligation to use the income for the ex- zations exempt from income tax, it should file its empt organization's benefit, or the fact that such application on Form 1024. For a discussion of In general, the receipt of unrelated business organization has control over the income does the procedures for obtaining recognition of ex- income by a section 501 (c)(25) organization will not satisfy this requirement, emption, see chapter 1 , subject the organization to loss of exempt status Expenses. Expenses may reduce the Who can control the organization. Organi- since the organization cannot be exempt from amount of income required to be turned over to zations recognized as exempt under this section taxation if it engages in any business other than the tax-exempt organization for which your or- may have up to 35 shareholders or beneficia- that of holding title to real property and collect- ganization holds property. The term expenses ries, in contrast to title-holding organizations ing the income from the property. However, ex- (for this purpose) includes not only ordinary and recognized as exempt under IRC 501(c)(2), empt status generally will not be affected by the necessary expenses paid or incurred, but also which may have only 1 controlling parent organi- receipt of debt-financed income that is treated reasonable additions to depreciation reserves zation, as unrelated business taxable income solely be- and other reserves that would be proper for a cause of section 514. business corporation holding title to and main- Organizational requirements. A 501 (c)(25) Under section 514(c)(9), certain sharehold- taining property. organization must be either a corporation or a ers or beneficiaries are not subject to unrelated In addition, the title-holding corporation may trust. Only one class of stock is permitted in the debt-financed income tax under section 514 on retain part of its income each year to apply to case of a corporation. In the case of a trust, only their investments through the organization. debt on property to which it holds title. This one class of beneficial interest is allowed. These shareholders are generally schools, col- transaction is treated as if the income had been Organizations eligible to acquire or hold in- ages, universities, or supporting organizations turned over to the exempt organization and the terests in this type of title-holding organization of such educational institutions. Organizations latter had used the income to make a contribu- are qualified pension, profit-sharing, or stock other than these will take into account as gross tion to the capital of the title-holding corporation bonus plans, governmental plans, governments income from an unrelated trade or business their that in turn, applied the contribution to the debt. and their agencies and instrumentalities, and pro rata share of income that is treated as unre- Waiver of payment of income. Generally, charitable organizations. lated debt-financed income because section there is no payment of rent when the occupant of The articles of incorporation or trust instru- 514(c)(9) does not apply. These organizations property held b ment must include provisions showing that the will also take their pro rate share of the allowable t p y y your title-holding corporation is deductions from unrelated taxable income. the exempt organization for which your corpora- corporation or trust is organized to meet the tion holds the title. In this situation, the statutory requirements of the statute, including compli- requirement that income be paid over to the ance with the limitations on membership and Real property, Real property can include per- exempt organization is satisfied if your corpora- classes of stock or beneficial interest, and com- sonal property leased in connection with real tion turns over whatever income is available. pliance with the income distribution require- property, but only if the rent from the personal ments. The organizing document must permit property is not more than 15% of the total rent Application for recognition of exemption. the organization's shareholders or beneficiaries for both the real property and the personal prop- In addition to the information required by Form to dismiss the organization's investment advi- erty. 1024, the title-holding corporation must furnish sor, If any, upon a vote of the shareholders or Real property acquired after June 10, 1987, evidence that the organization for which title is beneficiaries holding a majority interest in the cannot include any interest as a tenant in com- held has obtained recognition of exempt status. organization. mon (or similar interest) or any indirect interest. Chapter 4 Other Section 501(c) Organizations Page 57 workers' compensation policyholders on a not change the tax law or make a technical tax 501 1 (c) (26) periodic basis and by reducing initial pre- decision, they can clear up problems that re- miums in anticipation of investment in- sulted from previous contacts and ensure that State-Sponsored come. your case is given a complete and impartial High -Risk Health Any organization (including a mutual insur- review. ance company) can qualify for exemption if it To contact your Taxpayer Advocate: Coverage meets all of the following requirements. . Call the Taxpayer Advocate toll free at It is created by state law and is organized 1-877-777-4778. Organizations 1 . and operated under state law exclusively a Call, write, or fax the Taxpayer Advocate A state-sponsored organization established to to: office in your area. provide medical care to high-risk individuals a. Provide workmen's compensation insur- • Cal 1-800-829-4059 if you are a should apply by letter for recognition of exemp- ance which is required by state law or TTY/TDD user. tion from federal income tax under section stale law must provide significant disin- 501 (c)(26). • Visit www.irs.gov/advocate. centives if employers fail to purchase To qualify for exemption, the organization such insurance, and must be a membership organization established For more information, see Publication 1546, by a state exclusively to provide coverage for b. Provide related coverage which is inci- The Taxpayer Advocate Service of the IRS— medical care on a nonprofit basis to high-risk dental to workmen's compensation in- How To Get Help With Unresolved Tax individuals who are state residents. It may pro- surance. Problems. vide coverage either by issuing insurance itself or by entering into an arrangement with a health 2. It provides workmen's compensation insur- Free tax services. To find out what services maintenance organization (HMO). ance to any employer in the state (for em- are available, get Publication 910, IRS Guide to The state must determine the composition of ployees in the state or temporarily Free Tax Services. It contains a list of free tax membership in the organization. No part of the assigned out-of-state) which seeks such publications and an index of tax topics. It also net earnings of the organization can benefit any insurance and meets other reasonable re- describes other free tax information services, private shareholder or individual. quirements relating to the insurance. including tax education and assistance pro- High-risk individuals. These are individuals, 3. The state makes a financial commitment to grams and a list of TeleTax topics. their spouses and qualifying children, who, be- such organization either by extending its Internet. You can access the IRS web- full faith and credit to the initial debt of the site 24 hours a day, days a week, at cause of apre-existing medical condition: organization or by providing the initial op- ■ y' y www.irs.gov to: 1 . Cannot get medical care coverage for that erating capital of the organization. condition through insurance or an HMO, or 4. The assets of the organization revert to the a E-file your return. Find out about commer- 2. Can covers e et for that condition only at state upon dissolution or the organization cial tax preparation and a-file services g 9 y is not permitted to dissolve understate available free to eligible taxpayers. rate for the same coverage from the a tale that is substantially higher than the p law. • Check the status of your 2004 refund. state-sponsored organization. 5. The majority of the board of directors or Click on Where's My Refund. Be sure to oversight body of such organization are wait at least 6 weeks from the date you appointed by the chief executive officer or filed your return (3 weeks if you filed elec- other executive branch official of the state, tronically), Have your 2004 tax return 501 (c) (27) by the state legislature, or by both. available because you will need to know // \ your filing status and the exact whole dol- State-Sponso red lar amount of your refund. • Download forms, instructions, and publica- Workers ' Compensation • Order IRS products online. Reinsurance • Research your lax questions online. • Search publications online by topic or Organizations keyword. A state-sponsored workers' compensation rein- How ■y�o Get g' e ` Tax • View Internal Revenue Bulletins (IRBs) surance organization should apply by letter for published in the last few years. recognition of exemption from federal income Help • Figure your withholding allowances using tax under section 501 (c)(27). our Form W-4 calculator. To qualify for exemption, any membership You can get help with unresolved tax issues, • Sign up to receive local and national tax organization must meet all the following require- order free publications and fors, ask tax ques- news by email. ments. bons, and get more information from the IRS in 1 . It was established by a state before June several ways. By selecting the method that is • Get information on starting and operating 1 , 1996, exclusively to reimburse its mem- best for you, you will have quick and easy ac- a small business. bers for losses under workers' compensa- cess to tax help. tion acts. Email Service. The IRS has established a Contacting your Taxpayer Advocate. If you 2. The state requires that the membership have attempted to deal with an IRS problem new, subscription-based email service for lax consist of all persons who issue insurance unsuccessfully, you should contact your Tax- Professionals and representatives of tax-exempt covering workers' compensation losses in payer Advocate. organizations. Subscribers will receive periodic the state and all persons and government The Taxpayer Advocate independently rep- updates from the IRS regarding exempt organi- entities who self-insure against those resents your interests and concerns within the zations tax law and regulations, available serv- losses. IRS by protecting your rights and resolving ices, and other information. To subscribe, visit 3. It operates as a nonprofit organization by problems that have not been fixed through nor- www.frs.gov/eo. returning surplus income to, its members or mal channels. While Taxpayer Advocates can- Page 58 Chapter 5 How To Get Tax Help toFax. You can get over 100 of the most ices. To ensure that IRS representatives give Central part of U.S.: requested forms and instructions 24 accurate, courteous, and professional answers, Central Area Distribution Center hours a day, 7 days a week, by fax. we use several methods to evaluate the quality P.O. Box 8903 Just call 703-368-9694 from the telephone con- of our telephone services. One method is for a Bloomington, IL 61702-8903 nected to your fax machine. When you call, you second IRS representative to sometimes listen , Eastern part of U.S. and foreign will hear instructions on how to use the service. in on or record telephone calls. Another is to ask addresses: The items you request will be faxed to you, some callers to complete a short survey at the Eastern Area Distribution Center For help with transmission problems, call end of the call. past Box 85074 703-487-4608. Richmond, 0723261-5074 Long-distance charges may apply. Walk-in. Many products and services Phone. Many services are available by are available on a walk-in basis. ❑ CD-ROM for tax products. You can phone. �O7 order Publication 1796, IRS Federal • Products. You can walk in to many post Tax Products CD-ROM, and obtain: • Ordering forms, instructions, and publica- offices, libraries, and IRS offices to pick up • Current-year forms, instructions, and pub- tions. Call 1-800-829-3676 to order certain forms, instructions, and publica- lications. current-year forms, instructions, and publi- lions. Some IRS offices, libraries, grocery cations and prior-year forms and instruc- stores, copy centers, city and county gov- • Prior-year forms and instructions. tions. You should receive your order within ernment offices, credit unions, and office a Frequently requested tax forms that may 10 days, supply stores have a collection of products be filled in electronically, printed puffer available to print from a CD-ROM or pho- submission, or saved for recordkeeping. • Asking tax questions. Call the IRS with tocopy from reproducible proofs. Also, your tax questions about exempt organiza- some IRS offices and libraries have the • Internal Revenue Bulletins. tions at 1-877-829-5500. Internal Revenue Code, regulations, Inter- • Solving problems. You can get nal Revenue Bulletins, and Cumulative Buy the CD-ROM from National Technical In- face-to-face help solving tax problems Bulletins available for research purposes. formation Service (NTIS) at www.irs.gov/ every business day in IRS Taxpayer As- Services. You can walk in to your local cdorders for $22 (no handling fee) or call sistance Centers. An employee can ex- Taxpayer Assistance Center every bust- 1-877-233-6767 toll free to buy the CD-ROM for $22 (plus a $5 handling fee). The first release is plain IRS letters, request adjustments to ness day to ask tax questions or get help your account, or help you set up a pay- with a tax problem. An employee can ex- available in early January and the final release is ment plan. Call your local Taxpayer Assis- plain IRS letters, request adjustments to available in late February, tance Center for an appointment. To find your account, or help you set up a pay- CD-ROM for small businesses. Pub- the number, go to ment plan. You can set up an appointment °O7 lication 3207, The Small Business Re- www.irs.govgocalcontacts or look in the by calling your local Center and, at the o source Guide, CD-ROM 2004, is a phone book under United States Govern- prompt, leaving a message requesting must for every small business owner or any ment, Internal Revenue Service, Everyday Tax Solutions help. A represen- taxpayer about to start a business. This handy, • TTY?DD equipment. if you have access tative will call you back within 2 business interactive CD contains all the business tax to TTY/TDD equipment, call days to schedule an in-person appoint- forms, instructions, and publications needed to 1-800-829-4059 to ask tax questions or to ment at your convenience. To find the successfully manage a business. In addition, the order forms and publications. number, go to wwwirs.gov/localcontacts CD provides other helpful information, such as or look in the phone book under United how to prepare a business plan, finding fnanc- • TeleTax topics. Call 1-800-829-4477 and States Government, Internal Revenue ing for your business, and much more. The de- press 2 to listen to pre-recorded Service. sign of the CD makes finding information easy messages covering various tax topics. and quick and incorporates file formats and • Refund information. If you would like to Mail. You can send your order for browsers that can be run on virtually any check the status of your 2004 refund, call forms, instructions, and publications to desktop or laptop computer. 1-800-829-4477 and press 1 for auto- the Distribution Center nearest to you It is available in early April. You can get a mated refund information or call and receive a response within 10 business days free copy by calling 1-800-829-3676 or by visit- 1-800-829-1954. Be sure to wait at least 6 after your request is received. Use the address ing ww Jrs.gov/smallbiz. weeks from the date you filed your return that applies to your part of the country. (3 weeks if you filed electronically). Have • Western part of U.S.: your 2004 tax return available because Western Area Distribution Center you will need to know your filing status Rancho Cordova, CA 95743-0001 and the exact whole dollar amount of your refund. Evaluating the quality of our telephone serv- Chapter 5 How To Get Tax Help Page 59 Organization Reference Chart Section of Application Annual return Contributions 1986 Code Description of organization General nature of activities Form No. required to be allowable filed 501 (c)(1) Corporations Organized under Act Instrumentalities of the No Form None Yes, if made for of Congress (including Federal Credit United States exclusively Unions) public purposes 501 (c)(2) Title Holding Corporation For Holding title to property of an 1024 990' or 99oEZ8 Noe Exempt Organization exempt organization 501 (c)(3) Religious, Educational, Charitable, Activities of nature implied by 1023 990' or 990EZ8, Yes, generally Scientific, Literary, Testing for Public description of class of organization or 990-PF Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations 501 (c)(4) Civic Leagues, Social Welfare Promotion of community welfare; 1024 990' or 990EZ8 No, generally 2. 3 Organizations, and Local charitable, educational or recreational Associations of Employees 501 (c)(5) Labor, Agricultural, and Horticultural Educational or instructive, the 1024 9901 or 99oEZ8 Noe Organizations purpose being to improve conditions of work, and to improve products of efficiency 501 (c)(6) Business Leagues, Chambers of Improvement of business 1024 9901 or 990EZ8 Noe Commerce, Real Estate Boards, conditions of one or more lines of Etc. business 501 (c)(7) Social and Recreational Clubs Pleasure, recreation, social activities 1024 9901 or 990EZ8 No' 501 (c)(8) Fraternal Beneficiary Societies Lodge providing for payment of life, 1024 9901 or 99oEZ8 Yes, if for certain and Associations sickness, accident or other benefits Sec. 501 (c)(3) to members purposes 501(c)(9) Voluntary Employees Beneficiary - Providing for payment of life, sickness, 1024 9901 or 990EZB Noe Associations accident, or other benefits to members 501 (c)(10) Domestic Fraternal Societies Lodge devoting its net earnings to 1024 9901 or 990EZ8 Yes, if for certain and Associations charitable, fraternal, and other Sec. 501 (c)(3) specified purposes. No life, sickness, or purposes accident benefits to members 501 (c)(11 ) Teachers' Retirement Fund Teachers' association for payment of No Forme 9901 or 990EZB Noe Associations retirement benefits 501 (c)(12) Benevolent Life Insurance Activities of a mutually beneficial 1024 9901 or 990F28 Noe Associations, Mutual Ditch or nature similar to those implied by the Irrigation Companies, Mutual or description of class of organization Cooperative Telephone Companies Etc. 501 (c)(13) Cemetery Companies Burials and incidental activities 1024 990' or 990EZ8 Yes, generally 501(c)(14) State Chartered Credit Unions, Loans to members No Forme 9901 or 990EZ8 Noe Mutual Reserve Funds 501 (c)(15) Mutual Insurance Companies or Providing insurance to members 1024 990? or 990EZ8 Noe Associations substantially at cost 501 (c)(16) Cooperative Organizations to Financing crop operations in No Forme 9901 or 990EZ8 Noz Finance Crop Operations conjunction with activities of a marketing or purchasing association 501 (c)(17) Supplemental Unemployment Provides for payment of 1024 9901 or 990EZ8 Noe Benefit Trusts supplemental unemployment compensation benefits 501 (c)(18) Employee Funded Pension Trust Payment of benefits under a No Forme 9901 or 990EZB Nob . (created before June 25, 1959) pension plan funded by employees 501(c)(19) Post or Organization of Past or Activities implied by nature of 1024 9901 or 990EZ8 No, generally' Present Members of the Armed organization Forces 501(c)(21 ) Black Lung Benefit Trusts Funded by coal mine operators to No Forme 990-BL N04 satisfy their liability for disability or death due to black lung diseases Page 60 Chapter 5 How To Get Tax Help Section of Application Annual return Contributions 1986 Code Description of organization General nature of activities Form No. required to be allowable filed 501(c)(22) Withdrawal Liability Payment Fund To provide funds to meet the No Forms 990 or 990EZs Nos liability of employers withdrawing from a multi-employer pension fund 501 (c)(23) Veterans Organization (created To provide insurance and other No Forms 990 or 990EZ' No, generally? before 1880) benefits to veterans 501(c)(25) Title Holding Corporations or Trusts Holding title and paying over 1024 990 or 990EZ No with Multiple Parents income from property to 35 or fewer parents or beneficiaries 501 (c)(26) State-Sponsored Organization Provides health care coverage to No Forms 990' or 990EZ8 No Providing Health Coverage for high-risk individuals High-Risk Individuals 501 (c)(27) State-Sponsored Workers' Reimburses members for losses No Forms 990' or 990EZ' No Compensation Reinsurance under workers' compensation acts Organization 501(c)(28) National Railroad Retirement Manages and invests the assets of the No Form" Not yet No Investment Trust Railroad Retirement Account determined 501 (d) Religious and Apostolic Associations Regular business activities. No Form 10659 NO2 Communal religious community 501 (e) Cooperative Hospital Service Performs cooperative services for 1023 990' or 990EZ' Yes Organizations hospitals 501 (f) Cooperative Service Organizations Performs collective investment 1023 990' or 990EZa Yes of Operating Educational services for educational organizations Organizations 501 (k) Child Care Organizations Provides cares for children 1023 990 or 990EZ8 Yes 501 (n) Charitable Risk Pools Pools certain insurance risks of 1023 990' or 990EZs Yes 501(c)(3) 521 (a) Farmers' Cooperative Associations Cooperative marketing and 1028 990-C No purchasing for agriculturai procedures 527 Political organizations A parry, committee, fund, 8871 1120-POL1" No association, etc., that directly or 990 or 990EZ' indirectly accepts contributions or makes expenditures for political campaigns 'For exceptions to the filing requirement, see chapter 2 and the form °Application is by letter to the address shown on Form 8718. A copy of the instructions. organizing document should be attached and the letter should be signed by an officer. 'An organization exempt under a subsection of Code sec. 501 other than 501 (c)(3) may establish a charitable fund, contributions to which are 'Contributions to these organizations are deductible only if 90% or more of deductible. Such a fund must itself meet the requirements of section the organization s members are war veterans. 501 (c)(3) and the related notice requirements of section 508(a). °For limits on the use of Form 990EZ, see chapter 2 and the general 'Contributions to volunteer fire companies and similar organizations are instructions for Form 990EZ (or Form 990). deductible, but only if made for exclusively public purposes. 9Although the organization files a partnership return, all distributions are °Deductible as a business expense to the extent allowed by Code section 192 deemed dividends. The members are not entitled to pass-through treatment of the organization's income or expenses. 'Deductible as a business expense to the extent allowed by Code section 194A. "Form 1120—POL is required only if the organization has taxable income as defined in IRC 527(c). "Application procedures not yet determined. Chapter 5 How To Get Tax Help Page 61 Index g To help us develop a more useful index, please let us know if you have ideas for index entries. See "Comments and Suggestions' in the "Introduction" for the ways you can reach us. A Credit union . . _ . . . . . . . . . . . . . 55 Forms: I Acknowledgement of 1023 . . . 3, 6, 7, 13, 17, 18, 22, Inactive organization . . . . . . . . 16 contributions . . . . . . . . . . . . . 13 D 26. 45. 47 Industrial development . . . . . . 48 Advance ruling . . . . . . . . . . . . 4, 39 1024 . . . . . . 3, 4, 13, 47, 48, 49, Instrumentalities . . . . . . . . . . . . 16 Determination letter . . . . . . . . . . 4 50, 51, 52, 54, 55, 56, 57 Adverse determination . . . . . . . 5 Disclosures, required: 1040 10 Insurance, organizations Aged, home for . . . . . . . . . . . . . . 25 Dues used for lobbying . . . . . 15 .. . " " " " . . . . . . providing . . . . . . . . . . . . . . . . . 24 1065 . . . . . . . . . . . . . . . . . . . . . . . 8 Agricultural organization . . . . 48 Nondeductible 1120-POL 10 Integral-part test . . . . . . . . . . . . 43 Airport . . . . . . . . . . . . . . . . . . . . . . 48 contribution . . . . . . . . . . . . . 15 .. . . . . " " " . " ' Alumni association . . . . . . . . . . 22 Quid pro quo 1128 . . . . . . . . . . . . . . . . . . - . . 16 Amateur athletic contributions . . . . . . . . . . . . . 12 2848 . . . . . . . . . . . . . . . . . . . . . 416 L organizations 26 Services available from 4720 . . . . . . . . . . . . . . . . . . . . . . 46 Labor organization . . . . . . 15. 48 g . . . . . . . . . . . . . Animals, prevention of cruelty government . . . . . . . . . . . . . . 15 5578 . . . . . . . . . . . . . . . . . . . . . . 23 Law, public interest . . . . . . . . . 25 to . . . . . . . . . . . . . . . . . . . . . . . . . 26 Dispositions of donated 5768 . . . . . . . . . . . . . . . . I . . . I . 45 Legislative activity . . . . . . 45, 49 Appeal procedures . . . . . . . . . . . 5 property . . . . . . . . . . . . . . . . . . . 12 6069 . . . . . . . . . . . . . . . . . . . . . . 10 Literary organizations . . . . . . . 26 Disqualified persons 42 8274 . . . . . . . . . . . . . . . . . . _ . . 10 Loans, organizations Application procedures: q P � 8282 12 9 Bylaws . . . . . . . . . . . . . . . . . . . . . 3 Domestic fraternal 8283 _ 12 Providing . . . . . . . . . . . . . . . . . 25 . . . . . . . . . . . . . . . . . Conformed copy . . . . . . . . . . . . 3 society . . . . . . . . . . . . . . . . . . . . 51 8300 . . . . . . . . . . . . . . . . . . . . . . 13 Lobbying expenditures . . . . . . 45 Description of activities . . . . . . 3 Dues used for political or 8718 3 4 Local benevolent life insurance Employer identification legislative activities . . . . . . 15, . . . . . . . . . . I . . . . . . associations . . . . . . . . . . . . . . 53 872-C . . . . . . . . . . . . . . . . 35, 39 number . . . . . . . . . . . . . . . . . . . 3 49 8821 5 Local employees' Financial data . . . . . . . . . . . . . . . 3 8871 11 , 13 association . . . . . . . . . . . . . . . 51 Organizing documents . . . . . . . 3 ' � � " � " � 11 13 Lodge system . . . . . . . . . . . . . . . 50 E 687z . . . . . . . . . . . . . Aquatic resources . . . . . . . . . . . 48 Educational 990 . . . . . . . . . . . . . . . . 7, 9, 13, 45 Articles of organization . . . . . 19 organizations . . . . . . . . . 22. 30 990-BL 8, 56 M Assistance (See Tax help) Employees' association . . . . . 51 990-EZ . . . . . . . . . . . . . . . . . . . . 9 Medical research Athletic organization . . . . 22, 26 Employment taxes . . . . . . . . . . 10 990-PF . . . . . . . . . . . . . . . . . 9, 27 organization . . . . . . . . . . 30 Attorney's fees . . . . . . . . . . . . . . 25 Endowment fund . . . . . . . . . . . . 30 990-T . . . . . . . . . . . . . . . . . . . . . 9 Medicare and Medicaid Attribution, special rules . . . . 44 Estimated tax . . . . . . . . . . . . . . . . 9 SS-4 . . . . . . . . . . . . . . . . . . . . 3, 7 payments . . . . . . . . . . . . . . . . . 33 W-2 10 Excess benefit transaction: .. . . . . I . . . . . . . . I . . . . . . Membership fee . . . . . . . . . 33, 40 B Date occurs . . . . . . . . . . . . . . . 29 Fraternal beneficiary Modification of exemption . . . . 5 Black lung benefit trust . . . . . 56 Disqualified person . . . . . . . . . 28 society . . . . . . . . . . . . . . . . . . . . 50 More information (See Tax help) Controlled entity, 35% . . . . 28 Fraternal societies . . . . . . 15, 50 Board of trade . . . . . . . . . . . . . . . 49 Mutual financial Bureau defined . . . . . . . . . . . . . . 40 Family members . . . . . . . . . 28 Free tax services . . . . . . . . . . . . 58 Burial benefit insurance . . . . . 53 organization . . . . . . . . . . . . . . 55 Substantial influence . . . . . 29 Funeral benefit Business income, Disregarded benefits . . . . . . . 30 insurance . . . . . . . . . . . . . . . . . 53 Mutual or cooperative association . . . . . . . . . . . . . . . 54 unrelated . . . . . . . . . . . . . . . . . . . 9 Excise tax . . . . . . . . . . . . . . . . . 27 Initial contracts . . . . . . . . . . . . . 30 Business league . . . . . . . . . . . . 48 Organization managers . . . . . 28 G N Reasonable Gifts and contributions, public Nursing bureau . . . . . . . . . . . . . 25 C - compensation . . . . . . . . . . . . 29 charity . . . . . . . . . . . . . . . . . . . . 39 Cemetery company . . . . . . . . . . 54 Rebuttable presumption . . . . 29 Governmental unit . . . . . . . . . . 31 Chamber of commerce . . . . . . 49 Excise tax: Grant: O Change in legal Black lung benefit trust . . . . . 56 Distinguished from gross One-third support test . . . . . . . 31 structure . . . . . . . . . . . . . . . . . . 16 Lobbying expenditures . . . . . . 46 receipts . . . . . . . . . . . . . . . . . . 39 Organization assets: Charitable contributions . . . . 13, Political expenditures . . . . . . . 46 Exclusion for unusual Dedication . . . . . . . . . . . . . . . . . 20 16 Private foundations . . . . . . . . . 27 grant . . . . . . . . . . . . . . . . 34, 38 Distribution . . . . . . . . . . . . . . . . 20 Exempt function . . . . . . . . . . . . . 10 From public charity . . . . . 34. 40 Organization Reference Charitable organization . . . . 16, Exempt purposes . . . . . . . . . . . 16 Grantor and contributor, g 24 P P P Chart . . . . . . . . . . . . . . . . . . 60, 61 Charitable risk pools . . . . . . . . 24 Extensions of time . . . . . . . . . . 18 reliance on ruling . . . . . . . . . 44 Organizational changes . . . . . 16 Gross receipts from Child care organization . . . . . . 16 nonmembership Children, prevention of cruelty F to 26 Facts and circumstances sources . . . . . . . . . . . . . . . . . . . 50 P " ' " " " " " " " " ' Church: test . . . . . . . . . . . . . . . . . . . . . . . 31 Group exemption letter . . . . . . . 6 Payments for terroristic Integrated auxiliaries . . . . . . . 25 Fair market value, estimate attacks . . . . . . . . . . . . . . . . . . . . 27 Penalties: of . . . . . . . . . . . . . . . . . . 13 Civic leagues . . . . . . . . . . . . . . . 47 � � � � � � � H Failure to allow public Clinic . , . . . . . . . . . . . . . . . . . . . . . 25 Filing requirements: Health coverage inspection . . . . . . . . . . . . . . . 15 ti f information College bookstore, organization . . . . . . . . . . . . . . 58 Failure to disclose . . . . . . 13, 15 restaurant . . . . . . . . . . . returns . . . . . . . . . . . 6 . . . . . . 22 � � � � � � � � Help (See Tax help) Failure to fie . . . . . . . . . . . . . . . . 9 Comments on publication . . . . 3 Donee information High-risk health coverage Perpetual care return 12 . , . . 58 organization 54 Community association . . . . . 48 " � � � � ' � � � ' � ' " � � organization . . . . . . . . . . g . . . . . . . . . . . . . . Due date . . . . . . . . . . . . Community nursing Employment tax . . . . . . . . . . . . 10 Home for the aged . . . . . . . . . . 25 Political activity . . . . . . 15, 17, 47 bureau . . . . . . . . . . . . . . . . . . . . 25 Excise tax 27 Homeowners' Political organization: . . . . . . . . ... . . . . . . . Community trust . . . . . . . . . . . . 36 Political organization . . . . . . . . 10 association . . . . . . . . . . . . . . . 47 Income tax return . . . . . . . . . . 10 Contributions, Private foundations . . . . . . . . . . 9 Horticultural Taxable income . . . . . . . . . . . . 10 charitable . . . . . . . . . . . . . 13, 16 Unrelated business organization . . . . . . . . . . . . . . 48 Power of attorney . . . . . . . . . . . . 4 Court appeals . . . . . . . . . . . . . . . . 6 income . . . . . . . . . . . . . . . . . . . 9 Hospital . . . . . . . . . . . . . . . . . 24, 30 Preferred stock . . . . . . . . . . . . . . 54 Page 62 Prevention of cruelty to children Recognition of exemption, Social welfare Title-holding corporation . . . . 56 or animals . . . . . . . . . . . . . . . . 26 application . . . . . . . . . . . . . . . . 17 organization . . . . . . . . . . 15, 47 TTYITDD information . . . . . . . . 58 Private delivery service . . . . . 17 Reliance period . . . . . . . . . . . . . 35 Special computation period for Private foundations . . . . . . . . . 26 Religious organizations . . . . . 25 new organizations . . . . 33. 38 U Private operating Requests other than Specified organizations . . . . . 41 Unemployment benefit foundation . . . . . . . . . . . . . . 44 applications . . . 4 Sports organization, trust . . . . . . . . . . . . . . . . . . . . . . Private school . . . . . . . . . . . . . . . 22 Responsiveness test . . . . . . . . 43 amateur . . . . . . . . . . . . . . . . . . . 26 Unrelated business Public charity: Revised Form 1023 (Rev, State-sponsored: income . . . . . . . . . . . . . . . . . . . . . 9 Gifts and contributions . . . . . . 39 October 2004) . . . . . . . . . . . . . . 1 High-risk health coverage organization . . . . . . . . . . . . . 58 Unusual grants . . . . . . . . . . 34, 38 Grant from . . . . . . . . . . . . . . . . . 40 Revocation of exemption . . . . . 5 9 User fee . . . . . . . . . . . . . . . . . . . . 3, 4 Section 509(a)(1 ) . . . . . _ . . . . 30 Ruling letter . . . . . 4 Workers' compensation Section 509(a)(2) . . . . . . . . . . . 37 reinsurance Section 509(a)(3) . . . . . . . . . . . 40 organization . . . . . . . . . . . . . 58 V Section 509(a)(4) . . . . . . . . . . . 44 S Stock or commodity Veterans' organization . . . . . . 55 Support test . . . . . . . . . . . . 31 , 37 Scholarship: exchange . . . . . . . . . . . . . . . . . 49 Voluntary employees' Public inspection: Private school . . . . . . . . . . . . . . 23 Suggestions for beneficiary Annual return . . . . . . . . . . . . . . 13 Scholarships . . . . . . . . . . . . . . . . 24 publication . . . . . . . . . . . . . . . . . 3 association . . . . . . . . . . . . . . . 51 Exemption applications . . . . . 13 School, private . . . . . . . . . . . . . . 22 Supplemental unemployment Volunteer fire company . . . . . 47 Forms 8871 and 8872 . . . . . . 13 Scientific organizations . . . . . 26 benefit trust . . . . . . . . . . . . . . . 52 Public-interest law firm . . . . . . 25 Section 501(c)(3) organizations: Support . . . . . . . . . . . . . . . . . . . . . 33 W Publications (See Tax help) Amateur athletic . . . . . . . . . . . . 26 Support test: War veterans' Publicly-supported Charitable . . . . . . . . . . . . . . . . . 24 Facts and organization 31 Educational . . . . . . . . . . . . . . . . 22 circumstances . . . . . . . . . . . 31 organization . plicat . . . . . . . 55 9 — Withdrawal of information from Attraction of public Literary on of c . . . . . . . . 26 One-third . ty . . . . . . . . . . . . 37 Withholding information from support . . . . . . . . . . . . . . . . . . 31 Prevention of cruelty . . . . . . . . 26 public charity . . . . . . . . . . . . . . 37 Ten-percent-of-support . . . . . 31 Private foundations . . . . . . . . . 26 public . . . . . . . . . . . . . . . . . . . . . . 4 Public charities . . . . . . . . . . . . . 27 T Workers' compensation Qualifications . . . . . . . . . . . . . . 16 reinsurance R Religious . . . . . . . . . . . . . . . . . . 25 Tax help . . . . . . . . . . . . . . . . . . . . . 58 organization . . . . . . . . . . . . . . 58 Racial composition . . . . . . . . . . 22 Scientific . . . . . . . . . . . . . . . . . . . 26 Taxpayer Advocate . . . . . . . . . . 58 Racially nondiscriminatory Single entity . . . . . . . . . . . . . . . . . 36 Technical advice . . . . . . . . . . . . . 5 policy . . . . . . . . . . . . . . . . . . . . . 22 Social clubs . . . . . . . . . . . . . 15. 49 Testing for public safety. . . . . 44 Real estate board . . . . . . . . . . . 49 Page 63