HomeMy WebLinkAbout10.A.1. 2013 Annual Financial Report and Audit Presentation and Review by Staff from Kern, DeWenter, Viere, Ltd.pwig
St-M-KOPEE
TO: Mayor and City Council
General Business 10. A. 1.
Mark McNeill, City Administrator
FROM: Julie Linnihan, Finance Director /City Clerk
DATE: 05/20/2014
SUBJECT: 2013 Annual Financial Report and Audit Presentation and Review by Staff from
Kern, DeWenter, Viere, Ltd.
Action Sought
Council is asked to consider and accept the 2013 audit and accompanying reports, as presented by
the audit staff from KDV.
Background
Annually the City of Shakopee Finance staff and KDV audit staff undertake an extensive audit
process, beginning in December and continuing into April. The audit results, Comprehensive
Annual Financial Report (CAFR) and accompanying data will be presented and discussed at the
May 20th, 2014 meeting, by Steve Wischmann, Government Audit Partner with KDV.
Recommendation
Request consideration and approval of the 2013 Comprehensive Annual Financial Report
(CAFR), as presented by audit staff from KDV.
Budget Impact
No anticipated budget impact.
Relationship to Vision
Maintain the City's strong financial health.
Requested Action
Request approval of the 2013 Comprehensive Annual Financial Report and audit findings and
presentation.
Attachments: CAFR Communication Letter
CAFR Compliance Letter
CAFR
CITY OF SHAKOPEE
COMMUNICATIONS LETTER
Year Ended December 31, 2013
CITY OF SHAKOPEE
TABLE OF CONTENTS
REPORT ON MATTERS IDENTIFIED AS A RESULT OF
THE AUDIT OF THE FINANCIAL STATEMENTS ................................ ............................... 1
MATERIAL WEAKNESS ............................................................................... ............................... 3
SIGNIFICANTDEFICIENCY ........................................................................ ............................... 4
DEFICIENCIES................................................................................................ ............................... 5
REQUIRED COMMUNICATION ................................................................. ............................... 6
EMERGINGISSUES ....................................................................................... ............................... 9
FINANCIAL ANALYSIS ................................................................................. ............................... 12
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REPORT ON MATTERS IDENTIFIED AS A RESULT OF
THE AUDIT OF THE FINANCIAL STATEMENTS
Honorable Mayor, Members
of the City Council and Management
City of Shakopee
Shakopee, Minnesota
In planning and performing our audit of the financial statements of the City of Shakopee, Minnesota, as
of and for the year ended December 31, 2013, in accordance with auditing standards generally accepted
in the United States of America, we considered the City's internal control over financial reporting
(internal control) as a basis for designing our auditing procedures that are appropriate in the
circumstances for the purpose of expressing our opinion on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do
not express an opinion on the effectiveness of the City's internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that
were not identified.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies in internal control, such that there is a reasonable possibility that a material
misstatement of the City's financial statements will not be prevented or detected and corrected, on a
timely basis. The material weakness identified is stated within this letter.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance. The significant deficiency identified is stated within this letter.
During our audit, we also became aware of deficiencies in internal control other than significant
deficiencies or material weaknesses, and other matters that are opportunities for strengthening internal
controls and operating efficiency. They are described in the accompanying letter under Deficiencies.
The accompanying memorandum also includes financial analysis provided as a basis for discussion.
The matters discussed herein were considered by us during our audit and they do not modify the opinion
expressed in our Independent Auditor's Report dated May 8, 2014, on such statements.
KON
This communication is intended solely for the information and use of management, the City Council,
others within the City and state oversight agencies and is not intended to be and should not be used by
anyone other than these specified parties.
Kct, , 2)ew4�m 4, U-', w.
KERN, DEWENTER, VIERS, LTD.
St. Cloud, Minnesota
May 8, 2014
2
CITY OF SHAKOPEE
MATERIAL WEAKNESS
December 31, 2013
MATERIAL AUDIT ADJUSTMENT
During the course of our engagement, we proposed material audit adjustments that would not have been
identified as a result of the City's existing internal controls and, therefore, could have resulted in a
material misstatement of the City's financial statements.
In order to ensure financial statements were free from material misstatement, audit adjustments were
required in the following areas:
• Enterprise Revenue
• Compensated Absences
3
CITY OF SHAKOPEE
SIGNIFICANT DEFICIENCY
December 31, 2013
LACK OF SEGREGATION OF ACCOUNTING DUTIES
Adequate segregation of accounting duties is in place when the four areas of a transaction have been
separated: authorization, custody, recording and reconciliation. During 2013, the City did not have
sufficient staff to segregate the duties listed above. The lack of adequate segregation of accounting
duties could adversely affect the City's ability to initiate, record, process and report financial data
consistent with the assertions of managements in the financial statements. Specific areas where this is a
lack of internal controls includes (but is not all- inclusive):
Payroll
The Payroll Clerk processes payroll, posts payroll to the general ledger, issues direct deposits,
prepares the payroll taxes, initiates transfers for payment of payroll, prepares all W -2s and maintains
all data files as well as the payroll program.
Cash Receipts
Deposits at City Hall — The front desk personnel receives money, codes the revenue and prepares
bank deposits. The Accountant reconciles cash and posts all deposits into the general ledger.
Deposits at Recreation Center — One employee is able to receipt money and prepare the bank
deposit.
Cash Disbursements
The Accountant enters invoices, matches purchase orders to invoices and prepares checks for
payment.
Management is aware of this condition and has taken certain steps to compensate for the lack of
segregation but due to the small staff needed to handle all of the accounting duties, the costs of obtaining
desirable segregation of accounting duties often exceeds benefits which could be derived. However,
management must remain aware of this situation and should continually monitor the accounting system,
including changes that occur.
4
CITY OF SHAKOPEE
DEFICIENCIES
December 31, 2013
IMPROVE ICE ARENA RECEIPTING INTERNAL CONTROL
During our audit, we analyzed the receipts collection process of the ice arena and found the process to
be decentralized from the City's regular receipting process. Currently, the City employs an Ice Arena
Manager who collects and records funds and also maintains copies of signed ice rental contracts and a
list of payers, creating a segregation of duties incompatibility.
Areas where controls could be implemented include:
• Segregate duties so that employees are not able to receipt money, prepare reconciliations and
prepare the deposit
• Have an employee independent of collecting the cash maintain and create the billing contracts to
ensure that all the contracts are being billed and the revenue is being deposited by the City
• Check ice arena schedules to contracts to ensure that all ice time is being billed
To improve internal control over the ice arena receipting process and to prevent potential omissions and
errors, we recommend the City implement additional oversight procedures to ensure the accuracy and
completeness of ice arena receipts.
IMPROVE COMMUNITY CENTER RECEIPTING INTERNAL CONTROL
During our audit, we analyzed the receipts collection process of the community center and also found
the process to be decentralized from the City's regular receipting process. Currently, the City
employees who collect and record funds, remit payments to the Community Center Manager who
maintains all ledgers and prepares deposits, creating a segregation of duties incompatibility.
Areas where controls could be implemented include:
• Include support for deposits from the Teen Center
• Ensure all cash collected is processed through the cash register
• Segregate duties so that employees are not able to receipt money, prepare reconciliations and
prepare the deposit
To improve internal control over the community center receipting process and to prevent potential
omissions and errors, we recommend the City implement additional oversight procedures to ensure the
accuracy and completeness of community center receipts.
5
CITY OF SHAKOPEE
REQUIRED COMMUNICATION
December 31, 2013
We have audited the basic financial statements of the City for the year ended December 31, 2013, and
have issued our report dated May 8, 2014. Professional standards require that we provide you with the
following information related to our audit.
OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN
THE UNITED STATES OF AMERICA AND GO VERNMENT A UDITING STANDARDS
As stated in our engagement letter, our responsibility, as described by professional standards, is to
express an opinion about whether the financial statements prepared by management with your oversight
are fairly presented, in all material respects, in conformity with accounting principles generally accepted
in the United States of America. Our audit of the financial statements does not relieve you or
management of your responsibilities.
As part of our audit, we considered the internal control of the City. Such considerations were solely for
the purpose of determining our audit procedures and not to provide any assurance concerning internal
control.
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations,
contracts and grant agreements. However, the objective of our tests was not to provide an opinion on
compliance with such provisions.
Our responsibility for the supplementary information accompanying the financial statements, as
described by professional standards, is to evaluate the presentation of the supplementary information in
relation to the financial statements as a whole and to report on whether the supplementary information is
fairly stated, in all material respects, in relation to the financial statements taken as a whole
PLANNED SCOPE AND TIMING OF THE AUDIT
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements; therefore, our audit involved judgment about the number of transactions to be
examined and the areas to be tested.
Our audit included obtaining an understanding of the City and its environment, including internal
control, sufficient to assess the risks of material misstatement of the financial statements and to design
the nature, timing and extent of further audit procedures. Material misstatements may result from
(1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets or (4) violations of laws or
governmental regulations that are attributable to the City or to acts by management or employees acting
on behalf of the City.
QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City are described in Note 1 to the financial statements. During 2013,
the City implemented GASB Statement No. 65, Financial Reporting of Items Previously Reported as
Assets and Liabilities. The City has changed the interest rate method used in the cash and investment
footnote from the weighted average method to segmented time method. We noted no transactions
entered into by the City during the year for which there is a lack of authoritative guidance or consensus.
All significant transactions have been recognized in the proper period.
CITY OF SHAKOPEE
REQUIRED COMMUNICATION
December 31, 2013
QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's knowledge and experience about past and current events and assumptions about
future events. Certain accounting estimates are particularly sensitive because of their significance to the
financial statements and because of the possibility that future events affecting them may differ
significantly from those expected. The most sensitive estimates affecting the financial statements were:
Depreciation — The City is currently depreciating its capital assets over their estimated useful lives,
as determined by management, using the straight -line method.
Expense/Expenditure Allocation — The City is currently allocating certain costs among the programs
and supporting services benefited. The costs are allocated based on management's estimates.
Net Other Post Employment Benefits (OPEB) Obligation— This liability is based on an actuarial
study using estimates of future obligations of the City for post employment benefits.
The financial statement disclosures are neutral, consistent and clear.
DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT
We encountered no difficulties in dealing with management in performing and completing our audit.
CORRECTED AND UNCORRECTED MISSTATEMENTS
Professional standards require us to accumulate all misstatements identified during the audit, other than
those that are clearly trivial, and communicate them to the appropriate level of management.
Management has corrected all such misstatements. The following material misstatements detected as a
result of audit procedures were corrected by management:
• Enterprise Revenue
• Compensated Absences
DISAGREEMENTS WITH MANAGEMENT
For purposes of this letter, a disagreement with management is a financial accounting, reporting or
auditing matter, whether or not resolved to our satisfaction that could be significant to the financial
statements or the auditor's report. We are pleased to report that no such disagreements arose during the
course of our audit.
MANAGEMENT REPRESENTATIONS
We requested certain representations from management which were provided to us in the management
representation letter.
7
CITY OF SHAKOPEE
REQUIRED COMMUNICATION
December 31, 2013
MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves
application of an accounting principle to the City's financial statements or a determination of the type of
auditor's opinion that may be expressed on those statements, our professional standards require the
consulting accountant to check with us to determine that the consultant has all the relevant facts. To our
knowledge, there were no such consultations with other accountants.
OTHER AUDIT FINDINGS OR ISSUES
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the City's auditors. However, these
discussions occurred in the normal course of our professional relationship and our responses were not a
condition to our retention.
OTHER MATTERS
With respect to the supplementary information accompanying the financial statements, we made certain
inquiries of management and evaluated the form, content and methods of preparing the information to
determine that the information complies with accounting principles generally accepted in United States
of America, the method of preparing it has not changed from the prior period, and the information is
appropriate and complete in relation to our audit of the financial statements. We compared and
reconciled the supplementary information to the underlying accounting records used to prepare the
financial statements or to the financial statements themselves.
CITY OF SHAKOPEE
EMERGING ISSUES
December 31, 2013
Executive Summary
The following is an executive summary of financial and business related updates to assist you in staying
current on emerging issues in accounting and finance. This summary will give you a preview of the new
standards that have been recently issued and what is on the horizon for the near future. The most recent
and significant updates include:
Accounting for pensions —This accounting update has been issued and will be applied for
12/31/15 year -end reporting.
Internal Control Integrated Framework — COSO has issued an updated integrated framework
for internal control. The update is expected to make the integrated internal control framework
easier to use and apply. In addition, the update takes into account globalization of businesses
today and its interdependence on technology. This update has been issued and will supersede the
original framework at the end of 2014.
The following are extensive summaries of each of the current updates. As your continued business
partner, we are committed to keeping you informed of new and emerging issues. We are happy to
discuss these issues with you further and their applicability to your company.
ACCOUNTING STANDARD UPDATE — ACCOUNTING FOR PENSIONS
GASB Statement No. 68 replaces the requirements of Statement No. 27, Accounting for Pensions by
State and Local Governmental Employers and Statement No. 50, Pension Disclosures, as they relate to
governments that provide pensions through pension plans administered as trusts or similar arrangements
that meet certain criteria. Statement No. 68 requires governments providing defined benefit pensions to
recognize their long -term obligation for pension benefits as a liability for the first time, and to more
comprehensively and comparably measure the annual costs of pension benefits.
E
CITY OF SHAKOPEE
EMERGING ISSUES
December 31, 2013
COSO PROJECT — INTERNAL CONTROL INTEGRATED FRAMEWORK
In 1992, the Committee on Sponsoring Organizations of the Treadway Commission (COSO) developed
an internal control framework that has been adopted and used by entities worldwide. In 2013, COSO
finalized and released an updated integrated internal control framework. The update is expected to make
the integrated framework easier to use and apply. In addition, the update takes into account, the
business environment of today and the reliance on and interdependence of technology within business
systems.
The internal control update is not changing the core definition of internal control, the three categories of
objectives or the five components of internal control.
COSO defines internal control as a process, affected by an entity's board of directors, management and
other personnel. This process is designed to provide reasonable assurance regarding the achievement of
the three objectives, as follows: effectiveness and efficiency of operations; reliability of financial
reporting; and compliance with applicable laws and regulations.
1. Internal control is a process. It is a means to an end, not an end in itself.
2. Internal control is not merely documented by policy manuals and forms. Rather, it is put in by
people at every level of an organization.
3. Internal control can provide only reasonable assurance, not absolute assurance, to an entity's
management and board.
4. Internal control is geared to the achievement of objectives in one or more separate but
overlapping categories.
The five components of internal control, which are unchanged, are as follows:
1. Control Environment - integrity, ethics, management style, etc.
2. Risk Assessment - identification and analysis of relevant risks
3. Control Activities - policies, procedures and activities, including segregation of duties
4. Information and Communication - ensure information effectively flows up, down and across the
organization, both internally and externally
5. Monitoring Activities - assessment of the systems performance over time
The updated framework has changed to address the changes in business and operating environments,
such as globalization of markets and operations, greater complexities in businesses, reliance on evolving
technologies and expectations relating to preventing and detecting fraud. In addition, principles of
effective internal controls have been added to each of the components of internal control as follows:
Control Environment:
1. Demonstrates a commitment to integrity and ethical values.
2. The board of directors is independent from management and exercises oversight responsibility of
the performance of internal controls.
3. Management establishes structure, reporting lines, authority and responsibility.
4. Demonstrates a commitment to attract, develop and retain competent individuals.
5. Enforces accountability for individual's internal control responsibilities.
10
CITY OF SHAKOPEE
EMERGING ISSUES
December 31, 2013
COSO PROJECT — INTERNAL CONTROL INTEGRATED FRAMEWORK (CONTINUED)
Risk Assessment:
1. Specifies suitable objectives with sufficient clarity.
2. Identifies and analyzes risk as a basis for how risks should be managed.
3. Assesses the potential for fraud risk.
4. Identifies and analyzes significant changes that could impact the system of internal controls.
Control Activities:
5. Selects and develops control activities that contribute to the mitigation of risks.
6. Selects and develops general controls over technology.
7. Deploys control activities through policies that establish what is expected and procedures that
put policies into place.
Information and Communication:
8. Uses relevant information to support the functioning of other components of internal control.
9. Communicates information internally, including objectives and responsibilities necessary to
support the internal controls.
10. Communicates with external parties regarding matters affecting internal control.
Monitoring Activities:
11. Conducts ongoing and /or separate evaluations to ascertain whether the components of internal
control are present and functioning.
12. Evaluates and communicates deficiencies to those parties responsible for corrective actions.
The updated framework also has additional examples relevant to operation, compliance and reporting
objectives added.
While COSO integrated internal control framework is very extensive, this is only a short summary of
some of the changes of the updated framework. The updated framework will supersede the original
framework at the end of 2014; however, users of the framework are encouraged to transition to the
updated framework as soon as possible.
11
CITY OF SHAKOPEE
FINANCIAL ANALYSIS
December 31, 2013
The following pages provide graphic representation of select data pertaining to the financial position and
operations of the City for the past five years. Our analysis of each graph is presented to provide a basis
for discussion of past performance.
GENERAL FUND OPERATIONS OF THE CITY
For the year ended December 31, 2013, expenditures and transfers out exceeded revenues and transfers
in. Total fund balance in the General Fund decreased $ 429,852, or 0.5 %, in 2013 to $ 9,092,989.
General Fund
$700
$600
$500
$400
$300
$200
$100
General Fund Revenues/Expenditures
Per Capita
$600
$575
5556
;.'.. 5495 5494
2009 2010 2011 2012
■ Revenues ■Expenditures
* 2010 updated for change in accounting principle for component unit reporting
2013
12
CITY OF SHAKOPEE
FINANCIAL ANALYSIS
December 31, 2013
GENERAL FUND OPERATIONS OF THE CITY
70%
60%
50%
40%
30%
20%
10%
0%
Unreserved/Unassigned Fund Balance as a Percent of Expenditures
rM
2009 2010 2011 2012 2013
The City's target General Fund balance is an unassigned level between 40% (minimum) and 45% of
current year expenditures. This level is to provide working capital for cash flow, expected decline in
revenues and unforeseen expenditures such as natural disasters. Replenishing the Fund balance when it
falls below the target level shall be accomplished by interfund transfers or budgeting for expenditures
and other uses to be less than revenues or other sources over a period not to exceed three years. For the
year -ended December 31, 2013, the City slightly exceeded their policy, maintaining an unassigned fund
balance of 46 %.
13
CITY OF SHAKOPEE
FINANCIAL ANALYSIS
December 31, 2013
GENERAL FUND REVENUES
The City's revenue in the General Fund has increased each of the last five years. During 2013, revenue
in the General Fund exceeded the prior year revenue by $ 1,099,051, increasing from $ 21,770,348 to
$ 22,869,399. The major increases in the 2013 revenue were in property taxes, licenses and permits and
charges for services. Property taxes increased due to an increase in the General Fund levy of
approximately $ 752,000. License and permits increased with an increase in commercial development
within the City. Charges for services increased due to the increased electrical usage fund transfer, a new
conduit debt issuance fee and increased public engineering fees. Miscellaneous revenues decreased
$ 227,121 as a result of an increased unrealized loss on investments.
During 2013, property taxes represented 68% of the total General Fund revenues. Charges for services
represented the second largest component at 19 %.
General Fund Revenues
.pGY,VVV,VVV
$21,000,000
$18,000,000
$15,000,000
$12,000,000
$9,000,000
$6,000,000
$3,000,000
$
2009
2010
2011
2012
2013
■ Miscellaneous
$416,023
$418,654
$397,477
$359,323
$132,202
[]Charges for Services
804,536
3,028,330
3,879,113
4,035,921
4,304,786
❑ Fines and Forfeitures
364,895
423,746
357,249
368,167
348,262
■Licenses and Pen-nits
1,122,619
1,303,904
1,225,560
1,229,184
1,443,885
■Intergovernmental
1 593,647
1 828,906
796,076
991,445
1,042,127
❑ Taxes and Assessments
1 13,772,919
1 13,585,995
14,300,921
14,786,308
15,598,137
14
CITY OF SHAKOPEE
FINANCIAL ANALYSIS
December 31, 2013
GENERAL FUND
In 2013, total General Fund expenditures increased $ 845,300, or 4.5 %, from $ 18,694,101 in 2012 to
$ 19,539,401 in 2013. General government increased approximately $ 232,000 as a result of adding
staffing positions that had been vacant, and step and lane increases for employees. Public safety
increased approximately $ 357,000 as a result of an increase in overtime, and fully staffing the
department. Public works increased $ 265,348 as a result of significant snow and ice removal costs, and
related repairs as the machinery was being used more for the removal. All of the functions were under
their budgets.
Public
14
Public
13
2013 General Fund Expenditures
50%
2012 General Fund Expenditures
Government
17%
fety
3overnment
7%
afety
50%
15
CITY OF SHAKOPEE
FINANCIAL ANALYSIS
December 31, 2013
GENERAL FUND OPERATIONS OF THE CITY
For the 2013 operating year, the City Council provided a budget that would increase the General Fund
balance by $ 59,138. Revenues exceed expectations and expenditures were 4.6% under budget. At
year -end, expenditures and transfers out exceeded revenues and transfers in by $ 429,852.
During 2013, revenue in the General Fund exceeded the budget by $1,614,549, or 7.5 %. Significant
revenue budget variances are a result of receiving more in property taxes than anticipated, state fire aid,
conduit debt charges, tribal contributions and increased electrical transfer.
All functions of the expenditures were under budget. General government was under budget due to
positions that were vacant during the year, the allocation of legal expenditures to actual departments that
incurred the costs rather than all in general government function where it was budgeted and retirements.
Public safety was under budget due to open positions during the year. Public works set aside money for
a transfer for future projects. Parks and recreation had budgeted for assessments that were paid off in
2012 and more projects were done through public works than parks and recreation.
16
Budget
Actual
Variance
Revenues:
Taxes and Assessments
$ 14,590,000
$
15,598,137
$
1,008,137
Licenses and Permits
1,316,700
1,443,885
127,185
Intergovernmental
755,500
1,042,127
286,627
Charges for Services
3,852,150
4,304,786
452,636
Fines and Forfeitures
425,000
348,262
(76,738)
Miscellaneous Revenues
315,500
132,202
(183,298)
Total Revenues
$ 21,254,850
$
22,869,399
$
1,614,549
Expenditures:
General Government
$ 3,603,765
$
3,349,501
$
(254,264)
Public Safety
9,913,889
9,765,310
(148,579)
Public Works
2,883,328
2,641,079
(242,249)
Parks and Recreation
4,084,730
3,783,511
(301,219)
Total Expenditures
$ 20,485,712
$
19,539,401
$
(946,311)
Proceeds from Sale of Capital Asset
$ -
$
150
$
150
Transfers In
150,000
150,000
-
Transfers Out
(860,000)
(3,910,000)
(3,050,000)
Total Other Financing
Sources (Uses)
(710,000)
(3,759,850)
(3,049,850)
Change in Fund Balance
$ 59,138
$
(429,852)
$
(488,990)
During 2013, revenue in the General Fund exceeded the budget by $1,614,549, or 7.5 %. Significant
revenue budget variances are a result of receiving more in property taxes than anticipated, state fire aid,
conduit debt charges, tribal contributions and increased electrical transfer.
All functions of the expenditures were under budget. General government was under budget due to
positions that were vacant during the year, the allocation of legal expenditures to actual departments that
incurred the costs rather than all in general government function where it was budgeted and retirements.
Public safety was under budget due to open positions during the year. Public works set aside money for
a transfer for future projects. Parks and recreation had budgeted for assessments that were paid off in
2012 and more projects were done through public works than parks and recreation.
16
CITY OF SHAKOPEE
FINANCIAL ANALYSIS
December 31, 2013
TAX LEVY, CAPACITY AND RATES
The 2013 levy includes the General Fund and debt service levies. The tax levy is then reduced by fiscal
disparity credit that is received in the form of state aid. Disparity aid is reported as tax revenue and
reduces the amount of property tax revenue levied upon the City.
Taxable Tax Capacity and Certified Levy
J"J,VVV,VVV
$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
- -
--
—
i
i
$
1 2009
2010
2011
2012
2013
113 Taxable Tax Capacity
$40,984,725
$38,952,163
$37,680,587
$35,402,744
$32,445,035
■ Certified Levy
14,983,677
14,715,299
14,717,367
14,717,435
15,333,211
* Tax capacity values and levy obtained from the League of Minnesota Cities.
17
CITY OF SHAKOPEE
FINANCIAL ANALYSIS
December 31, 2013
TAX LEVY, CAPACITY AND RATES
As illustrated below and on the prior page, the tax capacity of the City decreased $ 8.5 million, or
20.8 %, since 2009. The City's property tax levy increased 2.3 %, or $ 349,534, in the same time frame.
With the levy increasing and tax capacity declining, the tax rate increased from 32.63% in 2009 to
42.00% in 2013. The state average tax rate for Minnesota cities was 48.79% for 2013.
Tax Capacity Rate
45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
42.00
O
36.66
33.71 34.73 O
32.63 0
0
2009 2010 2011 2012 2013
* Tax rates obtained from the League of Minnesota Cities.
18
CITY OF SHAKOPEE
FINANCIAL ANALYSIS
December 31, 2013
ENTERPRISE FUNDS
The City has two enterprise funds. The following charts compare the segment information and retained
earnings of all the enterprise funds for the last five years.
Sewer Fund
Storm Drainage Fund
$1,500,000
$1,000,000
$500,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
--
—
—
- - --
- -- -
--
-
$-
$(500,000)
-
_.-
$(1,000,000)
2009
2010
2011
2012
2013
■Service Charges
$-
$(1,000,000)
$1.187,229
$995,855
$1,037,427
$1,047,160
$(2,000,000)
2009
2010
1 2011 1
2012
1 2013
■ Operating Revenues
$3,444,044
$3,460,974
$2,936,144
$3,7307226
$2,973,474
■ Operating Expenses
3,398,117
3,683,168
3,836,202
3,953,269
4,122,406
O Operating Income (Low)
45,927
(222,194)
(900,058)
(223,043)
(1,148,932)
■ Change in Net Position
603,882
301,459
($524,858)
($14,003)
($1,162,542)
Storm Drainage Fund
$1,500,000
$1,000,000
$500,000
--
- - --
—
- - --
- -- -
--
-
$-
$(500,000)
$(1,000,000)
2009
2010
2011
2012
2013
■Service Charges
$1,320,566
$1.187,229
$995,855
$1,037,427
$1,047,160
• Operating Expenses
1,264,261
1.787,295
1,411,271
1,472,361
1,604,937
E3 Operating Income (Loss)
56,305
(600,066)
(415,416)
(434,934)
(557,777)
■ Change in Net Position
673,618
299,132
55,008
431,658
(3,004)
During 2013, the Sewer and Storm Drainage Funds both had operating losses. This is the fourth time in
the past five years the Funds reported an operating loss. This is primarily due to the depreciation
expense in both Funds and significantly lower revenues in the Sewer Fund.
19
CITY OF SHAKOPEE
FINANCIAL ANALYSIS
December 31, 2013
DEBT SERVICE
The following charts illustrate debt service requirements through 2028 and bonded debt for the last five
years.
$16,000,000
$15,000,000
$14,000,000
$13,000,000
$12,000,000
$11,000,000
$10,000,000
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
Debt Service Schedule
(Five Year Increments)
2014 -2018 2019 -2023 2024 -2028
■ G.O. Bond Principal ■Interest
Bonded General Obligation Debt
2009 2010 2011 2012 2013
■ Gross Bonded Debt ■Debt Service Fund Balance ■Net Bonded Debt
20
ADDITIONAL INFORMATION
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
00%
CITY OF SHAKOPEE
FINANCIAL ANALYSIS
December 31, 2013
US City Bond Ratings
30.39'0
20.5% 20.1%
9.4%
3.5%
Aaa Aal Aa2* Aa3 Al A2 A3 Below
* Denotes City's Rating
Information obtained from Moody's Bond Ratings for US Local Government Median Cities
21
CITY OF SHAKOPEE
FINANCIAL ANALYSIS
December 31, 2013
ADDITIONAL INFORMATION
The following information shows 2012 per capita data for the City in comparison to three other cities
similar in size and/or operations (Cities of Savage, Chanhassen and Chaska [the "Cities "]). This
information is based on the population estimates listed below. Information for 2013 is not yet available.
When analyzing this information, keep in mind that each of the Cities is unique in its operations.
Population Employees
Shakopee
37,841
170
Savage
27,500
150
Chanhassen
23,484
67
Chaska
24,002
184
The graph below shows the total General Fund revenues and expenditures per capita, as well as General
Fund tax revenues per capita for the various Cities.
2012 General Fund
Revenues and Expenditures Per Capita
* Population, revenues and expenditures obtained from 2012 Comprehensive Annual Financial
Report (CAFR) for all Cities
22
CITY OF SHAKOPEE
FINANCIAL ANALYSIS
December 31, 2013
ADDITIONAL INFORMATION
The following graphs show the General Fund expenditures by function per capita for the various Cities.
2012 General Fund
Expenditures Per Capita
2012 Per Capita Information
Governmental Funds
* Data obtained from 2012 Comprehensive Annual Financial Report (CAFR) for all Cities
23
CITY OF SHAKOPEE
Scott County, Minnesota
REPORTS ON COMPLIANCE WITH
GOVERNMENT A UDITING STANDARDS
AND MINNESOTA LEGAL COMPLIANCE
For the Year Ended December 31, 2013
CITY OF SHAKOPEE
TABLE OF CONTENTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENTAUDITINGSTANDARDS ................................. ...............................
REPORT ON LEGAL COMPLIANCE ......................................................... ............................... 3
SCHEDULE OF FINDINGS AND RESPONSES ON INTERNAL CONTROL ...................... 4
KDV
Lxpert adtrice. When you treed it.'"
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENTAUDITINGSTANDARDS
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and Members
of the City Council
City of Shakopee
Shakopee, Minnesota
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business -type activities, the aggregate discretely presented component unit, each major
fund and the aggregate remaining fund information of the City of Shakopee, Minnesota as of and for the
year ended December 31, 2013, and the related Notes to the Financial Statements, which collectively
comprise the City's basic financial statements, and have issued our report thereon dated May 8, 2014.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate
in the circumstances for the purpose of expressing our opinions on the financial statements, but not for
the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we
do not express an opinion on the effectiveness of the City's internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that
were not identified. However, as described in the accompanying Schedule of Findings and Responses
on Internal Control, we identified certain deficiencies in internal control that we consider to be material
weaknesses and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of the City's financial statements will not be prevented or detected and corrected on a
timely basis. We consider the deficiency described in the accompanying Schedule of Findings and
Responses on Internal Control to be a material weakness, listed as audit finding 13 -01.
I�DV
Internal Control Over Financial Reporting
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance. We consider the deficiency described in the accompanying Schedule of Findings and
Responses on Internal Control to be a significant deficiency, listed as audit finding 10 -01.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, noncompliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit and, accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
City's Response to Findings
The City's responses to the findings identified in our audit are described in the accompanying Schedule
of Findings and Responses on Internal Control. The City's response was not subjected to the auditing
procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
City's internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City's internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
KERN, DEWENTER, VIERE, LTD.
St. Cloud, Minnesota
May 8, 2014
K -"V
01 1
lrvpert advice. When you tteol it."
REPORT ON LEGAL COMPLIANCE
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and Members
of the City Council
City of Shakopee
Shakopee, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America, and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business -type activities, the discretely presented component unit, each major fund and the
aggregate remaining fund information of the City of Shakopee, Minnesota, for the year ended
December 31, 2013, and the related Notes to the Financial Statements, which collectively comprise the
City's basic financial statements and have issued our report thereon dated May 8, 2014.
The Minnesota Legal Compliance Audit Guide for Political Subdivisions, promulgated by the State
Auditor pursuant to Minnesota Statutes § 6.65, contains seven categories of compliance to be tested:
contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and
disbursements, miscellaneous provisions and tax increment financing. Our audit considered all of the
listed categories.
In connection with our audit, nothing came to our attention that caused us to believe that the City of
Shakopee failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for
Political Subdivisions. However, our audit was not directed primarily toward obtaining knowledge of
such noncompliance. Accordingly, had we performed additional procedures, other matters may have
come to our attention regarding the City's noncompliance with the above referenced provisions.
This report is intended solely for the information and use of those charged with governance and
management of the City and the State Auditor and is not intended to be and should not be used by
anyone other than these specified parties.
KERN, DEWENTER, VIERE, LTD.
St. CIoud, Minnesota
May 8, 2014
CITY OF SHAKOPEE
SCHEDULE OF FINDINGS AND RESPONSES ON INTERNAL CONTROL
December 31, 2013
CURRENT YEAR INTERNAL CONTROL FINDING:
Material Weakness:
Audit Finding 13 -01— Material Audit Adjustment
During the course of our engagement, we proposed material audit adjustments that would not have
been identified as a result of the City's existing internal controls and, therefore, could have resulted
in a material misstatement of the City's financial statements.
In order to ensure financial statements were free from material misstatement, audit adjustments were
required in the following areas:
• Enterprise Revenue
• Compensated Absences
City's Response:
City staff will complete an analytical review of estimate to actual amounts to identify and analyze any
variances in revenues received from Shakopee Public Utilities, to ensure that the amounts received and
recorded are accounted for in the correct revenue sources.
Compensated absence balances increased during the 2013 fiscal year, as the City hired several new
employees and upgraded several positions. These changes and the adjustments to wages resulted in
increases in the balances, and a new method of calculating these balances was determined. The newly
devised calculation will ensure a more consistent determination of the year end balances.
4
CITY OF SHAKOPEE
SCHEDULE OF FINDINGS AND RESPONSES ON INTERNAL CONTROL
December 31, 2013
CURRENT AND PRIOR YEAR INTERNAL CONTROL FINDING:
Significant Deficiency:
Audit Finding 10 -01— Lack of Segregation of Accounting Duties
Adequate segregation of accounting duties is in place when the four areas of a transaction have been
separated: authorization, custody, recording and reconciliation. During 2012, the City did not have
sufficient staff to segregate the duties listed above. The lack of adequate segregation of accounting
duties could adversely affect the City's ability to initiate, record, process, and report financial data
consistent with the assertions of management in the financial statements. Specific areas where this is
a lack of internal controls includes (but is not all- inclusive):
Payroll
The Payroll Clerk processes payroll, posts payroll to the general ledger, issues direct deposits,
prepares the payroll taxes, initiates transfers for payment of payroll, prepares all W -2s and
maintains all data files as well as the payroll program.
Cash Receipts
Deposits at City Hall — The front desk personnel receives money, codes the revenue and prepares
bank deposits. The Accountant reconciles cash and posts all deposits into the general ledger.
Deposits at Recreation Center — One employee is able to receipt money and prepare the bank
deposit.
Cash Disbursements
The Accountant enters invoices, matches purchase orders to invoices and prepares checks for
payment.
Management is aware of this condition and has taken certain steps to compensate for the lack of
segregation but due to the small staff needed to handle all of the accounting duties, the costs of
obtaining desirable segregation of accounting duties often exceeds benefits which could be derived.
However, management must remain aware of this situation and should continually monitor the
accounting system, including changes that occur.
City's Response:
The auditors recognize that with the City's limited number of employees, this will most likely remain as
a significant deficiency. The City continues to analyze personnel responsibilities in an attempt to
provide for enhanced controls and to mitigate control risks.
CITY OF SHAKOPEE, MINNESOTA
Scott County
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended
December 31, 2013
Department of Finance
Julie Linnihan, Director of Finance
Melissa Schlingman, Accounting Manager
129 Holmes Street South
Shakopee, MN 55379
(THIS PAGE LEFT BLANK INTENTIONALLY)
CITY OF SHAKOPEE
TABLE OF CONTENTS
SECTION I
INTRODUCTORY SECTION
Elected Officials and Administration ................................................ ...............................
OrganizationChart ............................................................................. ...............................
Letterof Transmittal .......................................................................... ...............................
Certificate of Achievement for Excellence in Financial Reporting ... ...............................
SECTION II
FINANCIAL SECTION
Independent Auditor's Report ........................................................... ...............................
Management's Discussion and Analysis (Unaudited) ....................... ...............................
Basic Financial Statements:
Government -Wide Financial Statements:
Statementof Net Position ...................................................... ...............................
Statementof Activities ........................................................... ...............................
Fund Financial Statements:
Balance Sheet — Governmental Funds ................................... ...............................
Reconciliation of the Balance Sheet to the Statement of Net Position —
GovernmentalFunds ............................................................ ...............................
Statement of Revenues, Expenditures and Changes in Fund Balances —
GovernmentalFunds ............................................................ ...............................
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances to the Statement of Activities — Governmental Funds ...............
Statement of Revenues, Expenditures and Changes in Fund Balances —
Budget and Actual — General Fund___________________________
Statement of Net Position — Proprietary Funds ............... ...............................
Statement of Revenues, Expenses and Changes in Fund Net Position —
ProprietaryFunds ........................................................... ...............................
Statement of Cash Flows — Proprietary Funds ................. ...............................
Combined Statement of Fiduciary Net Position .............. ...............................
Statement of Net Position — Component Unit .................. ...............................
Statement of Revenues, Expenses and Changes in Fund Net Position —
ComponentUnit ............................................................ ...............................
Notes to the Financial Statements .......................................... ...............................
Required Supplementary Information:
Schedule of Funding Progress — Other Post Employment Benefits .....................
Supplementary Information:
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual — General Fund ...................................... ...............................
Combining and Individual Fund Financial Statements and Schedules:
Combining Balance Sheet — Nonmajor Governmental Funds .........................
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances — Nonmajor Governmental Funds ................... ...............................
Page
1
2
3
8
9
13
26
27
28
29
30
31
33
34
35
36
37
38
39
41
76
78
80
86
CITY OF SHAKOPEE
TABLE OF CONTENTS
SECTION II (Continued)
Table Page
FINANCIAL SECTION
Supplementary Information: (Continued)
Combining and Individual Fund Financial Statements and Schedules: (Continued)
Combining Statement of Fund Net Position — Internal Service Funds ................. 92
Combining Statement of Revenues, Expenses and Changes in Fund Net
Position — Internal Service Funds ........................................ ............................... 93
Combining Statement of Cash Flows — Internal Service Funds ........................... 94
Combined Statement Fiduciary Net Position ......................... ............................... 95
Statement of Changes in Assets and Liabilities — Agency Fund ........................... 96
SECTION III
STATISTICAL SECTION
Net Position by Component ....... ...............................
Changesin Net Position ..................................................................... ...............................
2
104
Fund Balances — Governmental Funds .............................................. ...............................
3
106
Changes in Fund Balances — Governmental Funds ........................... ...............................
4
108
Tax Capacity and Estimated Actual Value of Taxable Property ....... ...............................
5
110
Direct and Overlapping Property Tax Rates ...................................... ...............................
6
111
PrincipalTaxpayers ........................................................................... ...............................
7
112
Property Tax Levies and Collections ................................................. ...............................
8
113
Ratio of Outstanding Debt by Type ................................................... ...............................
9
114
Ratio of General Bonded Outstanding ............................................... ...............................
10
115
Direct and Overlapping Governmental Activities Debt .................... ...............................
11
117
Legal Debt Margin Information ......................................................... ...............................
12
118
Pledged Revenue Coverage ............................................................... ...............................
13
120
Demographic and Economic Statistics .............................................. ...............................
14
121
PrincipalEmployers ........................................................................... ...............................
15
123
Full -Time Equivalent City Government Employees by Function/Program .....................
16
124
Operating Indicators by Function/Program ....................................... ...............................
17
126
Capital Asset Statistics by Function/Program ................................... ...............................
18
128
CITY OF SHAKOPEE
ELECTED OFFICIALS AND ADMINISTRATION
DECEMBER 31, 2013
Elected Officials
Brad Tabke
Matthew Lehman
Jay Whiting
Steven Clay
Pamela Schurman
(Resigned 08/31/2013)
Patrick Heitzman
(Appointed 09/01/13)
Administration
Mark H. McNeill
Julie A. Linnihan
Position
Mayor
Council Member
Council Member
Council Member
Council Member
Council Member
City Administrator
Finance Director /City Clerk
Term Expires
December 31, 2013
December 31, 2015
December 31, 2015
December 31, 2013
December 31, 2013
December 31, 2013
Appointed
Appointed
1
CITY OF SHAKOPEE
ORGANIZATION CHART
DECEMBER 31, 2013
Electorate
City Council
Economic Development
Authority
Planning Commission & Board of Adjustment &
Appeals
Shakopee Public Utilities Commission
Environmental Advisory Committee
Police Fire Public Finance/ Recreation Economic
Works City Clerk Development
Coordinator
Natural
Resources
Park and Recreation Advisory Board
Police Civil Service Commission
Economic Development Authority Commission
City
Administrator
Engineering I I Operations
Street
Park
Fleet
Sewer
Storm Water
Community Administration
Development
Planning I W HR
Bldg Insp I H IT
Transit I H Facilities
Telecomm
K
SHAKOPEE
May 8, 2014
To the Honorable Mayor, Members of the City Council, and Citizens of the City of Shakopee:
Minnesota Statutes require that within six months of the close of each fiscal year every city publish a
complete set of audited financial statements. This report is published to fulfill that specific requirement for
the fiscal year ended December 31, 2013.
The City's management staff has exercised its best efforts to insure that the information presented in the
report is complete and reliable and is based upon a comprehensive framework of internal control that has
been established for this purpose. The costs of internal control should not exceed anticipated benefits and
therefore the object is to provide reasonable rather than absolute assurance that the financial statements are
free from material misstatement.
The City of Shakopee's financial statements have been audited by Kern DeWenter Viere, Ltd., a firm of
licensed certified public accountants. The goal of the independent audit was to provide reasonable
assurance that the financial statements of the City for the year ended December 31, 2013, are fairly
presented in conformity with GAAP (generally accepted accounting principles). Based on the audit, the
independent auditor concluded that there was reasonable basis for rendering an unmodified ( "clean")
opinion on the City's financial statements for the year ended December 31, 2013. The independent audit
involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements; assessing the accounting principles used; significant estimates made by management; as well as
evaluation of the overall financial statement presentation. The independent auditor's report is presented as
the first component of the financial section of this report.
Management Discussion and Analysis (MD & A) immediately follows the independent auditor's report and
provides a narrative introduction, overview, and analysis to accompany the basic financial statements. This
letter of transmittal is designed to complement the MD &A and should be read in conjunction with it.
Profile of the City
The City of Shakopee was incorporated for the second time in 1870 and is located approximately 25 miles
southwest of Minneapolis. Bounded by the Minnesota River on the north, Shakopee is in the northern part
of Scott County and is the county seat. In recent years, the City has been one of the most rapidly growing
communities in the state. The 2000 population of the City was 20,568 and the land area covered is
approximately 30 square miles. The 2010 census confirmed that the population had increased to 37,076 and
has been continuing to experience growth into the current year, with an estimated population of 38,120, in
2013. The city comprises a unique blend of residential, commercial and industrial properties, which
provides a wide range of opportunities that are the result of the strong economic health of the community
and region. More than 60 % of the community is developed, with approximately 30 % of the developed
land as residential. However, about 25 % of the undeveloped land is owned or controlled by the Shakopee
Mdewakanton Sioux Community (SMSC), a federally recognized Native American Tribe. The City levies a
property tax on both real and personal property located within its boundaries. The City may also by state
statute, extend its corporate limits by annexation, which historically has occurred periodically.
COMMUNITY PRIDE SINCE 1857
129 Holmes Street South • Shakopee, Minnesota • 55379 -1351 •952- 233 -9300 • FAX 952- 233 -3801 • www.ShakopeeNTN.gov
Shakopee is organized in Minnesota under Plan A, which includes a City Administrator, but the City
Council retains primary decision making authority such as policy setting, adopting ordinances and budget
and staffing. The City Council has four members who serve staggered terms of four years plus the Mayor
who serves a two -year term. All council positions are non - partisan, part-time and members are elected at
large.
The City provides typical municipal services such as police and fire protection, street and infrastructure
construction, public works maintenance, parks, recreation, planning and zoning. Also provided are
utilities such as sewer and storm drainage utilities, organized refuse collection, recycling, and certain
transit services. The City is one of several regional transit providers (opt- outs), and specifically provides
express bus and local circulator bus service directly. The City is in discussions about merging these
services with a larger regional transit provider, but would still remain an opt -out. Electric and water
utilities are operated by Shakopee Public Utilities Commission which is appointed by the City Council
but operates independently of the City of Shakopee.
Economic development and redevelopment are controlled by the Shakopee Economic Development
Authority (the Authority). The Authority is comprised of the Mayor and City Council members and is
included as an integral part of the City's report. In 2013, the City filled the newly created position of
Economic Development Coordinator, which allows for a greater emphasis on the coordination of business
and commercial activity with the City operations, as well as Chamber, County and other impacted
organizations. The economic development activities of both staff and Council continue to increase from
past years, as the strong economic climate in the region has provided the City with the benefit of planned
commercial and industrial growth as well as expansion of several existing businesses and commercial
sites. 2014 activity has already confirmed that the continuation of the growth trend will carry into the
current year as staff prepares to meet the numerous requests for site availability, market niche information
and updates relating to a variety of funding options that would provide the necessary bridge considered
for a business location or expansion in 2014.
The annual budget is the basis for the City's financial planning and control. The budget is prepared by Fund
(e.g., General), function (e.g., Public Works) and department (e.g., Engineering). Budget requests are
submitted in July by Department Heads. The City Administrator reviews the submittals with the Finance
Director and department heads, to determine the prioritization of specific budget requests. Informational
budget summaries are presented to the City Council during work sessions and allow for open community
presentation and discussion. The City Council is presented with a proposed budget and tax levy in August
of each year. This information succinctly details changes in the upcoming year budget, such as changes in
personnel and position structure, funding requests that are unique to the specific budget year, and the basis
for the request, such as development of anew program or project, to a Council approved initiative, as well
as requests for transfers and internal funding needs, such as internal service fund reviews. City Council is
required to adopt a maximum tax levy by September 15. The final tax levy and budget are adopted in
December after a public meeting, which provides the City Council and community impact information
relating to both the budget decisions and property tax levies. Final levy information is submitted to the
County, for inclusion in the development of the upcoming year property tax statements. Budgeting control
is provided by an annual budget resolution passed by City Council. Formal control is at the division level
and Council action is necessary to change budgeted amounts between divisions and /or funds. The Finance
Director or City Administrator may make changes within divisions.
Along with the operating budget, the city annually prepares a five -year capital improvement plan (CIP) that
is the basis for the long term goal of providing and maintaining a functional public facility program, that
provides the residents and businesses with infrastructure necessary for the on -going growth and
development. The capital plans have historically provided details on the infrastructure projects that are
funded through property tax levy, special assessments, utility funds and other intergovernmental revenue
sources. These projects are primarily allowing for the upgrades, expansion and coordination of
transportation based needs, as well as trails, signals and other infrastructure improvements. The City
Council also reviews and discusses the Park planned improvements that are funded through the Park
Reserve fund, which provides for the use of park and community facilities that have historically been funded
through the collection of Park Dedication fees. The capital plans are reviewed with the Council and City
staff, and the funding sources and priorities developed for the annual and future budget practices.
A five -year major equipment list is also annually prepared and presented to Council. The funding for this
program is through the Internal Service fund rate charges, which are determined by departmental use,
replacement plans and determination of the remaining life. Internal Service funds are utilized for the
definition and application of other charges, including governmental buildings, park assets facilities, and
information technology. These charges are integrated into the individual budgets of the General fund and
departments that are benefitted by the activities of the programs. The Internal Service funds continue to be
reviewed and updated as the community needs and council directives are considered during each budget
cycle.
Local Economy
Shakopee is the county seat of Scott County, and it abuts the largest county in the region, Hennepin
County. Shakopee continues to benefit from its strategic location within the metropolitan region, as well
as its direct access to TH 169, which connects the city to other major regional roadways, the MSP
International Airport, and major employment centers. The City is also at the heart of regional attractions
which includes Valleyfair, Canterbury Park horse racing track, Mystic Lake and Little Six casinos, and
the Minnesota Renaissance Festival. These and other factors have propelled the City through a period of
strong and consistent growth that is likely to continue for years to come.
In 2013 and 2014, permits were issued for the construction of the following;
• Emerson Process Management's remodeling of the approximate 490,000 sq. ft. former ADC 11
building;
• Opus' construction of a new 195,000 sq. ft. office /warehouse spec building;
• A new 187,000 sq. ft. Shutterfly facility in the Dean Lakes area;
• Construction of a data center, operated by Century Link in the Dean Lakes area;
• Construction of a new 175,000 sq. ft. facility for TE Connectivity on Fourth Avenue;
The Emerson and Shutterfly development projects, which were initiated in 2012 and 2013, will benefit
from financing assistance such as tax abatement programs or participation in Minnesota Investment Fund
(MIF) opportunities.
The City continues to issue residential permits in the Dakota Crossings plat, which was approved in 2012,
and is in the process of reviewing a second plat (Dakota Highlands) which would bring another 54 single
family lots to the market in 2014.
A major residential apartment expansion is currently underway in the multi - family residential area near
Canterbury downs, which will add 88 new apartment units, as an expansion of the Addison Apartment
Complex.
The recent commercial, industrial and residential growth has required the City to maintain a commitment to
the infrastructure plans, and integration with other local and regional projects. The City Council committed
funding in 2013 for a dedicated transfer of the property tax levy to fund a portion of the planned capital
improvements. The initial $500,000 commitment allows for street reconstruction and overlays, and
miscellaneous other construction projects. The 2014 budget provides $750,000 for continued and expanded
capital improvement funding.. This will provide for a consistent funding source needed to address recently
deferred infrastructure programs.. The City also continues to work with Scott County, the State of
Minnesota (MnDOT), as well as private developers, to allow for a strong coordination of project planning
and benefits to the region's transportation system and business climate.
Supporting retail opportunities, such as restaurants and small retail sites, are investigating Shakopee as a
result of the impending increased employee counts from the planned commercial ventures that are scheduled
to build in the community.
Scott County has historically dealt with a daily out - migration of workers who work in neighboring counties.
This issue is being addressed by decision makers, who want to utilize the skilled and educated work force as
an attraction to businesses.. The commercial and industrial growth that will be experienced in 2014 and
2015 will eliminate some of the loss of daily work force from the area. By seeking a solution to both
transportation and employment issues, the residents of the Shakopee area will be able to benefit by living
and working close to home.
In late 2013, the City Council and Economic Development Advisory Commission members embarked on a
study of the Highway 101 Corridor, to address and study the options of the best use of this historic, but
under - utilized area. The study continues into 2014, and reviews the options that include housing, retail
attractions, as well as a unique niche of businesses that could benefit from the residents who walk, bike and
travel through the area, but seldom frequent the offerings of this unique river front site. This study will
integrate many of the community needs and suggestions, and allow for the prioritizing of the project plans.
The improved state -wide economic climate has provided the 2014 Minnesota Legislature with the ability to
reduce or eliminate several specific business taxes, in an effort to encourage the continuing expansion of the
work force and economic environment..
Long -Term Financial Planning
Historically, the City has issued only limited debt, in the form of bonds and internal funding for the planned
infrastructure projects, expansion specific to streets, underground utilities, trails and sidewalk expansion. A
portion of the long term debt is funded by special assessments against benefited properties. The City applies
special assessments against benefitted properties at a rate of 30% of the assessable project costs. This
limited amount of special assessment revenue does require the City to clearly define the other recognized
components of the payment of project costs. The City does not assess for overlays, which then requires
funding from the tax levy or other regional revenues sources. The City Council has recently allowed for the
use of inter -fund transfers, use of existing fund balance position, as well as review of charges and fees that
may be applicable to the projects, and currently not tapped for future funding sources.
City equipment needs are currently identified and funded in a manner that will not place an undue burden or
single year expense fluctuation on the taxpayers. The planned equipment replacement program clearly
identifies the equipment needs for current projects as well as future use. This is based on known and
anticipated programs and mandates, such as environmental program adjustments and possible community
expansion and growth. The capital and equipment needs of the City require constant appraisal for
replacement cost, life span and the assurance that the insurance coverage is providing for the most
comprehensive, yet affordable, coverage. This has become a high priority of the departments to make
certain that the assets of the City are adequately covered.
Relevant Financial Policies
The City's target General Fund balance is to maintain an unassigned level between 40% and 45% of
current year expenditures. This level is to provide working capital for cash flow, expected declines in
revenues, and for unforeseen expenditures such as natural disasters, or for unforeseen but urgent requests.
Replenishing the fund balance when it falls below the target level shall be accomplished by inter -fund
transfers, or adjusting of expenditures or revenues, over a period not to exceed three years.
The City historically receives no local government aid (LGA) or market value homestead credit (MVHC)
from the State of Minnesota. Annual legislative actions may impact the financial position of those cities
that are currently reliant on these and other revenue sources, which leaves them vulnerable to the
economies of the State as a whole. As of this writing, it was not anticipated that actions by the Minnesota
Legislature would negatively impact the city and its' operations and planning. The standard budget
process, which provides for the presentation and approval of the property tax levies for the General fund
(including Economic Development), debt service and referendum debt, will be consistent with prior year
actions.
The accounting, auditing and financial reporting policies are designed to maintain a system of financial
monitoring, control and reporting for all operations and funds in order to provide effective means of
ensuring that overall City goals and objectives will be met and to assure the City's residents and investors
that the City is well managed and fiscally sound.
The investment policy provides for conservative investing, preserving capital and maintaining adequate
liquidity for forecasted cash needs. A third party investment manager handles the majority of the portfolio
and all investments are held in a trust account.
The debt policy ensures that the City's debt; 1) does not weaken the City's financial structure; and 2)
provide limits on debt to avoid problems in servicing debt. This policy is critical for maintaining the best
possible credit rating.
Capital policies include having expenditures forecasted ahead for five to ten years and are updated annually.
Internal Service Funds for major equipment, major buildings and facilities, park asset replacement and
information technology costs stabilize the annual impact of those items to the General fund.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Shakopee for its
Comprehensive Annual Financial Report (CAFR) for the fiscal year ended December 31, 2012. This was
the 28th consecutive year that the City has received this award. In order to be awarded a Certificate of
Achievement, a government must publish an easily readable and efficiently organized CAFR. This report
satisfied both GAAP and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current CAFR
continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the
GFOA to determine its eligibility for another certificate.
The preparation of this report would not have been possible without the efficient and dedicated services of
the Finance Department, Accounting Manager Melissa Schlingman, and the entire city staff. We express
appreciation to those staff members who assisted and contributed to the preparation of this report. Credit
also must be given to the Mayor and Councilors for their support for maintaining the highest standards of
professionalism in the management of the City of Shakopee's finances.
Respectfully submitted,
Mark McNeill Julie A. Linnihan
Administrator Finance Director
►1+J
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Shakopee
Minnesota
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2012
Executive Director /CEO
KD'*V
Expert advice. When you need it. '
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and Members
of the City Council
City of Shakopee
Shakopee, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -
type activities, the aggregate discretely presented component units, each major fund and the aggregate
remaining fund information of the City of Shakopee, Minnesota, as of and for the year ended
December 31, 2013, and the related Notes to the Financial Statements, which collectively comprise the
City's basic financial statements as listed in the Table of Contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the City's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
KOV
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, the aggregate
discretely presented component units, each major fund and the aggregate remaining fund information of
the City of Shakopee, Minnesota, as of December 31, 2013, and the respective changes in financial
position and, where applicable, cash flows thereof and the budgetary comparison for the General Fund
for the year then ended in accordance with accounting principles generally accepted in the United States
of America.
Implementation of GASB 65
As discussed in Note 21 to the financial statements, the City has adopted the provisions of the
Governmental Accounting Standards Board (GASB) Statement No. 65, Items Previously Reported as
Assets and Liabilities. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's
Discussion and Analysis which follows this letter the Schedule of Funding Progress - Other Post
Employment Benefits as listed in the Table of Contents be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board who considers it to be an essential part of financial reporting
for placing the basic financial statements in an appropriate operational, economic or historical context.
We have applied certain limited procedures to the required supplementary information in accordance
with auditing standards generally accepted in the United States of America, which consisted of inquiries
of management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Shakopee's basic financial statements. The introductory section,
accompanying supplementary information and statistical section, are presented for purposes of
additional analysis and are not a required part of the basic financial statements.
10
KD-"'*V
The accompanying supplementary information is the responsibility of management and were derived
from and relate directly to the underlying accounting and other records used to prepare the basic
financial statements. Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the
basic financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America. In
our opinion, the accompanying supplementary information is fairly stated, in all material respects, in
relation to the basic financial statements as a whole.
The introductory section and statistical section have not been subjected to the auditing procedures
applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or
provide any assurance on it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated May 8, 2014
on our consideration of the City of Shakopee's internal control over financial reporting and on our tests
of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and results of that testing, and not to provide an opinion on internal
control over financial control over financial reporting or on compliance. That report is an integral part
of an audit performed in accordance with Government Auditing Standards in considering the City of
Shakopee's internal control over financial reporting and compliance.
/4,L ., DeWX't, A, V-*-� W.
KERN, DEWENTER, VIERE, LTD.
St. Cloud, Minnesota
May 8, 2014
11
(THIS PAGE LEFT BLANK INTENTIONALLY)
12
CITY OF SHAKOPEE
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
As management of the City of Shakopee (the "City "), we offer readers of the City's financial statements
this narrative overview and analysis of the financial activities of the City for the year ended
December 31, 2013. We encourage readers to consider the information presented here in conjunction
with additional information that we have furnished in our Letter of Transmittal, which can be found on
pages 3 to 7 of this report.
Financial Highlights
• The assets of the City exceeded its liabilities at the close of the most recent year by $ 255.6
million (net position). Of this amount, $ 61.8 million (unrestricted net position) may be used to
meet the City's ongoing obligations to citizens and creditors.
• The City's total net position decreased $ 1,778,567.
• As of the close of the current year, the City's governmental funds reported combined ending
fund balances of $ 27,702,197 million, decreasing from the prior year. Approximately 32.7% of
this total amount, $ 9.1 million is available for spending at the City's discretion (unassigned fund
balance).
• At the end of the current year, unassigned fund balance for the General Fund was $ 9.1 million,
or 46.5 %, of total General Fund expenditures.
• The City's total bonded debt decreased $ 2,070,000.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the City's basic financial
statements. The City's basic financial statements comprise three components: 1) government -wide
financial statements, 2) fund financial statements, and 3) Notes to the Financial Statements. This report
also contains other supplementary information in addition to the basic financial statements themselves.
Government -Wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad overview of the
City's finances, in a manner similar to private- sector business.
The Statement of Net Position presents information on all of the City's assets and liabilities, with the
difference between the two reported as net position. Over time, increases or decreases in net position
may serve as a useful indicator of whether the financial position of the City is improving or
deteriorating.
The Statement of Activities presents information showing how the City's net position changed during
the most recent year. All changes in net position are reported as soon as the underlying event giving rise
to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are
reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g.,
uncollected taxes and earned but unused employee leaves).
Both of the government -wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that
are intended to recover all or a significant portion of their costs through user fees and charges (business -
type activities). The governmental activities of the City include general government, public safety,
13
CITY OF SHAKOPEE
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
highways and streets, economic development and recreation. The business -type activities of the City
include sewer and storm drainage utilities.
The government -wide financial statements include not only the City itself (known as the primary
government), but also two legally separate entities for which the City is financially accountable. The
component units are Shakopee Public Utilities Commission (SPUC) and the Economic Development
Authority (EDA). SPUC's financial information is reported separately from the financial information
presented for the primary government as a discretely presented component unit. The EDA, which
functions like a department of the City although it is a legally separate entity, is presented within the
City's government -wide financial statements. The City Council is the EDA Board.
The government -wide financial statements can be found on pages 26 and 27 of this report
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other state and local governments, uses
fund accounting to ensure and demonstrate compliance with finance- related legal requirements. All of
the funds of the City can be divided into three categories: governmental funds, proprietary funds and
fiduciary funds.
Government Funds
Government funds are used to account for essentially the same functions reported as governmental
activities in the government -wide financial statements. However, unlike the government -wide financial
statements, governmental fund financial statements focus on near -term inflows and outflows of
spendable resources, as well as on balances of spendable resources available at the end of the year.
Such information may be useful in evaluating a City's near -term financing's requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government -wide financial statements. By
doing so, readers may better understand the long -term impact of the City's near -term financing
decisions. The governmental funds Balance Sheet and the governmental funds Statement of Revenues,
Expenditures and Changes in Fund Balances provide a reconciliation to facilitate this comparison
between governmental funds and governmental activities.
The City maintains 31 individual governmental funds. Information is presented separately in the
governmental funds Balance Sheet and in the governmental funds Statement of Revenues, Expenditures
and Changes in Fund Balances for the General Fund, the 2004A Improvement Bond Debt Service Fund,
and the Capital Improvement Capital Project Fund. Those are considered to be major funds. Data from
the other governmental funds are combined into a single, aggregated presentation. Individual fund data
for each of these non -major governmental funds is provided in the form of combining statements
elsewhere in this report.
The City adopts an annual appropriated budget for its General Fund. A budgetary comparison statement
has been prepared for the fund to demonstrate compliance with the budget.
14
CITY OF SHAKOPEE
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
The basic governmental funds financial statements can be found on pages 28 to 31 of this report
Proprietary Funds
The City maintains two different types of proprietary funds. Enterprise funds are used to report the
same functions presented as business -type activities in the government -wide financial statements. The
City uses enterprise funds to account for its sewer and storm drainage operations. Internal service funds
are an accounting device used to accumulate and allocate costs internally among the City's various
functions. The City uses internal service funds to account for its fleet of vehicles and mobile equipment,
its major buildings, the replacement of park assets, information technology items and for employee
compensated absences. All of these services predominantly benefit governmental rather than business -
type functions.
Proprietary funds provide the same type of information as the government -wide financial statements.
The proprietary fund financial statements provide separate information for the sewer and storm drainage
operations, all of which are considered to be major funds of the City. Conversely, all internal service
funds are combined into a single, aggregated presentation in the proprietary fund financial statements.
Individual fund data for the internal service funds is provided in the form of combining statements
elsewhere in this report.
The basic proprietary fund financial statements can be found on pages 34 to 36 of this report.
Component Units
Component units are legally separate organizations for which the City is financially accountable. The
government -wide financial statements present information for the component units in a single column
on the Statement of Net Position. Also, some information on the Statement of Changes in Net Position
is aggregated for component units. The component units' Statements of Net Position and Statement of
Changes in Net Position provide detail for each major component unit.
Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the government.
Fiduciary funds are not reflected in the government -wide financial statement because the resources of
those funds are not available to support the City's own programs.
The basic fiduciary fund financial statements can be found on page 37 of this report.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in
the government -wide and fund financial statements. The Notes to the Financial Statements can be found
on pages 41 to 73 of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information concerning the City's progress in funding its obligation to provide
15
CITY OF SHAKOPEE
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
pension benefits to its employees.
The combining statements referred to earlier in connection with non -major governmental funds, internal
service funds and fiduciary funds are presented immediately following the required supplementary
information on pensions. Combining and individual fund statements and schedules can be found on
pages 80 to 97 of this report.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a City's financial position.
For the City, assets exceeded liabilities by $ 255.6 million at the close of the most recent year.
By far the largest portion of the City's net position (71.7 %) reflects its investment in capital assets (e.g.,
land, buildings and equipment); less any related debt used to acquire those assets that is still
outstanding. The City used these capital assets to provide services to citizens; consequently, these assets
are not available for future spending. Although the City's investment in its capital assets is reported net
of related debt, it should be noted that the resources needed to repay this debt must be provided from
other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
An additional portion of the City's net position (4.0 %) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position ($ 61.8
million) may be used to meet the City's ongoing obligations to citizens and creditors.
16
Net Position
(Expressed in Thousands)
Governmental Activities
Business -Type
Activities
Total
2013
2012
2013
2012
2013
2012
Current and Other Assets
$
51,813
$
54,141
$
31,753
$
34,525
$
83,566
$
88,666
Capital Assets
130,292
129,387
65,181
64,125
195,473
193,512
Total Assets
$
182,105
$
183,528
$
96,934
$
98,650
$
279,039
$
282,178
Long -Term Liabilities
Outstanding
$
15,832
$
18,793
$
93
$
1,089
$
15,925
$
19,882
Other Liabilities
7,010
4,807
476
82
7,486
4,889
Total Liabilities
$
22,842
$
23,600
$
569
$
1,171
$
23,411
$
24,771
NET POSITION:
Net Investment in Capital Assets
$
118,167
$
115,192
$
65,181
$
64,125
$
183,348
$
179,317
Restricted
10,454
9,912
-
-
10,454
9,912
Unrestricted
30,642
34,824
31,184
33,354
61,826
68,178
Total Net Position
$
159,263
$
159,928
$
96,365
$
97,479
$
255,628
$
257,407
An additional portion of the City's net position (4.0 %) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position ($ 61.8
million) may be used to meet the City's ongoing obligations to citizens and creditors.
16
CITY OF SHAKOPEE
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
At the end of the current year, the City was able to report positive balances in all three categories of net
position, both for the government as a whole, as well as for its separate governmental and business -type
activities. The same situation held true for the prior year.
During the current year, the City's net position decreased by $ 1.8 million. This is a result of additional
positions added in 2013 as well as an increase in projects and repairs during the year. Additionally
decreases in charges for services due to lower transit revenue, decreased capital grants and contributions
due to less state aid funding and lower assessment revenue relating to capital projects. The business -
type activities experienced a decrease in net position during 2013 with revenues decreasing due to
decreases from the previous year in metro SAC charges and state aid construction. Expenditures
increased as a result of increased Met Council charges and increased maintenance and operational costs.
Changes in Net Position
(Expressed in Thousands)
17
Governmental Acvtivities
Business -Type Activities
Total
2013
2012
2013
2012
2013
2012
REVENUES:
Program Revenues:
Charges for Services
$ 7,468
$ 7,574
$ 4,725
$ 5,170
$ 12,193 $
12,744
Operating Grants and
Contributions
1,894
2,107
-
-
1,894
2,107
Capital Grants and
Contributions
689
1,479
8
349
697
1,828
General Revenues:
Property Taxes
15,796
15,003
-
-
15,796
15,003
Other Taxes
114
114
-
-
114
114
Other
297
558
53
424
350
982
Total Revenues
26,258
26,835
4,786
5,943
31,044
32,778
EXPENSES:
General Government
4,705
4,603
-
-
4,705
4,603
Public Safety
9,868
9,431
-
9,868
9,431
Public Works
7,578
7,083
-
7,578
7,083
Culture and Recreation
4,021
3,818
-
4,021
3,818
Economic Development
339
152
-
339
152
Interest on Long -Term Debt
574
587
-
-
574
587
Sewer
-
-
4,097
3,926
4,097
3,926
Storm
-
-
1,641
1,446
1,641
1,446
Total Expenses
27,085
25,674
5,738
5,372
32,823
31,046
Increase (Decrease in Net
Position before Transfers
(827)
1,161
(952)
571
(1,779)
1,732
Transfers
162
100
(162)
(100)
-
-
Change in Net Position
(665)
1,261
(1,114)
471
(1,779)
1,732
NET POSTION:
January 1
159,928
158,667
97,479
97,008
257,407
255,675
December 31
$ 159,263
$ 159,928
$ 96,365
$ 97,479
$ 255,628 $
257,407
17
CITY OF SHAKOPEE
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
Governmental Activities
Governmental activities decreased the City's net position by $ 664,825. The major decrease was a result
of new positions added during 2013 as well as decreased revenues in park dedications fees, transit and
special assessment payments partially offset by an increase in property tax revenue.
$10,000,000
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
Expenses and Program Revenues — Governmental Activities
Charges for
Other Taxes
0%
60%
[]Program Revenues
mExpenses
aerating Grants
and
contributions
7%
Capital Grants
and
Contributions
3%
18
O
E
ca
CA
o
3
_U
E
o C.
a
U
Q
wQa
F
c
Revenues by Source
— Governmental Activities
Charges for
Other Taxes
0%
60%
[]Program Revenues
mExpenses
aerating Grants
and
contributions
7%
Capital Grants
and
Contributions
3%
18
CITY OF SHAKOPEE
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
Business -Type Activities
Business -type activities decreased the City's net position by $ 1,113,742. Key elements of this decrease
are as follows:
• Charges for services decreased $ 445,104 as metro SAC charges decreased due to the city
depleting its metro sac credits during 2013. The City also experienced decreased revenue
collections due to decreased water consumption and usage. This was partially offset by an
increase in storm trunk charges in 2013 due to additional industrial and residential development.
• Expenses increased in 2013 due to higher Met Council fees, which are anticipated to continue
annually.
• The sewer and storm water activities will continue to experience a higher degree of expense, as
the deferral of maintenance and increasing mandates will continue to put pressure on the funds,
to meet the demands of on -going and future development needs.
Expenses and Program Revenues — Business -Type Activities
$4,500,000
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
Sewer Storm
Revenues by Source — Business -Type Activities
Capital Grants
and
Charges for
Services
99%
o Program
Revenues
■ Expenses
19
CITY OF SHAKOPEE
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance -
related legal requirements.
Governmental Funds
The focus of the City's governmental funds is to provide information on near -term inflows, outflows
and balances of spendable resources. Such information is useful in assessing the City's financing
requirements. In particular, assigned and unassigned fund balance may serve as a useful measure of a
City's net resources available for spending at the end of the year.
As of the end of the current year, the City's governmental funds reported combined ending fund
balances of $ 27,702,197, a decrease of $ 4,047,554 in comparison with the prior year. Approximately
32.8 %, ($ 9,074,833), of the total amount constitutes unassigned fund balance, which is available for
spending at the City's discretion. Approximately 21.6 %, ($ 5,984,566), of the total amount constitutes
assigned fund balance, which is assigned for designated purposes. The remainder of fund balance,
($ 12,642,798), is not available for new spending because it has already been restricted or is
non - spendable.
The General Fund is the chief operating fund of the City. At the end of the current year, fund balance of
the General Fund was $ 9,092,989. As a measure of the General Fund's liquidity, it may be useful to
compare fund balance (unassigned) to total fund expenditures. Fund balance represents 46.5% of total
General Fund expenditures.
Fund balance of the City's General Fund decreased by $ 429,852 during the current year. Key factors in
this decrease consist of the following:
• Before transfers, the fund balance of the General Fund showed a $ 3,329,998 increase. After the
net transfer of $ 3,760,000 and a gain on sales of assets of $ 150, fund balance decreased
$ 429,852. Transfers provided the necessary funding for several significant capital infrastructure
programs and projects, as well as funding for the growing Information Technology needs of the
City
• Overall Revenues increased approximately $ 1 Million as a result of increased property taxes.
Additional licenses and permits and charges for services revenues increased due to increased
growth and development during the year
• Overall expenditures increased approximately $ 845,000 due to new positions added during 2013
and increased development related costs. The colder weather in 2013 impacted the expenditures
specific to Public Works, as both personnel costs and operational costs for ice control, snow
plowing and street maintenance were higher than the prior year
• Debt Service funds did not have specific levies for the 2013 budget year, and the transfers at year
end provided a needed funding source for these funds, allowing for the cash coverage for future
year bond payments
Fund balance of the 2004A Improvement Bonds fund decreased $ 48,273 due to an additional year of
payments on the bond partially offset by special assessment revenue and a transfer in from the General
Fund.
20
CITY OF SHAKOPEE
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
Fund balance of the Capital Improvements fund decreased $ 2,927,806. The City paid for the following
projects in 2013 from this fund:
• Valley View Road
• Vierling Drive and CSAH 17 Interchange
• Street Reconstruction Project
• Bituminous Overlay
• CR 101 Trail Extension
• Valley Park Business Center
Fund balance of the Nonmajor Governmental Funds decreased $ 641,623 as a result of annual debt
service payments.
Proprietary funds
The City's proprietary funds provide the same type of information found in the government -wide
financial statements, but in more detail.
Unrestricted net position of the enterprise funds (expressed in thousands):
Beginning of Year
Change During Year
End of Year
Sewer
$ 16,787
Storm
$ 16,456
(1,140) (1,082)
$ 15,647 $ 15,374
The City has undertaken several new development projects, beginning in 2013 and continuing into 2014,
which will expand both the collections of revenues for connection fees and charges for services. The capital
assets of the projects will increase the capital assets of these funds, as well as the offsetting future year
depreciation charges. A portion of these projects are funded through special assessments, but a significant
portion of this is funded through the anticipated future revenues collected for services.
GENERAL FUND BUDGETARY HIGHLIGHTS
The original legally adopted budget for expenditures was $ 20,485,712 and transfers out were budgeted
at $ 860,000 with no budget adjustments. Actual expenditures of $ 19,539,401 were $ 946,311 under
budget. The variance was a result of several unique events, including higher than anticipated position
turnover and the accompanying lag in replacement hiring time and lower than anticipated commodity
costs. Additionally City staff continued a trend of conservative spending. The City was diligent in
obtaining many of the services and supplies originally budgeted for the year at a lower than anticipated
cost, such as training and training related costs, building maintenance costs and limited use of the
contingency funds which provide for unplanned events or occurrences. Additional transfers out over
budget are under taken annually. This is to comply with the City's established fund balance policy. At
the end of 2013 following transfers the city maintained a fund balance percentage of 46.5 %.
21
CITY OF SHAKOPEE
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
The original and final adopted budgets for revenues were $ 21,254,850 and transfers in were
$ 150,000. Actual revenues of $ 22,869,399 were $ 1,614,549 over budget. This was a result of an
increase in collection of property taxes. Additionally increases in development and building resulting in
both licenses and permits and charges for services to come in over budget. The revenue received from
the Electric and Water utility, component units, is recorded as a Charge for Service, were over budget as
a result of conservative budgeting as the amounts can fluctuate from year to year based on usage.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City's investment in capital assets for its governmental and business type activities as of
December 31, 2013, amounts to $ 195,472,990 (net of accumulated depreciation). This investment in
capital assets includes land, buildings and systems, improvement, machinery and equipment, park
facilities, roads, highways and bridges.
In the near future, the impact of planned business, commercial and residential expansions will impact
the type and funding of capital projects, as the economy in the area is experiencing upward and steady
growth and will impact planning and construction of roads, trails, parks and traffic flows and
management.
CAPITAL ASSETS
(Net of Depreciation)
Expressed in Thousands
Major capital assets events during the current year included the following:
• Riverside fields shelter /warming facility and outdoor ice rink
• Valley Park Business Center improvements relating to streets, trails, storm drainage, sanitary
sewer and watermains
• Reconstruction of streets, sanitary sewer, storm sewer and watermains on Harrison Street, Van
Buren Street, Jackson Street, Tyler Street, 12th Avenue and Atwood Street.
• Several bituminous overlay projects were also undertaken in the community, to maintain the
infrastructure of the system
22
Governmental Activities
Business -Type
Activities
Total
2013
2012
2013
2012
2013
2012
Land
$ 20,022
$ 20,023
$ 3,784
$ 3,944
$ 23,806 $
23,967
ROW
Construction in Progress
-
3,500
-
3,841
448
1,582
75
1,289
448
5,082
75
Line Rights
5,130
Infrastructure
-
73,101
_
73,708
866
57,023
891
56,597
866
130,124
891
130,305
Buildings
26,682
24,634
-
26,682
24,634
Machinery and Equipment
6,987
7,181
1,478
1,329
8,465
8,510
Total
$ 130,292
$ 129,387
$ 65,181
$ 64,125
$ 195,473 $
193,512
Major capital assets events during the current year included the following:
• Riverside fields shelter /warming facility and outdoor ice rink
• Valley Park Business Center improvements relating to streets, trails, storm drainage, sanitary
sewer and watermains
• Reconstruction of streets, sanitary sewer, storm sewer and watermains on Harrison Street, Van
Buren Street, Jackson Street, Tyler Street, 12th Avenue and Atwood Street.
• Several bituminous overlay projects were also undertaken in the community, to maintain the
infrastructure of the system
22
CITY OF SHAKOPEE
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
Additional information on the City's capital assets can be found in Note 6 on pages 58 to 60 of this
report.
In 2013, several projects that were "in progress" were continued and completed, as these projects often
involved the coordination with County, State and Federal entities. The status of these projects is highly
dependent on weather and the funding and staffing of cooperating entities, and will often impact the
ability of the City to complete these projects in the anticipated year.
Long -Term Debt
At the end of the current year, the City had total bonded debt outstanding of $ 16,990,000. Of this
amount, $ 5,000,000 comprises debt backed by the full faith and credit of the government and
$ 11,990,000 is special assessment debt for which the government is liable in the event of default by the
property owners subject to the assessment.
Outstanding Debt
G.O. and Revenue Bonds
Expressed in Thousands
G.O. Bonds
Special Assessment Debt with
Governmental Commitment
Total
Governmental Activities
2013 2012
$ 5,000 $ 5,460
11,990 13,600
$ 16,990 $ 19,060
The City's total bonded debt decreased by $ 2,070,000 during the current year.
Minnesota Statutes limit the amount of general obligation (G.O.) debt a government entity may issue to
a net figure of 3% of the taxable market value. The current legal debt margin for the City is $ 82
million, which is significantly in excess of the City's outstanding G.O. debt.
Additional information on the City's long -term debt can be found in Note 7 on pages 60 -63 of this
report.
23
CITY OF SHAKOPEE
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The unemployment rate for the state continued to decrease to a year -end level of 4.6%
The City is currently experiencing the construction and development of several new commercial
business sites that were initiated in 2012 and 2013. These companies such as Emerson Rosemount,
Shutterfly and improvements at sites such as Valleyfair and Canterbury Park are expanding and
enhancing the economic tax base as well as the employment options in the community. These business
ventures will bring not only a strong base of varied jobs to the area but enhanced tax base for the
recently developed commercial and industrial sites.
The City is also experiencing interest from unique business entities such as a craft brewing site and new
retail businesses that are considering Shakopee as a favorable site due to increased economic activity
and expanded retail sale activity
During the current year, the unassigned fund balance in the General Fund was $ 9,076,549. This can be
similarly compared to the unassigned fund balance of 2012 of $ 9,503,652. The City continues to
maintain a strong financial position as the economic climate and the economic diversification of the
region and the state continue to improve.
The general tax levy for 2013/2014 is increased to $ 15,793,220, in comparison to the prior year amount
of $ 15,333,223. This levy was increase to provide needed funding for newly created city positions to
provide a broader base of services through engineering and public works. The levy also provided
increased funding for the infrastructure needs through the capital improvement fund. Historically only
30 % of some of the project costs are funded through special assessments which will require a firm
commitment of the Council to provide needed resources for maintenance, improvements and additions
to the existing infrastructure.
City staff continues to refine and coordinate multi - department development related activities. This is
done through review of fees, charges, consistent practices and detailed discussions specific to each
development review. As staff continues to refine these practices the achieved outcome will be to
provide a higher level of positive customer and development satisfaction.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general view of the City's finances for all those with an
interest in the City's finances. Questions concerning any of the information provided in this report or
requests for additional information should be addressed to the Finance Director, 129 Holmes St. S.,
Shakopee, Minnesota, 55379.
24
BASIC FINANCIAL STATEMENTS
25
CITY OF SHAKOPEE
STATEMENT OF NET POSTION
December 31, 2013
The Notes to the Financial Statements are an integral part of this statement.
26
Governmental
Business -Type
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Activities
Activities
Total
Component Unit
Assets
Cash and Investments (Including Cash Equivalents)
$ 41,371,695
$ 31,004,579
$ 72,376,274
$ 25,510,450
Cash with Fiscal Agent
4,789,675
-
4,789,675
Restricted Cash and Investments
Property Tax Receivable
293,025
-
10,180,925
Accounts Receivable (Net of Allowance for
-
293,025
Uncollectible Accounts)
856,672
61
856,733
3,281,175
Interest Receivable
176,554
129,431
305,985
27,814
Due From Other Governments
392,602
461,350
853,952
179,970
Special Assessments Receivable
3,821,672
157,540
3,979,212
Inventories
Prepaid Expenses
16,440
-
-
16,440
1,001,496
64,552
Notes Receivable
95,000
95,000
_
Electric Plant Acquisition (Net of Accumulated
Amortization)
Capital Assets, Net of Accumulated
-
-
-
175,960
Depreciation (Where Applicable):
Land and Land Improvements
20,022,040
3,784,003
23,806,043
5,097,532
Right of Way
-
447,746
447,746
_
Construction in Progress
3,499,929
1,582,443
5,082,372
882,577
Line Rights
-
866,276
866,276
Infrastructure
73,100,366
57,022,789
130,123,155
Plant in Service
Buildings
_
26,682,062
-
-
26,682,062
66,485,870
_
Machin and
Machinery Equipment
6,987,128
1,478,208
8,465,336
Total Assets
$ 182,104,860
$ 96,934,426
$ 279,039,286
$ 112,888,321
Deferred Outflows of Resources
Deferral on Refunding
228,740
Total Assets and Deferred Outflows of Resources
$ 182,104,860
$ 96,934,426
$ 279,039,286
$ 113,117,061
LIABILITIES AND NET POSITION
Liabilities
Accounts and Contracts Payable
$ 1,579,543
$ 371,435
$ 1,950,978
$ 3,262,879
Other Current Liabilities
Due to Other Governments
-
674,681
70,057
744,738
262,220
505,225
Salaries and Benefits Payable
556,556
-
556,556
Deposits Payable
Interest Payable
-
232,300
-
30
232,0
1,119,669
164,628
Unearned Revenue
Customer Advances
-
-
-
2,543
Bond Principal Payable, Net:
-
-
420,955
Payable Within One Year
3,160,000
3,160,000
380,000
Payable After One Year
13,830,000
-
13,830,000
8,755,838
Compensated Absences Payable:
Payable Within One Year
806,606
34,146
840,752
Payable After One Year
985,853
41,733
1,027,586
Net Other Post Employment Benefits (OPEB) Obligation
1,016,115
51,686
1,067 801
Total Liabilities
22,841,654
569,057
23,410,711
14,873,957
Net Position
Net Investment in Capital Assets
118,166,525
65,181,465
183,347,990
63,457,396
Restricted for:
Economic Development
685,671
-
685,671
Cable PEG Fees
54,499
54,499
Transit
941,469
941,469
Forfeiture
180,696
-
180,696
Debt Service
6,714,875
6,714,875
Component Units
Capital Improvements
1,877,028
-
1,877,028
8,796,628
Unrestricted
Total Net Position
30,642,443
31,183,904
61,826,347
25,989,080
159,263,206
96,365,369
255,628 575
98,243,104
Total Liabilities and Net Position
$ 182,104,860
$ 96,934,426
$ 279,039,286
$ 113,117,061
The Notes to the Financial Statements are an integral part of this statement.
26
N
v
CITY OF SHAKOPEE
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2013
The Notes to the Financial Statements are an integral part of this statement.
Net (Expense) Revenues
Program Revenues
and Changes in Net Position
Operating
Capital Grants
Charges for
Grants and
and
Governmental
Business -Type
Functions /Programs
Expenses Services
Contributions
Contributions
Activities
Activities
Total
Component Units
Governmental Activities
General Government
$ 4,704,956 $ 3,047,447
$ 811,809
$
$ (845,700)
$
$ (845,700)
$
Public Safety
9,868,702 1,701,875
623,668
(7,543,159)
-
(7,543,159)
-
Public Works
7,578,493 688,286
398,903
689,424
(5,801,880)
(5,801,880)
-
Culture and Recreation
4,020,974 2,012,436
48,598
-
(1,959,940)
-
(1,959,940)
-
Economic Development
338,907 18,000
11,458
(309,449)
(309,449)
-
Interest on Long -Term Debt
573,949 -
-
(573,949)
-
(573,949)
Total Governmental Activities
27,085,981 7,468,044
1,894,436
689,424
(17,034,077)
(17,034,077)
Business -Type Activities
Sewer
4,096,504 3,004,826
-
7,359
(1,084,319)
(1,084,319)
-
Storm Drainage
1,641,438 1,720,653
421
79,636
79,636
-
Total Business -Type Activities
5,737,942 4,725,479
-
7,780
(1,004,683)
(1,004,683)
Total Primary Government
$ 32,823,923 $ 12,193,523
$ 1,894,436
$ 697,204
(17,034,077)
(1,004,683)
(18,038,760)
-
Component Unit - SPUC
Electric
$ 37,624,206 $ 40,983,517
$ -
$ 128,334
3,487,645
Water
4,486,565 4,801,969
2,281,600
2,597,004
Total Component Unit
$ 42,110,771 $ 45,785,486
$
$ 2,409,934
-
-
6,084,649
General Revenues
Property Taxes
15,795,777
15,795,777
-
Tax Increments
113,796
-
113,796
-
Unrestricted Investment Earnings
40,589
53,431
94,020
55,522
Gain on Sale of Asset
256,600
-
256,600
-
Transfers
162,490
(162,490)
-
-
Total General Revenues and Transfers
16,369,252
(109,059)
16,260,193
55,522
Change in Net Position
(664,825)
(1,113,742)
(1,778,567)
6,140,171
Net Position - Beginning
159,928,031
97,479,111
257,407,142
92,414,711
Change in Accounting Principles
(311,778)
Net Assets - Beginning, As Restated
159,928,031
97,479,111
257,407,142
92,102,933
Net Position - Ending
$ 159,263,206
$ 96,365,369
$ 255,628,575
$ 98,243,104
The Notes to the Financial Statements are an integral part of this statement.
CITY OF SHAKOPEE
BALANCE SHEET - GOVERNMENTAL FUNDS
December 31, 2013
Debt Service Capital Project
The Notes to the Financial Statements are an integral part of this statement.
28
2004A
Other
Total
Improvement
Capital
Governmental
Governmental
ASSETS
General Fund
Bonds
Improvements
Funds
Funds
Cash and Investments
$ 9,627,212
$ 273,139
$ 6,657,525
$ 7,676,000
$ 24,233,876
Cash with a Fiscal Agent
1,135,000
-
3,654,675
4,789,675
Delinquent Taxes Receivable
290,507
-
-
2,518
293,025
Special Assessments Receivable:
Delinquent
4,448
-
131
17,944
22,523
Deferred
Accounts Receivable
41,895
1,760,379
644,050
1,352,825
3,799,149
Interest Receivable
287,333
50,484
-
733
180,039
389,300
856,672
Due from Other Funds
18,426
30,754
100,397
Due From Other Governments
-
384,277
-
623
75,325
75,948
Prepaid Items
16,440
-
8,325
392,602
-
-
16,440
Total Assets
$ 10,702,596
$ 3,169,251
$ 7,500,794
$ 13,207,666
$ 34,580,307
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities
Accounts Payable
$ 428,021
$
$ 456,207
$ 181,821
$ 1,066,049
Contracts Payable
-
346,505
43,674
390,179
Due to Other Funds
Due to Other Governments
-
288,180
-
300,232
75,948
86,269
75,948
674,681
Salaries and Benefits Payable
556,556
Total Liabilities
1,272,757
1,102,944
387,712
556,556
2,763,413
Deferred Inflows of Resources
Unavailable Revenue - Property Taxes
290,507
Unavailable Revenue - Special Assessments
46,343
1,760,379
644,181
2,518
1,370,769
293,025
3,821,672
Total Deferred Inflows of Resources
336,850
1,760,379
644,181
1,373,287
4,114,697
Fund Balances
Nonspendable
16,440
-
Restricted
Assigned
-
1,408,872
-
-
-
11,217,486
16,440
12,626,358
Unassigned
9,076,549
-
5,753,669
230,897
5,984,566
Total Fund Balances
9,092,989
1,408,872
-
5,753,669
(1,716)
11,446,667
9,074,833
27,702,197
Total Liabilities, Deferred Inflows
of Resources and Fund Balances
$ 10,702,596
$ 3,169,251
$ 7,500,794
$ 13,207,666
$ 34,580,307
The Notes to the Financial Statements are an integral part of this statement.
28
CITY OF SHAKOPEE
RECONCILIATION OF THE BALANCE SHEET TO
THE STATEMENT OF NET POSITION - GOVERNMENTAL FUNDS
December 31, 2013
Total Fund Balances - Governmental Funds $ 27,702,197
Amounts reported for governmental activities in the Statement of Net Position
are different because:
Capital assets used in governmental activities are not current financial
resources and, therefore, are not reported as assets in governmental funds.
Cost of Capital Assets 164,028,415
Less Accumulated Depreciation (66,075,442)
Long -term liabilities, including bonds payable, are not due and payable in
the current period and, therefore, are not reported as liabilities in the funds.
Long -term liabilities at year -end consist of:
Bond Principal Payable (16,990,000)
Net OPEB Obligation (1,016,115)
Delinquent property taxes and assessments receivable will be collected this
year, but are not available soon enough to pay for the current period's
expenditures and, therefore, are reported as unavailable revenue in the funds.
Property Taxes 293,025
Special Assessments 22,523
Deferred special assessments receivable are not available to pay for current
expenditures and, therefore, are reported as unavailable revenue in the funds.
Deferred Special Assessments 3,799,149
Governmental funds do not report a liability for accrued interest
due and payable. (232,300)
Internal service funds are used by management to charge the costs of
equipment, buildings, park assets and employee benefits to individual funds.
A portion of the assets and liabilities of those funds are included in
governmental activities in the Statement of Net Position. 47,731,754
Total Net Position - Governmental Activities $ 159,263,206
The Notes to the Financial Statements are an integral part of this statement.
29
CITY OF SHAKOPEE
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the Year Ended December 31, 2013
REVENUES
Property Taxes
Tax Increment
Special Assessments
Licenses and Permits
Intergovernmental
Charges for Services
Fines and Forfeitures
Miscellaneous
Total Revenues
EXPENDITURES
Current
General Government
Public Safety
Public Works
Culture and Recreation
Economic Development
Debt Service
Principal
Interest and Other Charges
Capital Outlay
Total Expenditures
Excess of Revenues Over
(Under) Expenditures
OTHER FINANCING SOURCES
(USES)
Proceeds from Sale of Capital Asset
Transfers In
Transfers Out
Total Other Financing
Sources (Uses)
Net Change in Fund
Balances
FUND BALANCES
Beginning of Year
End of Year
The Notes to the Financial Statements are an integral part of this statement.
30
Debt Service
Capital Projects
2004A
Other
Total
Improvement
Capital
Governmental
Governmental
General Fund
Bonds
Improvements
Funds
Funds
$15,587,147
$
$ -
150,616
$ 15,737,763
-
-
113,797
113,797
10,990
199,409
294,727
425,205
930,331
1,443,885
-
-
906,060
2,349,945
1,042,127
815,676
1,857,803
4,304,786
278,765
4,583,551
348,262
-
33,208
381,470
132,202
(3,403)
19,307
41,611
189,717
22,869,399
196,006
314,034
2,764,938
26,144,377
3,320,067
-
-
1,175,595
4,495,662
9,677,697
53,710
9,731,407
2,631,154
-
2,631,154
3,769,778
-
1,290
3,771,068
-
-
-
340,904
340,904
280,000
-
1,790,000
2,070,000
-
64,279
-
554,416
618,695
140,705
-
5,894,973
847,513
6,883,191
19,539,401
344,279
5,894,973
4,763,428
30,542,081
3,329,998
(148,273)
(5,580,939)
(1,998,490)
(4,397,704)
150
-
-
-
150
150,000
100,000
3,041,971
1,598,838
4,890,809
(3,910,000)
(388,838)
(241,971)
(4,540,809)
(3,759,850)
100,000
2,653,133
1,356,867
350,150
(429,852)
(48,273)
(2,927,806)
(641,623)
(4,047,554)
9,522,841
1,457,145
8,681,475
12,088,290
31,749,751
$ 9,092,989
$ 1,408,872
$ 5,753,669
$ 11,446,667
$ 27,702,197
The Notes to the Financial Statements are an integral part of this statement.
30
CITY OF SHAKOPEE
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES TO
THE STATEMENT OF ACTIVITIES - GOVERNMENTAL FUNDS
For the Year Ended December 31, 2013
Net Change in Fund Balances - Governmental Funds $ (4,047,554)
Amounts reported for governmental activities in the Statement of Activities are
Capital outlays are reported in governmental funds as expenditures. However, in the
Statement of Activities, the cost of those assets is allocated over the estimated useful
lives as depreciation expense.
Capital Outlays
6,477,446
Depreciation Expense
(4,516,666)
Loss on Disposal of Fixed Assets
(1,000)
Principal payments on long -term debt are recognized as expenditures in the
governmental funds but as an increase in the net position in the Statement of Activities.
2,070,000
Interest on long -term debt in the Statement of Activities differs from the amount
reported in the governmental funds because interest is recognized as an expenditure
in the funds when it is due and thus requires use of current financial resources.
In the Statement of Activities, however, interest expense is recognized as
the interest accrues, regardless of when it is due.
44,746
Certain revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds.
Special Assessments Delinquent
(2,171)
Special Assessments Deferred
(238,736)
OPEB obligations are recognized when paid in the government funds but recognized
when incurred in the Statement of Activities
(171,785)
Delinquent and deferred receivables will be collected this year, but are not
available soon enough to pay for the current period's expenditures and, therefore,
are not revenues in the funds.
58,014
Capital assets transferred from proprietary funds to governmental funds
12,490
Capital assets transferred from internal service funds to governmental funds
150,752
Internal service funds are used by management to charge the costs of certain
activities such as buildings, equipment, park assets and employee benefits to
individual funds. (See Note 2.B.)
(500,361)
Change in Net Position - Governmental Activities
$ (664,825)
The Notes to the Financial Statements are an integral part of this statement.
31
(THIS PAGE LEFT BLANK INTENTIONALLY)
32
CITY OF SHAKOPEE
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2013
The Notes to the Financial Statements are an integral part of this statement.
33
Variance with
Original and
Actual
Final Budget -
Final Budget
Amounts
Over (Under)
REVENUES
Property Taxes
$ 14,579,000
$ 15,587,147
$ 1,008,147
Special Assessments
11,000
10,990
(10)
Licenses and Permits
1,316,700
1,443,885
127,185
Intergovernmental
755,500
1,042,127
286,627
Charges for Services
3,852,150
4,304,786
452,636
Fines and Forfeitures
425,000
348,262
(76,738)
Miscellaneous Revenues:
Investment Income
225,000
(31,609)
(256,609)
Contributions and Donations
4,000
18,134
14,134
Rents
-
8,409
8,409
Other
86,500
137,268
50,768
Total Revenues
21,254,850
22,869,399
1,614,549
EXPENDITURES
Current
General Government
3,603,765
3,320,067
(283,698)
Public Safety
9,913,889
9,677,697
(236,192)
Public Works
2,883,328
2,631,154
(252,174)
Parks and Recreation
4,084,730
3,769,778
(314,952)
Capital Outlay
General Government
-
29,434
29,434
Public Safety
-
87,613
87,613
Public Works
-
9,925
9,925
Park and Recreation
-
13,733
13,733
Total Expenditures
20,485,712
19,539,401
(946,311)
Excess of Revenues Over
(Under) Expenditures
769,138
3,329,998
2,560,860
OTHER FINANCING SOURCES (USES)
Proceeds from Sale of Capital Asset
-
150
150
Transfers In
150,000
150,000
-
Transfers Out
(860,000)
(3,910,000)
(3,050,000)
Total Other Financing Sources
(Uses)
(710,000)
(3,759,850
(3,049,850)
Net Change in Fund Balances
$ 59,138
(429,852)
$ (488,990)
FUND BALANCES
Beginning of Year
9,522,841
End of Year
$ 9,092,989
The Notes to the Financial Statements are an integral part of this statement.
33
CITY OF SHAKOPEE
STATEMENT OF NET POSITION - PROPRIETARY FUNDS
December 31, 2013
ASSETS
Current Assets
Cash and Investments, Including Cash Equivalents
Accounts Receivable
Interest Receivable
Special Assessment Receivable:
Delinquent
Deferred
Notes Receivable, Current
Due from Other Governments
Total Current Assets
Noncurrent Assets
Capital Assets:
Land
Right of Way
Construction in Progress
Line Rights
Infrastructure
Buildings
Machinery and Equipment
Total Cost
Less Accumulated Depreciation
Net Capital Assets
Total Assets
LIABILITIES AND NET POSITION
Current Liabilities
Accounts Payable
Contracts Payable
Due to Other Governments
Current Compensated Absences
Total Current Liabilities
Noncurrent Liabilities
Compensated Absences
Net OPEB Obligation
Total Noncurrent Liabilities
Total Liabilities
Net Position
Net Investment in Capital Assets
Unrestricted
Total Net Position
Total Liabilities and Net Position
Adjustment to Reflect the Consolidation of Internal Service
Fund Activity Related to Enterprise Funds (See Note 2c)
Total Business -Type Activities Net Position
Business -Type Activities - Enterprise Funds
Governmental
Activities -
Storm Internal
Sewer Drainage Total Service Funds
$ 15,549,970
$ 15,291,589
$ 30,841,559
$ 17,300,839
-
61
61
-
64,778
64,653
129,431
76,157
47,723
19
47,742
-
109,704
94
109,798
-
-
-
-
95,000
328,174
133,176
461,350
985,853
16,100,349
15,489,592
31,589,941
17,471,996
4,500
3,779,503
3,784,003
-
-
447,746
447,746
1,915,774
303,486
1,278,957
1,582,443
1,368,569
-
1,368,569
-
38,693,101
38,650,219
77,343,320
2,923,925
-
-
-
34,548,576
1,832,385
982,273
2,814,658
12,433,189
42,202,041
45,138,698
87,340,739
49,905,690
(11,364,153)
(10,795,121)
(22,159,274)
(17,567,138)
30,837,888
34,343,577
65,181,465
32,338,552
$ 46,938,237 $ 49,833,169 $ 96,771,406 $ 49,810,548
$ 320,843
$ 36,799
$ 357,642
123,315
-
13,793
13,793
-
52,692
17,365
70,057
-
24,177
9,969
34,146
806,606
397,712
77,926
475,638
929,921
29,549
12,184
41,733
985,853
25,843
25,843
51,686
-
55,392
38,027
93,419
985,853
453,104
115,953
569,057
1,915,774
30,837,888
34,343,577
65,181,465
32,338,552
15,647,245
15,373,639
31,020,884
15,556,222
46,485,133
49,717,216
96,202,349
47,894,774
$ 46,938,237
$ 49,833,169
$ 49,810,548
163,020
$ 96,365,369
The Notes to the Financial Statements are an integral part of this statement.
34
CITY OF SHAKOPEE
STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION - PROPRIETARY FUNDS
For the Year Ended December 31, 2013
The Notes to the Financial Statements are an integral part of this statement.
35
Business -Type
Activities - Enterprise
Funds
Governmental
Activities -
Internal Service
OPERATING REVENUES
Sewer
Storm Drainage
Total
Funds
Charges for Services
$ 2,973,474
$ 1,047,160
$ 4,020,634
$
Rental Charges
Other Charges
-
2,016,943
Total Operating Revenues
-
2,973,474
1,047,160
4,020,634
2,497
2,019,440
OPERATING EXPENSES
Salaries and Benefits
Depreciation
260,310
459,048
719,358
48,955
Professional Services
732,940
97,192
695,761
1,428,701
1,897,336
Sewer Disposal Charges
2,800,405
57,031
154,223
41,593
Repairs and Maintenance
51,086
-
258,808
2,800,405
309,894
67,451
Materials and Supplies
Rent
27,392
67,091
94,483
360,109
Insurance
38,610
44,228
82,838
_
Utilities
25,924
22,178
48,102
Total Operating Expenses
88,547
4,122,406
792
1,604,937
89,339
5,727,343
2,415,444
Operating Loss
(1,148,932)
(557,777)
(1,706,709)
(396,004)
NONOPERATING REVENUES
(EXPENSES)
Investment Income
Gain (Loss) on Sale of Asset
22,679
30,750
53,429
40,582
Capital Asset Transfer
-
(62,403)
(62,403)
256,450
Other Income
-
31,352
(12,490)
673,495
(12,490)
704,847
(150,752)
1,167
Total Nonoperating Revenues
(Expenses)
54,031
629,352
683,383
147,447
Income before Capital
Contributions and Transfers
(1,094,901)
71,575
(1,023,326)
(248,557)
Capital Contributions
7,359
421
7,780
Transfers In
'
Transfers Out
(75,000)
(75,000)
-
(150,000)
250,000
(450,000)
Change in Net Position
(1,162,542)
(3,004)
(1,165,546)
(448,557)
NET POSITION
Beginning of Year
47,647,675
49,720,220
97,367,895
48,343,331
End of Year $
46,485,133 $
49,717,216 $
96,202,349
$ 47,894,774
Adjustment to Reflect the Consolidation of Internal Service
Fund Activity Related to Enterprise Funds (See Note 2d)
51,804
Change in Net Position - Business -Type Activities
$
(1,113,742)
The Notes to the Financial Statements are an integral part of this statement.
35
CITY OF SHAKOPEE
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
For the Year Ended December 31, 2013
The Notes to the Financial Statements are an integral part of this statement
36
Business -Type
Activities - Enterprise Funds
Governmental
Activities -
Storm
Internal
CASH FLOWS - OPERATING ACTIVITIES
Sewer
Drainage
Total
Service Funds
Receipts from Customers and Users
$ 3,397,762
$ 1,335,302
$ 4,733,064
$ 2,019,440
Payments to Suppliers
(3,279,070)
(423,950)
(3,703,020)
(543,019)
Payments to Employees
(252,613)
(452,313)
(704,926)
917
Net Cash Flows - Operating
Activities
(133,921)
459,039
325,118
1,477,338
CASH FLOWS - NONCAPITAL
FINANCING ACTIVITIES
Transfer from Other Funds
Transfer to Other Funds
(75,000)
(75,000)
(150,000)
250,000
(450,000)
Net Cash Flows - Noncapital
Financing Activities
(75,000)
(75,000)
(150,000)
(200,000)
CASH FLOWS - CAPITAL AND RELATED
FINANCING ACTIVITIES
Trunk Charges
31,352
673,495
704,847
1,167
Capital Related Special Assessments
4,481
643
5,124
Proceeds from Disposal of Capital Assets
Acquisition of Capital Assets
-
(710,299)
-
(1,850,170)
-
(2,560,469)
341,400
(914,773)
Net Cash Flows - Capital and
Related Financing Activities
(674,466)
(1,176,032)
(1,850,498)
(572,206)
CASH FLOWS - INVESTING ACTIVITIES
Payment Received for Notes Receivable
Interest Received
-
29,389
-
35,747
-
65,136
95,000
37,423
Net Cash Flows - Investing
Activities
29,389
35,747
65,136
132,423
Net Change in Cash and Cash Equivalents
(853,998)
(756,246)
(1,610,244)
837,555
CASH AND CASH EQUIVALENTS
Beginning of Year
16,403,968
16,047,835
32,451,803
16,463,284
End of Year
$ 15,549,970
$ 15,291,589
_L30,841,559
$ 17,300,839
RECONCILIATION OF OPERATING
INCOME (LOSS) TO NET CASH
FLOWS - OPERATING ACTIVITIES
Operating Income (Loss)
$ (1,148,932)
$ (557,777)
$ (1,706,709)
$ (396,004)
Adjustments to Reconcile Operating
Income (Loss) to Net Cash
Flows - Operating Activities:
Depreciation Expense
732,940
695,761
1,428,701
1,897,336
Changes in:
Accounts Receivable
(61)
(61)
Due from Other Governments
424,288
288,203
712,491
Due to Other Governments
(452,634)
1,492
(451,142)
(4,011)
Accounts and Contracts Payable
302,720
24,686
327,406
(69,855)
Compensated Absences Payable
3,669
2,707
6,376
49,872
Net OPEB Obligation
4,028
4,028
8,056
-
Total Adjustments
1,015,011
1,016,816
2,031,827
1,873,342
Net Cash Flows - Operating
Activities
$ (133,921)
$ 459,039
$ 325,118
$ 1,477,338
NONCASH INVESTING, CAPITAL AND
FINANCING ACTIVITIES
Transfer of Capital Assets
$ -
$ (12,490)
$ (12,490)
$ (150,752)
The Notes to the Financial Statements are an integral part of this statement
36
CITY OF SHAKOPEE
COMBINED STATEMENT OF FIDUCIARY NET POSITION
December 31, 2013
The Notes to the Financial Statements are an integral part of this statement.
37
Total Agency
ASSETS
Funds
Current
Cash and Investments
Interest Receivable
$ 2,507,391
Due from Other Governments
2,763
41,155
Total Assets
$ 2,551,309
LIABILITIES
Accounts Payable
Deposits Payable
$ 588,530
Due to Other Governments
1,948,303
14,476
Total Liabilities
$ 2,551,309
The Notes to the Financial Statements are an integral part of this statement.
37
CITY OF SHAKOPEE
STATEMENT OF NET POSITION - COMPONENT UNIT - SPUC
December 31, 2013
ASSETS
Current Assets
Cash and Investments
Restricted Assets:
Sinking Account
Accrued Interest Receivable
Customer Accounts Receivable
Allowance for Uncollectible Accounts
Other Accounts Receivable
Due from City of Shakopee
Inventory
Prepaid Expenses
Total Current Assets
Noncurrent Assets
Restricted Assets:
Customer Deposits Account
Connection Account
Water Reconstruction Account
Emergency Repairs Account
Capital Assets:
Plant in Service
Accumulated Depreciation
Construction in Progress
Other Assets:
Electric Plant Acquisition, Net
Total Noncurrent Assets
Total Assets
Deferred Outflows of Resources
Deferral on Refunding
Total Assets and Deferred Outflows of Resources
LIABILITIES AND NET ASSETS
Current Liabilities
Accounts Payable
Due to City of Shakopee
Other Current Liabilities
Total Current Liabilities
Liabilities Payable from Restricted Assets
Current Portion of Revenue Bonds
Accrued Interest Payable
Customer Deposits
Total Liabilities Payable from Restricted Assets
Noncurrent Liabilities
Revenue Bonds
Unamortized Bond Discount
Unearned Revenues
Customer Advances
Total Noncurrent Liabilities
Total Liabilities
Net Position
Investment in Capital Assets
Restricted for Debt Service
Restricted for Connections & Reconstruction
Unrestricted
Total Net Position
Total Liabilities and Net Position
Electric Water Total
$ 20,981,443 $ 4,529,007 $ 25,510,450
512,961
-
512,961
20,947
6,867
27,814
2,997,870
256,832
3,254,702
(34,312)
(7,579)
(41,891)
51,981
16,383
68,364
54,323
125,647
179,970
966,794
34,702
1,001,496
48,414
16,138
64,552
25,600,421
4,977,997
30,578,418
1,108, 865
10,804
1,119,669
-
8,118,269
8,118,269
-
330,026
330,026
100,000
-
100,000
54,369,897
48,350,704
102,720,601
(17,445,546)
(13,691,653)
(31,137,199)
795,711
86,866
882,577
175,960
175,960
39,104,887
43,205,016
82,309,903
64,705,308
48,183,013
112,888,321
228,740
-
228,740
$ 64,934,048
$ 48,183,013
$ 113,117,061
$ 2,982,930
$ 279,949
$ 3,262,879
432,709
72,516
505,225
177,365
84,855
262,220
3,593,004
437,320
4,030,324
380,000
-
380,000
164,628
-
164,628
1,108,865
10,804
1,119, 669
1,653,493
10,804
1,664,297
8,815,000
-
8,815,000
(59,162)
(59,162)
2,543
-
2,543
332,449
88,506
420,955
9,090,830
88,506
9,179,336
14,337,327
536,630
14,873,957
28,711,479
34,745,917
63,457,396
348,333
-
348,333
-
8,448,295
8,448,295
21,536,909
4,452,171
25,989,080
50,596,721
47,646,383
98,243,104
$ 64,934,048
$ 48,183,013
$ 113,117,061
The Notes to the Financial Statements are an integral part of this statement. 38
CITY OF SHAKOPEE
STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND NET POSITION - COMPONENT UNIT - SPUC
For the Year Ended December 31, 2013
Operating Revenues
Operating Expenses
Operating Income
NONOPERATING REVENUES (EXPENSES)
Rentals and Miscellaneous
Interdepartmental Rent from Water
Investment Income
Interest Expense
Amortization of Debt Issuance Costs and
Loss on Refunding
Gain(Loss) on Disposition of Property
Total Nonoperating Revenues (Expenses)
Income Before Contributions and Transfers
Capital Contributions
Transfers to Municipality
Change in Net Position
NET POSITION
Beginning of Year
Change in Accounting Principle
Beginning of Year, as Restated
End of Year
Flarrtrir Ql. +— rr_.._I
$ 40,721,561 $ 4,683,461 $ 45,405,022
35,228,261 3,485,839 38,714,100
5,493,300
1,197,622
6,690,922
171,956
118,508
290,464
90,000
-
90,000
44,541
10,981
55,522
(427,900)
(2,513)
(430,413)
(720,911)
(61,140)
(782,051)
1,537
-
1,537
(840,777)
65,836
(774,941)
4,652,523
1,263,458
5,915,981
128,334
2,281,600
2,409,934
(1,248,671)
(937,073)
(2,185,744)
3,532,186
2,607,985
6,140,171
47,364,330
45,050,381
92,414,711
(299,795)
(11,983)
(311,778)
47,064,535
45,038,398
92,102,933
$ 50,596,721 $ 47,646,383 $ 98,243,104
The Notes to the Financial Statements are an integral part of these statements.
39
(THIS PAGE LEFT BLANK INTENTIONALLY)
40
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of Shakopee is a statutory city governed by an elected mayor and four council members. The
accompanying financial statements present the government entities for which the government is
considered to be financially accountable.
The financial statements present the City and its component units. The City includes all funds,
organizations, institutions, agencies, departments and offices that are not legally separate from such.
Component units are legally separate organizations for which the elected officials of the City are
financially accountable and are included within the financial statements of the City because of the
significance of their operational or financial relationships with the City.
The City is considered financially accountable for a component unit if it appoints a voting majority of
the organization's governing body and it is able to impose its will on the organization by significantly
influencing the programs, projects, activities or level of services performed or provided by the
organization or there is a potential for the organization to provide specific financial benefits to or
impose specific financial burdens on, the City.
As a result of applying the component unit definition criteria above, certain organizations have been
defined and are presented in this report as follows:
Blended Component Unit — Reported as if they were part of the City.
Discretely Presented Component Unit — Entails reporting the component unit financial data in
statements separate from the financial date of the City.
Joint Ventures and Jointly Governed Organizations — The relationship of the City with the entity is
disclosed.
For each of the categories above, the specific entities are identified as follows:
1. Blended Component Unit
The Shakopee Economic Development Authority (EDA) was organized to promote development,
improve housing and reduce blighted areas in the City. It is included by reason of the City Council
having final approval for Shakopee EDA actions and the Shakopee EDA Board being comprised
entirely of City Council Members. City staff handles Shakopee EDA activity including Shakopee
EDA funds and the City approves Shakopee EDA tax levies and bonding activity. Therefore, the
City has financial oversight for Shakopee EDA activities. The City also has operational
responsibility of the EDA.
The activity of the Shakopee EDA is shown in the Shakopee EDA Special Revenue Fund in the
City's financial statements. No separate financial statements for the Shakopee EDA are issued. For
any information desired beyond what is presented in this report, contact the Finance Director for the
City of Shakopee at 129 Holmes Street South, Shakopee, Minnesota 55379 -1351.
41
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity (Continued)
2. Discretely Presented Component Unit
The electric and water utilities of the Shakopee Public Utilities Commission (SPUC) are self -
supporting entities and collectively comprise separate enterprise funds of the City of Shakopee (the
"City "). The utility provides electric and water operations to properties within the City as well as
electric distribution to certain other areas outside of the City. The utility accounts for the costs of
electric and water operations on a continuing basis and is managed by the SPUC. The SPUC Board
consists of five members who serve three year consecutive terms. Separate financial statements are
included in this report for the SPUC Funds to emphasize that it is legally separate from the City.
The water and electric funds are presented as enterprise funds. The complete financial statements
can be obtained from the Shakopee Public Utility Commission, 225 Sarazin Street, Shakopee,
Minnesota 55379.
3. Joint Ventures and Jointly Governed Organizations
Local Government Information Systems
Local Government Information Systems ( LOGIS) is a joint venture of approximately 44
governmental entities that provides computerized data processing and support services to its
members. Legally separate, the City does not appoint a voting majority of the Board and LOGIS is
fiscally independent of the City. During 2013, the City paid $ 130,643 to LOGIS for services
provided which is included in expenditures of the General Fund. Financial statements are available
by contacting LOGIS, 5750 Duluth Street, Golden Valley, Minnesota 55422 -4036.
Scott Joint Prosecution Association
Scott Joint Prosecution Association (SJPA) is a joint venture of approximately seven cities that
provides legal prosecution and support services to its members. Legally separate, the City does not
appoint a voting majority of the Board of Directors and the SJPA is fiscally independent of the City.
During 2013, the City paid $ 413,610 to the SJPA for services provided which is included in
expenditures of the General Fund. Financial statements are available by contacting the SJPA, 200
Fourth Avenue West, Shakopee, Minnesota 55379.
42
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity (Continued)
4. Other Organizations
Shakopee Volunteer Fire Department Relief Association
The Shakopee Volunteer Fire Department Relief Association (the "Association ") is organized as a
nonprofit organization, legally separate from the City, by its members to provide pensions and other
benefits to such members in accordance with Minnesota Statutes. It is not a component unit of the City
because the Board of Directors is appointed by the membership of the Association and not by the City
Council. The financial oversight of the City is limited to approval authority for amending the
Association bylaws when the change results in an increase in the pension benefit level requiring an
increased City contribution. The Association has the authority to levy its own taxes for pensions and
deficits and would continue to exist for its members if the City was dissolved. Because the Association
is fiscally independent of the City, the financial statements of the Association have not been included
within the City's reporting entity.
B. Government -Wide and Fund Financial Statements
The government -wide financial statements (i.e., the Statement of Net Position and the Statement of
Activities) report information on all of the nonfiduciary activities of the City. The fiduciary funds are
only reported in the Statement of Fiduciary Net Position at the fund financial statement level.
Governmental activities, which normally are supported by taxes and intergovernmental revenues, are
reported separately from business -type activities, which rely to a significant extent on fees and charges
for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or
segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Interest on general long -term debt is considered an indirect expense and
is reported separately in the Statement of Activities. Program revenues include 1) charges to customers
or applicants who purchase, use or directly benefit from goods, services or privileges provided by a
given function or segment and 2) grants and contributions that are restricted to meeting the operational
or capital requirements of a particular function or segment. Taxes and other items not properly
included among program revenues are reported instead as general revenues. Internally dedicated
revenues are reported as general revenues rather than program revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Ma or
j
individual governmental funds and major individual enterprise funds are reported as separate columns in
the fund financial statements.
The Escrow Agency Fund is presented in the fiduciary fund financial statements. Since, by definition,
these assets are being held for the benefit of a third party (other local governments, private parties, etc.)
and cannot be used to address activities or obligations of the City, this Fund is not incorporated into the
government -wide statements.
43
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are
recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. Property taxes are recognized as revenues in the year for which they are levied.
Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met.
The Agency Funds report only assets and liabilities and have no measurement focus, but do use the
accrual basis of accounting to recognize receivables and payables.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
City considers revenues to be available if they are collected within 60 days of the end of the current
period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures related to compensated absences and claims
and judgments, are recorded only when payment is due.
Property taxes, franchise taxes, licenses and interest associated with the current period are all
considered to be susceptible to accrual and so have been recognized as revenues of the current period.
Only the portion of special assessments receivable due within the current period is considered to be
susceptible to accrual as revenue of the current period. All other revenue items are considered to be
measurable and available only when cash is received by the City.
Description of Funds:
Major Governmental Funds:
General Fund — This Fund is the City's primary operating fund. It accounts for all financial resources
of the general City, except those required to be accounted for in another fund.
2004A Improvement Bonds Debt Service Fund — This Fund accounts for resources accumulated and
payments made for principal and interest on this bond issue.
Capital Improvements Capital Project Fund — This Fund accounts for the capital projects of the City
not accounted for in separate capital funds.
Proprietary Funds:
Sewer Fund — This Fund accounts for operations of the City's sewer utility.
Storm Drainage Fund — This Fund accounts for the activities of the City's storm drainage utility.
44
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Description of Funds: (Continued)
Internal Service Funds:
Equipment Fund — This Fund accounts for the City's acquisition of larger pieces of equipment.
Building Fund — This Fund accounts for the City's funds accumulated for construction, improvement
or major repairs of major public buildings.
Park Assets Fund — This Fund accounts for the City's funds accumulated for the replacement of park
assets.
Employee Benefits Fund — This Fund accounts for the City's funds accumulated for compensated
absences and OPEB.
Information Technology — This Fund accounts for the City's funds accumulated for information
technology resources.
The City's internal service funds are allocated between governmental and business -type activities and
are combined, as allocated in Note 2, with the respective governmental activities and business -type
activities in the government -wide financial statements.
Fiduciary Funds:
Escrow Agency Fund — This Fund accounts for the monies held for specific purposes for individuals,
private organizations, other government units and other funds. Escrows are held on behalf of
builders and developers, for security deposits and police evidence deposits.
Southwest Metro Drug Task Force Agency Fund — This Fund accounts for the activity related to the
task force held by the City in a strictly custodial capacity.
Component Unit Funds:
Electric Fund — This Fund accounts for the operations of the SPUC's electric utility.
Water Fund — This Fund accounts for the operations of the SPUC's water utility.
:s.
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
As a general rule, the effect of interfund activity has been eliminated from the government -wide
financial statements. Exceptions to this general rule are payments, where the amounts are reasonably
equivalent in value to the interfund services provided and other charges between the City's utility
function and various other functions of the City. Elimination of these charges would distort the direct
costs and program revenues reported for the various functions concerned.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund's principal ongoing operations. The principal operating revenues of
the enterprise funds are charges to customers for sales and services. Operating expenses for enterprise
funds include the cost of sales and services, administrative expenses and depreciation on capital assets.
All revenues and expenses not meeting this definition are reported as nonoperating revenues and
expenses.
When both restricted and unrestricted resources are available for use, it is the City's policy to use
restricted resources first, then unrestricted resources as they are needed.
D. Assets, Liabilities and Net Position or Equity
1. Deposits and Investments
The City's cash and cash equivalents are considered to be cash on hand, demand deposits and highly
liquid debt instruments purchased with original maturities of three months or less from the date of
acquisition. Investments are stated at fair value.
Minnesota Statutes authorizes the City to invest in obligations of the U.S. Treasury, agencies and
instrumentalities, shares of investment companies whose only investments are in the aforementioned
securities, obligations of the State of Minnesota or its municipalities, bankers' acceptances, future
contracts, repurchase and reverse repurchase agreements and commercial paper of the highest
quality with a maturity of no longer than 270 days and in the Minnesota Municipal Money Market
Fund.
The Minnesota Municipal Money Market Fund is an external investment pool not registered with the
Securities Exchange Commission (SEC) that follows the same regulatory rules of the SEC under
Rule 2.a.7. The fair value of the position in the pool is the same as the value of the pool shares.
The City's investment policy for all funds except the component units addresses custodial credit risk
for deposits. The policy also addresses credit risk, interest rate risk, concentration of credit risk and
custodial credit risk for investments. The City's component units also have a formal policy to
address all of these risks except custodial credit risk for investments.
46
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Position or Equity (Continued)
1. Deposits and Investments (Continued)
Custodial Credit Risk — Deposits: This is the risk that in the event of a bank failure, the City's
deposits may not be returned to it. Minnesota Statutes require all deposits be protected by federal
deposit insurance, corporate surety bonds or collateral. The market value of collateral pledged must
equal 110% of deposits not covered by Federal Deposit Insurance Corporation (FDIC) insurance or
corporate surety bonds and letters of credit. The City and component unit's investment policies state
deposits must be collateralized in order to comply with Minnesota Statutes.
Credit Risk: This is the risk that an issuer or other counterparty to an investment will not fulfill its
obligation to the holder of the investment. Minnesota Statutes 118A.04 and 188A.05 limit
investments that are in the top two ratings issued by nationally recognized statistical rating
organizations. The City's investment policy references Minnesota Statutes and further limits the
types of investments that the City is allowed to invest in. The component unit's investment policy
also defines suitable and authorized investments and related minimum ratings.
Interest Rate Risk: This is the risk that changes in market interest rates will adversely affect the fair
value of an investment. The City's policy states the investment portfolio shall be designed with the
objective of attaining a market rate of return throughout budgetary and economic cycles, taking into
account the investment risk constraints and liquidity needs. To the extent possible, the City shall
attempt to match its investments in short-term operating funds with anticipated cash flow
requirements. Unless matched to a specific cash flow, the City will not directly invest in securities
maturing more than ten years from the date of purchase. Long -term funds shall not be invested in
securities exceeding 10 years in modified duration, at time of purchase. The investment policy for
the City's Electric and Water Enterprise Funds (Shakopee Public Utilities Commission) addresses
this risk by requiring holding of securities to maturity (subject to certain exceptions) and limiting
maturity constraints to a relatively short duration.
Concentration of Credit Risk: This is the risk of loss attributed to the magnitude of an investment in
a single issuer. According to the City's investment policy, the aggregate investment portfolio shall
be diversified by:
• Limiting investments to avoid over concentration in securities from a specific issuer or
business sector.
• Limiting investments in securities that have higher credit risks.
• Investing in securities with varying maturities.
• Continuously investing a portion of the portfolio in readily available funds, such as Local
Government Investment Pools (LGIP), money market funds or repurchase agreements to
ensure appropriate liquidity is maintained in order to meet ongoing obligations.
47
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Position or Equity (Continued)
1. Deposits and Investments (Continued)
Having all investments, other than those in direct obligations or agencies of the United
States, secured by collateral or repurchase agreements, shall not exceed 50% of the aggregate
investment portfolio. Mortgage backed securities shall not exceed 35% of the aggregate
investment portfolio, at the time of investment (i.e., commercial paper or bankers'
acceptance).
Limiting investments in any one corporation to 5% of the aggregate investment portfolio.
The investment policy for the City's Electric and Water Enterprise Funds (Shakopee Public Utilities
Commission) defines suitable and authorized investments and related minimum ratings as well as
application of prudent person standards in construction of portfolio management and diversification.
Custodial Credit Risk — Investments: For an investment, this is the risk that in the event of the
failure of the counterparty, the City will not be able to recover the value of its investments or
collateral securities that are in the possession of an outside parry. The City's investment policy
states all securities purchased, including appropriate collateral, shall be placed with an independent
third party for custodial safekeeping.
2. Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the
end of the year are referred to as "advances to /from other funds ". All other outstanding balances
between funds are reported as "due to /from other funds ". Any residual balances outstanding
between the governmental activities and business -type activities are reported in the government -
wide financial statements as "interfund balances ".
All trade and property tax receivables are shown at a gross amount since both are assessable to the
property taxes and are collectible upon the sale of the property.
The City levies its property tax for the subsequent year during the month of December. December
28 is the last day the City can certify a tax levy to the County Auditor for collection the following
year. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date.
The property tax is recorded as revenue when it becomes measurable and available. Scott County is
the collecting agency for the levy and remits the collections to the City three times a year. The tax
levy notice is mailed in March with the first half of the payment due on May 15 and the second half
due on October 15. Taxes not collected as of December 31 each year are shown as delinquent taxes
receivable.
The County Auditor prepares the tax list for all taxable property in the City, applying the applicable
tax rate to the tax capacity of individual properties, to arrive at the actual tax for each property. The
County Auditor also collects all special assessments, except for certain prepayments paid directly to
the City.
48
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Position or Equity (Continued)
2. Receivables and Payables (Continued)
The County Auditor submits the list of taxes and special assessments to be collected on each parcel
of property to the County Treasurer in January of each year.
3. Inventory, Prepaid Items and Other Assets
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both government -wide and fund financial statements. Prepaid expenditures of
governmental funds are reported using the consumption method and recorded as
expenditures /expenses at the time of consumption.
Inventories of enterprise funds are valued at average cost using the first in, first out (FIFO) method.
Inventory in the governmental funds is recorded as an expenditure when consumed rather than when
purchased.
4. Restricted Assets
Certain cash and investments in the component units are classified as restricted. The Electric Fund
has monies restricted for customer deposits and debt service. The Water Fund has monies restricted
for water production and trunk distribution facility acquisition, based on trunk and connection fees
collected from users, construction projects and debt service.
5. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads,
sidewalks and similar items), are reported in the applicable governmental or business -type activities
columns in the government -wide financial statements. Capital assets are defined by the City,
excluding the component unit, as assets with an initial, individual cost of more than $ 10,000 and an
estimated useful life in excess of two years. Capital assets for the component unit are defined as
assets with an initial, individual cost of more than $ 1,000 and an estimated useful life in excess of
one year. Such assets are recorded at historical cost or estimated historical cost if purchased or
constructed. Donated capital assets are recorded at estimated fair market value at the date of
donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially
extend assets lives are not capitalized.
11941
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Position or Equity (Continued)
5. Capital Assets (Continued)
Property, plant and equipment of the City are depreciated using the straight -line method over the
following estimated useful lives.
Assets
Years
Buildings
30 -50
Park Buildings
30
Building Improvements
25
Light Vehicles
4 -10
Machinery and Equipment
4 -20
Utility Distribution System
50 -75
Infrastructure
30 -50
Fire Trucks
20 -25
6. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element represents a consumption
of net position that applies to a future period(s) and so will not be recognized as an outflow of
resources (expense /expenditure) until that time. The Component Unit only has one item that
qualifies for reporting in this category. It is the deferred charge on refunding reported in the
statement of net position- component unit - SPUC. A deferred charge on refunding results from the
difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred
and amortized over the shorter of the life of the refunded or refunding debt.
In addition to liabilities, the statement of financial position and fund financial statements will
sometimes report a separate section for deferred inflows of resources. This separate financial
statement element represents an acquisition of net position that applies to a future period(s) and so
will not be recognized as an inflow of resources (revenue) until that time. The City only has one
type of item, which arises only under the modified accrual basis of accounting that qualifies for
reporting in this category. Accordingly, the item is reported only in the governmental funds balance
sheet as unavailable revenue. The governmental funds report unavailable revenues from two
sources: property taxes and special assessments. These amounts are deferred and recognized as an
inflow of resources in the period that the amounts become available.
50
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Position or Equity (Continued)
7. Compensated Absences
Vacation and sick leave benefits are recorded as expenditures in the Employee Benefits Internal
Service Fund and governmental funds when the obligations have matured and are expected to be
liquidated with expendable financial resources. City employees earn vacation time based on years
of City service. Employees who have 0 to 15 years of employment may accumulate no more than
240 hours. Employees who have 16 or more years of service may accumulate no more than 360
hours of vacation leave. Upon termination, employees will receive compensation for all unused
vacation. Employees earn sick leave and may accumulate to a maximum of 960 hours. The City
compensates employees who leave municipal service at the rate of 45% up to 15 years of service.
After 15 years of service, employees who leave are compensated at the rate of 55% plus 2% for
each year of service beyond 15 years up to 75% of unused sick leave.
8. Long -Term Obligations
In the government -wide financial statements and proprietary fund types in the fund financial
statements, long -term debt and other long -term obligations are reported as liabilities in the
applicable governmental activities, business -type activities or proprietary fund type Statement of Net
Position. Enterprise fund bond premiums and discounts, are deferred and amortized over the life of
the bonds using the effective interest method. Bonds payable are reported net of the applicable bond
premium or discount.
In the fund financial statements, governmental fund types recognize bond premiums and discounts,
as well as bond issuance costs, during the current period. The face amount of debt issued is reported
as other financing sources. Premiums received on debt issuances are reported as other financing
sources while discounts on debt issuances are reported as other financing uses. Issuance costs,
whether or not withheld from the actual debt proceeds received, are reported as expenditures.
9. Fund Equity
a. Classification
In the fund financial statements, governmental funds report fund classifications that comprise a
hierarchy based primarily on the extent to which the City is bound to honor constraints on the
specific purpose for which amounts in those funds can be spent. Non - spendable fund balances
include amounts that cannot be spent because they are not in spendable form. Amounts that are
restricted to specific purposes either by a) constraints placed on the use of resources by creditors,
grantors, contributors, or laws or regulations of other governments or b) imposed by law through
enabling legislation are classified as restricted fund balances. Amounts that can only be used for
specific purposes pursuant to constraints imposed by the City Council (highest level of decision
making authority) through resolution are classified as committed fund balances. Amounts that
are constrained by the City's intent to be used for specific purposes but are neither restricted nor
committed are classified as assigned fund balances. Assignments are made by the City's Finance
Director based on the City Council's direction. Unassigned fund balance represents fund
balance that has not been assigned to other funds and that has not been restricted, committed or
51
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Position or Equity (Continued)
9. Fund Equity (Continued)
a. Classification (Continued)
assigned to a specific purpose in the General Fund. The City's policy is to consider unrestricted
fund balance to be spent by City Council action, appropriations or emergency situations.
The City applies restricted resources first when expenditures are incurred for purposes for which
either restricted or unrestricted (committed, assigned and unassigned) are available. Similarly,
within unrestricted fund balance, committed amounts are reduced first followed by assigned and
then unassigned amounts when expenditures are incurred for purposes for which amounts in any
of the unrestricted fund balance classifications could be used.
b. Minimum Fund Balance
The City's target General Fund balance is to maintain an unassigned level between 40%
(minimum) and 45% of current year expenditures. This level is to provide working capital for
cash flow, expected decline in revenues and unforeseen expenditures such as natural disasters.
Replenishing fund balance when it falls below the target level shall be accomplished by
interfund transfers or budgeting for expenditures and other uses to be less than revenues or other
sources over a period not to exceed three years.
10. Net Position
Net position represents the difference between assets and deferred outflows and liabilities and
deferred inflows in the government -wide financial statements. Net investment in capital assets
consists of capital assets, net of accumulated depreciation, reduced by the outstanding balance of any
long -term debt used to build or acquire the capital assets. Net position is reported as restricted in the
government -wide financial statement when there are limitations on their use through external
restrictions imposed by creditors, grantors or laws or regulations of other governments.
11. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements. Estimates also affect the reported amounts of revenue and
expenditures /expense during the reporting period. Actual results could differ from those estimates.
W
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 2 — RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL
STATEMENTS
A. Explanation of Certain Differences between the Governmental Fund Balance Sheet and the
Government -Wide Statement of Net Position
The governmental fund Balance Sheet includes reconciliation between fund balance — total
governmental funds and net position — governmental activities as reported in the government -wide
Statement of Net Position. One element of that reconciliation explains that "Internal Service Funds are
used by management to charge the costs of providing certain services for the City."
Net Position of the Internal Service Funds $ 47,894,774
Less Portion Loss Related to Business- Type Activities $ (163,020)
Net Adjusmtent to Increase Fund Balance- Total Governmental
Funds to Arrive at Net Position- Governmental Activities $ 47,731,754
B. Explanation of Certain Differences between the Governmental Fund Statements of
Revenues, Expenditures, and Changes in Fund Balances and the Government -Wide
Statement of Activities
Another element of that reconciliation states that "Internal Service Funds are used by management to
charge the costs of providing various services for the City." The details of this difference are as follows:
Change in Net Position of the Internal Service Fund $ (448,557)
Less the Net of Indirect Revenues and Expense $ (51,804)
Net Adjustment to Decrease Net Change in Fund Balances - Total
Government Funds to Arrive at Changes in Net position of
Government Activities $ (500,361)
C. Explanation of Certain Differences between the Proprietary Fund Statements of Net
Position and the Government -Wide Statement of Net Position
The proprietary fund Statement of Net Position includes reconciliation between net position — total
enterprise funds and net position of business -type activities as reported in the government -wide
Statement of Net Position. The description of the sole reconciliation is "adjustment to reflect the
consolidation of internal service fund activities related to enterprise funds." The details of this
$ 163,020 are as follows:
53
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 2 — RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL
STATEMENTS
C. Explanation of Certain Differences between the Proprietary Fund Statements of Net
Position and the Government -Wide Statement of Net Position (Continued)
Internal Payable Representing Costs less than Charges to
Business- Type Activities- Current Year $ 163,020
D. Explanation of Certain Differences between the Proprietary Fund Statements of
Revenues, Expenses, and Changes in Fund Net Position and the Government -Wide
Statement of Activities
Net adjustment to Increase Net Change in Fund Balances- Total
Enterprise Funds to Arrive at Changes in Net Position of
Business- Type Activities $ 51,804
NOTE 3 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information
Budgets are adopted on a basis consistent with accounting principles generally accepted in the United
States of America. Annually appropriated budgets are adopted for the General Fund.
Budgeted amounts present the originally adopted budget and final amended budget approved by the City
Council. The City does not use encumbrances. Budgeted expenditure appropriations lapse at year -end.
1. In August of each year, City staff submits to the City Council, a proposed operating budget for
the year commencing the following January 1. The operating budget includes proposed
expenditures and the means of financing them for the upcoming year.
2. Public hearings are conducted to obtain taxpayer comments.
3. The budget is legally enacted through passage of a resolution after obtaining taxpayer comments.
4. Expenditures may not legally exceed budgeted appropriations at the division level. No fund's
budget can be increased without City Council approval. The City Council may authorize
transfer of budgeted amounts between divisions within any fund. Management may amend
budgets within a division level, so long as the total division budget is not changed.
5. An annual budget is adopted for the General Fund. Annual appropriated budgets are not adopted
for Debt Service Funds because effective budgetary control is alternatively achieved through
bond indenture provisions. Budgetary control for Capital Projects Funds is accomplished
through the use of project controls and budgets are not adopted.
54
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 3 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information (Continued)
6. Budgeted amounts are as originally adopted or as amended by the City Council. Individual
amendments were not material in relation to the original amounts budgeted.
NOTE 4 — DEPOSITS AND INVESTMENTS
A. Deposits
In accordance with applicable Minnesota Statutes, the City and the Component Unit maintains deposits
at depository banks authorized by the City Council and the Commissioners.
Custodial Credit Risk: As of December 31, 2013, the City and Commission's bank balances were not
exposed to custodial credit risk because they were insured through Federal Deposit Insurance
Corporation (FDIC) and properly collateralized with securities held by the pledging financial
institutions' trust departments or agents in the City's name.
As of December 31, 2013, the City had the following deposits:
City Deposits $ 1,574,227
Component Unit Deposits 9,702,690
Total Deposits $ 11,276,917
B. Investments
As of December 31, 2013, the City held the following investments:
Years to Maturity
Less than
Moody's
Fair Value One Year 1 -5 Years 5 -10 Years 10 -15 Years Concentration
Rating
4M $ 4,483 $ 4,483 $ $ $ 0.01%
4M Plus 998 998
Aaa
0.00%
Certificate of Deposit 7,526,709 2,980,632 4,546,077 10.27%
Aaa
NR
Commercial Paper 999,960 999,960 - 1.36%
NR
Money Market Fund 7,918,204 7,918,204 - 10.79%
NR
Mortgage
FAMC 650,164 - 650,164 0.89%
FFCB 6,321,412 1,409,357 4,912,055
AA1
- 8.62%
FHLB 13,399,183 4,001,920 5,046,438 2,410,845 1,939,980 18.28%
Aaa
Aaa
FHLMC 8,054,617 - 6,135,039 1,392,386 527,192 10.99%
FNMA
Aaa
7,769,610 696 7,465,238 303,676 - 10.60%
GNMA 11,246 11,246 -
NR
0.02%
Municipal Bond 11,054,280 3,583,743 3,921,323 3,549,214 15.08%
NR
Aaa -Al
US Treasury Notes 9,592,633 4,524,850 5,067,783 - - 13.09%
Aaa
Total Investments $ 73,303,499 $ 25,436,089 $ 37,744,117 $ 7,656,121 $ 2,467,172 100.00%
55
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 4 — DEPOSITS AND INVESTMENTS
B. Investments (Continued)
As of December 31, 2013, the City held the following cash with fiscal agent:
Years to Maturity
Less than Moody's
Fair Value One Year 1 -5 Years Rating Concentration
Money Market Fund $ 2 $ 2 $ NR 0.00%
Time Deposit 4,789,673 1,179,429 3,610,244 NR 100.00%
Total Cash with Fiscal Agent $ 4,789,675 $ 1,179,431 $ 3,610,244 100.00%
As of December 31, 2013, the component units had the following investments:
Years to Maturity
Less than
Fair Value One Year 1 -5 Years Rating Concentration
US Agencies $ 13,752,874 $ 5,553,665 $ 8,199,209 AAA 52.92%
U.S. Treasuries 4,256,905 2,301,016 1,955,889 AAA 16.38%
4M Fund 7,889,108 7,889,108 - N/A 30.36%
Money Market Fund 88,098 88,098 - N/A 0.34%
Total $ 25,986,985 $ 15,831,887 $ 10,155,098 100.00%
Custodial Credit Risk — Investments: As of December 31, 2013, all investments of the City and the
component units were insured, registered and held by the City or its agent and in the City's name, or by
the SPUC and in the SPUC's name.
Concentration of Credit Risk: As of December 31, 2013, the City held investments that exceeded 5% of
its total investments for all funds as noted in the table on the previous page.
The component units' investments noted in the table above exceeded 5% of its total investments as of
December 31, 2013.
The following is a summary of total deposits and investments as of December 31, 2013:
Deposits (Note 3.A.)
City Investments
City Investment with Fiscal Agent
Component Unit Investments
City Petty Cash
Component Unit Petty Cash
Total Deposits and Investments
$ 11,276,917
73,303,499
4,789,675
25,986,985
5,939
1,700
$ 115,364,715
56
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 4 — DEPOSITS AND INVESTMENTS
B. Investments (Continued)
Deposits and investments are presented in the December 31, 2013 basic financial statements as follows:
Statement of Net Position:
Cash and Investments
Cash with Fiscal Agent
Restricted Assets
Statement of Fiduciary Net Position:
Cash and Investments
Total
City Component
Funds Units Total
$ 72,376,274
4,789,675
$ 25,510,450
10,180,925
$ 97,886,724
4,789,675
10,180,925
2,507,391 - 2,507,391
$ 79,673,340 $ 35,691,375 $ 115,364,715
NOTE 5 — RECEIVABLESIUNAVAILA13LE REVENUE
A. Taxes and Assessments
Governmental funds report unavailable revenue in connection with receivables for revenues that are not
considered to be available to liquidate liabilities of the current period. Governmental funds also defer
revenue recognition in connection with resources that have been received, but not yet earned. At the
end of the current year, the various components of unavailable revenue reported in the governmental
funds were as follows:
Delinquent Delinquent Deferred
Property Special Special
Taxes Assessments Assessments Total
General Fund $ 290,507 $ 4,448 $ 41,895 $ 336,850
2004A Improvement Bonds - - 1,760,379 1,760,379
Capital Improvements - 131 644,050 644,181
Nonmajor Funds 2,518 17,944 1,352,825 1,373,287
Total $ 293,025 $ 22,523 $ 3,799,149 $ 4,114,697
B. Notes Receivable
The Equipment Internal Service Fund has a note receivable with the Scott County HRA that originated
in 1998 as a result of the River City Centre Development Project. This note has an interest rate of
6.75% and will be paid in full in February 2014. At December 31, 2013, the note's balance was
$ 95,000. During 2013, $ 95,000 of principal and $ 9,619 of interest was paid.
WA
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 6 — CAPITAL ASSETS
Governmental capital asset activity for the year ended December 31, 2013 was as follows:
Total Capital Assets being
Depreciated, Net 105,522,472 1,596,660 349,576 106,769,556
Governmental Activities Capital
Assets, Net $ 129,386,768 $ 4,870,105 $ 3,965,348 $ 130,291,525
Depreciation expense was charged to functions /programs of the City as follows:
Governmental Activities:
General Government $ 210,533
Public Safety 658,977
Public Works 4,741,156
Parks and Recreation 803,336
Total Depreciation Expense - Governmental Activities $ 6,414,002
58
Beginning
Ending
Balance
Increases
Decreases
Balance
Governmental Activities:
Capital Assets not being
Depreciated:
Land
$ 20,023,040
$ -
$ 1,000
$ 20,022,040
Construction in Progress
3,841,256
3,273,445
3,614,772
3,499,929
Total Capital Assets
not being Depreciated
23,864,296
3,273,445
3,615,772
23,521,969
Capital Assets being
Depreciated:
Buildings
34,987,146
2,937,763
371,129
37,553,780
Infrastructure
134,908,129
3,898,620
-
138,806,749
Machinery and Equipment
13,851,200
1,174,279
973,872
14,051,607
Total Capital Assets
being Depreciated
183,746,475
8,010,662
1,345,001
190,412,136
Less Accumulated
Depreciation for:
Buildings
10,353,160
868,355
349,797
10,871,718
Infrastructure
61,200,798
4,505,585
-
65,706,383
Machinery and Equipment
6,670,045
1,040,062
645,628
7,064,479
Total Accumulated
Depreciation
78,224,003
6,414,002
995,425
83,642,580
Total Capital Assets being
Depreciated, Net 105,522,472 1,596,660 349,576 106,769,556
Governmental Activities Capital
Assets, Net $ 129,386,768 $ 4,870,105 $ 3,965,348 $ 130,291,525
Depreciation expense was charged to functions /programs of the City as follows:
Governmental Activities:
General Government $ 210,533
Public Safety 658,977
Public Works 4,741,156
Parks and Recreation 803,336
Total Depreciation Expense - Governmental Activities $ 6,414,002
58
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 6 — CAPITAL ASSETS
Business -type capital asset activity for the year ended December 31, 2013 was as follows:
Business -Type Activities:
Capital Assets not being
Depreciated:
Land
Right -Of -Way
Construction in Progress
Total Capital Assets
not being Depreciated
Capital Assets being Depreciated:
Line Rights
Plant in Service
Machinery and Equipment
Total Capital Assets
being Depreciated
Less Accumulated
Depreciation for:
Line Rights
Plant in Service
Machinery and Equipment
Total Accumulated
Depreciation
Total Capital Assets being
Depreciated, Net
Business -Type Activities Capital
Assets, Net
Restated
Beginning
Balance Increases
Ending
liarraacac Ral�.,,.e
$ 3,783,603 $ 400 $ - $ 3,784,003
235,777 211,969 - 447,746
1,288,695 1,374,856 1,081,108 1,582,443
5,308,075 1,587,225 1,081,108 5,814,192
1,368,569 -
75,676,291 1,667,029
2,622,209 493,481
1,368,569
- 77,343,320
301,032 2,814,658
79,667,069 2,160,510 301,032 81,526,547
477,560
24,733
- 502,293
19,079,556
1,240,975
- 20,320,531
1,293,438
162,993
119,981 1,336,450
20,850,554
1,428,701
119,981 22,159,274
58,816,515
731,809
181,051 59,367,273
$ 64,124,590 $ 2,319,034 $ 1,262,159 $ 65,181,465
Depreciation expense was charged to functions /programs of the City as follows:
Business -Type Activities:
Sanitary Sewer
Storm Drainage
Total Depreciation Expense - Business -Type Activities
$ 732,940
695,761
$ 1,428,701
59
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 6 — CAPITAL ASSETS
Component unit capital asset activity for the year ended December 31, 2013 was as follows:
Component Unit Capital Assets
not being Depreciated:
Land and Land Rights
Construction in Progress
Total Capital Assets
not being Depreciated
Capital Assets being Depreciated:
Distribution
General
Total Capital Assets
being Depreciated
Less Accumulated Depreciation
Total Capital Assets being
Depreciated, Net
Component Unit Capital Assets, Net
Beginning Ending
Balance Increases Decreases Balance
$ 5,097,532 $ - $ - $ 5,097,532
137,942 3,095,280 2,350,645 882,577
5,235,474 3,095,280 2,350,645 5,980,109
82,236,075 1,749,613 128,633 83,857,055
13,338,656 485,876 58,518 13,766,014
95,574,731 2,235,489 187,151 97,623,069
28,392,535 2,879,376 134,712 31,137,199
67,182,196 (643,887) 52,439 66,485,870
$ 72,417,670 $ 2,451,393 $ 2,403,084 $72,465,979
Depreciation expense was charged to functions /programs of the component units as follows:
Component Units:
Electric $ 1,746,834
Water 1,132,542
Total Depreciation Expense - Component Units $ 2,879,376
NOTE 7 — LONG -TERM DEBT
A. General Obligation Bonds
The City issues general obligation (G.O.) bonds to provide for financing tax increment projects, street
improvements and construction of government buildings. Debt service is covered respectively by tax
increments and special assessments against benefited properties with any shortfalls being paid from
general taxes.
G.O. bonds are direct obligations and pledge the full faith and credit of the City. These bonds generally
are issued as serial bonds with equal debt service payments each year. G.O. bonds currently outstanding
are shown on the following page.
60
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 7 — LONG -TERM DEBT
B. Revenue Bonds
The Commission issues Revenue Bonds for electric and water activity.
Debt service is covered through
the revenue producing activities of these funds.
C. Components of Long -Term Liabilities
Issue Interest
Original
Final
Principal
Due Within
Date Rates
Issue
Maturity
Outstanding
One Year
Governmental Activities:
G.O. Bonds:
G.O. Improvement Bonds:
2004A 05/01/04 2.25 %4.10%
$ 4,225,000
02/01/25
$ 1,385,000
$ 1,385,000
2004C 11/01/04 3.00 % -4.00%
2,570,000
02/01/15
515,000
255,000
2006A 07/01/06 4.00%
3,440,000
02/01/17
1,470,000
360,000
2007A 02/01/07 4.00%
1,370,000
02/01/17
620,000
160,000
2007B 09/01/07 4.00%
1,445,000
02/01/18
755,000
145,000
2008A 09/01/08 3.50 % -4.00%
2,170,000
02/01/19
1,230,000
195,000
2010A 08/01/10 0.50°/m2.90%
1,555,000
02/01/21
1,150,000
185,000
G.O. Building Refunding
Bonds 2004B 05/01/04 2.25 0/,4.00%
2,275,000
02/01/17
860,000
200,000
G.O. Capital Improvement
Bonds 2004D 11/01/04 2.500/ 4.20%
6,000,000
02/01/25
4,140,000
275,000
G.O. Building Refunding
Bonds 2012A 06/14/12 1.50 %2.125%
4,865,000
02/01/25
4,865,000
-
Total G.O. Bonds
16,990,000
3,160,000
Compensated Absences
1,792,459
806,606
Total Governmental
Activities
$ 18,782,459
$ 3,966,606
Business -Type Activities
Compensated Absences
$ 75,879
$ 34,146
Component Unit Long -Term Liabilities:
Utility Revenue Bonds:
Series 2006A Crossover Refunding Bonds 11/21/06 4.125 % - 4.375%
10,570,000
02/01/30
$ 9,195,000
$ 380,000
Unamortized Discounts
(59,162)
-
Total Component Unit Long -Term Liabilities
$ 9,135,838
$ 380,000
Long -term bonded indebtedness listed above were issued to finance acquisition and construction of
capital facilities or to refinance (refund) previous bond issues.
61
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 7 — LONG -TERM DEBT
D. Changes in Long -Term Liabilities
Long -term liability information for the year ended December 31, 2013 was as follows.
Component Unit Activites:
G.O. Utility Revenue Bonds
Beginning
$ 9,090,000
$ 9,195,000 $ 380,000
Ending
Due Within
(378,983)
Balance
Additions
Reductions
Balance
One Year
Governmental Activities:
Bonds Payable
$ 19,060,000
$ -
$ 2,070,000
$ 16,990,000
$ 3,160,000
Compensated Absences
1,742,587
966,679
916,807
1,792,459
806,606
Total Governmental Activities
$ 20,802,587
$ 966,679
$ 2,986,807
$ 18,782,459
$ 3,966,606
Business -Type Activities
Compensated Absences
$ 69,503
$ 43,391
$ 37,015
$ 75,879
$ 34,146
Component Unit Activites:
G.O. Utility Revenue Bonds
$ 18,285,000 $
$ 9,090,000
$ 9,195,000 $ 380,000
Unamortized Discounts
(438,145)
(378,983)
(59,162) -
Total Component Unit Activites
$ 17,846,855 $
- $ 8,711 0.17
$ 9,135,838 $ 380,000
The General Fund, Employee Benefits Internal Service Fund and Sewer and Storm Drainage Enterprise
Funds typically liquidate the liability related to compensated absences.
E. Governmental Activity G.O. Bonds
Debt service to maturity for outstanding G.O. bonds is as follows:
Year Ending
December 31,
2014
2015
2016
2017
2018
2019 -2023
2024 -2028
Total
Governmental Bonds
Principal Interest
$ 3,160,000
5,615,000
1,685,000
1,685,000
955,000
2,930,000
960,000
$ 500,959
329,425
192,723
139,200
98,893
236,170
20,100
Total
$ 3,660,959
5,944,425
1,877,723
1,824,200
1,053,893
3,166,170
980,100
$ 16,990,000 $ 1,517,470 $ 18,507,470
62
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 7 — LONG -TERM DEBT
F. Component Unit Revenue Bonds
Debt service to maturity for outstanding revenue bonds is as follows:
Year Ending
December 31,
2014
2015
2016
2017
2018
2019 -2023
2024 -2028
2029 -2030
Total
G. Refunding
Utility Revenue Bonds
Principal Interest Total
$ 380,000
390,000
410,000
425,000
445,000
2,510,000
3,145,000
1,490,000
$ 387,269
371,388
354,888
337,400
318,912
1,289,943
682,391
66,062
$ 767,269
761,388
764,888
762,400
763,912
3,799,943
3,827,391
1,556,062
$ 9,195,000 $ 3,808,253 $ 13,003,253
In June 2012, the City issued $ 4,865,000 G.O. Improvement Refunding Bonds to refund G.O. Bonds,
Series 2004A, maturing in years 2014 through 2025 and G.O. Bonds, Series 2004D, maturing in years
2015 through 2025. The net proceeds of $ 4,951,424 were deposited with an escrow agent to provide
for the payment of the principal maturities at the call date of the refunded bonds and for the interest on
the refunding bonds through the call date. The City is responsible for the principal and interest
payments on the remaining refunded bond issues through the call date. The call date for the refunded
G.O. Bonds, Series 2004A is February 1, 2014 and the call date for the refunded G.O. Bonds, Series
2004D is February 1, 2015. The refunding resulted in reduction of future debt service payments of
$ 442,330 and a net present value savings of $ 387,886.
63
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 8 — CONDUIT DEBT OBLIGATIONS
Conduit debt obligations are certain limited obligation revenue bonds or similar debt instruments issued
for the express purpose of providing capital financing for a specific third party. The City has issued
various revenue bonds to provide funding to private- sector entities for projects deemed to be in the
public interest. Although these bonds bear the name of the City, the City has no obligation for such debt
beyond the resources provided by related leases or loans. Accordingly, the bonds are not reported as
liabilities in the financial statements of the City.
As of December 31, 2013, the following conduit debt was outstanding:
Date of Original Balance
Project Issue Amount of Issue Outstanding
Scott County CDA Housing Development
07/15/06
$ 905,000
$ 575,000
2006D Refunding- River City Center Project
Scott County CDA Housing Development
12/01/13
2,330,000
2,330,000
2013A Refunding- River City Center Project
Scott County CDA Housing Development
12/01/13
1,220,000
1,220,000
2013E Refunding- River City Center Project
Scott County CDA Housing Development
04/26/12
5,885,000
5,780,000
2012A Refunding- North Ridge Court Redevelopment
St. Francis Regional Medical Center
10/06/04
51,520,000
48,235,000
Health Care Facilities Revenue Bond Series 2004
St. Francis Regional Medical Center
12/23/87
8,000,000
2,635,000
Health Care Facilities Revenue Bond Series 1987
Total $ 50,870,000
NOTE 9 — PAY AS YOU GO TAX INCREMENT FINANCING AGREEMENTS
The City and the Shakopee EDA have a development agreement for costs related to an Imagine! Print
Solutions, formally known as Challenge Printing, facility moving to Shakopee. The Shakopee EDA
issued a Taxable Tax Increment Revenue Note in the amount of $ 513,900 in support of development
costs for the Imagine! Print Solutions Project. Imagine! Print Solutions is the holder of the note. The
Shakopee EDA is liable only to the extent of the tax increment received from the Imagine! Print
Solutions property. The interest on the note is 6.00 %. Payments are scheduled semiannually from
August 1, 2006 to February 1, 2015.
The City and the Shakopee EDA have a development agreement for costs related to Open Systems
Facility located in Shakopee. The Shakopee EDA issued a Taxable Tax Increment Revenue Note in the
amount of $ 125,000 in support of development costs for the Open Systems Project. Open Systems is
the holder of the note. The Shakopee EDA is liable only to the extent of the tax increment received
from the Open Systems property. The interest on the note is 6.00 %. Payments are scheduled
semiannually from August 1, 2007 to February 1, 2014.
64
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 10 — INTERFUND ASSETS/LIABILITIES
The composition of interfund balances as of December 31, 2013 is as follows:
Receivable Fund Payable Fund Amount
Capital Improvements Nonmajor Governmental Funds $ 623
Nonmajor Governmental Funds Nonmajor Governmental Funds 75,325
Total $ 75,948
The due from/due to other funds balance represents borrowing to eliminate a cash deficit. This will be
repaid as funds are available.
NOTE 11— INTERFUND TRANSFERS
Transfers Out:
General Fund
Capital Improvements
Other Governmental Funds
Sewer Fund
Storm Drainage Fund
Internal Service Fund
Total
Transfer In
2004 A Other Internal
General Improvement Capital Governmental Service
Fund Bonds Improvements Funds Fund Total
$ - $ 100,000 $ 2,800,000 $ 760,000
- - 388,838
- 241,971 -
75,000 - - _
75,000 - - -
- 450,000
$ 250,000 $ 3,910,000
- 388,838
- 241,971
- 75,000
- 75,000
- 450,000
$ 150,000 $ 100,000 $ 3,041,971 $ 1,598,838 $ 250,000 $ 5,140,809
Transfers were made according to budgets for operating purposes, to finance projects and for the
cancellation of the debt service levy.
NOTE 12 — RISK MANAGEMENT
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance
Trust ( LMCIT) with other cities in the state which is a public entity risk pool currently operating as a
common risk management and insurance program. The City pays an annual premium to the LMCIT for
its insurance coverage. The LMCIT is self - sustaining through member premiums and reinsures through
commercial companies for excess claims. The City is covered through the pool for any claims incurred
but unreported, however, retains risk for the deductible portion of its insurance policies. The amount of
these deductibles ranges from $ 2,500 to $ 5,000 and is considered immaterial to the financial
statements.
There were no significant reductions in insurance from the previous year or settlements in excess of
insurance coverage for any of the past three years.
65
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 12 — RISK MANAGEMENT
Through the pool, the City is subject to reassessment but due to reserves and reinsurance contracts, the
likelihood is very low. The policy limits through the pool included $ 2,000,000 aggregate for liability,
$ 1,500,000 for automobile coverage, $ 500,000 faithful performance employee bonding and
$ 1,000,000 for universal umbrella coverage. Property coverage is at approximately $ 91,000,000.
NOTE 13 — DEFINED BENEFIT PENSION PLANS — STATE -WIDE
Public Employees' Retirement Association
A. Plan Description
All full -time and certain part-time employees of the City are covered by defined benefit plans
administered by the Public Employees' Retirement Association of Minnesota (PERA). PERA
administers the General Employees' Retirement Fund (GERF) and the Public Employees' Police and
Fire Fund ( PEPFF), which are cost - sharing, multiple - employer retirement plans. These Plans are
established and administered in accordance with Minnesota Statutes Chapters 353 and 356.
GERF members belong to either the Coordinated or Basic Plan. Coordinated Plan members are covered
by Social Security and Basic Plan members are not. All new members must participate in the
Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by
statute are covered by the PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors
upon death of eligible members. Benefits are established by state statute and vest after five years of
credited service. The defined retirement benefits are based on a member's highest average salary for
any five successive years of allowable service, age and years of credit at termination of service.
Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The
retiring member receives the higher of a step -rate benefit accrual formula (Method 1) or a level accrual
formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% of
average salary for each of the first 10 years of service and 2.7% for each remaining year. The annuity
accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10 years and
1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for
Basic Plan members and 1.7% for Coordinated Plan members for each year of service. For PEPFF
members, the annuity accrual rate is 3.0% for each year of service. For all GERF and PEPFF members
hired prior to July 1, 1989, whose annuity is calculated using Method 1, a full annuity is available when
age plus years of service equal 90. Normal retirement age is 55 for PEPFF members and 65 for Basic
and Coordinated Plan members hired prior to July 1, 1989. Normal retirement age is the age for
unreduced Social Security benefits capped at 66 for Coordinated Plan members hired on or after July 1,
1989. A reduced retirement annuity is also available to eligible members seeking early retirement.
GS
9
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 13 — DEFINED BENEFIT PENSION PLANS — STATE -WIDE
Public Employees' Retirement Association (Continued)
A. Plan Description (Continued)
There are different types of annuities available to members upon retirement. A single -life annuity is a
lifetime annuity that ceases upon the death of the retiree — no survivor annuity is payable. There are also
various types of joint and survivor annuity options available which will be payable over joint lives.
Members may also leave their contributions in the Fund upon termination of public service in order to
qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to
members who leave public service, but before retirement benefits begin.
The benefit provisions stated in the previous paragraphs of this section are current provisions and apply
to active Plan participants. Vested, terminated employees who are entitled to benefits but are not yet
receiving them are bound by the provisions in effect at the time they last terminated their public service.
PERA issues a publicly available financial report that includes financial statements and required
supplementary information for GERF and PEPFF. That report may be obtained on the Internet at
www.mnpera.org, by writing to PERA at 60 Empire Drive, #200, St. Paul, Minnesota 55103 -2088 or by
calling (651) 296 -7460 or (800) 652 -9026.
B. Funding Policy
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These Statutes
are established and amended by the State Legislature. The City makes annual contributions to the
pension plans equal to the amount required by state statutes. GERF Basic Plan members and
Coordinated Plan members were required to contribute 9.1 % and 6.25 %, respectively, of their annual
covered salary in 2013. PEPFF members were required to contribute 9.6% of their annual covered
salary in 2013. In 2013, the City was required to contribute the following percentages of annual covered
payroll: 11.78% for Basic Plan members, 7.25% for Coordinated Plan members and 14.4% for PEPFF
members. The City's contributions to the Public Employees' Retirement Fund for the years ending
December 31, 2013, 2012 and 2011 were $ 372,656, $ 349,790 and $ 353,579, respectively. The City's
contributions to the PEPFF for the years ending December 31, 2013, 2012 and 2011 were $ 548,485,
$ 529,799 and $ 500,257, respectively. The City's contributions were equal to the contractually
required contributions for each year as set by state statute.
NOTE 14 — DEFINED CONTRIBUTION PLAN — STATE -WIDE
Four Council Members of the City are covered by the Public Employees' Defined Contribution Plan
( PEDCP), a multiple - employer deferred compensation plan administered by PERA. The PEDCP is a tax
qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf
of employees are tax deferred until time of withdrawal.
67
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 14 — DEFINED CONTRIBUTION PLAN — STATE -WIDE
Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less
administrative expenses. Minnesota Statutes Chapter 353D.03 specifies the employee and employer
contribution rates for those qualified personnel who elect to participate. An eligible elected official who
decides to participate contributes 5% of salary which is matched by the elected official's employer.
Employer and employee contributions are combined and used to purchase shares in one or more of the
seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, PERA
receives 2% of employer contributions and four - tenths of I% of the assets in each member's account
annually.
Total contributions made by the City during year 2013 were:
Contribution Amount Percentage of Covered Payroll Required
Employee Employer Employee Employer Rates
$ 1,400 $ 1,400 5% 5% 5%
NOTE 15 — DEFINED BENEFIT PENSION PLAN — SHAKOPEE VOLUNTEER FIRE
RELIEF ASSOCIATION
A. Plan Description
The Shakopee Fire Relief Association (the "Association ") is the administrator of a single employer
defined benefit pension plan established to provide benefits for members of the Shakopee Fire
Department.
The Association provides retirement and disability benefits to members, and benefits to survivors upon
the death of eligible members. Benefits are established in accordance with Minnesota Statutes. The
defined retirement benefits are based on a member's years of service. Benefit provisions can be
amended by the Association within the parameters provided by Minnesota Statutes.
The Association issues a publicly available financial report that includes financial statements and
required supplementary information. That report may be obtained by writing to Shakopee Fire Relief
Association, 129 Holmes Street South, Shakopee, Minnesota 55379.
B. Funding Policy
Minnesota Statutes Chapter 69.772 specifies minimum support rates required on an annual basis. The
minimum support rates from the municipality and from state aid are determined as the amount required
to meet the normal cost plus amortizing any existing prior service costs over a 10 year period. Actuarial
valuations are not required for the Association as the Association follows Minnesota Statutes for the
valuation calculation. The City has decided to make an annual contribution in addition to state aid
received for pension cost. The Association is comprised of volunteers; therefore, there are no payroll
expenditures (i.e., there are no covered payroll percentage calculations).
Contributions totaling $ 340,900 ($ 114,007 City of Shakopee and $ 226,893 State of Minnesota) were
made in accordance with contribution requirements as of December 31, 2013. These contributions were
entirely for normal service cost.
68
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 15 — DEFINED BENEFIT PENSION PLAN — SHAKOPEE VOLUNTEER FIRE
RELIEF ASSOCIATION
B. Funding Policy (Continued)
The City's annual pension cost for the current year and related
information is as follows:
Validation Date
December 31, 2013
Actuarial Cost Method
Entry Age Normal
Amortization Method
Level annual dollar closed
Remaining Amortization Period:
Normal Cost
20 years
Prior Service Cost
10 years
Asset Valuation Method
Market
Actuarial Assumptions:
Investment Rate of Return
4%
Projected Salary Increases
N/A
Includes Inflation at
N/A
Cost of Living Adjustments
None
Annual
Percentage
Net
Pension
of APC
Pension
Year Ended Cost (APC)
Contributed
Obligation
12/31/11 $ 509,553
100%
$ -
12/31/12 313,118
100%
12/31/13 340,900
100%
-
Satatutory
Statutory
Funded
Valuation Value of
Accrued
(Unfunded) Funded
Date Assets
Liability (SAL)
SAL Ratio
12/31/11 $ 3,974,012
$ 4,480,608
$ (506,596) 88.7%
12/31/12 4,634,023
4,832,549
(198,526) 95.9%
12/31/13 5,135,900
4,529,104
606,796 113.4%
The Association is comprised of volunteers; therefore, there are no payroll expenditures (i.e., there are
no covered payroll amounts or percentage calculations).
69
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 16 — POST EMPLOYMENT HEALTH BENEFITS PLAN
A. Plan Description
The City provides a single - employer defined benefit health care plan to eligible retirees and their
spouses. The plan offers medical coverage administered by Medica. It is the City's policy to
periodically review its medical coverage and to obtain requests for proposals in order to provide the
most favorable benefits and premiums for City employees and retirees.
B. Funding Policy
Retirees and their spouses contribute to the health care plan at the same rate as City employees. This
results in the retirees receiving an implicit rate subsidy. Contribution requirements are established by
the City, based on the contract terms with Medica. The required contributions are based on projected
pay -as- you -go financing requirements. For the year 2013, the City contributed $ 45,522 to the plan. As
of January 1, 2013, there were five retirees and one disabled officers receiving health benefits from the
City's health plan.
C. Annual OPEB Cost and Net OPEB Obligation
The City's annual OPEB cost (expense) is calculated based on the annual required contribution (ARC)
of the City, an amount actuarially determined in accordance with the parameters of GASB Statement
No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover
normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period
not to exceed 30 years. The following table shows the components of the City's annual OPEB cost of
the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation to
the plan.
ARC
$ 241,196
Interest on Net OPEB Obligation
35,518
Adjustment to ARC
(51,351)
Annual OPEB Cost (Expense)
225,363
Contribution Made
(45,522)
Increase in Net OPEB Obligation
179,841
Net OPEB Obligation - Beginning of Year
887,960
Net OPEB Obligation - End of Year
$ 1,067,801
70
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 16 — POST EMPLOYMENT HEALTH BENEFITS PLAN
C. Annual OPEB Cost and Net OPEB Obligation (Continued)
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net
OPEB obligation for 2013 was as follows:
Fiscal Year Annual OPEB
End Cost
Employer
Contribution
12/31/13 $ 225,363 $ 45,522
12/31/12 207,190 53,591
12/31/11 200,980 45,723
D. Funded Status and Funding Progress
Percentage of
Annual OPEB Net OPEB
Cost Contributed Obligation
20% $ 1,067,801
26% 887,960
23% 734,361
As of January 1, 2013, the most recent actuarial valuation date, the City had no assets deposited to fund
the plan. The actuarial accrued liability for benefits was $ 1,938,082 and the actuarial value of assets was
$ 0, resulting in an unfunded actuarial accrued liability (UAAL) of $ 1,938,082. The covered payroll
(annual payroll of active employees covered by the plan) was $ 8,738,120 and the ratio of the UAAL to
the covered payroll was 22.2 %.
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events far into the future. Examples include assumptions about future
employment, mortality and the health care cost trend. Amounts determined regarding the funded status
of the plan and the ARC of the employer are subject to continual revision as actual results are compared
with past expectations and new estimates are made about the future.
The Schedule of Funding Progress — Other Post Employment Benefits, presented as required
supplementary information following the Notes to the Financial Statements, presents multi -year trend
information about whether the actuarial value of plan assets is increasing or decreasing over time
relative to the actuarial accrued liabilities for benefits.
E. Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include the types of benefits provided at the
time of each valuation and the historical pattern of sharing of benefit costs between the employer and
plan members to that point. The actuarial methods and assumptions used include techniques that are
designed to reduce the effects of short-term volatility in actuarial accrued liabilities, consistent with the
long -term perspective of the calculations.
71
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 16 — POST EMPLOYMENT HEALTH BENEFITS PLAN
E. Actuarial Methods and Assumptions (Continued)
In the January 1, 2013 actuarial valuation, the projected unit credit actuarial cost method was used. The
actuarial assumptions included a 4.0 % discount rate, which is based on the investment yield expected to
finance benefits depending on whether the plan is funded in a separate trust (about 7.0% to 8.5 %, long-
term, similar to a pension plan) or unfunded (3.5% to 5.0 %, shorter -term, based on City's general
assets). The City currently does not fund this benefit. At the actuarial valuation date, the annual health
care cost trend rate was calculated to be 8% initially, reduced incrementally to an ultimate rate of 5%
after six years. The UAAL is being amortized as a level percentage of payroll on an open basis. The
remaining amortization period at January 1, 2013 was 30 years.
NOTE 17 — SEGMENT INFORMATION
The City maintains two enterprise funds that account for the sewer and storm drainage utilities. The
City considers each of its enterprise funds to be a segment. Since the required segment information is
already included in the City's proprietary funds' Balance Sheet and Statement of Revenues, Expenses
and Changes in Fund Net Position balances, this information has not been repeated in the Notes to the
Financial Statements.
NOTE 18 — FUND BALANCE DETAIL
Fund equity balances are classified as follows to reflect the limitations and restrictions of the respective
funds.
Assigned:
Telecommunications - - - 54,499 54,499
Capital Improvements - - 5,753,669 176,398 5,930,067
Total Assigned - - 5,753,669 230,897 5,984,566
Unassigned: 9,076,549 - - (1,716) 9,074,833
Total Fund Balance $ 9,092,989 $ 1,408,872 $ 5,753,669 $ 11,446,667 $ 27,702,197
72
2004A
Other
General Improvement
Capital Governmental
Fund Bonds
Improvements Funds
Total
Nonspendable:
Prepaid Items
$ 16,440 $ -
$ - $ -
$ 16,440
Restricted:
Forfeitures
- -
- 180,696
180,696
Transit
- -
- 941,469
941,469
SCDP Grant
- -
- 4,546
4,546
Revolving Loans
- -
- 253,065
253,065
Economic Development
- -
- 685,671
685,671
Debt Service
- 1,408,872
- 7,269,808
8,678,680
Capital Improvements
- -
- 1,882,231
1,882,231
Total Restricted
- 1,408,872
- 11,217,486
12,626,358
Assigned:
Telecommunications - - - 54,499 54,499
Capital Improvements - - 5,753,669 176,398 5,930,067
Total Assigned - - 5,753,669 230,897 5,984,566
Unassigned: 9,076,549 - - (1,716) 9,074,833
Total Fund Balance $ 9,092,989 $ 1,408,872 $ 5,753,669 $ 11,446,667 $ 27,702,197
72
CITY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 19 — SUBSEQUENT EVENTS
The City entered into a five -year agreement for refuse, recycling and yard waste with Allied Waste
Services, a Republic Services Company. The contract begins on June 1, 2014. The calculated five -year
total cost is approximately $5.5 million. As part of the new agreement, the City will be purchasing
approximately 23,280 garbage and recycling carts from Cascade Engineering Inc., at a cost of
$ 975,100. The funding for these carts will flow through the Sanitary Sewer Fund as a loan to the
General Fund at a rate of 1% interest.
NOTE 20 — COMMITTMENTS
Riverside Fields
Valley View Road
Valley View Business Center
Project
Work
12/31/2013
Authorization
Completed
Commitment
$ 637,671
$ 584,401
$ 53,270
619,438
414,089
205,349
3,167,477
2,614,233
553,244
NOTE 21— CHANGE IN ACCOUNTING PRINCIPLE
For the year ended December 31, 2013, the City implemented GASB Statement No. 65, Items
Previously Reported as Assets and Liabilities. The statement reclassified certain deferred revenue
amounts to deferred inflows of resources. The City also changed the interest rate risk method used to
present investments from weighted average maturity to segmented time.
For the year ended December 31, 2013, the Component Unit implemented GASB Statement No. 65,
Items Previously Reported as Assets and Liabilities. This resulted in an adjustment to the beginning net
position on the statement of revenues, expenses and changes in fund net position of $ 311,778 to remove
deferred charges no longer required to be capitalized in accordance with GASB Statement No. 65.
NOTE 22 — NEW STANDARDS ISSUED BUT NOT YET IMPLEMENTED
GASB Statement No. 68 replaces the requirements of Statement No. 27, Accounting for Pensions by
State and Local Governmental Employers and Statement No. 50, Pension Disclosures, as they relate to
governments that provide pensions through pension plans administered as trusts or similar arrangements
that meet certain criteria. Statement No. 68 requires governments providing defined benefit pensions to
recognize their long -term obligation for pension benefits as a liability for the first time, and to more
comprehensively and comparably measure the annual
73
(THIS PAGE LEFT BLANK INTENTIONALLY)
74
REQUIRED SUPPLEMENTARY INFORMATION
75
CITY OF SHAKOPEE
SCHEDULE OF FUNDING PROGRESS - OTHER POST EMPLOYMENT BENEFITS
December 31, 2013
* Because an actuarial valuation is being performed once every three years, the amounts for
the 01/01/08 and 01/01/09, and the 01 /01 /10, 01/01/11 and 01/01/12 valuation are the same.
76
Actuarial
UAAL as a
Actuarial
Accrued Liability
Unfunded
Percentage of
Actuarial
Value of
(AAL) -
AAL
Funded
Covered
Covered
Valuation
Assets
Entry Age
(UAAL)
Ratio
Payroll
Payroll
Date
(a)
(b)
(b -a)
(a/b)
(c)
((b -a) /c)
01/01/08
$ -
$ 1,887,961
$ 1,887,961
0.0%
$ 6,652,669
28.4%
01/01/09 *
-
1,887,961
1,887,961
0.0%
6,652,669
28.4%
01/01/10
-
1,483,810
1,483,810
0.0%
7,154,161
20.7%
O1 /01 /11 *
-
1,483,810
1,483,810
0.0%
7,154,161
20.7%
01/01/12 *
-
1,483,810
1,483,810
0.0%
7,154,161
20.7%
01/01/13
-
1,938,082
1,938,082
0.0%
8,738,120
22.2%
* Because an actuarial valuation is being performed once every three years, the amounts for
the 01/01/08 and 01/01/09, and the 01 /01 /10, 01/01/11 and 01/01/12 valuation are the same.
76
SUPPLEMENTARY INFORMATION
NJ
CITY OF SHAKOPEE
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2013
REVENUES
Property Taxes
General Property Taxes
Fiscal Disparities
Lodging Tax
Aggregate Tax
Total Property Taxes
Special Assessments
Licenses and Permits
Intergovernmental Revenues
Federal Grants
PERA Aid
Police Aid
Fire Aid
State Grants
Other Grants and Aids
Total Intergovernmental Revenues
Charges for Services
General Government
Public Safety
Public Works
Parks and Recreation
Total Charges for Services
Fines and Forfeitures
Miscellaneous Revenues
Investment Income
Contributions and Donations
Rents
Other
Total Miscellaneous Revenues
Total Revenues
EXPENDITURES
General Government
Current:
Mayor and Council
Administration
City Clerk
Finance
Planning
Government Buildings
Unallocated
Capital Outlay
Total General Government
Variance with
Variance with
Original and Actual Final Budget -
Final Budget Amounts Over (Under)
$ 12,650,000
$ 13,628,475
$ 978,475
1,707,000
1,655,619
(51,381)
210,000
289,284
79,284
12,000
13,769
1,769
14,579,000
15,587,147
1,008,147
11,000
10,990
(10)
1,316,700
1,443,885
127,185
5,000
21,724
16,724
17,500
18,170
670
305,000
329,349
24,349
-
223,893
223,893
420,000
445,491
25,491
8,000
3,500
(4,500)
755,500
1,042,127
286,627
1,931,450
2,132,740
201,290
522,900
534,287
11,387
286,700
524,927
238,227
1,111,100
1,112,832
1,732
3,852,150
4,304,786
452,636
425,000
348,262
(76,738)
225,000
(31,609)
(256,609)
4,000
18,134
14,134
-
8,409
8,409
86,500
137,268
50,768
315,500
132,202
(183,298)
21,254,850
22,869,399
1,614,549
179,645
151,597
(28,048)
1,093,542
966,974
(126,568)
336,196
231,504
(104,692)
851,500
981,239
129,739
482,512
443,725
(38,787)
435,370
426,747
(8,623)
225,000
118,281
(106,719)
-
29,434
29,434
3,603,765
3,349,501
(254,264)
78
CITY OF SHAKOPEE
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2013
EXPENDITURES
Public Safety
Current:
Police
Fire
Building Inspection
Capital Outlay
Total Public Safety
Public Works
Current:
Streets and Highways:
Engineering
Streets
Shop
Capital Outlay
Total Public Works
Parks and Recreation
Current:
Parks and Recreation:
Park Maintenance
Natural Resources
Recreation
Capital Outlay
Total Parks and Recreation
Total Expenditures
Excess of Revenues Over
(Under) Expenditures
OTHER FINANCING SOURCES (USES)
Proceeds from Sale of Capital Asset
Transfers In
Transfers Out
Total Other Financing Sources
(Uses)
Net Change in Fund Balances
FUND BALANCES
Beginning of Year
End of Year
637,560
609,150
Variance with
Original and
Actual
Final Budget -
Final Budget
Amounts
Over (Under)
$ 7,399,368
$ 7,000,191
$ (399,177)
1,792,325
2,017,548
225,223
722,196
659,958
(62,238)
-
87,613
87,613
9,913,889
9,765,310
(148,579)
637,560
609,150
(28,410)
2,170,818
2,009,610
(161,208)
74,950
12,394
(62,556)
-
9,925
9,925
2,883,328
2,641,079
(242,249)
1,566,702
1,435,717
(130,985)
97,530
83,797
(13,733)
2,420,498
2,250,264
(170,234)
-
13,733
13,733
4,084,730
3,783,511
(301,219)
20,485,712
19,539,401
(946,311)
769,138
3,329,998
2,560,860
- 150 150
150,000 150,000 -
(860,000) (3,910,000) (3,050,000)
(710,000) (3,759,850) (3,049,850)
$ 59,138 (429,852) $ (488,990)
9,522,841
$ 9,092,989
W9
CITY OF SHAKOPEE
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2013
Special Revenue
80
Forfeitures
Transit
Telecommunication
SCDP Grant
ASSETS
Cash and Investments
$
187,124
$
733,760
$
46,476
$ 4,527
Cash with a Fiscal Agent
-
-
-
-
Delinquent Taxes Receivable
-
-
-
-
Special Assessments Receivable:
Delinquent
-
-
-
-
Deferred
-
-
-
-
Accounts Receivable
400
380,932
7,827
-
Interest Receivable
791
3,102
196
19
Due from Other Funds
-
-
-
-
Due From Other Governments
315
-
-
-
Total Assets
$
188,630
$
1,117,794
$
54,499
$ 4,546
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities
Accounts Payable
$
6,033
$
92,394
$
$ -
Contracts Payable
-
-
-
-
Due to Other Funds
-
-
-
Due to Other Governments
1,901
83,931
-
-
Total Liabilities
7,934
176,325
-
Deferred Inflows of Resources
Unavailable Revenue Property Taxes
-
-
-
-
Unavailable Revenue - Special Assessments
-
-
Total Deferred Inflows of Resources
-
-
-
Fund Balances
Restricted for:
Special Revenue
180,696
941,469
-
4,546
Debt Service
-
-
-
Capital Projects
-
-
-
-
Assigned
-
-
54,499
-
Unassigned
-
-
-
Total Fund Balances
180,696
941,469
54,499
4,546
Total Liabilities, Deferred Inflows
of Resources and Fund Balances
$
188,630
$
1,117,794
$
54,499
$ 4,546
80
$ - $ 10,259 $ 108,686 $
220 86,052
10,479 194,738
171 171 2,347 - -
- - - 228,366 -
171 171 2,347 228,366 -
253,065 685,671 2,065,447 - _ _
- - - 314,973 569,003 4,232,725
54,499
$ 253,065 $ 696,321 $ 2,314,855 $ 317,320 $ 797,369 $ 4,232,725
81
Special Revenue
Debt Service
Economic
2004B
2004C
Development
Refunding
Improvement
2004D Building
Revolving Loan
Authority
Total
Bonds
Bonds
Bonds
$ 251,999
$ 693,223
$ 1,917,109
$ 312,584
$ 567,029
$ 500,609
-
-
-
-
-
3,654,675
-
171
171
2,347
-
-
-
-
228,366
-
-
-
389,159
-
-
_
1,066
2,925
8,099
1,322
1,974
2,116
-
-
-
-
-
75,325
-
2
317
1,067
-
$ 253,065
$ 696,321
$ 2,314,855
$ 317,320
$ 797,369
$ 4,232,725
$ - $ 10,259 $ 108,686 $
220 86,052
10,479 194,738
171 171 2,347 - -
- - - 228,366 -
171 171 2,347 228,366 -
253,065 685,671 2,065,447 - _ _
- - - 314,973 569,003 4,232,725
54,499
$ 253,065 $ 696,321 $ 2,314,855 $ 317,320 $ 797,369 $ 4,232,725
81
CITY OF SHAKOPEE
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
(Continued)
December 31, 2013
82
Debt Service
2006A
2007A
2007B
2008A
Improvement
Improvement
Improvement
Improvement
Bonds
Bonds
Bonds
Bonds
ASSETS
Cash and Investments
$ 474,294
$ 366,471
$ 232,554
$ 347,742
Cash with a Fiscal Agent
-
-
_
_
Delinquent Taxes Receivable
-
-
_
Special Assessments Receivable:
Delinquent
-
14,735
173
618
Deferred
114,103
361,378
34,467
323,209
Accounts Receivable
-
-
_
_
Interest Receivable
2,005
1,549
984
836
Due from Other Funds
-
-
_
_
Due From Other Governments
-
-
-
6,832
Total Assets
$ 590,402
$ 744,133
$ 268,178
$ 679,237
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities
Accounts Payable
$
$
$ _
$ _
Contracts Payable
Due to Other Funds
-
-
-
Due to Other Governments
Total Liabilities
Deferred Inflows of Resources
Unavailable Revenue - Property Taxes
-
_
_
Unavailable Revenue - Special Assessments
114,103
376,113
34,640
323,827
Total Deferred Inflows of Resources
114,103
376,113
34,640
323,827
Fund Balances
Restricted for:
Special Revenue
-
-
_
_
Debt Service
476,299
368,020
233,538
355,410
Capital Projects
-
-
_
_
Assigned
Unassigned
_
_
_
_
Total Fund Balances
476,299
368,020
233,538
355,410
Total Liabilities, Deferred Inflows
of Resources and Fund Balances
$ 590,402
$ 744,133
$ 268,178
$ 679,237
82
$ $ - $ - $ 17,246 $ 18,937 $ 22,350
43,674 - -
75,325 75,325 - -
- - 2,347 -
169,249 124,471 1,370,769 - -
169,249 124,471 1,373,116 -
430,941 288,899 7,269,808 -
- - - 1,877,028 - -
(863) (227)
430,941 288,899 7,269,808 1,877,028 (863) (227)
$ 600,190 $ 488,695 $ 8,718,249 $ 1,938,165 $ 18,074 $ 22,123
83
Debt Service
Capital Projects
2010A
2012A
Improvement
Refunding
TIF District No.
TIF District No.
Bonds
Bonds
Total
Park Reserve
10
12
$ 429,766
$ 362,574
$ 3,593,623
$ 1,929,864
$ 17,998
$ 22,030
-
-
3,654,675
-
-
-
-
-
2,347
-
2,418
-
17,944
-
166,831
124,471
1,352,825
-
-
-
-
141
-
-
1,183
1,533
13,502
8,160
76
93
-
-
75,325
-
-
-
(8)
117
8,008
-
-
$ 600,190
$ 488,695
$ 8,718,249
$ 1,938,165
$ 18,074
$ 22,123
$ $ - $ - $ 17,246 $ 18,937 $ 22,350
43,674 - -
75,325 75,325 - -
- - 2,347 -
169,249 124,471 1,370,769 - -
169,249 124,471 1,373,116 -
430,941 288,899 7,269,808 -
- - - 1,877,028 - -
(863) (227)
430,941 288,899 7,269,808 1,877,028 (863) (227)
$ 600,190 $ 488,695 $ 8,718,249 $ 1,938,165 $ 18,074 $ 22,123
83
CITY OF SHAKOPEE
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
(Continued)
December 31, 2013
LIABILITIES, DEFERRED INFLOWS OF
Capital Projects
RESOURCES AND FUND BALANCES
TIF District No.
TIF District No. TIF District No.
Road Expansion
Liabilities
13
14 15
Dedication
ASSETS
14,602 $
- $
- $
Cash and Investments
$ 19,722
$ - $ -
$ 90,364
Cash with a Fiscal Agent
_
_
_
Delinquent Taxes Receivable
-
_
_
Special Assessments Receivable:
14,602
349
274 -
Delinquent
_
Deferred
_
-
_ _
Accounts Receivable
-
-
_
Interest Receivable
83
(1) (2)
382
Due from Other Funds
-
Due From Other Governments
_
_
_
Total Assets
$ 19,805
$ (1) $ (2)
$ 90,746
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities
Accounts Payable $
14,602 $
- $
- $
Contracts Payable
_
Due to Other Funds
-
349
274 -
Due to Other Governments
_
_
_
Total Liabilities
14,602
349
274 -
Deferred Inflows of Resources
Unavailable Revenue - Property Taxes
-
-
_ _
Unavailable Revenue - Special Assessments
-
-
_
Total Deferred Inflows of Resources
-
-
_ _
Fund Balances
Restricted for:
Special Revenue
_
_
_ _
Debt Service
_
Capital Projects
5,203
-
_
Assigned
-
-
- 90,746
Unassigned
-
(350)
(276) -
Total Fund Balances
5,203
(350)
(276) 90,746
Total Liabilities, Deferred Inflows
of Resources and Fund Balances $
19,805 $
(1) $
(2) $ 90,746
84
$ $ - $ - $ 73,135 $ 181,821
- 43,674 43,674
- 623 75,948
217 86,269
117,649 387,712
2,518
1,370,769
1,373,287
2,065,447
- 7,269,808
- - - 1,882,231 1,882,231
14,223 60,324 11,105 176,398 230,897
(1,716) (1,716)
14,223 60,324 11,105 2,056,913 11,446,667
$ 14,223 $ 60,324 $ 11,105 $ 2,174,562 $ 13,207,666
85
Capital Projects
Total
Tree
Governmental
Lions Park
Replacement Sealcoat
Total
Funds
$ 14,163
$ 60,069 $ 11,058
$ 2,165,268
$ 7,676,000
-
- -
-
3,654,675
- -
-
2,518
'
- -
-
17,944
'
- -
-
1,352,825
-
- -
141
389,300
60
255 47
9,153
30,754
-
- -
-
75,325
-
-
8,325
$ 14,223
$ 60,324 $ 11,105
$ 2,174,562
$ 13,207,666
$ $ - $ - $ 73,135 $ 181,821
- 43,674 43,674
- 623 75,948
217 86,269
117,649 387,712
2,518
1,370,769
1,373,287
2,065,447
- 7,269,808
- - - 1,882,231 1,882,231
14,223 60,324 11,105 176,398 230,897
(1,716) (1,716)
14,223 60,324 11,105 2,056,913 11,446,667
$ 14,223 $ 60,324 $ 11,105 $ 2,174,562 $ 13,207,666
85
CITY OF SHAKOPEE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - NON MAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2013
Special Revenue
86
Forfeitures
Transit
Telecommunication
SCDP Grant
REVENUES
Property Taxes $
$
$ _
$
Tax Increment
_
Special Assessments
_
Licenses and Permits
31,620
Intergovernmental
-
793,639
-
Charges for Services
246,979
Fines and Forfeitures
33,208
-
_
Miscellaneous
5,375
(1,683)
63
(48)
Total Revenues
38,583
1,038,935
31,683
(48)
EXPENDITURES
Current
General Government
-
1,142,806
32,789
-
Public Safety
53,710
-
_
Culture and Recreation
_
_
Economic Development
17,853
Debt Service
Principal
-
Interest and Other Charges
-
_
Capital Outlay
-
11,384
Total Expenditures
53,710
1,142,806
44,173
17,853
Excess of Revenues Over
(Under) Expenditures
(15,127)
(103,871)
(12,490
(17,901)
OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Total Other Financing
Sources (Uses)
Net Change in Fund Balance
(15,127)
(103,871)
(12,490)
(17,901)
FUND BALANCES
Beginning of Year
195,823
1,045,340
66,989
22,447
End of Year $
180,696
$ 941,469
$ 54,499
$ 4,546
86
87
Special Revenue
Debt Service
Economic
2004B
2004C
2006A
Development
Refunding
Improvement
2004D Building
Improvement
Revolving Loan
Authority
Total
Bonds
Bonds
Bonds
Bonds
$
$ 10
$ 10
$ 149,289
$
$
$ -
-
103,830
-
60,760
-
31,620
-
-
_
11,458
805,097
-
18,000
264,979
-
-
33,208
-
-
426
1,238
5,371
53
(1,089)
1,778
(1,441)
426
30,706
1,140,285
149,342
102,741
1,778
59,319
-
-
1,175,595
-
-
-
_
53,710
-
207,994
225,847
-
-
-
_
-
-
195,000
255,000
265,000
350,000
-
38,790
24,784
176,363
66,431
-
11,384
-
_
_
-
207,994
1,466,536
233,790
279,784
441,363
416,431
426
(177,288)
(326,251)
(84,448)
(177,043)
(439,585)
(357,112)
-
300,000
300,000
100,000
450,000
60,000
-
300,000
300,000
100,000
450,000
60,000
426
122,712
(26,251)
(84,448)
(77,043)
10,415
(297,112)
252,639
562,959
2,146,197
399,421
646,046
4,222,310
773,411
$ 253,065
$ 685,671
$ 2,119,946
$ 314,973
$ 569,003
$ 4,232,725
$ 476,299
87
CITY OF SHAKOPEE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - NON MAJOR GOVERNMENTAL FUNDS
(Continued)
For the Year Ended December 31, 2013
REVENUES
Property Taxes
Tax Increment
Special Assessments
Licenses and Permits
Intergovernmental
Charges for Services
Fines and Forfeitures
Miscellaneous
Total Revenues
EXPENDITURES
Current
General Government
Public Safety
Culture and Recreation
Economic Development
Debt Service
Principal
Interest and Other Charges
Capital Outlay
Total Expenditures
Excess of Revenues Over
(Under) Expenditures
OTHER FINANCING SOURCES (USE
Transfers In
Transfers Out
Total Other Financing
Sources (Uses)
Net Change in Fund Balanc
FUND BALANCES
Beginning of Year
End of Year
Debt Service
2007A 2007B 2008A 2010A 2012A
Improvement Improvement Improvement Improvement Refunding
Bonds Bonds Bonds Bonds Bonds
$ $
$ $
$ $
$ 1,317 $
36,180 2
25,072 8
88,893 8
80,572 2
29,898
(704) (
(990) (
(2,367) (
(446) 1
16,566
35,476 2
24,082 8
86,526 8
81,443 4
46,464
205,000 1
140,000 1
195,000 1
185,000 -
-
29,532 3
33,550 5
52,250 2
24,322 1
108,394
234,532 1
173,550 2
247,250 2
209,322 1
108,394
(199,056) (
(149,468) (
(160,724) (
(127,879) (
(61,930)
88
Debt Service
Capital Projects
TIF District No.
TIF District No. TIF District
No.
Fire Station 2
Total
Park Reserve
10
12
13
2010 Projects
Construction
$ 150,606
$ -
$ -
$ _ $
_
$
$
-
41,092
44,701
28,004
-
425,205
-
_
-
-
874,440
_
10,579
3,286
_
11,360
25,124
(249)
16
(159)
220
160
587,171
913,429
40,843
44,717
27,845
220
160
-
41,984
44,945
27,504
-
1,790,000
-
_
_
554,416
-
_
-
846,599
-
-
-
(13,684)
2,344,416
846,599
41,984
44,945
27,504
(13,684)
(1,757,245)
66,830
(1,141)
(228)
341
220
13,844
910,000
-
_
_
_
_
-
-
(130,435)
(111,536)
910,000
-
(130,435)
(111,536)
(847,245)
66,830
(1,141)
(228)
341
(130,215)
(97,692)
8,117,053
1,810,198
278
1
4,862
130,215
97,692
$ 7,269,808
$ 1,877,028
$ (863)
$ (227) $
5,203
$ -
$ -
89
CITY OF SHAKOPEE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - NON MAJOR GOVERNMENTAL FUNDS
(Continued)
For the Year Ended December 31, 2013
Capital Projects
TIF District No. TIF District No. Road Expansion
2011 Projects 14 15 Dedication Lions Park
REVENUES
Property Taxes $ $ $ $ - $
Tax Increment
Special Assessments "
Licenses and Permits
Intergovernmental
Charges for Services 10,500
Fines and Forfeitures - -
Miscellaneous (659) (1) (1) 186 25
Total Revenues (659) (1) (1) 10,686 25
EXPENDITURES
Current
General Government -
Public Safety
Culture and Recreation - -
Economic Development - 349 275
Debt Service
Principal -
Interest and Other Charges -
Capital Outlay 3,214 - -
Total Expenditures 3,214 349 275
Excess of Revenues Over
(Under) Expenditures (3,873)
OTHER FINANCING SOURCES (USES)
Transfers In 388,838
Transfers Out -
Total Other Financing
Sources (Uses) 388,838
Net Change in Fund Balance 384,965
FUND BALANCES
(350) (276) 10,686 25
(350) (276) 10,686 25
Beginning of Year (384,965) - 80,060 14,198
End of Year $ - $ (350) $ (276) $ 90,746 $ 14,223
90
91
Capital Projects
Total Other
Tree
Govemmental
Replacement
Sealcoat
Total
Funds
$
$
$
$ 150,616
-
113,797
113,797
-
425,205
874,440
906,060
10,579
815,676
-
13,786
278,765
-
33,208
199
19
24,880
41,611
199
19
1,037,482
2,764,938
-
-
-
1,175,595
-
-
53,710
1,290
1,290
1,290
-
115,057
340,904
-
1,790,000
-
-
554,416
-
836,129
847,513
1,290
952,476
4,763,428
(1,091)
19
85,006
(1,998,490)
-
388,838
1,598,838
(241,971)
(241,971)
146,867
1,356,867
(1,091)
19
231,873
(641,623)
61,415
11,086
1,825,040
12,088,290
$ 60,324
$ 11,105
$ 2,056,913
$ 11,446,667
91
CITY OF SHAKOPEE
COMBINING STATEMENT OF FUND NET POSITION -
INTERNAL SERVICE FUNDS
December 31, 2013
92
Governmental Activities - Internal Service Funds
Information
Employee
and
Equipment
Buildings
Park Asset
Benefits
Technology
Total
ASSETS
Current Assets
Cash and Investments, Including
Cash Equivalents
$ 7,107,320
$ 6,226,203
$ 1,999,579
$ 1,408,267
$ 559,470
$17,300,839
Interest Receivable
30,050
26,324
8,243
10,020
1,520
76,157
Notes Receivable, Current
95,000
-
-
-
95,000
Total Current Assets
7,232,370
6,252,527
2,007,822
1,418,287
560,990
17,471,996
Noncurrent Assets
Capital Assets:
Infrastructure
-
-
2,923,925
-
-
2,923,925
Buildings
-
31,294,013
3,254,563
-
-
34,548,576
Machinery and Equipment
8,538,301
189,539
3,496,049
-
209,300
12,433,189
Total Cost
8,538,301
31,483,552
9,674,537
-
209,300
49,905,690
Less Accumulated Depreciation
(4,481,806)
(9,717,829)
(3,283,883)
-
(83,620)
(17,567,138)
Net Capital Assets
4,056,495
21,765,723
6,390,654
-
125,680
32,338,552
Total Noncurrent Assets
4,056,495
21,765,723
6,390,654
-
125,680
32,338,552
Total Assets
$11,288,865
$ 28,018,250
$ 8,398,476
$ 1,418,287
$ 686,670
$ 49,810,548
LIABILITIES AND NET POSITION
Current Liabilities
Accounts Payable
$ 31,018
$ 11,103
$ 54,478
$ -
$ 26,716
$ 123,315
Current Compensated Absences
-
-
-
806,606
-
806,606
Total Current Liabilities
31,018
11,103
54,478
806,606
26,716
929,921
Noncurrent Liabilities
Compensated Absences
-
-
985,853
-
985,853
Total Liabilities
31,018
11,103
54,478
1,792,459
26,716
1,915,774
Net Position
Net Investment in Capital Assets
4,056,495
21,765,723
6,390,654
-
125,680
32,338,552
Unrestricted
7,201,352
6,241,424
1,953,344
(374,172)
534,274
15,556,222
Total Net Position
11,257,847
28,007,147
8,343,998
(374,172)
659,954
47,894,774
Total Liabilities and
Net Position
$11,288,865
$ 28,018,250
$ 8,398,476
$ 1,418,287
$ 686,670
$ 49,810,548
92
OPERATING REVENUES
Rental Charges
Other Charges
Total Operating Revenues
OPERATING EXPENSES
Salaries and Benefits
Depreciation
Professional Services
Repairs and Maintenance
Materials and Supplies
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES
(EXPENSES)
Investment Income
Gain (Loss) on Sale of Asset
Capital Asset Transfer
Other Income
Total Nonoperating Revenues
(Expenses)
Income (Loss) before Capital
Contributions and Transfers
Transfers In
Transfers Out
Change in Net Position
NET POSITION
Beginning of Year
End of Year
CITY OF SHAKOPEE
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS -
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2013
Governmental Activities - Internal Service Funds
-
Information
-
Employee
and
48,955
Equipment Buildings Park Asset Benefits
Technology
Total
$ 619,263 $ 664,616 $ 437,064 $
$ 296,000
$ 2,016,943
- 2,497 -
-
2,497
619,263 667,113 437,064 -
296,000
2,019,440
-
-
-
48,955
-
48,955
729,048
768,031
360,284
-
39,973
1,897,336
-
-
7,890
-
33,703
41,593
-
343
55,625
-
11,483
67,451
20,570
129,446
-
-
210,093
360,109
749,618
897,820
423,799
48,955
295,252
2,415,444
(130,355)
(230,707)
13,265
(48,955)
748
(396,004)
20,759
7,888
6,769
3,020
2,146
40,582
7,051
281,016
(31,617)
-
-
256,450
-
(150,752)
-
(150,752)
-
1,167
-
-
1,167
27,810
139,319
(24,848)
3,020
2,146
147,447
(102,545)
(91,388)
(11,583)
(45,935)
2,894
(248,557)
-
50,000
200,000
250,000
(450,000)
-
(450,000)
(102,545)
(541,388)
38,417
(45,935)
202,894
(448,557)
11,360,392
28,548,535
8,305,581
(328,237)
457,060
48,343,331
$11,257,847
$ 28,007,147
$ 8,343,998
$ (374,172)
$ 659,954
$47,894,774
93
CASH FLOWS - OPERATING ACTIVITIES
Receipts from Customers and Users
Payments to Suppliers
Payments to Employees
Net Cash Flows - Operating
Activities
CASH FLOWS - NONCAPITAL
FINANCING ACTIVITIES
Transfer from Other Funds
Transfer to Other Funds
Net Cash Flows - Noncapital
Financing Activities
CASH FLOWS - CAPITAL AND RELATED
FINANCING ACTIVITIES
Trunk Charges
Proceeds from Disposal of Capital Assets
Acquisition of Capital Assets
Net Cash Flows - Capital and
Related Financing Activities
CASH FLOWS - INVESTING ACTIVITIES
Payment Received for Notes Receivable
Interest Received
Net Cash Flows - Investing
Activities
Net Change in Cash and Cash Equivalents
CASH AND CASH EQUIVALENTS
Beginning of Year
End of Year
RECONCILIATION OF OPERATING
INCOME (LOSS) TO NET CASH
FLOWS - OPERATING ACTIVITIES
Operating Income (Loss)
Adjustments to Reconcile Operating
Income (Loss) to Net Cash
Flows - Operating Activities:
Depreciation Expense
Changes in:
Due to Other Governments
Accounts and Contracts Payable
Compensated Absences Payable
Total Adjustments
Net Cash Flows - Operating
Activities
NONCASH INVESTING, CAPITAL AND
FINANCING ACTIVITIES
Transfer of Capital Assets
CITY OF SHAKOPEE
COMBINING STATEMENT OF CASH FLOWS -
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2013
Equipment Buildings
$ 619,263 $ 667,113
(105,500) (196,307)
513,763 470,806
(450,000)
(450,000)
1,167
39,051 302,349
(636,006) (115,187)
(596,955) 188,329
Park Asset
$ 437,064
(9,037)
428,027
50,000
50,000
(114,282)
(114,282)
200,000 250,000
- (450,000)
200,000 (200,000)
1,167
341,400
(49,298) (914,773)
(49,298) (572,206)
95,000
Information
-
Employee
and
95,000
Benefits
Technology
Total
$
$ 296,000
$ 2,019,440
116,737
(232,175)
(543,019)
917
1,682
917
917
63,825
1,477,338
200,000 250,000
- (450,000)
200,000 (200,000)
1,167
341,400
(49,298) (914,773)
(49,298) (572,206)
95,000
-
-
-
-
95,000
21,737
9,689
5,197
(882)
1,682
37,423
116,737
9,689
5,197
(882)
1,682
132,423
33,545
218,824
368,942
35
216,209
837,555
7,073,775
6,007,379
1,630,637
1,408,232
343,261
16,463,284
$ 7,107,320
$ 6,226,203
$ 1,999,579
$ 1,408,267
$ 559,470
$ 17,300,839
$ (130,355)
$ (230,707)
$ 13,265
$ (48,955)
$ 748
$ (396,004)
729,048
768,031
360,284
39,973
1,897,336
(3,987)
-
-
(24)
(4,011)
(80,943)
(66,518)
54,478
-
23,128
(69,855)
-
-
49,872
-
49,872
644,118
701,513
414,762
49,872
63,077
1,873,342
$ 513,763
$ 470,806
$ 428,027
$ 917
$ 63,825
$ 1,477,338
$ $ (150,752) $ - $ - $ - $ (150,752)
94
CITY OF SHAKOPEE
COMBINED STATEMENT OF FIDUCIARY NET POSITION
For the Year Ended December 31, 2013
ASSETS
Current
Cash and Investments
Interest Receivable
Due from Other Governments
Total Assets
LIABILITIES
Accounts Payable
Deposits Payable
Due to Other Governments
Escrow Agency
Fund
Metro Drug
Task Force
Agency Fund
Total Agency
Funds
$ 1,849,529 $ 657,862 $ 2,507,391
- 2,763 2,763
41,155 41,155
$ 1,849,529 $ 701,780 $ 2,551,309
$ - $ 588,530 $ 588,530
1,849,529 98,774 1,948,303
- 14,476 14,476
Total Liabilities $ 1,849,529 $ 701,780 $ 2,551,309
95
CITY OF SHAKOPEE
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES -
AGENCY FUNDS
For the Year Ended December 31, 2013
ASSETS
Current
Cash and Investments
LIABILITIES
Deposits Payable
Escrow Agency Fund
Balance at
December 31,
2012 Additions
Deductions
Balance at
December 31,
2013
$ 749,973 $ 1,516,674 $ 417,118 $ 1,849,529
$ 749,973 $ 1,516,674 $ 417,118 $ 1,849,529
Southwest Metro Drug Task Force Agency Fund
Balance at
December 31,
2012 Additions Deductions
ASSETS
Current
Cash and Investments
Interest Receivable
Due from Other Governments
Total Assets
LIABILITIES
Accounts Payable
Deposits Payable
Due to Other Governments
Total Liabilities
Balance at
December 31,
2013
$ 731,117 $ 294,037 $ 367,292 $ 657,862
3,119 - 356 2,763
50,033 - 8,878 41,155
$ 784,269 $ 294,037 $ 376,526 $ . 701,780
$ 677,467 $ 246,175 $ 335,112 588,530
85,422 47,862 34,510 98,774
21,380 - 6,904 14,476
$ 784,269 $ 294,037 $ 376,526 $ 701,780
96
CITY OF SHAKOPEE
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES -
AGENCY FUNDS
For the Year Ended December 31, 2013
ASSETS
Current
Cash and Investments
Interest Receivable
Due from Other Governments
Total Assets
LIABILITIES
Accounts Payable
Deposits Payable
Due to Other Governments
Total Liabilities
Total Agency Funds
Balance at
December 31,
2012 Additions Deductions
Balance at
December 31,
2013
$ 1,481,090 $ 1,810,711 $ 784,410 $ 2,507,391
3,119 - 356 2,763
50,033 - 8,878 41,155
$ 1,534,242 $ 1,810,711 $ 793,644 $ 2,551,309
$ 677,467 $ 246,175 $ 335,112 $ 588,530
835,395 1,564,536 451,628 1,948,303
21,380 - 6,904 14,476
$ 1,534,242 $ 1,810,711 $ 793,644 $ 2,551,309
97
(THIS PAGE LEFT BLANK INTENTIONALLY)
98
STATISTICAL SECTION
99
(THIS PAGE LEFT BLANK INTENTIONALLY)
100
CITY OF SHAKOPEE
STATISTICAL SECTION
December 31, 2013
This part of the City's Comprehensive Annual Financial Report (CAFR) presents detailed information for
placing in context and understanding what the information shown in the financial statements, note
disclosures and required supplementary information reveals about the City's overall financial health.
CONTENTS Page
Financial Trends 102
These schedules show trend information to help the reader
understand how the City's financial performance and
well being have changed over time.
Revenue Capacity 110
Portrayed is information to help the reader assess the
City's most important local revenue source, the property tax.
Debt Capacity 114
These schedules present information to help the reader assess
the affordability of the City's current levels of outstanding
debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information 121
Shown are demographic and economic indicators to help the
reader understand the environment within which the City's
financial activities take place.
Operating Information 124
These schedules shown service and infrastructure data to
help the reader understand how the information in the City's
financial report relates to the services the City provides
and the activities it performs.
Source: Unless noted otherwise, the information in these schedules is from the CAFR for the relevant
year.
101
Governmental Activities:
Net Investment in Capital Assets
Restricted
Unrestricted
Total Governmental
Activities Net Position
Business -Type Activities:
Net Investment in Capital Assets
Restricted
Unrestricted
Total Business -Type
Activities Net Position
Primary Government:
Net Investment in Capital Assets
Restricted
Unrestricted
Total Primary
Government Net Position
CITY OF SHAKOPEE
NET POSITION BY COMPONENT
Years 2004 Through 2013
From 2004 -2010, the SPUC Funds, Water and Electric Enterprise Funds, were reported as a
blended component unit of the City. In 2011, SPUC funds have been presented as discretely
presented component units as it no longer met the criteria for blending.
102
2004
2005
2006
2007
$
90,281,410
$
111,237,672
$
119,661,761
$
113,534,056
29,731,412
21,638,112
12,998,982
13,081,337
21,214,073
21,845,121
29,264,714
28,316,931
$
141,226,895
$
154,720,905
$
161,925,457
$
154,932,324
$
89,415,817
$
99,140,973
$
109,337,014
$
114,546,218
1,867,077
2,232,469
880,069
1,026,351
37,354,576
41,291,469
42,400,797
46,169,289
$
128,637,470
$
142,664,911
$
152,617,880
$
161,741,858
$
179,697,227
$
210,378,645
$
228,998,775
$
228,080,274
31,598,489
23,870,581
13,879,051
14,107,688
58,568,649
63,136,590
71,665,511
74,486,220
$
269,864,365
$
297,385,816
$
314,543,337
$
316,674,182
From 2004 -2010, the SPUC Funds, Water and Electric Enterprise Funds, were reported as a
blended component unit of the City. In 2011, SPUC funds have been presented as discretely
presented component units as it no longer met the criteria for blending.
102
2008 2009
Table 1
2010 2011 2012 2013
$
112,909,793
$
112,097,148
$
111,905,152
$
114,981,955
$
115,191,768
$
118,166,525
21,915,945
16,518,865
1,844,129
10,914,439
9,912,551
10,454,238
22,086,771
28,832,576
43,910,102
32,771,327
34,823,712
30,642,443
$
156,912,509
$
157,448,589
$
157,659,383
$
158,667,721
$
159,928,031
$
159,263,206
$
115,124,238
$
114,331,216
$
115,064,968
$
65,080,070
$
64,124,590
$
65,181,465
1,756,369
3,574,612
4,889,050
-
-
49,366,581
55,595,594
59,014,070
31,927,930
33,354,521
31,183,904
$
166,247,188
$
173,501,422
$
178,968,088
$
97,008,000
$
97,479,111
$
96,365,369
$
228,034,031
$
226,428,364
$
226,970,120
$
180,062,025
$
179,316,358
$
183,347,990
23,672,314
20,093,477
6,733,179
10,914,439
9,912,551
10,454,238
71,453,352
84,428,170
102,924,172
64,699,257
68,178,233
61,826,347
$
323,159,697
$
330,950,011
$
336,627,471
$
255,675,721
$
257,407,142
$
255,628,575
103
CITY OF SHAKOPEE
CHANGES IN NET POSITION
Years 2004 Through 2013
From 2004 -2010, the SPUC funds, Water and Electric Enterprise Funds, were reported as a blended component unit of the City. In 2011, SPUC Funds have been presented as discretely
presented component units as it no longer met the criteria for blending.
104
2004
2005
2006
2007
2008
2009
EXPENSES:
Governmental Activities:
General Government
$
3,135,421
$
2,563,526
$
3,161,106
$
3,543,980 $
3,514,573
$ 3,388,268
Public Safety
5,461,190
6,190,689
6,856,485
8,301,075
8,346,104
8,528,413
Public Works
6,036,920
8,298,258
6,798,917
15,264,606
8,099,384
7,860,080
Culture and Recreation
2,150,765
3,664,944
4,653,240
5,323,087
3,637,527
3,859,670
Economic Development
360,167
314,858
333,462
363,805
522,074
316,566
Other
861,864
924,270
896,110
1,042,133
1,033,999
1,040,044
Total Governmental Activities Expenses
18,006,327
21,956,545
22,699,320
33,838,686
25,153,661
24,993,041
Business -Type Activities:
Electric
19,820,900
23,378,764
29,169,297
34,710,974
36,186,676
30,140,842
Water
2,723,003
2,460,977
2,949,990
3,332,132
3,461,261
3,316,102
Sewer
2,009,468
2,349,047
2,786,234
2,938,955
3,308,759
3,398,117
Storm
941,842
999,849
1,523,343
1,352,078
1,435,376
1,264,261
Total Business-Type Activities Expenses
25,495,213
29,188,637
36,428,864
42,334,139
44,392,072
38,119,322
Total Primary Government Expenses
$
43,501,540
$
51,145,182
$
59,128,184
$
76,172,825 $
69,545,733
$ 63,112,363
PROGRAM REVENUES:
Governmental Activities:
Charges for Services:
General Government -
$
3,591,641
$
791,504
$
714,105
$
583,247 $
606,259
$ 680,681
Public Safety
3,446,465
3,462,283
2,063,023
1,650,235
1,506,680
1,677,772
Public Works
4,534,285
2,668,728
2,986,495
2,615,402
2,354,276
1,342,173
Culture and Recreation
1,497,853
1,826,847
1,676,630
1,086,750
1,295,772
1,013,044
Economic Development
_
_
-
_
_
-
Operating Grants and Contributions
4,303,581
3,646,605
1,653,238
1,943,805
1,660,191
1,485,124
Capital Grants and Contributions
-
8,666,283
6,116,366
2,463,129
1,825,124
1,241,884
Total Governmental Activities
Program Revenues
17,373,825
21,062,250
15,209,857
10,342,568
9,248,302
7,440,678
Business -Type Activities:
Charges for Services:
Electric
22,161,542
27,425,921
31,906,714
37,407,565
38,732,701
34,272,099
Water
2,349,505
2,627,084
3,127,207
3,525,140
3,390,309
3,605,498
Sewer
3,078,191
2,971,601
3,471,984
2,806,371
2,556,299
3,485,882
Storm
1,806,974
1,937,430
1,859,912
1,505,247
1,379,821
1,405,560
Operating Grants and Contributions
_
_
-
-
_
_
Capital Grants and Contributions
10,844,269
10,913,464
6,174,786
4,138,977
1,007,519
1,879,530
Total Business -Type Activities
Program Revenues
40,240,481
45,875,500
46,540,603
49,383,300
47,066,649
44,648,569
Total Primary Government
Program Revenues
$
57,614,306
$
66,937,750
$
61,750,460
$
59,725,868 $
56,314,951
$ 52,089,247
Net (Expense) Revenue:
Governmental Activities
$
(632,502)
$
(894,295)
$
(7,489,463)
$
(23,496,118) $
(15,905,359)
$ (17,552,363)
Business -Type Activities
14,745,268
16,686,863
10,111,739
7,049,161
2,674,577
6,529,247
Total Primary Government Net Expense
$
14,112,766
$
15,792,568
$
2,622,276
$
(16,446,957) $
(13,230,782)
$ (11,023,116)
GENERAL REVENUES AND OTHER
CHANGES IN NET POSITION:
Governmental Activities:
Taxes:
Property Taxes
$
7,842,043
$
9,341,977
$
10,547,177
$
12,767,354 $
14,200,833
$ 14,676,518
Other Taxes
364,211
314,858
336,648
369,240
388,935
151,956
Unrestricted Investment Earnings
740,612
951,795
1,661,257
2,232,717
1,941,335
1,323,230
Gain on Disposal of Assets
294,833
746,340
2,700
22,628
56,453
37,162
Enterprise Fund Reclassed to
Special Revenue
5,539,108
1,658,132
-
-
-
_
Transfers
2,215,871
1,375,203
2,146,233
1,111,046
1,297,988
1,899,577
Total Governmental Activities
16,996,678
14,388,305
14,694,015
16,502,985
17,885,544
18,088,443
Business -Type Activities:
Investment Earnings
709,483
870,714
1,973,715
3,185,863
3,128,741
1,336,979
Gain on Disposal of Assets
-
409,918
13,749
-
-
_
Special Item
(5,539,108)
(1,658,132)
-
Transfers
(2,215,871)
(1,375,203)
(2,146,233)
(1,111,046)
(1,297,988)
(1,899,577)
Total Business -Type Activities
(7,045,496)
(1,752,703)
(158,769)
2,074,817
1,830,753
(562,598)
Total Primary Government
$
9,951,182
$
12,635,602
$
14,535,246
$
18,577,802 $
19,716,297
$ 17,525,845
Change in Net Position:
Government Activities
$
16,364,176
$
13,494,010
$
7,204,552
$
(6,993,133) $
1,980,185
$ 536,080
Business -Type Activities
7,699,772
14,934,160
9,952,970
9,123,978
4,505,330
5,966,649
Total Primary Government
$
24,063,948
$
28,428,170
$
17,157,522
$
2,130,845 $
6,485,515
$ 6,502,729
From 2004 -2010, the SPUC funds, Water and Electric Enterprise Funds, were reported as a blended component unit of the City. In 2011, SPUC Funds have been presented as discretely
presented component units as it no longer met the criteria for blending.
104
2010
$ 14,487,805
2011
2012
$ 15,795,777
2013
$ 3,042,918
$
4,252,887
$ 4,603,027
$
4,704,956
9,123,316
546,681
9,236,767
9,430,785
-
9,868,702
8,397,874
256,600
7,094,047
7,083,299
7,578,493
3,765,660
17,505,945
3,866,307
3,817,677
15,775,116
4,020,974
427,169
244,361
152,541
338,907
784,824
619,099
587,384
(2,089,406)
573,949
25,541,761
(162,490)
25,313,468
25,674,713
27,085,981
(109,059)
$ 16,696,411
$ 16,439,280
$
16,099,062
$ 16,260,193
32,700,410
-
-
-
3,293,079
$
-
-
5,466,666
-
3,685,417
471,111
3,807,322
3,926,541
$ 596,248
4,096,504
1,792,749
$ (1,778,567)
1,382,391
1,445,633
1,641,438
41,471,655
5,189,713
5,372,174
5,737,942
$ 67,013,416
$
30,503,181
$ 31,046,887
$
32,823,923
$ 652,686
$
721,180
$ 3,356,772
$
3,047,447
1,716,573
1,503,188
1,524,158
1,701,875
941,224
478,788
454,145
688,286
1,039,820
1,071,482
2,222,430
2,012,436
-
7,100
16,500
18,000
2,943,857
3,606,089
2,106,559
1,894,436
952,450
3,152,881
1,479,343
689,424
8,246,610
10,540,708
11,159,907
10,051,904
36,872,008
-
-
-
4,417,498
-
-
-
3,508,947
2,941,753
3,728,189
3,004,826
1,281,986
1,083,878
1,442,394
1,720,653
6,415
-
-
-
1,661,001
93,810
348,756
7,780
47,747,855
4,119,441
5,519,339
4,733,259
$ 55,994,465
$
14,660,149
$ 16,679,246
$
14,785,163
$ (17,295,151) $ (14,772,760) $ (14,514,806) $ (17,034,077)
6,276,200 (1,070,272) 147,165 (1,004,683)
$ Q 1,018,951) $ (15,843,032) $ (14,367,641) $ (18,038,760)
$ 14,229,111
$ 14,487,805
$
15,002,764
$ 15,795,777
147,561
160,884
113,902
113,796
1,039,867
1,032,409
546,681
40,589
-
-
11,769
256,600
2,089,406
100,000
100,000
162,490
17,505,945
15,781,098
15,775,116
16,369,252
1,279,872
758,182
423,946
53,431
(2,089,406)
(100,000)
(100,000)
(162,490)
(809,534)
658,182
323,946
(109,059)
$ 16,696,411
$ 16,439,280
$
16,099,062
$ 16,260,193
$ 210,794
$ 1,008,338
$
1,260,310
$ (664,825)
5,466,666
(412,090)
471,111
(1,113,742)
$ 5,677,460
$ 596,248
$
1,731,421
$ (1,778,567)
Table 2
105
CITY OF SHAKOPEE
FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
106
2004
2005
2006
2007
General Fund:
Nonspendable:
Prepaids
$ -
$ -
$
-
$
'
Reserved
13,586
16,465
1,490,157
1,810,650
Restricted for:
BATC Litigation
-
-
-
-
Committed to:
Working Capital
-
-
-
-
Unreserved
7,233,268
9,662,677
8,354,477
7,896,883
Unassigned
-
Total General Fund
$ 7,246,854
$ 9,679,142
$
9,844,634
$
9, 707 , 533
All Other Governmental Funds
Reserved:
Special Revenue Funds
$ 2,232,061
$ 2,861,564
$
3,386,721
$
2,489,775
Debt Service Funds
10,837,684
9,236,020
7,930,114
-
Capital Projects Funds
17,088,803
9,915,610
8,082,799
3,849,703
Restricted for:
Forfeitures
-
-
-
-
Transit
-
-
-
-
SCDP Grant
-
-
-
-
Revolving Loans
-
-
-
-
Economic Development
-
-
-
-
Debt Service
-
-
-
-
Capital Improvements
-
-
-
-
Committed to:
Working Capital
-
-
-
-
Transit
-
-
-
-
Revolving Loans
-
-
-
-
Economic Development
-
-
-
-
Park Projects
-
-
-
-
Capital Improvements
-
-
-
-
2008 Projects
-
-
-
-
2009 Projects
-
-
-
-
2010 Projects
-
-
-
-
Fire Station 2
-
-
-
-
Assigned to:
Telecomminication
-
-
-
-
Capital Improvements
-
-
-
-
Capital Projects Funds
-
-
-
-
Unreserved
Special Revenue Funds
(4,971)
-
-
993,555
Debt Service Funds
-
-
-
7,941,439
Capital Projects Funds
(28,081)
(1,833,937)
(1,205,899)
1,673,762
Unassigned
-
-
-
-
Total all Other
Governmental Funds
$ 30,125,496
$ 20,179,257
$
18,193,735
$
16,948,234
Note: GASB Statement No. 54 was implemented
in 2010.
Only 2010 -2013 are reported in compliance with GASB Statement No. 54. 2004 -2009 are reported as previously
stated.
106
2008
2009
2010
2011
2012
2013
$ -
$ -
$ 149,940
$ 131,447
$ 19,189
$ 16,440
1,126,074
799,276
-
_
_
_
-
-
218,032
-
-
345,820
8,733,528
10,703,004
-
-
8,323,938
9,172,747
9,503,652
9,076,549
$ 9,859,602
$ 11,502,280
$ 9,037,730
$ 9,304,194
$ 9,522,841
$ 9,092,989
$ 2,738,909
$ 2,677,290
$ -
$ _
$ _
$ _
4,873,440
4,185,059
-
_
_
_
-
-
189,112
208,518
195,823
180,696
-
-
1,158,355
1,237,762
1,045,340
941,469
-
-
55,743
22,462
22,447
4,546
-
-
143,023
249,147
252,639
253,065
-
-
447,319
497,775
562,959
685,671
-
-
5,127,697
4,625,946
9,574,198
8,678,680
-
-
2,203,238
958,195
1,815,339
1,882,231
-
-
345,820
-
-
_
-
-
463,470
-
_
_
-
-
100,000
-
_
_
-
-
20,930
-
_
_
-
-
1,785,164
-
_
_
-
-
3,616,689
-
_
_
-
-
190,431
-
_
_
-
-
14,876
-
_
_
-
-
131,398
-
_
_
-
-
2,476,886
-
_
_
-
-
49,192
45,681
66,989
54,499
-
-
-
6,964,247
8,681,475
5,753,669
-
-
-
413,228
394,666
176,398
1,130,452
-
_
_
_
_
7,658,289
7,504,770
1,994,812
2,453,383
-
-
(116,803)
(484,089)
(384,965)
(1,716)
$ 18,395,902
$ 16,820,502
$ 18,402,540
$ 14,738,872
$ 22,226,910
$ 18,609,208
Table 3
107
CITY OF SHAKOPEE
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
REVENUES:
Taxes
Special Assessments
Licenses and Permits
Intergovernmental
Charges for Service
Fines and Forfeits
Miscellaneous
Total Revenues
EXPENDITURES:
General Government
Police
Public Works
Culture and Recreation
Economic Development
Debt Service:
Principal
Interest and Other Charges
Capital Outlay
Total Expenditures
Excess of Revenues
Under Expenditures
OTHER FINANCING SOURCES
(USES):
Bonds Issued
Sale of Assets
Premium on Bonds Issued
Refunded Bond Escrow
Transfers In
Transfers Out
Total Other Financing Sources
(Uses)
Net Change in Fund Balance
Debt Service as a Percentage of
Noncapital Expenditures
2004
2005
2006
2007
$ 8,207,254
$ 9,621,721
$10,815,367
$ 13,084,595
3,175,161
2,564,470
1,751,871
2,301,560
4,173,804
4,444,491
2,675,935
1,378,570
4,162,581
3,646,605
2,877,245
2,540,584
2,382,405
2,455,171
2,290,996
2,089,375
288,492
322,579
422,850
501,228
766,614
1,159,536
1,979,419
2,322,755
23,156,311
24,214,573
22,813,683
24,218,667
3,486,029
3,120,544
3,149,717
3,479,925
5,530,972
6,210,198
7,153,121
8,342,017
2,564,662
3,003,554
3,095,392
3,769,491
2,489,749
2,792,590
3,453,545
3,651,539
1,775,000
1,845,000
3,055,000
3,110,000
701,976
1,106,324
1,195,618
1,025,868
7,432,575
14,058,508
10,650,449
7,288,033
23,980,963
32,136,718
31,752,842
30,666,873
(824,652) (7,922,145) (8,939,159) (6,448,206)
15,070,000
-
3,440,000
2,815,000
299,183
753,024
2,700
17,700
-
-
20,275
9,956
-
(2,190,000)
-
-
5,963,741
3,374,566
6,683,532
4,411,281
(3,312,078)
(1,529,396)
(3,354,364)
(2,188,333)
18,020,846
408,194
6,792,143
5,065,604
$ 17,196,194 $ (7,513,951) $ (2,147,016) $ (1,382,602)
15% 19% 21% 16%
108
2008 2009
2010 2011 2012 2013
$ 14,437,766
$14,992,051
$ 14,385,788
$ 14,699,066
$ 15,141,903
$ 15,851,560
1,879,974
1,810,511
1,404,088
1,475,324
1,499,810
930,331
1,221,939
1,492,746
1,338,111
1,281,150
2,441,246
2,349,945
2,702,993
1,811,668
2,924,161
3,941,830
2,548,692
1,857,803
2,209,269
1,808,865
2,202,524
3,958,237
4,449,003
4,583,551
442,626
428,662
549,543
411,211
418,474
381,470
2,028,529
1,503,722
1,255,038
705,969
836,868
189,717
24,923,096
23,848,225
24,059,253
26,472,787
27,335,996
26,144,377
3,517,957
3,331,193
2,960,233
4,004,684
4,396,219
4,495,662
8,462,288
8,604,704
9,012,567
9,460,824
9,483,999
9,731,407
3,628,954
3,591,049
3,902,622
2,602,104
2,349,042
2,631,154
4,101,175
3,898,844
4,075,919
3,902,386
3,799,723
3,771,068
522,074
316,566
270,915
247,591
155,692
340,904
3,280,000
2,660,000
3,800,000
2,565,000
1,950,000
2,070,000
1,077,711
1,077,325
833,245
658,265
634,063
618,695
3,300,942
1,797,299
2,812,488
6,301,406
2,164,053
6,883,191
27,891,101
25,276,980
27,667,989
29,742,260
24,932,791
30,542,081
(2,968,005)
(1,428,755)
(3,608,736)
(3,269,473)
2,403,205
(4,397,704)
2,170,000
-
1,555,000
-
4,865,000
-
-
-
6,000
-
-
150
16,741
-
-
-
73,480
-
4,605,693
4,958,133
13,199,807
2,968,919
3,367,400
4,890,809
(2,224,692)
(3,462,100)
(12,380,403)
(2,750,830)
(3,002,400)
(4,540,809)
4,567,742
1,496,033
2,380,404
218,089
5,303,480
350,150
$ 1,599,737
$ 67,278
$ (1,228,332)
$ (3,051,384)
$ 7,706,685
$ (4,047,554)
17%
16%
18%
14%
11%
11%
Table 4
109
CITY OF SHAKOPEE
TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
Last Ten Fiscal Years
Source: Scott County Auditor
Table 5
Taxable Tax
Capacity as a
Percentage of
Estimated
Market Value
1.04%
1.14%
1.15%
1.15%
1.15%
1.17%
1.18%
1.19%
1.20%
1.28%
110
Estimated
Commercial
Less:
Less Net
Net Taxable
Total
Taxable
Fiscal
Residential
Industrial
Other
Tax Increment
Fiscal
Tax
Direct
Market
Year
Property
Property
Property
Property
Disparities
Capacity
Tax Rate
Value
2004
16,721,302
10,609,240
913,912
497,255
2,121,170
25,626,029
0.32433
2,464,564,300
2005
20,394,086
11,749,438
528,300
327,963
2,132,628
30,211,233
0.31115
2,654,161,900
2006
23,162,320
12,710,783
565,215
352,543
1,615,190
34,470,585
0.30974
2,987,657,400
2007
26,817,616
14,013,644
675,479
378,593
1,963,379
39,164,767
0.31939
3,419,040,600
2008
29,942,078
15,426,355
741,679
411,490
1,846,919
43,851,703
0.31925
3,800,795,500
2009
29,805,971
16,088,685
1,319,935
156,799
1,862,715
45,195,077
0.32630
3,850,591,200
2010
27,805,069
16,459,872
1,279,807
151,914
1,584,552
43,808,282
0.33710
3,710,814,056
2011
24,652,932
18,351,835
1,304,688
161,430
1,630,522
42,517,503
0.34731
3,570,069,500
2012
23,180,073
17,956,273
852,512
155,002
1,740,447
40,093,409
0.36655
3,347,179,800
2013
22,824,263
17,577,547
576,049
107,928
1,707,617
39,162,314
0.41996
3,064,695,700
Source: Scott County Auditor
Table 5
Taxable Tax
Capacity as a
Percentage of
Estimated
Market Value
1.04%
1.14%
1.15%
1.15%
1.15%
1.17%
1.18%
1.19%
1.20%
1.28%
110
CITY OF SHAKOPEE
Table 6
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Last Ten Fiscal Years
Sources: Scott County Auditor and Leauge of Minnesota Cities Reports
111
City Direct Rate
General
Obligation
Shakopee
Debt Service
Fiscal
Operating
Debt Service
Total Direct
School
Scott
Other
Market Value
Year
Rate
Rate
Rate
District
County
Jurisdictions
Rate
2004
0.31131
0.01302
0.32433
0.21517
0.36635
0.04123
0.01189
2005
0.29855
0.01260
0.31115
0.25215
0.35361
0.04660
0.00969
2006
0.28996
0.01978
0.30974
0.27789
0.34974
0.04578
0.00848
2007
0.29822
0.02117
0.31939
0.27132
0.33140
0.04434
0.00728
2008
0.29874
0.02051
0.31925
0.26103
0.32646
0.04642
0.00537
2009
0.30401
0.02229
0.32630
0.27274
0.32684
0.04960
0.00651
2010
0.32152
0.01558
0.33710
0.29050
0.33240
0.04980
0.00651
2011
0.32996
0.01735
0.34731
0.31182
0.35541
0.05020
0.00342
2012
0.34005
0.02650
0.36655
0.35512
0.38802
0.05610
0.00345
2013
0.41996
-
0.41996
0.39715
0.40674
0.05701
0.00467
Sources: Scott County Auditor and Leauge of Minnesota Cities Reports
111
CITY OF SHAKOPEE
PRINCIPAL TAXPAYERS
Current Year and Nine Years Ago
Taxpayer
Type of Business
Excel Energy
Electrical Generation
Rahr Malting
Grain Processing
J & J Minneapolis LLC
Manufacturing
Seagate
Manufacturing/Research
Lothenbach Properties
Warehouse/Manufacturing
St. Francis RMC
Health Care
Canterbury Park
Horse Racing
Certainteed
Manufacturing
Valleyfair
Amusement Park
Shakopee Crossing LTD
Retail
OIRE
Property Management
ADC Telecommunications Electronics
KMart Warehouse Warehouse/Distribution Center
Shakopee Valley Market Retail
Principal Mutual Mortgage Financial
Source: Scott County Auditor
Net Tax Capacity City
2013
2004
Table 7
40,977,859
From Table 5 -E Total for year
112
Percentage
Percentage
2012/13
of Total
2003/04
of Total
Tax Cap.
Tax Cap.
Tax Cap.
Tax Cap.
Value
Rank
Value
Value
Rank
Value
$ 603,146
1
1.47%
$ 432,954
2
1.53%
426,194
2
1.04%
358,847
4
1.27%
408,500
3
1.00%
399,250
4
0.97%
752,424
1
2.66%
379,250
5
0.93%
358,500
6
0.87%
323,760
7
0.79%
319,250
8
0.78%
311,678
6
1.10%
313,750
9
0.77%
292,117
7
1.03%
310,170
10
0.76%
364,928
3
1.29%
336,866
5
1.19%
288,946
8
1.02%
272,610
9
0.97%
259,752
10
0.92%
$ 3,841,770
9.38%
$ 3,671,122
12.98%
40,977,859
From Table 5 -E Total for year
112
CITY OF SHAKOPEE
Table 8
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
113
Ratio of
Accumulated
Percentage
Delinquent
Collections
Percentage
Collections
of Total
Accumulated
Taxes to
Year
Tax
of Current
of Levy
of Prior
Total
Collections
Delinquent
Current
Collected
Levy
Years Taxes
Collected
Years Taxes
Collections
To Tax Levy
Taxes
Years Taxes
2004
$ 8,625,695
$ 7,878,618
91%
$ (86,619)
$ 7,791,999
90%
$ 175,774
2.04%
2005
9,703,206
9,025,261
93%
67,187
9,092,448
94%
164,517
1.70%
2006
10,951,917
9,945,490
91%
38,986
9,984,476
91%
279,316
2.55%
2007
12,745,449
12,418,768
97%
91,200
12,509,968
98%
331,315
2.60%
2008
14,222,007
13,661,366
96%
208,470
13,869,836
98%
483,317
3.40%
2009
14,983,677
14,457,378
96%
157,920
14,615,298
98%
319,740
2.13%
2010
14,918,665
13,971,356
94%
55,020
14,026,376
94%
310,624
2.08%
2011
14,837,438
14,019,831
94%
278,981
14,298,812
96%
260,248
1.75%
2012
14,837,438
14,553,417
98%
188,750
14,742,167
99%
235,011
1.58%
2013
15,483,223
15,109,599
98%
279,485
15,389,084
99%
293,025
1.89%
Source: Scott County Auditor
1. The above
data does not include tax increment districts.
2. The State of Minnesota cancelled $ 561,000 in 2004 to 2006,
$ 243,439 in 2008, $ 511,956 in 2009, $ 558,860
in 2010 and $ 595,572
of
annual aid payments to the City that were part of the tax levy.
113
CITY OF SHAKOPEE
Table 9
RATIO OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
Governmental Activities
Business -type
Sources: See Table 14 for income and population data.
Note: From 2004 -2010, the SPUC Funds, Water and Electric Enterprise Funds, were reported as a blended
component unit of the City. In 2011, SPUC Funds have been presented as discretely presented component
units as it no longer met the criteria for blending.
114
Special
Activities
Total
Percentage
Fiscal
G.O.
Assessment
Revenue
Primary
of Personal
Per
Year
Bonds
Bonds
Bonds
Government
Income
Capita
2004
$ 10,595,000
$ 18,205,000
$ 25,515,000
$ 54,315,000
5.5%
1,879
2005
8,275,000
16,360,000
24,750,000
49,385,000
4.4%
1,593
2006
7,950,000
17,070,000
34,535,000
59,555,000
4.9%
1,816
2007
7,560,000
17,165,000
33,895,000
58,620,000
4.5%
1,752
2008
7,165,000
16,450,000
33,225,000
56,840,000
4.1%
1,689
2009
6,755,000
14,200,000
22,235,000
43,190,000
4.1%
1,276
2010
6,340,000
12,370,000
21,470,000
40,180,000
3.4%
1,084
2011
5,905,000
10,240,000
-
16,145,000
1.3%
428
2012
10,325,000
8,735,000
-
19,060,000
1.6%
504
2013
9,865,000
7,125,000
-
16,990,000
1.4%
446
Sources: See Table 14 for income and population data.
Note: From 2004 -2010, the SPUC Funds, Water and Electric Enterprise Funds, were reported as a blended
component unit of the City. In 2011, SPUC Funds have been presented as discretely presented component
units as it no longer met the criteria for blending.
114
CITY OF SHAKOPEE
RATIOS OF GENERAL BONDED OUTSTANDING
Last Ten Fiscal Years
Sources:
1. Metropolitan Council estimated for population.
2005 -2009 populations are the City's estimate.
2. Scott County Auditor
Percentage of
Total
Personal
Income
1.07%
0.76%
0.65%
0.61%
0.52%
0.65%
0.54%
0.49%
0.86%
0.81%
Table 10
115
Percentage of
Actual Taxable
Fiscal
G.O.
Value of
Per
Year
Bonds
Property
Capita
2004
$ 10,595,000
0.43%
366
2005
8,275,000
0.31%
267
2006
7,950,000
0.27%
242
2007
7,560,000
0.22%
226
2008
7,165,000
0.19%
213
2009
6,755,000
0.18%
199
2010
6,340,000
0.17%
171
2011
5,905,000
0.17%
157
2012
10,325,000
0.31%
273
2013
9,865,000
0.32%
259
Sources:
1. Metropolitan Council estimated for population.
2005 -2009 populations are the City's estimate.
2. Scott County Auditor
Percentage of
Total
Personal
Income
1.07%
0.76%
0.65%
0.61%
0.52%
0.65%
0.54%
0.49%
0.86%
0.81%
Table 10
115
(THIS PAGE LEFT BLANK INTENTIONALLY)
116
CITY OF SHAKOPEE
Table 11
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
December 31, 2013
Note: Overlapping governments are those that coincide, at least in part, with geographic boundaries of
the City. This schedule estimates the portion of the outstanding debt of those overlapping governments
that is borne by the residents and businesses of the City. This process recognizes that, when
considering the City's ability to issue and repay long -term debt, the entire debt burden borne by the
residents and businesses should be taken into account. However, this does not imply that every
taxpayer is a resident, and therefore responsible for repaying the debt of each government.
(1) The percentage of overlapping debt is estimated using tax capacity. Applicable percentages were
estimated by determining the portion of Scott County's tax capacity that is within the City's boundaries
and dividing it by Scott County's total tax capacity.
117
Percentage
Amount
Applicable
Applicable
G.O.
To City of
To City of
Debt
Shakopee(1)
Shakopee
Direct Debt:
City of Shakopee
$ 16,990,000
100.0%
$ 16,990,000
Overlapping Debt:
Independent School District No. 720
206,755,000
84.6%
174,861,150
Independent School District No. 191
108,795,000
2.1%
2,323,238
Scott County
66,660,000
26.3%
17,543,229
Metropolitan Council
1,638,249,257
1.0%
17,152,470
Total Overlapping Debt:
2,020,459,257
211,880,087
Total Direct and Overlapping Debt
$ 2,037,449,257
$ 228,870,087
Source: Scott County Auditor
Dakota County Auditor
Metropolitan Council
Note: Overlapping governments are those that coincide, at least in part, with geographic boundaries of
the City. This schedule estimates the portion of the outstanding debt of those overlapping governments
that is borne by the residents and businesses of the City. This process recognizes that, when
considering the City's ability to issue and repay long -term debt, the entire debt burden borne by the
residents and businesses should be taken into account. However, this does not imply that every
taxpayer is a resident, and therefore responsible for repaying the debt of each government.
(1) The percentage of overlapping debt is estimated using tax capacity. Applicable percentages were
estimated by determining the portion of Scott County's tax capacity that is within the City's boundaries
and dividing it by Scott County's total tax capacity.
117
Market Value (Taxable)
Debt Limit - Percent of
Market Value (Note A)
Amount of Debt Applicable
to Debt Limit:
G.O. Bonds
Available in Debt Service Funds
Total Debt Applicable
to Debt Limit
Legal Debt Margin
CITY OF SHAKOPEE
LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
2004 2005 2006 2007
$ 2,464,564,300 $ 2,654,161,900 $ 2,987,657,400 $ 3,419,040,600
49,291,286
53,083,238
59,753,148 68,380,812
10,595,000 8,275,000 7,950,000 7,560,000
(2,539,292) (1,155,148) (810,494) (834,155)
8,055,708
7,119,852
7,139,506 6,725,845
$ 41,235,578 $ 45,963,386 $ 52,613,642 $ 61,654,967
NOTE (A):
M.S.A. Section 475.53 (Limit on Net Debt)
Subdivision 1. Generally, except of otherwise provided in Sections 475.51 to 475.75, no municipality, except a
school district or a city of the first class, shall incur or be subject to a net debt in excess of 2%
(3% starting 2008) of the market value of taxable property in the municipality."
NOTE (B):
M.S.A. Section 475.51 Definitions: Subdivision 4. "Net debt" means the amount remaining after deduction
from its gross debt the aggregate of the principal of the following:
(1) Obligations issued for improvements which are payable wholly or partly from the proceeds of special
assessments levied upon property specially benefited thereby, including those which are general obligations
of the municipality issuing them, if the municipality is entitled to reimbursement in whole or in part from
the proceeds of the special assessments.
(2) Warrants or orders having no definite or fixed maturity.
(3) Obligations payable wholly from the income of revenue - producing conveniences.
(4) Obligations issued to create or maintain a permanent improvement revolving fund.
(5) Obligation issued for the acquisition, and betterment of public waterworks systems, and public lighting,
heating or power systems and on any combination thereof or for any other public convenience from
which a revenue is or may be derived.
(6) Amount of all money and the face value of all securities held as a sinking fund for the extinguishment
of obligations other than those deductible under this subdivision.
M.S.A. Section 469.178, subdivision 1. (tax increment bonds) "... The bonds are not included for purposes
of computing the net debt of any municipality.
118
Table 12
2008
2009
2010
2011
2012
2013
$ 3,800,795,500
$ 3,850,591,200
$ 3,710,814,056
$ 3,570,069,500
$ 3,347,179,800
$ 3,064,695,700
114,023,865
115,517,736
107,102,085
107,102,085
100,415,394
91,940,871
7,165,000
6,755,000
6,340,000
5,905,000
10,325,000
9,865,000
(847,608)
(837,100)
(786,306)
(826,957)
(4,623,939)
-
6,317,392
5,917,900
5,553,694
5,078,043
5,701,061
9,865,000
$ 107,706,473
$ 109,599,836
$ 101,548,391
$ 102,024,042
$ 94,714,333
$ 82,075,871
119
CITY OF SHAKOPEE
Table 13
PLEDGED REVENUE COVERAGE
Last Ten Fiscal Years
120
Utility Bonds
Utility Less:
Net
Fiscal Service Operating
Available Debt Service
Year Charges Expense
Revenue Principal
Interest
Coverage
2004 $ 25,473,439 $ 19,778,149
$ 5,695,290 $ 640,000 $
1,307,626
2.92
2005 33,841,730 25,821,489
8,020,241 765,000
1,074,487
4.36
2006 38,445,403 31,436,969
7,008,434 785,000
1,174,711
3.58
2007 44,692,049 36,644,414
8,047,635 640,000
1,574,925
3.63
2008 45,499,791 38,689,351
6,810,440 670,000
1,523,198
3.11
2009 42,437,910 33,009,500
9,428,410 710,000
1,012,874
5.47
2010 45,586,795 36,375,440
9,211,355 765,000
939,426
5.40
2011 - -
- -
2012
2013
1. Operating expense excludes depreciation and amortization.
Note: From 2004 -2010, the SPUC Funds, Water and Electric Enterprise Funds,were reported
as a blended component unit of the City. In 2011, SPUC Funds have been presented as
discretely presented component units as it no longer met the criteria for blending,
120
CITY OF SHAKOPEE
Table 14
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last Ten Calendar Years
Fiscal
School Unemployment Total
Per Capita
Personal
Year
Population (1) Enrollment (2) Rate (3) Employment
Income (4)
Income (5)
2004
28,913 5,121 3.9% 16,213
$ 34,284
$ 991,253,292
2005
31,000 6,247 3.6% 16,192
35,956
1,114,636,000
2006
32,800 6,643 3.7% 17,787
37,023
1,214,354,400
2007
33,460 6,905 4.6% 18,225
39,042
1,306,345,320
2008
33,660 7,163 6.7% 18,688
31,900
1,375,044,660
2009
33,860 7,465 7.8% 18,926
30,900
1,046,274,000
2010
37,076 7,814 7.0% 18,771
31,700
1,175,309,200
2011
37,721 8,115 4.6% 20,718
32,017
1,207,713,257
2012
37,841 8,392 5.0% 19,971
31,628
1,196,835,148
2013
38,120 8,452 4.6% 19,650
31,829
1,213,321,480
Source:
1.
2004 is a Metropolitan Council population estimates. 2010 is the official
census figure. 2005- 2009,2011 -2013 are the City's estimate.
2.
Shakopee School District, SACS, Bloomington Lutheran
3.
Minnesota Department of Employment and Economic Development
4.
Bureau of Economic Analysis and MET Council Community Profile Dad
5.
Per capita income times population
121
(THIS PAGE LEFT BLANK INTENTIONALLY)
122
CITY OF SHAKOPEE
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
2013
2004
Table 15
123
Total
Total
City
City
Taxpayer
Type of Business
Employees
Rank
Employment
Employees
Rank
Employment
Valley Fair
Amusement Park
2,000
1
10.18%
1,200
2
7.40%
Canterbury Park
Horse Racing
1,650
2
8.40%
Seagate
Manufacturing/Research
1,200
3
6.11%
1,100
3
6.78%
School District No. 720
Education
1,200
4
6.11%
390
7
2.41%
Imagine Print Solutions
Printing
950
5
4.83%
St. Francis RMC
Health Care
800
6
4.07%
363
8
2.24%
Scott County
Government
570
7
2.90%
470
4
3.05%
Walmart
Retail
375
8
1.91%
Northstar Auto Auction
Auto Auction
355
9
1.81%
Anchor Glass
Manufacturing
285
10
1.45%
287
10
1.76%
ADC
Manufacturing
1,400
1
8.64%
Kmart
Distribution Center
424
5
2.62%
Shakopee Valley Printing
Printing
415
6
2.56%
CertainTeed
Manufacturing
300
9
1.85%
9,385
47.77%
6,349
39.31%
Total Employment
19,650
16,213
Source: Minnesota Department of Employment and Economic Development.
123
CITY OF SHAKOPEE
FULL -TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES
BY FUNCTION/PROGRAM
Last Ten Fiscal Years
General Government:
Administration
City Clerk
Finance
Planning
Facilities Maintenance
Information Technology
Public Safety:
Police:
Licensed
Other
Fire:
Full time
Paid On Call
Building Inspection
Public Works:
Engineering
Street
Shop
Park and Recreation:
Park Maintenance
Recreation
Economic Development:
EDA
Total
Source: City departments
2004
2005
2006
2007
2008
6
6
6
5
5
4
4
4
4
4
3
3
3
3
3
5
5
5
5
5
4
4
6
6
7
2
2
2
2
2
40
42
45
46
47
7
9
7
7
6
-
-
-
1
2
50
50
48
48
48
8
8
8
7
6
9
9
9
7
7
11
12
12
12
13
3
3
3
3
3
7
7
7
8
8
8
10
10
10
7
167
174
175
174
173
124
2009
2010
2011
2012
2013
5
5
5
6
7
4
4
4
3
3
3
3
3
4
4
5
5
5
5
5
6
6
6
4
4
2
2
2
2
2
47
47
50
49
47
6
6
6
7
10
3
3
3
3
7
44
44
42
44
44
5
5
5
5
5
7
7
7
7
7
13
13
13
13
13
3
3
4
3
3
8
8
8
8
8
7
7
7
7
8
-
168
168
-
170
-
170
1
178
Table 16
125
CITY OF SHAKOPEE
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
General Government
Planning
Number of Case Files
Number of Plats Filed
Number of Acres Platted
Public Safety
Police
Arrests
Citations
Calls for Service
Fire
Calls for Service
Building Inspection
Building Permits Issued
Number of Inspections
Single Family Homes Permitted
Public Works
Street
Miles of Roadway
Park and Recreation
Park Maintenance
Acres Maintained
Recreation
Program Participants
Community Center Members
Community Center Admissions
Source: City departments
2007
109
120
91
67
9
7
10
3
238
321
155
38
1,248
1,451
1,770
2,199
3,802
3,843
4,970
6,073
16,062
17,363
18,333
19,606
479
539
494
609
1,638
1,512
1,131
1,194
14,535
15,175
9,671
8,174
396
352
223
138
114 123 153 154
760
925
930
930
9,693
9,842
9,928
10,847
541
516
578
597
75,018
77,543
91,776
100,044
126
2008
2009
2010
2011
2012
2013
68
35
33
24
47
49
2
2
1
2
5
8
50
34
6
68
89
99
1,881
1,913
1,962
1,666
1,798
1,387
4,058
6,127
5,528
5,647
5,636
4,665
19,057
17,909
17,831
17,852
18,349
17,822
538
517
557
600
617
584
1,019
1,102
1,083
1,881
1,413
3,556
5,946
9,726
8,048
8,004
8,191
7,446
94
314
160
118
97
104
154
154
154
154
154
154
933
933
933
933
933
933
11,410
10,377
13,001
13,157
13,104
15,854
613
823
2,534
3,682
4,009
5,025
100,397
109,257
117,336
120,667
128,929
140,778
Table 17
127
CITY OF SHAKOPEE
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Source: City Departments
128
2004
2005
2006
2007
2008
Police:
Stations
1
1
1
1
1
Patrol Zones
4
4
4
4
4
Patrol Units
13
13
15
15
15
Fire Stations
2
2
2
2
2
Street:
Miles of Roadway
114
123
153
154
154
Traffic Signals
25
25
25
25
26
Parks:
Acres
760
925
1,015
1,015
1,019
Ball Fields
46
46
47
47
49
Playgrounds
13
13
18
22
24
Source: City Departments
128
2009
2010
2011
2012
2013
1
1
1
1
1
4
4
4
4
4
15
15
15
15
15
2
2
2
2
2
154
154
154
154
154
27
27
27
29
29
1,024
1,024
1,024
1,048
1,048
49
52
54
56
56
24
24
26
26
26
Table 18
129
Oppr
i
May 20, 2014
City of Shakopee
Steve Wischmann, CPA, CFF, CFE, MAFF
Audit Partner
Audit Process
• Planning
• Fieldwork
• Draft CAFR
• Final Reports
• Board Presentation
City of Shakopee l 055/2 0/14 12
Kivu
i
,too
KOV
Independent Auditor's Report
• Unqualified Opinion on the Basic Financial Statements
• Comprehensive Annual Financial Report (CAFR) also reviewed
for GFOA Certificate of Achievement for Excellence in
Financial Reporting
City of Shakopee 1 05/20/14 1 3
A KD-V
Off, � Compliance Minnesota Le al
• Compliance audit based on the Minnesota Legal Compliance Audit Guide for Local
Governments covers seven areas of compliance:
❑ Deposits and Investments
❑ Conflicts of Interest
❑ Public Indebtedness
❑ Contracting and Bidding
❑ Claims and Disbursements
❑ Miscellaneous Provisions
❑ Tax Increment Financing
• No findings
City of Shakopee 1 05/20/1.4 1 4
A-�
GAS Report
Report on Government Auditing Standards Findings:
• Material Audit Adjustment — MW
• Lack of Segregation of Accounting Duties - SD
• Improve Ice Arena Receipting Internal Controls - D
• Improve Community Center Receipting Internal Controls - D
• Prior year corrected — follow fee schedule
City of Shakopee l 05/20/14 15
K-D-V
$16.000.000
$12,000,000
$8,000,000
$4,000,000
General Fund
K-DV
City of Shakopee I 03 /zO /i4 I n
2009 2010 2011 2012 2013
■ Rev enues
$17,074,639
$19,589,535
$20,956,396
$21,770,348
$22,869,399
®Expenditures
16,030,691
18,724,835
18,674,938
18,694,101
19,539,401
■Fund Balance
11,502,280
9,037,730
9.304,194
9,522,841
9,092,989
City of Shakopee I 03 /zO /i4 I n
$600
$500
$400
$300
5200
$100
FA
General Fund Revenues /Expenditures
Per Capita
2009 2010 2011 2012 2013
ORevenues OExpenditures
City of Shakopee j OS /LO /14 f 7
General Fund Performance
Revenues:
Taxes and Assessments
Licenses and Permits
Intergovernmental
Charges for Services
Fines and Forfeitures
Miscellaneous Revenues
Total Revenues
Expenditures:
General Government
Public Safety
Public Works
Parks and Recreation
Total Expenditures
Proceeds from Sale of Capital
Transfers In
Transfers Out
Total Other Financing
Sources (Uses)
Change in Fund Balance
City of Shakopee j OL/201`14 18
Actual Variance
$14,590,000 $ 15,598,137 $ 1,008,137
1,316,700
1,443,885
127,185
755,500
1,042,127
286,627
3,852,150
4,304,786
452,636
425,000
348,262
(76,738)
315,500
132,202
(183,298)
$21,254,850
$ 22,869,399
$ 1,614,549
$ 3,603,765 $ 3,349,501 $ (254,264)
9,913,889 9,765,310 (148,579)
2,883,328 2,641,079 (242,249)
4,084,730 3,783,511 (301,219)
$20,485,712 $ 19,539,401 $ (946,311)
$ - $ 150 $ 150
150,000 150,000 -
(860,000) (3,910,000) (3,050,000)
(710,000) (3,759,850) (3,049,850
$ 59,138 $ (429,852) $ (488,990)
KD-V
Total Revenues
• Actual: $ 1,038,935 for 2013 vs $ 1,102,294 in 2012
Total Expenditures and Other Financing Uses
• Actual: $ 1,142,806 for 2013 vs$ 1,294,716 in 2012
Net change in fund balance
• Actual: ($103,871) for 2013 vs ($ 192,422) in 2012
Fund balance at beginning of the year was $ 1,045,340
Fund balance at the end of the year is $ 941,469
City of Shakopee 1 05/20/14 19
0 70%
60%
50%
40%
30%
20%
10%
0%
Unreserved /Unassigned Fund Balance as a Percent of Expenditures
MIA
2009 2010 2011 2012 2013
F� tj
General Fund Revenues KD-V
M ONA AAA AAA
41--+,VVV,VVV
$21,000,000
$18.000.000
$15,000,000
$12,000,000
$9,000,000
$6,000,000
$3,000,000
--
$
2009
2010
2011
2012
2013
■ Miscellaneous
$416,023
$418,654
$397.477
$359,323
$132,202
❑Charges for Services
804,536
3,028,330
3,879,113
4,035,921
4,304,786
❑Fines and Forfeitures
364,895
423,746
357,249
368,167
348,262
■Licenses and Permits
1,122,619
1,303,904
1,225,560
1,229,184
1,443,885
■ Intergovernmental
593,647
828,906
796,076
991,445
1,042,127
El Taxes and Assessments
13,772,919
13,585,995
14,300,921
14,786,308
15,598,137
Ci y or 5 .Ac I T,
4 1 1 1
2
$45,000,000
540,000.000
$35,000,000
$30,000,000
$25,000,000
$20,000.000
$15,000,000
$10,00000
$5,000,000
Taxable Tax Capacity and Certified Levy
$ 2009 2010 2011 2012 2013
❑Taxable Tax Capacity $40,984,725 $38,952,163 $37,680,587 $35.-102.744 532,445,035
Certified Levy 14,983,677 14,715,299 14,717,367 14,717,435 15,333,211
City of Shakopee] 05/,W/14 1 12
40M
1 5.00
0.00
25.00
20.00
15.00
10.00
5.00
mw
Tax Capacity Rate KDV
2009 2010 2011 2012 2013
City of Shakopee i 05/2-0/14 1 13
Public
2013 General Fund Ex enditures
Recreation
General Government
17%
City of Shakopee 1 05/20/14 114
Safety
50%
Public Works
13%
2012 General Fund Expenditures
50°,x°
3ovemment
7%
afety
4
$5,000,000 -
$4,000,000
$3,000,000
$2.000.000
$1 >000,000 -
$(1,000,000)
Sewer Fund
$(2,000,000)
$3.460.974
$2.936.144
3.683.168
3,836 202
2009
• Operating Revenues
301,459
$3.444.044
®OperatingEspenses
3398,117
❑Operating Income (Loss)
45,927
• Chanee in Net Position
603.882
ClIcy of Shakopee 1 uDILU /i,4
2010 2011
$3.460.974
$2.936.144
3.683.168
3,836 202
(222.194)
(900.058)
301,459
($524,858)
K-DV
2012
2013
$3.730,226
$2,973.474
3,953269
4.122.406
(223.043)
(1,148,93'
($14.003)
($1.162.542)
$2,000,000
$1,500,000
$1,000,000
$500,000
S(500,000)
Storm Drainage Fund
K-D-V
$(1,000,000)
2009
2010
2011
2012
2013
® Service Charges
$1,320,566
$1,187,229
$995.855
$1,037,427
$1,047,160
® Operating Expenses
1,264,261
1,787,295
1,411,271
1,472,361
1,604937
E3 Operating Income (Loss)
56,305
(6007066)
(415,416)
(434,934)
(557,777)
■ Change in Net Position
673,618
299.132
55,008
431,658
(3,004)
City of Shakopee 1 0:31 Zut 14 1 10
r
-10.0%
15.0%
')0.0%
15.0%
10.0%
5.0%
U(lln
US City Bond Ratings
� �1 <1 A,I I A ! A? Below
` 000,000
$20,000,000
$15.000.000
$10.000,000
$5.000,000
Bonded General Obligation Debt
KDV
�nu o 2010 2011 2012 �()1.�
® Gross Bonded Debt ■ Debt Service Fund Balance s Net Bonded Debt I
City Ot ahakopeeI UD /ZU /i4 j Lb
P0,0010,000
$15,000,000
$14,000,000
$13,000,000
$12,000,000
$11,000,000
$10,000,000
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$-
Debt Service Schedule
(Five Year Increments)
m�
2014 -2018 2019 -2023 2024 -2028
■G.O. Boni Principal ■Interest L]
City of Shakopee] Ob /20 /i4 1 19
2012 General Fund
Expenditures Per Capita
Kiev
, -j V
$200
$150
$100
$50
$0
- -- -
-
General Government
Public
Safety
$249
Public Works
$63
Recreation
$100
• Shakopee
$82
• Savage
77
201
75
44
• Chanhassen
82
124
1 96
81
❑ Chaska
143
169
1 102
19
2012 Per Capita Information
Governmental Funds
MI AAA
KOV
.D -I,Vvv
$2,500
$2.000
$1,500
$1,000
$500
$0
— -
--
Debt* Total Revenues* Tax Revenues*
Capital Outlay*
Outstanding
Shakopee
$504
$722
$397
$57
Savage
2,144
1,023
546
700
■ Chanhassen
752
759
432
210
❑ Chaska
1,531
962
444
131
upee1 I /-1
$700
$600
$500
$400
$300
$200 1
$100
mn
2012 General Fund
Revenues and Expenditures Per Capita
w
Total Expenditures
Total Revenues
Tax Revenues
• Shakopee
$494
$575
$390
• Savage
419
443
351
• Chanhassen
400
427
316
11 Chaska
4 33
434
170
Questions?
Steve Wischmann, CPA, CFF, CFE, MAFF
City of Shakopee 1 05/20/14 1 23
320 -650 -0217
swischmann @kdv.com
rld-