HomeMy WebLinkAbout13.F.1. Presentation of 2007 annual Finanicial Report
CITY OF SHAKO PEE 13. F- /.
Memorandum
TO: Mayor and Council
Mark McNeill, City Administrator
FROM: Gregg Voxland, Finance Director
SUBJ: Comprehensive Annual Financial Report
DATE: July 10, 2007
Introduction & Background
Council has retained the firm of Kern, DeWenter and viere to audit the
financial records of the City of Shakopee for 2007. Steve Wischmann
will be at the meeting on June 20th to present their report.
The report is due to the State Auditors Office and the Government
Finance Officers Association by June 30th. The city has received an
extension from both parties.
Financially, there is nothing remarkable about 2007 compared to
previous years. General Fund had a deficit of $137,101. Development
related revenues were largely responsible for revenues being below the
estimate by $326,244. Due to conservative spending, the budget was
under spent by $692,873. Inter-fund transfers make up the difference
between the revenues and expenditures above and the bottom line deficit
of $137,101. Divisions exceeding the expenditure budget were Legal
($33,791) , Government Buildings ($6,058) , IT ($4,077) and Shop
($149,549) .
Other budgeted funds completed the year within budget except for the
Recreation Fund which exceed the budget for expenditures by $85,984.
Action
Move to accept the auditor's report.
ftJJ
Gregg Voxland
Finance Director
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CITY OF SHAKOPEE, MINNESOTA
Scott County
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Fiscal Year Ended
December 31, 2007
DEPARTMENT OF FINANCE
GREGG M. VOXLAND, Director of Finance
MEMBER OF GOVERNMENT FINANCE OFFICERS ASSOCIATION
OF THE UNITED STATES AND CANADA
129 HOLMES STREET SOUTH
SHAKOPEE, MN 55379
CITY OF SHAKOPEE
Scott County, Minnesota
TABLE OF CONTENTS
SECTION I
Page
INTRODUCTORY SECTION:
Elected Officials and Administration......................................... ...................................... 1
Organization Chart .................... ........... ..... ....... ..... ........ ...... ............ ..... ............................ 2
Letter of Transmittal.... ......................................... ............................. .............................. 3
Certificate of Achievement for Excellence in Financial Reporting................................. 7
SECTION II
FINANCIAL SECTION:
Independent Auditors' Report......... ....................... ........ ......... ....... .................................. 9
Management's Discussion and Analysis (Unaudited) ..................................................... 11
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Assets ..... ..... ........... ...... ............. ...... ........ ....... .......................... 24
Statement of Activities............... ...... ..... ........ .................... ..... .............................. 25
Fund Financial Statements:
Balance Sheet - Governmental Funds...... ....... .............. ..... ....... ..... .......... ........... 26
Reconciliation of the Balance Sheet to the Statement of Net Assets-
'.' Governmental Funds....... ............. ........... ................. ...... ............. ...................... 27
Statement of Revenues, Expenditures and Changes in Fund Balances-
Governmental Funds......................................................................................... 28
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances to the Statement of Activities - Governmental Funds ......... 29
Statement of Revenues, Expenditures and Changes in Fund Balances-
Budget and Actual- General Fund.... ....... ......................... ....... ...... ...... ............ 30
Statement of Net Assets - Proprietary Funds ...................................................... 32
Statement of Revenues, Expenses and Changes in Fund Net Assets-
Proprietary Funds. ........... ....... .......... ...... .............. ..... ... ........... ... ............ ........... 33
Statement of Cash Flows - Proprietary Funds..................................................... 34
Statement of Fiduciary Net Assets................ ............... .................... .................... 36
Notes to the Financial Statements. ..... ............ ........ .................. ............ .......... ............ 37
Combining and Individual Fund Financial Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds ............................. 70
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Governmental Funds ..................................................... 76
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual:
Transit Fund.......... ...................... ......... ...................... ..... ............................. 83
Telecommunication Fund............................................................................. 84
Economic Development Authority Fund..... .... ........... .................................. 85
Recreation Fund............................................................................................ 86
CITY OF SHAKO PEE
Scott County, Minnesota
TABLE OF CONTENTS
SECTION II
Table Page
FINANCIAL SECTION:
Basic Financial Statements: (Continued)
Combining and Individual Fund Financial Statements and Schedules (Continued):
Combining Statement of Fund Net Assets - Internal Service Funds................... 87
Combining Statement of Revenues, Expenses and Changes in Fund Net
Assets - Internal Service Funds.... .............. ................. ...... ...... .............. ............ 88
Statement of Cash Flows - Internal Service Funds ............................................. 89
Statement of Changes in Assets and Liabilities - Escrow Agency Fund............. 90
SECTION III
STATISTICAL SECTION:
Net Assets by Component.................................. ........... ....................... ............................ 1 92
Changes in Net Assets .............. ............ .................... ............................... ........................ 2 93
Fund Balances - Governmental Funds ............................. ............... ................ ................ 3 95
Changes in Fund Balances - Governmental Funds.......................................................... 4 96
Tax Capacity and Estimated Actual Value of Taxable Property..................................... 5 97
Direct and Overlapping Property Tax Rates .................................................................... 6 98
Principal Taxpayers.......................................................................................................... 7 99
Property Tax Levies and Collections........ ........... ...... .............. ...... ........ .................... ...... 8 100
Ratio of Outstanding Debt by Type ....... ........... ................................ ............................... 9 101
Ratio of General Bonded Outstanding ......... ........... .......... .................. ................ ............. 10 102
Direct and Overlapping Governmental Activities Debt................................................... II 103
Legal Debt Margin Information....................................................................................... 12 104
Pledged Revenue Coverage ........ ............. ......... .......... .................. ........ ........................... 13 105
Demographic and Economic Statistics ............ ........... ............ ............. ................. ........... 14 106
Principal Employers.......................................................................................................... 15 107
Full-Time Equivalent City Government Employees by FunctionIProgram..................... 16 108
Operating Indicators by FunctionIProgram ................................. ..... ..... .................. ......... 17 109
Capital Asset Statistics by FunctionlProgram....... ......................... ....................... ........... 18 110
CITY OF SHAKOPEE
Scott County, Minnesota
ELECTED OFFICIALS AND ADMINISTRATION
December 31, 2007
Elected Officials Position Term Expires
John Schmitt Mayor December 31, 2007
Matthew Lehman Council Member December 31, 2007
Steven Menden Council Member December 31, 2007
Steven Clay Council Member December 31, 2009
Terry Joos Council Member December 31, 2009
Administration
Mark H. McNeill City Administrator Appointed
Gregg M. V oxland Finance Director Appointed
I
CITY OF SHAKOPEE
Scott County, Minnesota
ORGANIZATION CHART
December 31,2007
ELECTORATE
CITY COUNCa
Planning Commission & Board of Adjustment and Appeals Building Code Board of Adjustment and Appeals
Police Civil Service Commission Telecommunications Advisory Commission
Park and Recreation Advisory Board Board of Review
Economic Development Authority Public Utilities Commission
Environmental Advisory Commission Historic Preservation Commission
Administration
Police Fire Public Works Recreation Finance Community City Clerk
Development
Planning Building Inspection
Transit
N
SHAKOPEE
June 27,2008
To the Honorable Mayor, Members of the City Council, and Citizens of the City of Shakopee:
State law requires that all general-purpose local governments publish within six months of the
close of the fiscal year, a complete set of financial statements presented in conformity with
generally accepted accounting principles (GAAP) and audited in accordance with generally
accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that
requirement, we hereby issue the Comprehensive Annual Financial Report of the City of
Shakopee for the fiscal year ended December 31, 2007.
The report consists of the city's management team representations concerning the finances of the
City of Shakopee (City). Consequently, management assumes full responsibility for the
completeness and reliability of all of the information presented in this report. To provide a
reasonable basis for making these representations, management of the City has established a
comprehensive internal control framework that is designed both to protect the government's
assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation
of the City's financial statements in conformity with GAAP. Because the cost of internal controls
should not outweigh their benefits, the City's comprehensive framework of internal controls has
been designed to provide reasonable rather than absolute assurance that the financial statements
will be free from material misstatements. As management, we assert that, to the best of our
knowledge and belief, this financial report is complete and reliable in all material respects.
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 fiscal year ended December
31,2007, are free of material misstatements, and to comply with state law requiring such an audit.
The independent audit involved examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements; assessing the accounting principles used and significant
estimates made by management; and evaluating the overall financial statement presentation.
The independent auditor concluded, based on the audit, that there was a reasonable basis for
rendering an unqualified opinion that the City's financial statements for the fiscal year ended
December 31, 2007, are fairly presented in conformity with GAAP. The independent auditor's
report is presented as the first component of the financial section of this report.
Management is providing a narrative introduction, overview, and analysis to accompany the basic
financial statements in the form of 'Management's Discussion and Analysis' (MD&A). This letter
of transmittal is designed to complement the MD&A and should be read in conjunction with the
MD&A.
COMMUNITY PRIDE SINCE 1857 3
129 Holmes Street South' Shakopee, Minnesota' 55379-1351 . 952-233-9300 . FAX 952-233-3801 . www.ci.shakopee.mn.us
Profile of the Government
The City of Shakopee was incorporated for the second time in 1870 and is located about 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. The City is one of the most rapidly growing
communities of the state. The 2000 population of the City was 20,568 and the land area covered
is approximately 30 square miles. For 2007, the estimated population is about 34,000. The City
is empowered to levy a property tax on both real and personal property located within its
boundaries. It is also empowered by state statute to extend its corporate limits by annexation,
which occurs periodically.
Shakopee is organized in Minnesota under Plan A, which includes a City Administrator, but the
City Council retains most decision making authority such as policy setting, adopting ordinances,
budget adoption 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 the normal municipal services such as police and fire protection, street and
infrastructure construction and maintenance, parks and recreation, planning and zoning. Also
provided are electrical distribution, water, sewer and storm drainage utilities, organized refuse
collection and recycling, and some transit services. Electric and water utilities are operated by
Shakopee Public Utilities Commission which is appointed by the City Council and is included as
an integral part of the City's report. Housing, economic development and redevelopment are
controlled by the Shakopee Economic Development Authority. The Authority is comprised of City
Council members and is included as an integral part of the City's report.
The annual budget is the basis for the City's financial planning and control. Budget requests from
divisions are submitted in July and are prepared by fund and division. The City Administrator
reviews the submittals and presents City Council with a proposed budget in August of each year.
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 hearing. Budgeting control is provided by an
annual budget resolution passed by City Council (or EDA as appropriate). 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, a five-year capital improvement plan and major equipment list is
also prepared annually. Budget-to-actual comparisons are provided in this report for each
individual governmental fund for which an appropriated annual budget has been formally adopted.
Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood when it is
considered from the broader perspective of the specific environment within which the City of
Shakopee operates.
Local Economy. The City currently has favorable economic environment and local indicators
point to continued growth. The tax base grew 12% for taxes payable in 2008 and 14% for taxes
payable in 2007. The City has traditionally had a strong industrial base with commercial/industrial
property currently comprising 20% of market value and 35% of tax capacity. The largest
commercial/industrial taxpayer comprises 1.5% of total tax capacity. Companies in the City
manufacture chemicals, malt, roofing products, glass, cardboard and electronics with electronics
4
being the rapidly growing industry in recent years. Housing had grown rapidly following the
opening of the new Highway 169 bridge over the Minnesota River in 1995. The slowdown in the
housing industry over the past two years has impacted the city. Tax capacity growth for taxes
payable in 2009 appears will be around 3 percent.
Other governmental units with a significant presence in the City include the State of Minnesota
Women's Correctional Facility, Scott County Courthouse, Shakopee School District #720 and
federal wildlife/refuge areas.
Long-term financial planning.
About every year, the City issues bonds to fund infrastructure expansion and additions for the
growing population. Much of this debt is funded by special assessments against benefited
properties. The City has built a new library (2003), police station (2003) and public works building
(2005). A new city hall and three satellite fire stations are anticipated to be built over the next five
to ten years. The Shakopee Public Utilities Commission has constructed a new service center
(2004).
The City of Shakopee annually prepares an updated five-year capital improvement plan and five
year capital equipment list.
Cash management policies and practices. Cash temporarily idle during the year was invested
in commercial paper or securities backed by the U.S. Government such as treasuries and
agencies or pools that invest in such securities. Of the city's total investments, 35% will mature in
less than one year and 30% will mature in one to five years. The majority of the portfolio is
managed by an independent investment manager. The manager is required to follow the City's
Investment Policy.
Risk management. The City has third party insurance coverage for all significant risks. The City
has the exposure for deductibles under the various policies. Deductibles are $5,000 or less.
Pension and other post employment benefits. All full-time and certain part-time employees of
the City of Shakopee are covered by defined benefit plans administered by the Public
Employees Retirement Association of Minnesota (PERA). PERA administers the Public
Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF).
These are cost sharing, multiple-employer retirement plans.. These plans are established and
administered in accordance with Minnesota Statutes, Chapters 353 and 356. The City has no
obligation in connection with employee benefits offered through this plan beyond its annual
required contributions.
PERA issues a publicly available financial report that includes financial statements and required
supplementary information for PERF and PEPFF. That report may be obtained by writing to
PERA, 514 St. Peter Street #200, St. Paul, Minnesota, 55102 or by calling 651-296-7460 or 1-
800-652-9026.
The Shakopee Fire Department Relief Association is the administrator of a single employer
defined benefit pension plan established to provide benefits for paid on call members of the
Shakopee Fire Department. The Relief Association provides retirement benefits to members
and benefits to survivors upon the death of eligible members. Benefit provisions are also
subject to enabling state statutes; therefore, any amendments to benefit provisions are
reviewed by the Office of the State Auditor. Benefits are lump sum payments and the annual
5
City contribution to the Association is determined by State of Minnesota directed calculations.
Deficits are amortized over ten years as part of the city contribution. Annual actuarial studies
are not done because the calculations to determine liability and city contributions are done by
following Minnesota State law.
The Relief Association issues a publicly available financial report that includes financial
statements and required supplementary information for the Relief Association. The
Association's report may be obtained by writing to Shakopee Fire Department Relief
Association, 129 Holmes S1. S., Shakopee, MN 55379.
City employees are eligible to participate in COBRA provisions after severing employment or
MN Chapter 488 after retirement, which allows employees to continue coverage on the City's
health Insurance plan under certain provisions. Currently, the City has 5 former
employees/dependents participating under the MN Chapter 488 provision and 4 disabled at the
end of 2007. The participants pay for the premium under the above provisions.
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 Shako pee for its
Comprehensive Annual Financial Report (CAFR) for the fiscal year ended December 31, 2006.
This was the twenty second 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 and the entire city staff. We would like to express our
appreciation to all staff members who assisted and contributed to the preparation of this report.
Credit also must be given to the Mayor and Councilors for their unfailing support for maintaining
the highest standards of professionalism in the management of the City of Shakopee's finances.
Respectfully submitted,
lIUe1L~~' ~jI
Mark McNeill
City Administrator Finance Dir ctor
6
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, 2006
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Govenunent Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
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Executive Director
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Expert advice. When you need it. SM
INDEPENDENT AUDITORS' REPORT
June 27, 2008
Honorable Mayor and Members
of the City Council
City of Shakopee
Shakopee, Minnesota
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, the aggregate remaining fund information and fiduciary
activities of the City of Shakopee, Minnesota, as of and for the year ended December 31, 2007,
which collectively comprise the City's basic financial statements as listed in the Table of
Contents. These financial statements are the responsibility of the City's management. Our
responsibility is to express opinions on these financial statements based on our audit. We did not
audit the Electric Fund and Water Fund financial statements of the Shakopee Public Utilities
Commission which represent 53% and 91 %, respectively, of the assets and operating revenues of
the Enterprise Funds. Those statements were audited by other auditors whose report thereon has
been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts
included for the Shakopee Public Utilities Commission, is based solely upon the report ofthe
other auditors.
We conducted our audit in accordance with U.S. generally accepted auditing standards and the
standards applicable to financial audits contained in Government Auditing Standards issued by
the Comptroller General ofthe United States. Those Standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe our audit provides a reasonable basis for
our OpInIOns.
In our opinion, based on our audit and the report of other auditors, the financial statements
referred to above present fairly, in all material respects, the respective financial position of the
governmental activities, the business-type activities, each major fund, the aggregate remaining
fund information and fiduciary fund information of the City of Shakopee, Minnesota, as of
December 31, 2007, and the respective changes in financial position and cash flows, where
applicable, thereof and the respective budgetary comparison for the General Fund for the year
then ended in conformity with U.S. generally accepted accounting principles.
9
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In accordance with Government Auditing Standards, we have also issued our report dated
June 27,2008, on our consideration of the City'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 the results of that testing, and not to provide an
opinion on the internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards and
should be considered in assessing the results of our audit.
The Management's Discussion and Analysis, which follows this report letter, is not a required
part ofthe basic financial statements but is supplementary information required by U.S. generally
accepted accounting principles. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation
of the required supplementary information. However, we did not audit the information and
express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The information identified in the
Table of Contents as Combining and Individual Fund Statements and Schedules is presented for
purposes of additional analysis and is not a required part of the basic financial statements. This
information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
The information identified in the Table of Contents as the Introductory and Statistical Sections
are presented for purposes of additional analysis and are not a required part of the basic financial
statements of the City. This information has not been subjected to the audit procedures applied
in the audit of the basic financial statements and, accordingly, we express no opinion on it.
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KERN, DEWENTER, VIERE, LTD.
Minneapolis, Minnesota
10
CITY OF SHAKO PEE
Scott County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2007
As management of the City of Shako pee (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 fiscal
year ended December 31,2007. 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 6 of this report. All amounts, unless otherwise
indicated, are expressed in thousands of dollars.
Financial Highlights
. The assets of the City exceeded its liabilities at the close of the most recent fiscal year by
$ 317 million (net assets). Of this amount, $ 74 million (unrestricted net assets) may be
used to meet the City's ongoing obligations to citizens and creditors.
. The City's total net assets increased by $ 2 million.
. As of the close of the current fiscal year, the City's governmental funds reported
combined ending fund balances of $ 27 million, a decrease of $ 1 million in comparison
with the prior year. Approximately 69% of this total amount, $ 19 million is available for
spending at the City's discretion (unreserved fund balance).
. At the end ofthe current fiscal year, unreserved fund balance for the General Fund was
$ 7.9 million or 49% of total General Fund expenditures.
. The City's total debt decreased by $ .9 million (2%) during the current fiscal year.
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) govemment-
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 Assets presents information on all of the City's assets and liabilities, with
the difference between the two reported as net assets. Over time, increases or decreases in net
assets 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 assets changed
during the most recent fiscal year. All changes in net assets 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 ).
11
CITY OF SHAKO PEE
Scott County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
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, highways and streets, economic development and recreation.
The business-type activities of the City include an electrical distribution operation, water, sewer
and storm drainage utilities.
The government-wide financial statements include not only the City itself (known as the primary
government), but also the Economic Development Authority (EDA) which functions like a
department of the City although it is a legally separate entity. City Council is the EDA Board.
The Shakopee Public Utilities Commission (Electric and Water Funds) is mostly legally separate
but functions as a department of the City. The City Council appoints Commission members and,
therefore, it has been included as an integral part of the primary government.
The government-wide financial statements can be found on pages 24 and 25 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 fiscal year. Such information may be useful in evaluating a
government'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. Both the governmental fund Balance Sheet and the governmental fund
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 38 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 which is considered to be a
major fund. Data from the other governmental funds are combined into a single, aggregated
presentation. Individual fund data for each of these nonmajor governmental funds is provided in
the form of combining statements elsewhere in this report.
12
CITY OF SHAKO PEE
Scott County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
The City adopts an annual appropriated budget for its General Fund and four Special Revenue
Funds. A budgetary comparison statement has been prepared for those funds to demonstrate
compliance with the budget.
The basic governmental fund financial statements can be found on pages 26 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 electric,
water, 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, and its
major buildings, 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
electric, water, sewer and storm 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 32 to 35 of this report.
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 36 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 37 to 67 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 pension benefits to its employees.
The combining statements referred to earlier in connection with nonmajor governmental funds
and internal service funds are presented immediately following the required supplementary
information on pensions. Combining and individual fund statements and schedules can be found
on pages 70 to 90 of this report.
13
CITY OF SHAKOPEE
Scott County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a City's financial
position. For the City, assets exceeded liabilities by $ 317 million at the close of the most recent
fiscal year.
By far the largest portion of the City's net assets (72%) 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 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.
City of Shakopee's Net Assets
Governmental Business-type
Activities Activities Total
2007 2006 2007 2006 2007 2006
Current and Other Assets $ 45,624 $ 46,438 $ 65,631 $ 61,705 $111,255 $ 108,143
Capital Assets 138,259 144,682 135,143 130,377 273,402 275,059
Total Assets $ 183,883 $ 191,120 $ 200,774 $ 192,082 $ 384,657 $ 383,202
Long-Term Liabilities
Outstanding $ 22,005 $ 25,657 $ 32,282 $ 33,515 $ 54,287 $ 59,172
Other Liabilities 6,945 3,538 6,750 5,949 13,695 9,487
Total Liabilities 28,950 29,195 39,032 39,464 67,982 68,659
Net Assets:
Invested in Capital
Assets, Net of Related
Debt 113,534 119,662 114,546 109,337 228,080 228,999
Restricted 13,081 12,998 1,026 880 14,107 13,878
Unrestricted 28,3 1 7 29,265 46,170 42,401 74,487 71,666
Total Net Assets $ 154,932 $ 161,925 $ 161,742 $ 152,618 $ 316,674 $ 314,543
An additional portion of the City's net assets (4%) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net assets
($ 74 million) may be used to meet the City's ongoing obligations to citizens and creditors.
14
CITY OF SHAKOPEE
Scott County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
At the end of the current fiscal year, the City is able to report positive balances in all three
categories of net assets, both for the City as a whole, as well as for its separate governmental and
business-type activities. The same situation held true for the prior fiscal year.
During the current fiscal year, the City's net assets increased by $ 2 million. 100% of this
increase is due to enterprise fund activities reflecting the growth in the city.
City of Shakopee's Changes in Net Assets
Governmental Business-Type
Activities Activities Total
2007 2006 2007 2006 2007 2006
Revenues:
Program Revenues:
Charges for Services $ 5,936 $ 7,440 $ 45,244 $ 40,366 $ 51,180 $ 43,806
Operating Grants and
Contributions 1,944 1,653 - - 1,944 1,653
Capital Grants and
Contributions 2,463 6,116 4,139 6,175 6,602 12,291
General Revenues:
Property Taxes 12,768 10,547 - - 12,768 10,547
Other Taxes 369 337 - - 369 337
Other 2,255 1,664 3,186 1,987 5,441 3,651
Total Revenues 25,735 27,757 52,569 48,528 78,304 76,285
Expenses:
General Government 3,908 3,495 - - 3,908 3,495
Public Safety 8,301 6,856 - - 8,301 6,856
Public Works 15,265 6,799 - - 15,265 8,799
Culture and Recreation 5,323 4,653 - - 5,323 4,653
Interest on Long-Term Debt 1,042 896 - - 1,042 896
Electric - - 34,711 29,169 34,711 29,169
Water - - 3,332 2,950 3,332 2,950
Sewer - - 2,939 2,786 2,939 2,786
Storm - - 1,352 1,524 1,352 1,524
Total Expenses 33,839 22,699 42,334 36,429 76,173 59,128
Increase (Decrease) in Net Assets
before Transfers (1,111) 5,058 10,235 12,099 2,131 17,157
Transfers 1,111 2,146 (1,111) (2,146) - -
Change in Net Assets (6,993) 7,204 9,124 9,953 2,131 17,157
Net Assets, January 1 161,925 154,721 152,618 142,665 314,543 297,386
Net Assets, December 31 $ 154,932 $ 161,925 $ 161,742 $ 152,618 $ 316,674 $ 314,543
15
----------- -- -----"_.----- -------- - ---_.---- ------------- ---
CITY OF SHAKO PEE
Scott County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2007
Governmental activities. Governmental activities decreased the City's net assets by $ 7
million. The major element of this decrease was the transfer of 1 ih A venue to Scott County
I with a net value of $ 4.7 million.
Expenses and Program Revenues - Governmental Activities I
I
!
i 18,000.000 I
16.000.000 I
14.000.000
12.000.000
10.000.000 tJProgram Revenues
8.000.000 .Expenses
6.000.000
4.000.000
2.000,000
-
C :>. (fI C c c E
~ ~ 0
-~ .... o ~ o ....
~ E 0 .- E +:; .....~.....
<G 3: Eo. <G (fit-on
~ c (f) Q) ~ Ol ~
C .... o 0 ....
~ ~ 0 0 c_ o Q:icO
<.9~ on o ~ ~ ..... 0
on ::J o > a::: E.J
<.9 ::J a.. w~
a.. 0
Revenues by Source - Governmental Activities
Operating
Other Revenues Grants and
9% Contributions I
Charges for 7%
Services I
23%
Capital Grants I
and
Contributi ons
10% I
OtherTaxes
1% I
Property Tax es I
50%
I
I
I I
16 i
I
!
1
I
i
CITY OF SHAKO PEE I
Scott County, Minnesota I
MANAGEMENT'S DISCUSSION AND ANALYSIS I
December 31,2007
I
I For the most part, increases in expenses closely paralleled inflation and growth in the demand for i
serVIces.
Business-type activities. Business-type activities increased the City's net assets by $ 9 million,
accounting for 100% of the total growth in the City's net assets. Key elements of this increase
are as follows.
. Capital grants and contribution by developers - $ 4,139.
. Charges for utility service - $ 45,244.
Expenses and Program Revenues - Business-Type Activities
$40.000.000
$35.000.000
$30.000.000
$25.000.000
$20.000.000
$15.000.000
$10.000.000
$5.000.000
$-
Electric Water Sewer Storm
I
I
I
I
I
I
I
17 !
I
I
CITY OF SHAKO PEE
Scott County, Minnesota
I
MANAGEMENT'S DISCUSSION AND ANALYSIS
I December 31,2007
I
Revenues by Source - Business-Type Activities
Capital Grants and
Contributions
8% Charges for
Services
86%
Investment
Earnings
6%
Financial Analysis of the Government'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, unreserved fund balance may serve as
a useful measure of a City's net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City's governmental funds reported combined ending
fund balances of $ 26,656, a decrease of $ 1,383 in comparison with the prior year.
Approximately 69% ($ 18,506) of the total amount of $ 26,656 constitutes unreserved fund
balance, which is available for spending at the City's discretion. The remainder of fund balance
($ 8,150) is reserved to indicate that it is not available for new spending because it has already
been committed to restricted purposes. The Park Reserve Fund showed a decrease of $ 2,202
due to large construction projects.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year,
fund balance of the General Fund was $ 9,708. As a measure of the General Fund's liquidity, it
may be useful to compare fund balance (unreserved) to total fund expenditures. Fund balance
represents 60% of total General Fund expenditures.
18
CITY OF SHAKO PEE
Scott County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
Fund balance of the City's General Fund decreased by $ 137 during the current fiscal year. This
was in part due to the continued decline in building and development related revenues due to the
downturn in the housing market and certain fee reductions. Key factors in this change are as
follows:
. Under-spending the budget by $ 693 or 4%.
. Revenues fell short of the budget by $ 326.
. The final adopted budget had a deficit of $ 776.
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 assets of the enterprise funds:
Electric Water Sewer Storm
Beginning of Year $ 13,306 $ 1,336 $ 15,036 $ 12,724
Change During Year 2,311 50 (110) 1,516
End of Year $ 15,617 $ 1,386 $ 14,926 $ 14,240
General Fund Budgetary Highlights
The difference between the original General Fund budget and the final amended budget for
expenditures was not significant for the current year. The original legally adopted budget for
expenditures was $ 16,545 and transfers out were $ 1,179. Final budget was $ 16,823 and
transfers out were $ 1,185. The original adopted budget for revenues was $ 15,451 and the final
amended was $ 15,592.
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, 2007, amounts to $ 228,080 (net of accumulated depreciation and
related debt). This investment in capital assets includes land, buildings and systems,
improvement, machinery and equipment, park facilities, roads, highways and bridges. The
City's capital assets for the current fiscal year was virtually unchanged (a 4.4% decrease for
governmental activities and a 3.7% increase for business-type activities).
Major capital assets events during the current fiscal year included the following:
. A variety of street construction projects were completed with a value of $ 1,924.
. Buildings added $ 1,690.
. Additions to the utility assets for electric $ 1,553, water $ 2,018, sewer $ 5,951 and storm
$ 794.
19
CITY OF SHAKOPEE
Scott County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
City of Shakopee's Capital Assets
(Net of depreciation)
Governmental Activities Business-Type Activities Total
2007 2006 2007 2006 2007 2006
Land $ 19,272 $ 19,832 $ 6,088 $ 6,082 $ 25,360 $ 25,914
Construction in Progress 188 1,859 1,207 1,370 1,395 3,229
Buildings and System:
Improvements Other than Buildings 26,674 25,793 126,885 122,503 153,559 148,296
Infrastructure 84,683 90,011 - - 84,683 90,011
Machinery and Equipment 7,443 7,186 963 422 8,406 7,608
Total $ 138,260 $ 144,681 $ 135,143 $ 130,377 $ 273,403 $ 275,058
Additional information on the city's capital assets can be found in note 5 on pages 54 to 56 of
this report.
Long-term debt. At the end of the current fiscal year, the City had total bonded debt
outstanding of$ 58,620. Of this amount, $ 7,560 comprises debt backed by the full faith and
credit of the City and $ 17,165 is special assessment debt for which the City is liable in the event
of default by the property owners subject to the assessment. The remainder ofthe City's debt
represented bonds secured solely of specified revenue sources (i.e., revenue bonds).
City of Shakopee's Outstanding Debt
General Obligation and Revenue Bonds
Governmental Activities Business-Type Activities Total
2007 2006 2007 2006 2007 2006
General Obligation Bonds $ 7,560 $ 7,950 $ - $ - $ 7,560 $ 7,950
Special Assessment Debt
with Governmental Commitment 17,165 17,070 - - 17,165 17,070
Revenue Bonds - - 33,895 34,535 33,895 34,535
Total $ 24,725 $ 25,020 $ 33,895 $ 34,535 $ 58,620 $ 59,555
The City's total debt decreased by $ 935 during the current fiscal year.
Minnesota Statutes limit the amount of general obligation debt a government entity may issue to
a net figure of2% of the taxable market value. The current debt limitation for the City is $ 62
million, which is significantly in excess of the City's outstanding general obligation debt.
20
CITY OF SHAKOPEE
Scott County, Minnesota
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2007
Additional information on the City's long-term debt can be found in note 6 on pages 56 to 60 of
this report.
Economic Factors and Next Year's Budgets and Rates
The unemployment rate for the City was 4.6% at years end. This is an increase from a rate of
3.7% a year ago. The state's average unemployment rate was 4.9% and the national average rate
was 4.8%.
Inflationary trends in the region compare favorably to national indices.
During the current fiscal year, unreserved fund balance in the General Fund decreased from
$ 8,354 to $ 7,897. The City has appropriated $ 892 of this amount for spending in the 2008
fiscal year. General Fund revenues from development activities such as permits, engineering
fees and platting were $ 1,449, which is 9% of total revenues. For 2006, the amounts were
$ 2,292 and 17%.
Building permits have been a significant source of revenue in recent years. The downturn in that
sector of the economy and a reduction in the fees charged for permits had a significant impact on
the General Fund for 2006 and 2007. The City has reserved part of the fund balance for building
inspection related activities. The slower housing market is expected to continue through 2008
and into 2010.
The tax levy for 2007/08 increased from $ 12,725 to $ 14,202, an increase of 11.6%. The tax
rate decreased from 31.939 to 31.925 (.04% decrease) due to an increase in the tax levy
moderated by the growth in the tax base. The General Fund budget for 2008 expenditures as
originally adopted was $ 17,031 compared to $ 16,545 for 2007 and $ 14,784 for 2006. This is
reflective of the rapid population, commercial/industrial activity and infrastructure growth in the
City.
In 2007, there were 1610ts/units in 3 plats made available for building. The respective numbers
for the prior year were 214 and 10.
Utility rates for the enterprise funds were slightly increased from 2006.
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 Street South, Shakopee, Minnesota 55379.
21
CITY OF SHAKO PEE
Scott County, Minnesota
STATEMENT OF NET ASSETS
December 31, 2007
Governmental Business-Type
Activities Activities Total
ASSETS:
Cash and Investments ~ 36,943,773 $ 43,012,442 $ 79,956,215
Restricted Accounts - 12,900,206 12,900,206
Receivables:
Property Tax Receivable 331,315 - 331,315
Accounts Receivable (Net of Allowance for
Uncollectible Accounts) 695,814 4,126,289 4,822,103
Interest Receivable 253,902 367,26 I 621,163
Notes Receivable 831,436 - 831,436
Special Assessments Receivable 8,345,861 275,337 8,621,198
Due from Other Funds (Internal Balances) 109,964 (109,964)
Advances to Other Funds (Internal Balances) (2,000,000) 2,000,000 -
Inventories - 924,663 924,663
Prepaid Expenses 111,258 88,784 200,042
Unamortized Debt Issue Costs - 984,401 984,401
Electric Plant Acquisition (Net of Accumulated Amortization) - 1,061,076 1,061,076
Capital Assets not being Depreciated:
Land 19,271,560 6,088,241 25,359,801
Construction in Progress 187,868 1,206,959 1,394,827
Capital Assets being Depreciated:
Infrastructure 124,544,337 124,544,337
Plant in Service - 158,339,152 158,339, I 52
Buildings 32,812,022 - 32,812,022
Machinery and Equipment 12,012,076 1,682,349 13,694,425
Less Accumulated Depreciation (50,568,447) (32,173,33 I) (82,741,778)
Total Assets $ 183,882,739 $ 200,773,865 $ 384,656,604
LIABILITIES AND NET ASSETS:
Liabilities:
Accounts Payable $ 1,599,893 $ 4,379,768 $ 5,979,661
Contracts Payable 400,668 47,877 448,545
Due to Other Governments 213,264 - 213,264
Salaries and Benefits Payable 302,367 - 302,367
Deposits Payable - 875,033 875,033
Interest Payable 418,825 631,278 1,050,103
Unearned Revenue - 100,778 100,778
Customer Advances - 23,295 23,295
Bond Principal Payable:
Payable Within One Year 3,280,000 670,000 3,950,000
Payable After One Year 21,445,000 32,254,440 53,699,440
Compensated Absences Payable:
Payable Within One Year 730,000 22,088 752,088
Payable After One Year 560,398 27,450 587,848
Total Liabilities 28,950,415 39,032,007 67,982,422
Net Assets:
Invested in Capital Assets, Net of Related Debt 113,534,4 I 6 I 14,546,2 I 8 228,080,634
Restricted for:
Special Revenue 2,489,775 2,489,775
Debt Service 7,522,614 1,026,351 8,548,965
Capital Projects 3,068,948 3,068.948
Unrestricted 28,316,571 46,169,289 74,485,860
Total Net Assets 154,932,324 161,741,858 316,674,182
Total Liabilities and Net Assets $ 183,882,739 $ 200,773,865 $ 384,656,604
The Notes to the Financial Statements are an integral part of this statement. 24
CITY OF SHAKO PEE
Scott County, Minnesota
STATEMENT OF ACTIVITIES
For the Year Ended December 31,2007
Net (Expense) Revenues
Program Revenues and Changes in Net Assets
Operating Capital Grants
Charges for Grants and and Governrnental Business-Type
FunctionslPrograrns Expenses Services Contributions Contributions Activities Activities Total
Governrnental Activities:
General Governrnent $ 3,543,980 $ 583,247 $ 60,877 $ - $ (2,899,856) $ - $ (2,899,856)
Public Safety 8,301,075 1,650,235 524,083 - (6,126,757) - (6,126,757)
Public Works 15,264,606 2,615,402 1,256,489 2,012,229 (9,380,486) - (9,380,486)
Economic Development 363,805 - - - (363,805) - (363,805)
Culture and Recreation 5,323,087 1,086,750 102,356 450,900 (3,683,081) - (3,683,081 )
Interest on Long-Term Debt 1,042,133 - - - (1,042,133) - (1,042,133)
Total Governmental Activities 33,838,686 5,935,634 1,943,805 2,463,129 (23,496,118) (23,496,118)
Business-Type Activities:
Electric 34,710,974 37,407,565 - 312,813 - 3,009,404 3,009,404
Water 3,332,132 3,525,140 - 934,115 - 1,127,123 1,127,123
Sewer 2,938,955 2,806,371 - 2,892,049 - 2,759,465 2,759,465
Storm Drainage 1,352,078 1,505,247 - - - 153,169 153,169
Total Business-Type Activities 42,334,139 45,244,323 - 4,138,977 - 7,049,161 7,049,161
Total Governmental and
Business-Type Activities $ 76,172,825 $ 51,179,957 $ 1,943,805 $ 6,602,106 (23,496,118) 7,049,161 (16,446,957)
General Revenues:
Property Taxes 12,767,354 - 12,767,354
Tax Increments 399,240 - 369,240
Unrestricted Investment Earnings 2,232,717 3,185,863 5,418,580
Gain on Sale of Asset 22,628 - 22,628
Transfers 1,111,046 (1,111,046) -
Total General Revenues and Transfers 16,502,985 2,074,817 18,577 ,802
Change in Net Assets (6,993,133) 9,123,978 2,130,845
Net Assets - Beginning 161,925,457 152,617,880 314,543,337
Net Assets - Ending $ 154,932,324 $161,741,858 $316,674,182
~ The Notes to the Financial Statements are an integral part of this staternent.
CITY OF SHAKO PEE
Scott County, Minnesota
BALANCESHEET-GOVERNMENTALFUNDS
December 31, 2007
Other Total
Governmental Governmental
General Fund Funds Funds
ASSETS:
Cash and Investments
(Including Cash Equivalents) $ 10,116,870 $ 19,605,842 . $ 29,722,712
Taxes Receivable - Delinquent , 322,173 9,142 331,315
Special Assessments Receivable:
Delinquent 7,861 15,715 23,576
Deferred 34,916 8,287,369 8,322,285
Accounts Receivable 469,900 225,914 695,814
Interest Receivable 51,896 149,075 200,971
Due from Other Funds 166,131 310,246 476,377
Notes Receivable - 271,436 271,436
Prepaid Items 111,258 - 111,258
Total Assets $11,281,005 $ 28,874,739 $40,155,744
LIABILITIES AND FUND BALANCES:
Liabilities:
Accounts Payable $ 906,154 $ 686,373 $ 1,592,527
Contracts Payable - 397,768 397,768
Due to Other Funds - 316,875 316,875
Due to Other Governments - 213 ,264 213,264
Advances from Other Funds - 2,000,000 2,000,000
Salaries and Benefits Payable 302,367 - 302,367
Deferred Revenue 364,951 8,312,225 8,677,176
Total Liabilities 1,573,472 11,926,505 13,499,977
Fund Balances:
Reserved for:
Special Revenue - 2,489,775 2,489,775
Capital Projects - 3,849,703 3,849,703
Prepaid Items 111,258 - 111,258
Building Permits and Activities 1,699,392 - 1,699,392
Unreserved, Reported in:
General Fund - Undesignated 7,896,883 - 7,896,883
Special Revenue - Undesignated - 993,555 993,555
Debt Service - Undesignated - 7,941,439 7,941,439
Capital Projects - Undesignated - 1,673,762 1,673,762
Total Fund Balances 9,707,533 16,948,234 26,655,767
Total Liabilities and
Fund Balances $ 11,281,005 $ 28,874,739 $40,155,744
The Notes to the Financial Statements are an integral part of this statement. 26
CITY OF SHAKOPEE
Scott County, Minnesota
RECONCILIATION OF THE BALANCE SHEET TO
THE STATEMENT OF NET ASSETS - GOVERNMENTAL FUNDS
December 31, 2007
Total Fund Balances - Governmental Funds $ 26,655,767
Amounts reported for governmental activities in the Statement of Net Assets
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 151,265,745
Less Accumulated Depreciation (41,655,955)
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 (24,725,000)
Delinquent property taxes receivable will be collected this year, but are not
available soon enough to pay for the current period's expenditures and,
therefore, are deferred in the funds.
Property Taxes 331,315
Special Assessments 23,576
Deferred special assessments receivable are not available to pay for current
expenditures and, therefore, are deferred in the funds.
Deferred Special Assessments 8,322,285
Governmental funds do not report a liability for accrued interest
due and payable. (418,825)
Internal service funds are used by management to charge the costs of
equipment buildings to individual funds. A portion of the assets and liabilities
of those funds are included in governmental activities in the Statement of
Net Assets. 35,133,416
Total Net Assets - Governmental Activities $ 154,932,324
The Notes to the Financial Statements are an integral part of this statement. 27
CITY OF SHAKOPEE
Scott County, Minnesota
ST A TEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the Year Ended December 31,2007
Other Total
Governmental Governmental
General Fund Funds Funds
REVENUES:
Property Taxes $ 11,569,002 $ 1,146,353 $ 12,715,355
Tax Increments - 369,240 369,240
Special Assessments 5,405 2,296,155 2,301,560
Licenses and Permits 973,658 404,912 1,378,570
Intergovernmental 590,438 1,950,146 2,540,584
Charges for Services 1,090,018 999,357 2,089,375
Fines and Forfeitures 451,418 49,810 501,228
Miscellaneous 586,137 1,736,618 2,322,755
Total Revenues 15,266,076 8,952,591 24,218,667
EXPENDITURES:
Current:
General Government 3,1.21,509 358,416 3,479,925
Public Safety 8,283,702 58,315 8,342,017
Public Works 2,609,674 1,159,817 3,769,491
Culture and Recreation 1,496,678 2,154,861 3,651,539
Debt Service:
Principal - 3,110,000 3,110,000
Interest and Other Charges - 1,025,868 1,025,868
Capital Outlay 618,244 6,669,789 7,288,033
Total Expenditures 16,129,807 14,537,066 30,666,873
Excess of Revenues
Under Expenditures (863,731) (5,584,475) (6,448,206)
OTHER FINANCING SOURCES (USES):
Proceeds from Sale of Capital Asset 17,700 - 17,700
Bonds Issued - 2,815,000 2,815,000
Premium on Bonds Issued - 9,956 9,956
Transfers In 1,889,111 2,522,170 4,411,281
Transfers Out (1,180,181) (1,008,152) (2,188,333)
Total Other Financing Sources (Uses) 726,630 4,338,974 5,065,604
Net Change in Fund Balances (137,101) (1,245,501) (1,382,602)
FUND BALANCES:
Beginning of Year 9,844,634 18,193,735 28,038,369
End of Year $ 9,707,533 $ 16,948,234 $ 26,655,767
The Notes to the Financial Statements are an integral part of this statement. 28
CITY OF SHAKOPEE
Scott County, Minnesota
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES TO
THE STATEMENT OF ACTIVITIES - GOVERNMENTAL FUNDS
For the Year Ended December 31,2007
Total Net Change in Fund Balances - Governmental Funds $( 1,382,602)
Amounts reported for governmental activities in the Statement of Activities are
different because:
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 5,525,213
Depreciation Expense (5,045,943)
Loss on Disposal of Fixed Assets (7,149,931)
Principal payments on long-term debt are recognized as expenditures in the
governmental funds but as an increase in the net assets in the Statement of Activities. 3,110,000
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. (16,265)
Proceeds from long-term debt are recognized as an other financing source in the
governmental funds but as a decrease in net assets in the Statement of Activities.
Bonds Payable (2,815,000)
Certain revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds.
Special Assessments (425,781)
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. 51,999
Internal service funds are used by management to charge the costs of certain
activities such as buildings and equipment, to individual funds. This amount
represents the change in net assets of the Internal Service Funds, which all is
reported with governmental activities. 1,155,177
Change in Net Assets - Governmental Activities $(6,993,133)
The Notes to the Financial Statements are an integral part of this statement. 29
CITY OF SHAKO PEE
Scott County, Minnesota
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2007
Variance with
Budgeted Amounts Actual Final Budget -
Original Final Amounts Over (Under)
REVENUES:
Property Taxes:
General Property Taxes $ 10,386,700 $ 10,386,700 $ 10,456,643 $ 69,943
Fiscal Disparities 955,800 955,800 906,165 (49,635)
Lodging Tax 210,000 210,000 200,682 (9,318)
Tax Increments - - (1,571 ) (1,571)
AggregateTax 8,000 8,000 7,083 (917)
Total Property Taxes 11,560,500 11,560,500 11,569,002 8,502
Special Assessments 2,000 2,000 5,405 3,405
Licenses and Permits 1,504,700 1,504,700 973,658 (531,042)
Intergovernmental Revenues:
Federal Grants 13,000 153,860 228,340 74,480
PERA Aid - 5,960 18,170 12,210
Police Aid 240,960 225,000 295,743 70,743
Other Grants and Aids 8,000 18,000 48,185 30,185
Total Intergovernmental Revenues 261,960 402,820 590,438 187,618
Charges for Services:
General Government 372,800 372,800 126,788 (246,012)
Public Safety 356,000 356,000 326,001 (29,999)
Public Works 830,000 830,000 637,229 (192,771)
Total Charges for Services 1,558,800 1,558,800 1,090,018 (468,782)
Fines and Forfeitures 280,000 280,000 451,418 171,418
Miscellaneous Revenues:
Investment Income 220,000 220,000 523,673 303,673
Rents 2,000 2,000 142 (1,858)
Other 61,500 61,500 62,322 822
Total Miscellaneous Revenues 283,500 283,500 586,137 302,637
Total Revenues 15,451,460 15,592,320 15,266,076 (326,244)
EXPENDITURES:
General Government:
Mayor and Council 198,090 215,260 161,415 (53,845)
Adrninistration 487,750 577,800 466,898 (110,902)
City Clerk 314,790 323,270 300,736 (22,534)
Finance 748,780 760,360 710,906 (49,454)
Legal 486,300 486,300 520,091 33,791
Planning 511,350 503,850 459,383 (44,467)
Government Buildings 351,190 258,960 265,018 6,058
Information Technology 282,090 273,170 277,247 4,077
Total General Government 3,380,340 3,398,970 3,161,694 (237,276)
The Notes to the Financial Statements are an integral part of this statement. 30
CITY OF SHAKO PEE
Scott County, Minnesota
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL FUND
For the Year Ended December 31, 2007
Variance with
Budgeted Amounts Actual Final Budget -
Original Final Amounts Over (Under)
EXPENDITURES:
Public Safety:
Police $ 5,719,500 $ 5,726,700 $ 5,708,373 $ (18,327)
Fire 1,954,050 2,101,230 2,062,925 (38,305)
Building Inspection 857,930 949,870 945,197 (4,673)
Total Public Safety 8,531,480 8,777,800 8,716,495 (61,305)
Public Works:
Streets and Highways:
Engineering 968,340 976,840 817,438 (159,402)
Streets 1,705,860 1,743,170 1,607,730 (135,440)
Shop 65,250 57,630 207,179 149,549
Total Public Works 2,739,450 2,777,640 2,632,347 (145,293)
Park and Recreation:
Park Maintenance 1,315,260 1,346,180 1,217,790 (128,390)
Natural Resources 118,830 122,820 122,593 (227)
Library/Congregate Dining 309,460 309,460 278,888 (30,572)
Total Park and Recreation 1,743,550 1,778,460 1,619,271 (159,189)
Miscellaneous 150,000 89,810 - (89,810)
Total Expenditures 16,544,820 16,822,680 16,129,807 (692,873)
Excess of Revenues Over
(Under) Expenditures (1,093,360) (1,230,360) (863,731 ) 366,629
OTHER FINANCING SOURCES (USES):
Proceeds from Sale of Capital Asset - - 17,700 17,700
Transfers In 1,609,730 1,639,730 1,889,111 249,381
Transfers Out (1,178,770) (1,185,160) (1,180,181) 4,979
Total Other Financing Sources (Uses) 430,960 454,570 726,630 272,060
Net Change in Fund Balances $ (662,400) $ (775,790) (137,101) $ 638,689
FUND BALANCE:
Beginning of Year 9,844,634
End of Year $ 9,707,533
The Notes to the Financial Statements are an integral part of this statement. 31
CITY OF SHAKOPEE
Scott County, Minnesota
STATEMENT OF NET ASSETS - PROPRIETARY FUNDS
December 31, 2007
Business-Type Activities - Enterprise Funds
Governmental
Activities -
Internal Service
Electric Water Sewer Stonn Drainage Total Funds
ASSETS:
Current Assets:
Cash and Cash Equivalents $ 6,091,173 $ 843,246 $ 2,551,906 $ 2,943,094 $ 12,429,4 I 9 $ 1,500,487
Investments 6,787,66 I 3,034,800 9,641,312 11,119,250 30,583,023 5,720,574
Restricted Accounts 789,945 45,937 835,882
Accounts Receivable 3,222,673 228,20 I 490,7 I I 234,331 4,175,916
Allowance for Uncollectible Accounts (34,903 ) (14,724) (49,627)
Interest Receivable 104,423 32,648 101,691 108,232 352,994 52,931
Special Assessment Receivable, Current 30,593 30,593
Notes Receivable, Current 55,000
Due from Other Funds 1,779,610 10,886 42,450 7,088 1,840,034
Advances to Other Funds, Current 350,000 350,000
Inventories 891,845 32,818 924,663
Prepaid Expenses 66,588 22,196 88,784
Total Current Assets 19,699,015 4,236,008 13,214,663 14,411,995 51,561,681 7,328,992
Noncurrent Assets:
Restricted Accounts ] 1.155,646 808,678 I 1,964,324
Other Accounts 100,000 100,000
Interest Receivable 14,267 14,267
Special Assessment Receivable, Noncurrent 244,744 244,744
Notes Receivable, Noncurrent 505,000
Advances to Other Funds, Noncurrent 1,650,000 1,650,000
Unamortized Debt Issue Costs 924,175 60,226 984,401
Electric Plant Acquisition (Net of Amortization) 1,061,076 1,06 I ,076
Capital Assets:
Land 4,811,952 892,333 4,500 379,456 6,088,241
Plant in Service 37,176,485 43,519,426 37,630,229 40,013,0 I 2 158,339,152 29,725,095
Machinery and Equipment 1,232,949 449,400 1,682,349 7,832,223
Construction in Progress 820,030 386,929 1,206,959 4,800
Total Cost 42,808,467 44,798,688 38,867,678 40,841,868 167,316,701 37,562,118
Less Accumulated Depreciation (8,912,892) (8,609,560) (7.123,744) (7,527,135) (32,173,331 ) (8,912,492)
Net Capital Assets 33,895,575 36,189.128 31,743,934 33,314,733 135,143,370 28,649,626
Total Noncurrent Assets 47,136,472 37,072,299 33,638,678 33,314,733 ]51,162,182 29,154,626
Total Assets $66,835,487 $41,308,307 $46,853,341 $ 47,726,728 $202,723,863 $ 36,483,6 I 8
LlABfLlTIES AND NET ASSETS:
Current Liabilities:
Accounts Payable $ 3,239,824 $ 915,848 $ 70,787 $ ] 53,309 $ 4,379,768 $ 7,366
Contracts Payable 47,030 847 47,877 2,900
Due to Other Funds 111,031 1.804,996 23,085 10,886 1,949,998 49,538
Current Compensated Absences 15,000 7,088 22,088 730,000
Liabilities Payable from Restricted Accounts:
Current Portion of Revenue Bonds 573,600 96,400 670,000
Accrued Interest Payable 599,008 32,270 631,278
Customer Deposits 875,033 875,033
Total Current Liabilities 5,398,496 2,849,514 155,902 172,130 8,576,042 789,804
Noncurrent Liabilities:
Deferred Revenue 17,657 83,121 100,778
Customer Advances 23,295 23,295
Compensated Absences 27,450 27,450 560,398
Revenue Bonds (Net of Unamortized Bond Premium and
Unamortized Loss on Advance Refunding) 30,594,173 1,660,267 32,254,440
Total Noncurrent Liabilities 30,635, I 25 1,743,388 27,450 32,405,963 560,398
Total Liabilities 36,033,621 4,592,902 183,352 172,130 40,982,005 1,350,202
,
Net Assets:
Invested in Capital Assets, Net of Related Debt 14,994,864 34,492,687 3 I ,743,934 33,3 14,733 114,546,218 28,649,626
Restricted 189,739 836,612 1,026,351
Unrestricted 15,617,263 1,386,106 14,926,055 14,239,865 46,169,289 6,483,790
Total Net Assets 30,80 I ,866 36,715,405 46,669,989 47,554,598 161,741,858 35,133,416
Total Liabilities and Net Assets $66,835,487 $41,308,307 $46,853,341 $ 47,726,728 $202,723,863 $ 36,483,618
The Notes to the Financial Statements are an integral part of this statement. 32
CITY OF SHAKOPEE
Scott County, Minnesota
STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN FUND NET ASSETS - PROPRIETARY FUNDS
For the Year Ended December 31,2007
Business-Type Activities - Enterprise Funds
Governmental
Activities -
Internal Service
Electric Water Sewer Storm Drainage Total Funds
OPERATING REVENUES:
Charges for Services $37,178,581 $ 3,474,059 $ 2,773,051 $ 1,250,779 $ 44,676,470 $
Rental and Other Charges 2,519,81 I
Other Revenues 15,579 15,579
Total Operating Revenues 37,178,581 3,474,059 2,773,051 1,266,358 44,692,049 2,5 I 9,811
OPERATING EXPENSES:
Operations and Maintenance 31,729,774 2,048,235 2,273,410 592,995 36,644,414
Depreciation 1,323,061 1,194,185 665,545 759,083 3,941,874 1,230,807
Amortization 63,003 63,003
Employee Benefits 642,483
Total Operating Expenses 33,115,838 3,242,420 2,938,955 1,352,078 40,649,291 1,873,290
Operating Income (Loss) 4,062,743 231,639 (165,904) (85,720) 4,042,758 646,521
NONOPERATING REVENUES (EXPENSES):
Investment Income 1,017,132 343,469 952,391 872,871 3,185,863 466,994
Special Assessments 29,764 29,764
Interest Expense (1,495,726) (79,199) (1,574,925)
Gain on Disposal of Assets 4,928
Amortization of Debt Issue Costs and
Loss on Refunding (~9,410) (10,513) (109,923)
Other Income 228,984 51,081 33,320 238,889 552,274
Total Nonoperating Revenues (Expenses) (349,020) 304,838 1,015,475 1,1 I 1,760 2,083,053 471,922
Income before Capital
Contributions and Transfers 3,713,723 536,477 849,571 1,026,040 6,125,811 1,118,443
Capital Contributions 312,813 934,115 3,280,993 693,194 5,221,115 36,734
Transfers Out (1,080,962) (704,809) (245,892) (191,285) (2,222,948)
Change in Net Assets 2,945,574 765,783 3,884,672 1,527,949 9,123,978 1,155,177
NET ASSETS:
Beginning of Year 27,856,292 35,949,622 42,785,317 46,026,649 152,617,880 33,978,239
End of Year $30,801,866 $36,715,405 $46,669,989 $ 47,554,598 $161,741,858 $ 35,133,416
The Notes to the Financial Statements are an integral part of this statement. 33
CITY OF SHAKOPEE
Scott County, Minnesota
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
For the Year Ended December 31, 2007
Business-Type Activities - Enterprise Funds
Governmental
Activities -
Storm Internal
Electric Water Sewer Drainage Total Service Funds
CASH FLOWS - OPERATING ACTIVITIES:
Receipts from Customers and Users $37,043,261 $3,382,217 $2,662,986 $ 1,241,780 $44,330,244 $ 2,519,811
Payments to Suppliers (29,921,990) (1,391,085) (2,085,129) (222,687) (33,620,891) (383,265)
Payments to Employees (1,707,843) (772,877) (117,953) (210,191) (2,808,864) (608,645)
Payments for Interfund Services (47,411 ) (8,900) (56,311) 49,538
Net Cash Flows - Operating Activities 5,413,428 1,218,255 412,493 800,002 7,844,178 1,577,439
CASH FLOWS - NONCAPITAL
FINANCING ACTIVITIES:
Cash Implicitly Financed to (from) Other Funds (483,661) 483,661
Advances to Other Funds (42,450) (7,088) (49,538)
Transfer to Other Funds (1,080,962) (704,809) (245,892) (191,285) (2,222,948)
Net Cash Flows - Noncapital
Financing Activities (1,564,623) (221,148) (288,342) (198,373) (2,272,486)
CASH FLOWS - CAPITAL AND RELATED
FINANCING ACTIVITIES:
Principal Paid on Debt (546,800) (93,200) (640,000)
Interest Paid on Debt (1,301,803) (80,453) (1,382,256)
Capital Contributions 278,528 3,324 281,852
Installation Fees 58;375 58,375
Connection Charges 793,342 793,342
Trunk Charges 39,383 33,320 238,889 3 II ,592
Capital Related Special Assessments - 60,357 60,357
Interfund Loan for Capital Acquisition (2,000,000) (2,000,000)
Proceeds from Disposal of Capital Assets 191,524
Acquisition of Capital Assets (1,392,492) (1,894,242) (1,378,709) (77,669) (4,743,112) (1,628,985)
Net Cash Flows - Capital and Related
Financing Activities (2,962,567) (1,173,471) (3,285,032) 161,220 (7,259,850) (1,437,461)
CASH FLOWS - INVESTING ACTIVITIES:
Proceeds (Purchases) of Investments (524,752) 35,628 2,860,409 (288,219) 2,083,066 (488,050)
Payment Received for Notes Receivable 55,000
Interest and Dividends Received 982,222 335,467 971,053 865,855 3,154,597 464,026
Net Cash Flows - Investing Activities 457,470 371,095 3,831,462 577,636 5,237,663 30,976
Net Change in Cash and Cash Equivalents 1,343,708 194,731 670,581 1,340,485 3,549,505 170,954
CASH AND CASH EQUIVALENTS:
January I 4,747,465 648,515 1,881,325 1,602,609 8,879,914 1,329,533
December 31 $ 6,091,173 $ 843,246 $2,551,906 $ 2,943,094 $12,429,419 $ 1,500,487
RECONCILIATION OF CASH AND CASH
EQUIV ALENTS TO THE STATEMENT OF
NET ASSETS:
Restricted Accounts $11,945,591 $ 854,615 $ $ $12,800,206 $
Other Accounts 100,000 100,000
Cash and Investments 12,878,834 3,878,046 12,193,218 14,062,344 43,012,442 7,221,061
Subtotal 24,924,425 4,732,661 12,193,218 14,062,344 55,912,648 7,221,061
Less Long-Term Investments 18,833,252 3,889,415 9,641,312 11,119,250 43,483,229 5,720,574
Cash and Cash Equivalents $ 6,091,173 $ 843,246 $2,551,906 $ 2,943,094 $12,429,419 $ 1 ,500,487
The Notes to the Financial Statements are an integral part of this statement. 34
CITY OF SHAKO PEE
Scott County, Minnesota
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
For the Year Ended December 31,2007
Business-Type Activities - Enterprise Funds
Governmental
Activities -
Storm Internal
Electric Water Sewer Drainage Total Service Funds
RECONCILIATION OF OPERATING
(INCOME) LOSS TO NET CASH FLOWS -
OPERATING ACTIVITIES:
Operating Income (Loss) $ 4,062,743 $ 231,639 $ (165,904) $ (85,720) $ 4,042,758 $ 646,521
Adjustments to Reconcile Operating Income
(Loss) to Net Cash Flows - Operating Activities:
Miscellaneous Revenue 228,984 51,081 280,065
Depreciation and Amortization Expense 1,386,064 1,194,185 665,545 759,083 4,004,877 1,230,807
Change in Assets and Liabilities:
Accounts Receivable (369,381) 39,215 (110,065) (24,578) (464,809)
Due from Other Funds (2,856) 25,196 22,340
Prepaid Items (20,341 ) (4,211) (24,552)
Inventory (88,052) (2,178) (90,230)
Accounts Payable 233,106 (30,652) (14,647) 143,987 331,794 (367,217)
Contracts Payable 19,440 (1,844) 17,596 (16,048)
Customer Deposits 12,924 12,924
Deferred Revenue (4,991) (207,334) (212,325)
Due to Other Funds (18,867) (86,999) (24,326) 1,986 (128,206) 49,538
Compensated Absences Payable 42,450 7,088 49,538
Other Liabilities (5,905) 8,313 2,408 33,838
Total Adjustments 1,350,685 986,616 578,397 885,722 3,801,420 930,918
Net Cash Flows-
Operating Activities $ 5,413,428 $1,218,255 $ 412,493 $ 800,002 $ 7,844,178 $ 1,577,439
NONCASH INVESTING, CAPITAL AND
FINANCING ACTIVITIES:
Contributions of Capital Assets from the
Municipality and Developers $ 10,233 $ 39,691 $3,280,993 $ 693,194 $ 4,024,111 $ 36,734
Purchases of Capital Assets on Account (29,214)
Other Disposals and Transfers of Capital Assets (26,219) (26,219) (422,390)
Other Disposals and Transfers of Accumulated
Depreciation 2,619 2,619 235,794
Capital Asset Trade-Ins 23,600 23,600
The Notes to the Financial Statements are an integral part of this statement. 35
CITY OF SHAKO PEE
Scott County, Minnesota
STATEMENT OF FIDUCIARY NET ASSETS
December 31, 2007
Escrow
Agency Fund
ASSETS:
Cash and Investments
(Including Cash Equivalents) $ 1,333,877
LIABILITIES:
Deposits Payable $ 1,333,877
The Notes to the Financial Statements are an integral part of this statement. 36
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
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 City 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 ifthey were part of the City
Joint Ventures and Jointly Governed Organizations - The relationship of the City with the
entity is disclosed
For each ofthe 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 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 Shako pee at 129 Holmes Street South, Shakopee, Minnesota
55379-1351.
37
CITY OF SHAKO PEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity (Continued)
2. Joint Ventures and Jointly Governed Organizations
Local Government Information Systems
Local Government Information Systems (LOGIS) is a joint venture of approximately 28
governmental entities that provides computerized data processing and support services to its
members. Legally separate, the City does not appoint a voting majority ofthe Board and
LOGIS is fiscally independent of the City. During 2007, the City paid $ 198,939 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 (SJP A) is a joint venture of approximately five cities that
provides legal prosecution and support services to its members. Legally separate, the City
does not appoint a voting majority of the Board and SJP A is fiscally independent of the City.
During 2007, the City paid $ 372,415 to SJP A for services provided which is included in
expenditures of the General Fund. Financial statements are available by contacting SJP A,
200 Fourth Avenue West, Shakopee, Minnesota 55379.
3. Other Organizations
Shakopee Fire Relief Association
The Shakopee Fire Relief Association (the "Association") is organized as a nonprofit
organization by its members to provide pensions and other benefits to its 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. 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.
38
CITY OF SHAKO PEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Assets and the Statement
of Activities) report information on all of the nonfiduciary activities of the City. The fiduciary
funds are only reported in the Statement of Fiduciary Net Assets and the Statement of Changes
in Fiduciary Net Assets 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 are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. futerest on genera110ng-term debt is considered
an indirect expense and is reported separately in the Statement of Activities. Program revenues
include I) 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. futernally dedicated revenues are reported as general revenues
rather than program revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental funds and major individual enterprise funds are reported as separate
columns in the fund financial statements.
The City's 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.
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 City's Agency Fund reports only assets and liabilities and has no measurement focus, but
does use the accrual basis of accounting to recognize receivables and payab1es.
39
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
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 fiscal period. Expenditures generally are recorded when
a liability is incurred, as under accrual accounting. However, debt service expenditures, as well
as expenditures related to claims and judgments, are recorded only when payment is due.
Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are
all considered to be susceptible to accrual and so have been recognized as revenues of the
current fiscal period. Only the portion of special assessments receivable due within the current
fiscal 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 Fund:
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.
Major Proprietary Funds:
Electric Fund - This Fund accounts for the operations of the City's electric utility.
Water Fund - This Fund accounts for the operations of the City's water utility.
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
operations.
40
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
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 oflarger pieces of
equipment.
Building Fund - This Fund accounts for the City's funds accumulated for construction,
improvement or major repairs of major public buildings.
Employee Benefits Fund - This Fund accounts for the City's funds accumulated for
compensated absences.
Fiduciary Fund:
Escrow Agency Fund - This Fund accounts for the monies held for specific purposes for
individuals, private organizations, other government units and other funds. Escrows may be
held on behalf of builders and developers, for security deposits and police evidence deposits.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989,
generally are followed in both the government-wide and proprietary fund financial statements to
the extent that those standards do not conflict with or contradict guidance of the Governmental
Accounting Standards Board (GASB). Governments also have the option of following
subsequent private-sector guidance for their business-type activities and enterprise funds, subject
to this same limitation. The City has elected not to follow subsequent private-sector guidance.
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.
41
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
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 Assets 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.
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 Investment Pool. Investments are stated at fair value.
The Minnesota Municipal Investment Pool 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 Electric and Water Enterprise Funds
(Shakopee Public Utilities Commission) addresses custodial credit risk for deposits. The
policy also addresses credit risk, interest rate risk and concentration of credit risk. The City's
Electric and Water Enterprise Funds (Shakopee Public Utilities Commission) do not have a
formal policy to address any of these risks.
Custodial Credit Risk - Deposits: In the case of 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) or bonds. The City's deposit and investment policy
states deposits must be collateralized in order to comply with Minnesota Statutes.
42
CITY OF SHAKO PEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
1. Deposits and Investments (Continued)
Credit Risk: Credit risk is the risk that an issuer or other counterparty to an investment will
not fulfill its obligation to the holder of the investment. This is measured by the assignment
of a rating by a nationally recognized statistical rating organization. The City's investment
policy states that the City will minimize credit risk, the risk of loss due to failure of the
security issuer or backer, by:
. Limiting investments to the safest types of securities.
. Prequa1ifying the financial institutions, brokers/dealers, intermediaries and advisors
with which the City will do business.
. Diversifying the investment portfolio so the potential losses on individual securities
will be minimized.
Interest Rate Risk: This is the risk that changes in market interest rates will adversely affect
the fair value of an investment. The policy states the City will minimize the risk the market
value of securities in the portfolio will fall due to changes in interest rates by:
. Structuring the short-term investment portfolio so securities mature to meet cash
requirements for ongoing operations, thereby avoiding the need to sell securities on
the open market prior to maturity.
. Investing short-term funds primarily in short-term securities, money market mutual
funds or similar investment pools.
. Evaluating the long-term investment portfolio against an agreed upon benchmark that
meets the risk tolerances of the City and its investment policy.
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 five years from the date of
purchase or in accordance with state and local statutes and ordinances. The City shall adopt a
maximum weighted average maturity of three years for these funds. Long-term funds shall
not be invested in securities exceeding 10 years in modified duration, at time of purchase.
43
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
1. Deposits and Investments (Continued)
Concentration of Credit Risk: Concentration of credit risk is the risk of loss that may be
caused by the City's 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.
. 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 anyone corporation to 10% of the aggregate investment
portfolio and 5% of the corporation's assets.
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
that are in the possession of an outside party.
2. Receivables and Payables
Activity between funds that are representative of 1endinglborrowing arrangements
outstanding at the end of the fiscal 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 property taxes receivable are shown at a gross amount since it is assessable and is
collectible upon the sale of the property.
44
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
2. Receivables and Payables (Continued)
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 I 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. 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.
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. Other
assets include unamortized debt issue costs for the Electric and Water Enterprise Funds.
Also included is the unamortized cost of buying capacity in a sewer inceptor owned by
Metropolitan Council - Environmental Services.
Inventories of enterprise funds are valued at average cost using the first in, first out (FIFO)
method. Inventories of governmental funds are not recorded at year-end on the Balance
Sheets because they accumulate insignificant inventories
4. Restricted Assets
Certain cash and investments in the enterprise funds are classified as restricted. The Electric
Fund has monies restricted for customer deposits, emergency system repairs, construction
projects 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.
45
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
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 as assets with an initial, individual cost of more than $ 5,000 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.
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 10-50
Infrastructure 30-50
6. Compensated Absences
Vacation and sick leave benefits are recorded as expenditures in the Employee Benefits
internal service fund and governmental funds when the obligations 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 unused vacation. Employees earn sick leave at a rate of 3.69 hours per pay
period and may accumulate it to a maximum of 960 hours. The City compensates
employees who leave municipal service at the rate of 45% plus 2% for each year of service
beyond 15 years up to 75% of unused sick leave up to a maximum of960 hours.
46
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
6. Compensated Absences (Continued)
The General Fund and Employee Benefits internal service fund typically liquidate the
compensated absences liability.
7. 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 Assets. Enterprise fund bond premiums and discounts, as well as issuance costs, 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. Bond issuance costs
are reported as deferred charges and amortized over the term of the related debt.
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 debt service expenditures.
8. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for
amounts that are not available for appropriation or are legally restricted by outside parties for
use for a specific purpose. Designations of fund balance represent tentative management
plans that are subject to change.
9. Net Assets
Net assets represent the difference between assets and liabilities in the government-wide
financial statements. Net assets invested in capital assets, net of related debt 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 assets are 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.
47
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
D. Assets, Liabilities and Net Assets or Equity (Continued)
10. Use of Estimates
The preparation of financial statements in conformity with u.s. generally accepted
accounting principles 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.
NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information
Budgets are adopted on a basis consistent with U.S. generally accepted accounting principles.
Annually appropriated budgets are adopted for the General Fund and the Shakopee EDA, Transit,
Telecommunications and Recreation Special Revenue Funds. The Forfeiture Fund is not required
to have a budget adopted. All activity in this Fund is at the discretion of the Chief of Police.
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 fiscal 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. Budgets for the General and Special Revenue Funds are adopted on a basis consistent
with U.S. generally accepted accounting principles.
5. 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.
48
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information (Continued)
6. Annual appropriated budgets are adopted for the General and applicable Special Revenue
Funds. 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 formal appropriated budgets are not adopted.
7. 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,
except for licenses and permit revenue in the General Fund.
B. Deficit Fund Equity
Capital Projects Funds:
Park Reserve $ (1,783,739)
2008 Projects (56,130)
The deficit fund balances in the Capital Projects Funds are a result of ongoing construction which
is periodically reimbursed by transfers from other funds and bond proceeds.
NOTE 3 - DEPOSITS AND INVESTMENTS
A. Deposits
In accordance with applicable Minnesota Statutes, the City maintains deposits at depository
banks authorized by the City Council.
Custodial Credit Risk - Deposits: As of December 31, 2007, the City's bank balances were not
exposed to custodial credit risk because they were insured through FDIC and properly
collateralized with securities held by the pledging financial institution's trust department or agent
in the City's name.
49
CITY OF SHAKO PEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 3 - DEPOSITS AND INVESTMENTS
A. Deposits (Continued)
As of December 31,2007, the City had the following deposits:
Deposits (All Funds but the Electric and $ 43,412
Water Enterprise Funds)
Deposits (Electric and Water Enterprise Funds) 1,778,669
Total Deposits $ 1,822,081
B. Short-Term Investments
As of December 31,2007, the City had the following short-term investments for all funds,
excluding the Electric and Water Enterprise Funds (Shakopee Public Utilities Commission).
Weighted
Average Moody's
Fair Value Maturity (Years) Rating
Agency Bonds:
FHLB $ 2,000,620 4.21 Aaa
FHLMC 998,300 4.97 Aaa
Mortgage Bonds:
FNMA 2,028,760 8.98 Aaa
Commercial Paper 1,992,640 0.08 P-1
Money Market Funds 5,541,306 N/A NR
Total Short-Term Investments $ 12,561,626
50
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 3 - DEPOSITS AND INVESTMENTS
C. Long-Term Investments
As of December 31, 2007, the City had the following long-term investments for all funds,
excluding the Electric and Water Enterprise Funds (Shakopee Public Utilities Commission).
Modified
Duration Moody's
Fair Value (Years ) Rating
U.S, Treasury Notes $ 698,709 5.89 Aaa
Agency Bonds:
FFCB 2,575,903 2,82 Aaa
FHLB 7,957,800 1.07 Aaa
FHLMC 4,040,598 1.43 Aaa
FNMA 7,645,070 I.II Aaa
Agency Step-Up Bonds:
FHLMC 508,320 1.05 Aaa
FNMA 360,171 0.83 Aaa
Mortgage Bonds:
CMO 5,458,823 2.26 Aaa
FHLMC 5,853,531 3.38 Aaa
FNMA 5,361,943 3.35 Aaa
GNMA 409,738 2.11 Aaa
Municipal Bonds 5,127,664 1.85 (Aaa-A3)
Commercial Paper 5,520,118 0.17 PI
Money Market Funds 408,616 N/A NR
Total Long-Term Investments 51,927,004 1.87
Total Investments $ 64,488,630
As of December 31,2007, the City's Electric and Water Enterprise Funds (Shakopee Public
Utilities Commission) had the following investments.
Investment Maturities
Fair Less than 1-5 6 - 10 More than
Investment Type Value One Year Years Years 10 Years
U,S, Treasuries $ 12,819,093 $ 552,270 $ 12,266,823 $ - $ -
U.S. Agencies 12,209,343 3,413,426 8,795,917 -
External Investment Pools 2,849,981 2,849,981 - - -
Total Investments $ 27,878,4 I 7 $ 6,815,677 $ 21,062,740 $ - $ -
51
CITY OF SHAKO PEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 3 - DEPOSITS AND INVESTMENTS
C. Long-Term Investments (Continued)
Custodial Credit Risk - Investments: As of December 31, 2007, all investments of the City and
the Electric and Water Enterprise Funds (Shakopee Public Utilities Commission) were insured,
registered and held by the City or its agent and in the City's name.
Credit Risk: In accordance with the City's investment policy, the City is invested in securities
with high ratings. Investments in government bonds are rated Aaa, Aa1, Aa2, AI, A2 and A3.
Investments in commercial paper have a credit rating of P-1 and the money market funds do not
have credit ratings. The City's Electric and Water Enterprise Funds investments in U.S. Agency
Securities have ratings by Moody's Investors Service ranging from umated to Aaa.
Concentration of Credit Risk: As of December 31,2007, the City's investments exceeding 5% of
the City's total investments for all funds excluding the Electric and Water Enterprise Funds
(Shakopee Public Utilities Commission) were as follows.
Percentage of
Issuer Investment Type Portfolio
Federal Home Loan Bank (FHLB) U.S. Agencies 15.4%
Federal Home Loan Mortgage Corporation (FHLMC) U.S. Agencies 25.1%
Federal National Mortgage Association (FNMA) U.S. Agencies 24.9%
The City's Electric and Water Enterprise Funds investments in FHLB, FNMA and FHLMC also
exceeded 5% of the total investments of those funds at December 31,2007.
The following is a summary oftota1 deposits and investments as of December 31,2007:
Deposits (Note 3.A.) $ 1,822,081
Investments (All Funds but the Electric and
Water Enterprise Funds) 64,488,630
Investments (Electric and Water Enterprise Funds) 27 ,878,417
Petty Cash 1,170
Total Deposits and Investments $ 94,190,298
52
CITY OF SHAKO PEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
NOTE 3 - DEPOSITS AND INVESTMENTS
C. Long-Term Investments (Continued)
Deposits and investments are classified in the December 31,2007 financial statements as
follows:
Statement of Net Assets:
Cash and Investments $ 79,956,215
Restricted and Other Accounts 12,900,206
Statement of Fiduciary Net Assets 1,333,877
Total Cash and Investments $ 94,190,298
NOTE 4 - RECEIVABLES
Governmental funds report deferred 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 fiscal year, the various components of deferred revenue
reported in the governmental funds were as follows:
Delinquent Delinquent Deferred
Property Special Special
Taxes Assessments Assessments Total
General Fund $ 322,173 $ 7,861 $ 34,916 $ 364,950
Nonmajor Funds 9,142 15,715 8,287,369 8,312,226
Total $ 331,315 $ 23,576 $ 8,322,285 $ 8,677,176
53
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
NOTE 5 - CAPITAL ASSETS
Capital asset activity for the year ended December 31,2007 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital Assets not being
Depreciated:
Land $ 19,832,201 $ 5,939 $ 566,580 $ 19,271,560
Construction in Progress 1,859,230 187,868 1,859,230 187,868
Total Capital Assets
not being Depreciated 21,691,431 193,807 2,425,810 19,459,428
Capital Assets being
Depreciated:
Buildings 31,173,154 1,689,757 50,889 32,812,022
Infrastructure 126,163,148 4,080,443 5,699,254 124,544,337
Machinery and Equipment 11,231,832 1,226,922 446,678 12,012,076
Total Capital Assets
being Depreciated 168,568,134 6,997,122 6,196,821 169,368,435
Less Accumulated
Depreciation for:
Buildings 5,379,971 796,922 39,013 6,137,880
Infrastructure 36,151,982 4,707,152 997,813 39,861,321
Machinery and Equipment 4,045,851 772,675 249,280 4,569,246
Total Accumulated
Depreciation 45,577,804 6,276,749 1,286,106 50,568,447
Total Capital Assets being
Depreciated, Net 122,990,330 720,373 4,910,715 118,799,988
Governmental Activities Capital
Assets, Net $ 144,681,761 $ 914,180 $ 7,336,525 $138,259,416
54
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 5 - CAPITAL ASSETS
Beginning Ending
Balance Increases Decreases Balance
Business-Type Activities:
Capital Assets not being
Depreciated:
Land $ 6,082,364 $ 5,877 $ - $ 6,088,241
Construction in Progress 1,369,834 983,433 1,146,308 1,206,959
Total Capital Assets
not being Depreciated 7,452,198 989,310 1,146,308 7,295,200
Capital Assets being Depreciated:
Plant in Service 149,120,057 9,349,605 130,510 158,339,152
Machinery and Equipment 747,128 961,440 26,219 1,682,349
Total Capital Assets
being Depreciated 149,867,185 10,311,045 156,729 160,021,501
Less Accumulated
Depreciation for:
Plant in Service 26,617,821 4,836,374 - 31,454,195
Machinery and Equipment 324,867 396,889 2,620 719,136
Total Accumulated
Depreciation 26,942,688 5,233,263 2,620 32,173,331
Total Capital Assets being
Depreciated, Net 122,924,497 5,077,782 154,109 127,848,170
Business-Type Activities Capital
Assets, Net $ 130,376,695 $ 6,067,092 $1,300,417 $ 135,143,370
Of the $ 5,233,263 increase in depreciation, $ 1,291,389 is accumulated depreciation on assets
that were contributed to the Sewer Fund from the Met Council.
55
CITY OF SHAKO PEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 5 - CAPITAL ASSETS
Depreciation expense was charged to functions/programs ofthe City as follows:
Governmental Activities:
General Government $ 247,119
Public Safety 488,817
Public Works 5,036,764
Park and Recreation 504,049
Total Depreciation Expense - Governmental Activities $ 6,276,749
Business- Type Activities:
Electric $ 1,323,061
Water 1,194,185
Sanitary Sewer 665,545
Storm Drainage 759,083
Total Depreciation Expense - Business-Type Activities $ 3,941,874
NOTE 6 - LONG-TERM DEBT
A. General Obligation Bonds
The City issues General Obligation (G.O.) Bonds to provide for financing tax increment projects
and street improvements. 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 op1igations 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.
B. Revenue Bonds
The City issued Revenue Bonds for electric and water activity.
Debt service is covered through the revenue producing activities of these funds.
56
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 6 - LONG-TERM DEBT
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:
1996A 12/01/96 4.6%-4.8% $ 2,555,000 02/01/08 $ 150,000 $ 150,000
1997B 11/05/97 4.40%-4.75% 1,805,000 02/01/09 175,000 105,000
1998B 12/01198 4.0%-4.4% 2,375,000 02/01/10 585,000 195,000
2000A 09/19/00 4.45%-4.95% 2,560,000 02/01/11 945,000 240,000
2002A 02/01/02 3.0%-4.3% 1,185,000 02/01/12 670,000 130,000
2002B 07/01/02 2.0%-4.1 % 3,750,000 02/01/13 1,725,000 715,000
2003A 07/01/03 2.0%-3.0% 2,215,000 02/01!l4 1,110,000 185,000
2004A 05/01/04 2.25%-4.10% 4,225,000 02/01/25 3,530,000 495,000
G.O. Building Refunding
Bonds 2004B 05/01/04 2,25%-4.00% 2,275,000 02/01/17 1,945,000 165,000
G.O. Improvement Bonds
2004C 11/01/04 3.0%-4.0% 2,570,000 02/01/15 2,020,000 250,000
G.O. Capital Improvement
Bonds 2004D 11/01/04 2.5%-4.2% 6,000,000 02/01/25 5,615,000 230,000
G.O. Improvement Bonds
2006A 07/01/06 4.00% 3,440,000 02/01/17 3,440,000 310,000
G.O. Improvement Bonds
2007 A 02/01/07 4.00% 1,370,000 02/01/17 1,370,000 110,000
G.O. Improvement Bonds
2007B 09/01/07 4.00% 1,445,000 02/01/18 1,445,000
Total G.O. Bonds 24,725,000 3,280,000
Compensated Absences 1,290,398 730,000
Total Governmental
Activities $ 26,015,398 $ 4,010,000
57
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
NOTE 6 - LONG-TERM DEBT
C. Components of Long-Term Liabilities (Continued)
Issue Interest Original Final Principal Due Within
Date Rates Issue Maturity Outstanding One Year
Business-Type Activities:
Revenue Bonds:
Utility Revenue Bonds 1999 12/06/99 5.00% $ 9,850,000 08/01/18 $ 275,000 $ 130,000
Utility Revenue Bonds 2001 06/01/0 I 4.25%-5,12% 12,000,000 02/01/30 10,820,000 265,000
Utility Refunding Revenue
Bonds 2003A 05/01/03 2,25%-4.45% 3,385,000 08/01/18 2,650,000 200,000
Utility Refunding Revenue
Bonds 2004A 10/01/04 3,5%-4.5% 9,830,000 10/01/18 9,580,000 75,000
Utility Refunding Revenue
Bonds 2006A 11/01/06 4,125%-4.375% 10,570,000 02/01/30 10,570,000 -
Total Revenue Bonds 33,895,000 670,000
Compensated Absences 49,538 22,088
Total Business-Type
Activities $ 33,944,538 $ 692,088
Long-term bonded indebtedness listed on the previous page were issued to finance acquisition
and construction of capital facilities or to refinance (refund) previous bond issues,
On November 1,2006, the Shakopee Public Utilities Commission issued $ 10,570,000 Public
Utilities Crossover Refunding Revenue Bonds, Series 2006A, to crossover refund $ 10,280,000 of
the $ 10,820,000 currently outstanding of the $ 12,000,000 Shakopee Public Utilities Revenue
Bonds, Series 2001 on February 1,2009,
58
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 6 - LONG-TERM DEBT
D. Changes in Long-Term Liabilities
Long-term liability information for the year ended December 31, 2007 was as follows.
Beginning Ending
Balance Additions Reductions Balance
Governmental Activities:
Bonds Payable:
G.O. Bonds $ 25,020,000 $ 2,815,000 $ 3,110,000 $ 24,725,000
Compensated Absences 1,256,559 636,642 602,803 1,290,398
Total Governmental Activities $ 26,276,559 $ 3,451,642 $ 3,712,803 $ 26,015,398
Business-Type Activities:
Revenue Bonds $ 34,535,000 $ - $ 640,000 $ 33,895,000
Bond Premium 53,435 - 4,323 49,112
Deferred Refunding Costs (1,073,066) - (53,394) (1,019,672)
Compensated Absences - 167,318 117,780 49,538
Total Business-Type Activities $ 33,515,369 $ 167,318 $ 708,709 $ 32,924,440
The General Fund, Recreation and Employee Benefit Internal Service Funds 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 Ended
December 31, Principal Interest Total
2008 $ 3,280,000 $ 912,463 $ 4,192,463
2009 2,660,000 785,257 3,445,257
2010 2,565,000 691,384 3,256,384
2011 2,185,000 604,079 2,789,079
2012 2,075,000 525,022 2,600,022
2013-2017 8,100,000 1,597,660 9,697,660
2018-2022 2,355,000 597,075 2,952,075
2023-2027 1,505,000 105,537 1,610,537
Total $24,725,000 $5,818,477 $30,543,477
59
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
NOTE 6 - LONG-TERM DEBT
F. Business-Type Activity Revenue Bonds
Debt service to maturity for outstanding revenue bonds is as follows:
Year Ended
December 31, Principal Interest Total
2008 $ 670,000 $ 1,053,048 $ 1,723,048
2009 710,000 1,251,898 1,961,898
2010 1,055,000 1,443,241 2,498,241
2011 1,080,000 1,401,393 2,481,393
2012 1,145,000 1,357,015 2,502,015
2013-2017 6,340,000 6,011,929 12,351,929
2018-2022 7,890,000 4,416,350 12,306,350
2023-2027 9,910,000 2,386,953 12,296,953
2028-2032 5,095,000 338,088 5,433,088
Total $33,895,000 $19,659,915 $53,554,915
NOTE 7 - 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, 2007, the following conduit debt was outstanding:
Date of Original Amount Balance
Project Issue ofIssue Retired Outstanding
St. Francis RMC 10/06/04 $ 52,520,000 $ 2,000,000 $ 50,520,000
St. Francis RMC 12/23/87 8,000,000 2,735,000 5,265,000
Total $ 55,785,000
60
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 8 - PLEDGING AGREEMENTS
The City has pledged its taxing authority to back certain revenue bonds issued by the Scott
County Community Development Agency (CDA), formally known as the Scott County Housing
and Redevelopment Authority (HRA), for the Blocks 3 and 4 redevelopment project in
downtown Shakopee. Refunding bonds were issued during 2006 to advance refund the 1997 A,
1997D and 1997E Series Bonds on their call dates. The 1997D Series Bonds were called on
September 1,2006 and the 1997A and 1997E Series Bonds were callable on February 1, 2008.
The outstanding issues at December 31, 2007 were:
. Scott County CDA Housing Development Refunding Revenue Bonds, Series 2006A, the
amount is $ 3,260,000 and payments are scheduled from February 1, 2007 to 2027, with
interest ranging from 4.25% to 4.5%.
. Scott County CDA Housing Development Refunding Revenue Bonds, Series 2006D, the
amount is $ 925,000 and payments are scheduled from February 1, 2007 to 2016, with
interest ranging from 5.7% to 6.25%.
. Scott County CDA Housing Development Refunding Revenue Bonds, Series 2006E, the
amount is $ 1,245,000 and payments are scheduled from February I, 2018 to 2023, with
interest ranging from 4.5% to 4.7%.
. Scott County CDA Housing Development Revenue Bonds, Series 1997 A, the original
amount is $ 3,220,000 and payments are scheduled from February 1, 2002 to the call date
of February 1,2008, with interest ranging from 4.10% to 5.38%.
. Scott County CDA Taxable Tax mcrement Development Revenue Bonds, Series 1997E,
the original amount is $ 1,170,000 and payment is scheduled for the call date on
February 1, 2008, with interest at 5.38%.
The City has pledged its taxing authority to back a series of revenue bonds issued by the Scott
County CDA for the North Ridge Court Redevelopment Project in downtown Shakopee. The
Issue IS:
. Scott County CDA Housing Development Revenue Bonds, Series 2003, the amount is
$ 6,690,000 and payments are scheduled from February 1, 2006 to 2034, with interest
ranging from 2.00% to 5.00%.
The City and the Shakopee EDA have a development agreement for costs related to a Seagate
facility moving to Shakopee. The Shakopee EDA issued a Taxable Tax Increment Revenue Note
in the amount of$ 4,572,725 in support of development costs for the Seagate Project. Seagate is
the holder of the note. The Shakopee EDA is liable only to the extent of the tax increment
received from the Seagate property. The interest on the note is 7.5%. Payments are scheduled
semiannually from August 1,2000 to February 1,2009.
61
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 8 - PLEDGING 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 ofthe tax increment
received from the Imagine! Print Solutions property. The interest on the note is 6.0%. 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 6.0%.
Payments are scheduled semiannually from August 1,2007 to February 1,2014.
NOTE 9 - INTERFUND ASSETS/LIABILITIES
The composition of inter fund balances as of December 31,2007 is as follows:
Receivable Fund Payable Fund Amount
General Fund Nonmajor Governmental Funds $ 55,100
General Fund Electric Fund 111,031
Nonmajor Governmental Funds Nonmajor Governmental Funds 261,775
Nonmajor Governmental Funds Water Fund 48,471
Electric Fund Water Fund 1,756,525
Electric Fund Sewer Fund 23,085
Water Fund Storm Drainage Fund 10,886
Sewer Fund Nonmajor Governmental Funds 2,000,000
Sewer Fund Employee Benefits Internal Service Fund 42,450
Storm Drainage Fund Employee Benefits Internal Service Fund 7,088
Total $ 4,316,411
The due from/due to other funds balances generally represent borrowing to resolve deficit cash
balances and billing expenses. The $ 2,000,000 balance represents an advance from the Sewer
Fund to the Park Reserve Fund which will be repaid according to the amortization schedule.
62
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 10 - INTERFUND TRANSFERS
Transfer In
Nonmajor
General Governmental
Fund Funds Total
Transfer Out:
General Fund $ - $ 1,180,181 $ 1,180,181
Nonmajor Governmental Funds 36,900 971,252 1,008,152
Electric Fund 1,080,962 - 1,080,962
Water Fund 704,809 - 704,809
Sewer Fund 18,400 227,492 245,892
Storm Drainage Fund 48,040 143,245 191,285
Total $ 1,889,111 $ 2,522,170 $ 4,411 ,281
General Fund transfers in the amount of $ 1,108,770 were made to the Recreation Fund for
operating purposes and $ 71,411 to the Shakopee EDA Fund for tax abatements,
Transfers in the amount of$ 430,047 were made from the Public Works Building Capital
Projects Fund to the 2004D Improvement Bonds Debt Service Fund to close out the Public
Works Building Capital Projects Fund. Transfers in the amount of$ 92,261 were made from the
West Dean's Lake Capital Projects Fund to the 2004A Improvement Bonds Debt Service Fund to
close the West Dean's Lake Capital Project Fund. A transfer in the amount of$ 3,505 was made
from the 2003 Projects Capital Projects Fund to the 2003A Improvement Bonds Debt Service
Fund to close the 2003 Capital "projects Fund. Other transfers between nonmajor governmental
funds were made for operating purposes.
Transfers from the business-type funds were made to assist with financing of various activities in
the recipient funds.
NOTE 11 - FUND EQUITY/NET ASSETS
Fund equity or net assets are the residual or net assets of a given fund. Fund equity is what is left
over when the tota11iabilities of a fund are deducted from its total assets. Governmental funds
refer to a fund's net assets as fund balance. The government-wide Statement of Net Assets and
the City's proprietary fund financial statements refer to a fund's residual assets as net assets.
Governmental fund balance is divided into three major categories: reserved, designated and
unreserved. Reservations of governmental fund balance are used to quantify the amount of a
fund's net assets that are not available to meet the current financial needs ofthe City.
Designations are used to indicate a future use has been identified for net assets that are available
for current financial needs. Finally, unreserved fund balance is a measure of a governmental
fund's net resources available for current financial needs.
63
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
NOTE 11 - FUND EQUITY/NET ASSETS
The government-wide Statement of Net Assets and the proprietary fund financial statements
divide net assets into the following components: net assets invested in capital assets, net of
related debt, restricted net assets and unrestricted net assets. Restricted net assets are required to
be reported when external parties mandate their restriction.
NOTE 12 - RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of
assets; errors and omissions and natural disasters for which the City carries insurance policies
through a risk pool from the League of Minnesota Cities Insurance Trust. The City retains risk
for the deductible portions of the insurance policies. The amount of these deductib1es ranges
from $ 2,500 to $ 5,000. There were no significant reductions in insurance from the previous
year or settlements in excess of insurance coverage for any of the past five years.
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 $ 1,000,000
aggregate for liability, $ 1,000,000 for automobile coverage, $ 100,000 faithful performance
employee bonding and $ 1,000,000 for universal umbrella coverage. Property coverage is at
approximately $ 76,000,000.
NOTE 13 - DEFINED BENEFIT PENSION PLANS - STATEWIDE
Public Employees' Retirement Association
All full-time and certain part-time employees of the City are covered by defined benefit pension
plans administered by the Public Employees' Retirement Association of Minnesota (PERA).
PERA administers the Public Employees' Retirement Fund (PERF) 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.
PERF members belong to either the Coordinated Plan or the 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
three 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.
64
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 13 - DEFINED BENEFIT PENSION PLANS - STATEWIDE
Public Employees' Retirement Association (Continued)
A. Plan Description (Continued)
Two methods are used to compute benefits for PERA's Coordinated Plan 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 PERF and PEPFF members hired prior to July 1,
1989, whose annuity is calculated using Method I, 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 Plan and
Coordinated Plan members hired prior to July 1, 1989. Normal retirement age for unreduced
social security benefits is 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.
There are different types of annuities available to members upon retirement. A single-life
annuity is a lifetime annuity that ceases upon the death ofthe 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 ofthis 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 PERF and PEPFF. That report may be obtained on the Internet at
www.mnpera.org, by writing to PERA at 60 Empire Drive, Suite 200, St. Paul, Minnesota
55103-2088 or by calling (651) 296-7460 or (800) 652-9026.
65
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31,2007
NOTE 13 - DEFINED BENEFIT PENSION PLANS - STATEWIDE
Public Employees' Retirement Association (Continued)
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. PERF Basic
Plan members and Coordinated Plan members were required to contribute 9.10% and 5.75%,
respectively, of their annual covered salary in 2007. Contribution rates in the Coordinated Plan
will increase in 2008 to 6.0%. PEPFF members were required to contribute 7.8% of their annual
covered salary in 2007. That rate will increase to 8.6% in 2008. The City is required to
contribute the following percentages of annual covered payroll: 11.78% for Basic Plan PERF
members, 6.25% for Coordinated Plan PERF members and 11.7% for PEPFF members.
Employer contribution rates for the Coordinated Plan and PEPFF will increase to 6.5% and
12.9%, respectively, effective January 1, 2008. The City's contributions to the PERF for the
years ending December 31, 2007, 2006 and 2005 were $ 452,967, $ 410,849 and $ 353,029,
respectively. The City's contributions to the PEPFF for the years ending December 31, 2007,
2006 and 2005 were $ 359,836, $ 278,056 and $ 209,661, respectively. The City's contributions
were equal to the contractually required contributions for each year as set by state statute.
C. Shakopee Volunteer Fire Relief Association
The City contributes to the Shakopee Volunteer Fire Department Relief Association (the
"Association") that provides pension benefits to its members under a defined benefit plan. Since
fire department members are volunteers, contributions to the Association are not based on
payroll, but rather on years of active service. All active firefighters may apply for membership in
the Association and shall become a member immediately upon approval by the Board of
Trustees.
The City's contribution to the Association is determined by multiplying $ 7,500 by the number of
years of active service completed by members ofthe Association for the plan year, prorated by
months for members who did not complete a full year of active service. Required and actual
employer contributions to the plan during 2007 were $ 210,301. Members of the Association are
not allowed to make voluntary contributions to the Plan.
D. Post Retirement Benefits
City employees are eligible to participate in COBRA provisions after severing employment or
Minnesota Statutes Chapter 488 after retirement, which allows employees to continue coverage on
the City's health insurance plan under certain provisions. Currently, the City has eight former
employees/dependents participating under the Minnesota Statutes Chapter 488 provision and four
disabled at the end of 2007. The participants pay for the premium under the above provisions.
66
CITY OF SHAKOPEE
Scott County, Minnesota
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2007
NOTE 14 - CONTINGENT LIABILITIES AND COMMITMENTS
The City is a currently a defendant in litigation with a developer concerning platting issues.
Although the outcome of this lawsuit is not presently determinable, the resolution in not expected
to have a material adverse effect on the financial condition of the City.
There are various uncompleted construction contracts as of year-end totaling approximately
$ 1,385,998 for work yet to be done. Completed work is reflected in the financial statements,
work yet to be done is not.
NOTE 15 - SEGMENT INFORMATION
The City maintains four enterprise funds that account for the electric, water, 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 Net Assets balances, this information has
not been repeated in the notes to the basic financial statements.
67
CITY OF SHAKO PEE
Scott County, Minnesota
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2007
(Continued)
Special Revenue
Forfeiture Transit Telecommunication SCDP Grant Revolving Loan
ASSETS:
Cash and Investments $ 66,688 $ 1,989,431 $ 621,075 $ 65,208 $ 159,434
Taxes Receivable - Delinquent - - - - -
Special Assessments Receivable:
Delinquent - - - - -
Deferred - - - - -
Accounts Receivable - 54,638 78,042 - -
Interest Receivable 534 14,896 4,473 509 1,153
Due from Other Funds - - - - -
Notes Receivable - - - - 271,436
Total Assets $ 67,222 $ 2,058,965 $ 703,590 $ 65,717 $ 432,023
LIABILITIES AND FUND BALANCES:
Liabilities:
Accounts Payable $ 1,456 $ 291,537 $ 62,698 $ - $ -
Contracts Payable - - - - -
Due to Other Funds - - - - -
Advances from Other Funds - - - - -
Due to Other Governments - - - - 213,264
Deferred Revenue - - - - -
Total Liabilities 1,456 291,537 62,698 - 213,264
Fund Balances:
Reserved for:
Special Revenue 65,766 1,767,428 - 65,717 218,759
Capital Projects - - - - -
Unreserved, Reported in:
Special Revenue - Undesignated - - 640,892 - -
Debt Service - Undesignated - - - - -
Capital Projects - Undesignated - - - - -
Total Fund Balances 65,766 1,767,428 640,892 65,717 218,759
Total Liabilities and
Fund Balances $ 67,222 $ 2,058,965 $ 703,590 $ 65,717 $ 432,023
70
Special Revenue Debt Service
Economic I 996A 1997B 1998B
Development Improvement Improvement Improvement
Authority Recreation Total Bonds Bonds Bonds
$ 421,829 $ 310,982 $ 3,634,647 $ 138,006 $ 49,697 $ 365,008
1,648 - 1,648 - - -
- - - 131 - 397
- - 107,671 94,994
- 93,234 225,914 - - -
2,567 6,659 30,791 747 292 2,567
- - - -
- - 271,436 - - -
$ 426,044 $ 410,875 $ 4,164,436 $ 138,884 $ 157,660 $ 462,966
$ 52,291 $ 58,212 $ 466,194 $ 500 $ 1,700 $ -
- - - - -
- - - -
- - - - - -
- 213,264 - - -
1,648 - 1,648 130 107,671 95,391
53,939 58,212 681,106 630 109,371 95,391
372,105 2,489,775 - - -
- - - - - -
- 352,663 993,555 - - -
- - - 138,254 48,289 367,575
- - - - -
372,105 352,663 3,483,330 138,254 48,289 367,575
$ 426,044 $ 410,875 $ 4,164,436 $ 138,884 $ 157,660 $ 462,966
71
CITY OF SHAKO PEE
Scott County, Minnesota
COMBINING BALANCE SHEET -
NON MAJOR GOVERNMENTAL FUNDS
December 31,2007
(Continued)
Debt Service
2000A 2002A 2002B 2003A 2004A
Improvement Improvement Improvement Improvement Improvement
Bonds Bonds Bonds Bonds Bonds
ASSETS:
Cash and Investments $ 548,784 $ 353,324 $ 1,145,373 $ 747,702 $ 1,421,980
Taxes Receivable - Delinquent - - - -
Special Assessments Receivable:
Delinquent - - - - -
Deferred 272,385 123,447 1,269,002 377,079 2,618,292
Accounts Receivable - - - - -
Interest Receivable 3,823 2,401 7,720 5,865 9,248
Due from Other Funds - - - - -
Notes Receivable - - - - -
Total Assets $ 824,992 $ 479,172 $ 2,422,095 $ 1,130,646 $ 4,049,520
LIABILITIES AND FUND BALANCES:
Liabilities:
Accounts Payable $ - $ 2,100 $ 2,750 $ - $ -
Contracts Payable - - - - -
Due to Other Funds - - - - -
Advances from Other Funds - - - - -
Due to Other Governments - - - - -
Deferred Revenue 272,385 123,447 1,269,002 377,079 2,618,292
Total Liabilities 272,385 125,547 1,271,752 377,079 2,618,292
Fund Balances:
Reserved for:
Special Revenue - - - - -
Capital Projects - - - - -
Unreserved, Reported in:
Special Revenue - Undesignated - - - - -
Debt Service - Undesignated 552,607 353,625 1,150,343 753,567 1,431,228
Capital Projects - Undesignated - - - - -
Total Fund Balances 552,607 353,625 1,150,343 753,567 1,431,228
Total Liabilities and
Fund Balances $ 824,992 $ 479,172 $ 2,422,095 $ 1,130,646 $ 4,049,520
72
Debt Service
2004B 2004C 2004D 200M 2007 A 2007B
Refunding Improvement Building Improvement Improvement Improvement
Bonds Bonds Bonds Bonds Bonds' Bonds Total
$ 373,612 $ 934,770 $ 446,970 $ 663,703 $ 176,565 $ 531,579 $ 7,897,073
7,494 - - - - 7,494
- - - 1,028 - - 1,556
795,80 I 536,433 1,227,455 158,231 7,580,790
- - - - - - -
1,924 7,397 4,155 3,702 477 1,097 51,415
- - - - - -
- - - - - - -
$ 383,030 $ 1,737,968 $ 451,125 $ 1,204,866 $ 1,404,497 $ 690,907 $ 15,538,328
$ - $ - $ - $ - $ - $ - $ 7,050
- - - - - - -
- - - - - - -
- - - - - -
- - - - - - -
7,494 795,80 I - 537,461 1,227,455 158,231 7,589,839
7,494 795,80 I - 537,461 1,227,455 158,231 7,596,889
- - - - - -
- - - - - - -
- - - - -
375,536 942,167 451,125 667,405 177,042 532,676 7,941,439
- - - - - - -
375,536 942,167 451,125 667,405 177,042 532,676 7,941,439
$ 383,030 $ 1,737,968 $ 451,125 $ 1,204,866 $ 1,404,497 $ 690,907 $ 15,538,328
73
CITY OF SHAKO PEE
Scott County, Minnesota
COMBINING BALANCE SHEET -
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2007
(Continued)
Capital Projects
Capital East Dean's
State Aid Park Reserve Improvements Lake 2005 Projects
ASSETS:
Cash and Investments $ 2,782,768 $ 475,383 $ 3,599,581 $ 347,399 $ 220,952
Taxes Receivable - Delinquent - - - - -
Special Assessments Receivable:
Delinquent - - 14,159 - -
Deferred - - 706,579 - -
Accounts Receivable - - - - -
Interest Receivable 24,405 7,166 28,987 2,711 916
Due from Other Funds 261,775 - - - -
Notes Receivable - - - - -
Total Assets $ 3,068,948 $ 482,549 $ 4,349,306 $ 350,110 $ 221,868
LIABILITIES AND FUND BALANCES:
Liabilities:
Accounts Payable $ - $ 64,381 $ 114,937 $ - $ 21,112
Contracts Payable - 201,907 - - -
Due to Other Funds - - - - -
Advances from Other Funds - 2,000,000 - - -
Due to Other Governments - - - - -
Deferred Revenue - - 720,738 - -
Total Liabilities - 2,266,288 835,675 - 21,112
Fund Balances:
Reserved for:
Special Revenue - - - - -
Capital Projects 3,068,948 - - 350,110 200,756
Unreserved, Reported in:
Special Revenue - Undesignated - - - - -
Debt Service - Undesignated - - - - -
Capital Projects - Undesignated - (1,783,739) 3,513,631 - -
Total Fund Balances 3,068,948 (1,783,739) 3,513,631 350,110 200,756
Total Liabilities and
Fund Balances $ 3,068,948 $ 482,549 $ 4,349,306 $ 350,110 $ 22 I ,868
74
Capital Projects
Total
Governmental
2006 Projects 2007 Projects 2008 Projects Total Funds
$ 327,736 $ 320,204 $ 99 $ 8,074,122 $ 19,605,842
- - - - 9,142
- - - 14,159 15,715
- - - 706,579 8,287,369
- - - 225,914
2,684 - - 66,869 149,075
- 48,471 - 310,246 310,246
- - - - 271,436
$ 330,420 $ 368,675 $ 99 $ 9,171,975 $ 28,874,739
$ 3,134 $ 8,436 $ 1,129 $ 213,129 $ 686,373
110,576 85,285 - 397,768 397,768
- 261,775 55,100 316,875 316,875
- - - 2,000,000 2,000,000
- - - - 213,264
- - - 720,738 8,312,225
113,710 355,496 56,229 3,648,510 11,926,505
- - - 2,489,775
216,710 13,179 - 3,849,703 3,849,703
- - - - 993,555
- - - 7,941,439
- - (56,130) 1,673,762 1,673,762
216,710 13,179 (56,130) 5,523,465 16,948,234
$ 330,420 $ 368,675 $ 99 $ 9,171,975 $ 28,874,739
75
CITY OF SHAKO PEE
Scott County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2007
(Continued)
Special Revenue
Revolving
Forfeiture Transit Telecommunication SCDP Grant Loan
REVENUES:
Property Taxes $ - $ 14 $ $ - $ -
Tax Increments - - - -
Special Assessments - - - - -
Licenses and Permits - - 306,865 - -
Intergovernmental:
State Grants - 1,017,077 - - -
Other Grants and Aids - - - -
Charges for Services - 26,434 - - -
Fines and Forfeitures 49,810 - - - -
Miscellaneous:
Investment Income 4,484 120,147 35,885 4,020 15,869
Contributions and Donations - - - -
Other 1,127 - 309 12,691 -
Total Revenues 55,421 1,163,672 343,059 16,711 15,869
EXPENDITURES:
Current:
General Government - - 242,993 - -
Public Safety 58,315 - - - -
Public Works - 1,159,817 - - -
Culture and Recreation - - - - -
Debt Service:
Principal - - - - -
Interest and Other Charges - - - - 4,423
Capital Outlay - 27,088 - - -
Total Expenditures 58,315 1,186,905 242,993 - 4,423
Excess of Revenues Over
(Under) Expenditures (2,894) (23,233) 100,066 16,711 11 ,446
OTHER FINANCING SOURCES (USES):
Bonds Issued - - - - -
Premium on Bonds Issued - - - -
Transfers In - - - - -
Transfers Out - (11,200) (6,500) - -
Total Other Financing Sources (Uses) - (11,200) (6,500) - -
Net Change in Fund Balances (2,894) (34,433 ) 93,566 16,711 11,446
FUND BALANCES:
Beginning of Year 68,660 1,801,861 547,326 49,006 207,313
End of Year $ 65,766 $ 1,767,428 $ 640,892 $ 65,717 $ 218,759
76
Special Revenue Debt Service
Economic 1995A 1996A 1997B 1998B
Development Improvement Improvement Improvement Improvement
Authority Recreation Total Bonds Bonds Bonds Bonds
$ 76,428 $ $ 76,442 $ $ 91,701 $ 29,447 $ 62,597
- - - - - - -
- - 3,563 8,817 39,599 53,768
306,865
- 1,017,077 - -
26,376 26,376 - - -
- 972,1 I I 998,545 - - - -
- - 49,810 - - - -
20,685 54,607 255,697 61 6,706 2,632 21,818
- - - - - - -
- 14,091 28,218 - - -
123,489 1,040,809 2,759,030 3,624 107,224 71,678 138,183
115,423 - 358,416 - - - -
- 58,315 - - - -
- - 1,159,817 - - -
- 2,154,861 2,154,861 - - - -
- - 185,000 175,000 105,000 215,000
- - 4,423 5,417 12,386 37,464 30,222
- 51,403 78,491 - - - -
115,423 2,206,264 3,814,323 190,417 187,386 142,464 245,222
8,066 (1,165,455) (l,055,293) (186,793) (80,162) (70,786) (107,039)
- - - - -
- - - - -
80,032 1,108,770 1,188,802 88,912 - -
(19,200) - (36,900) - - - -
60,832 1,108,770 1,151,902 88,912 - - -
68,898 (56,685) 96,609 (97,881 ) (80,162) (70,786) (l07,039)
303,207 409,348 3,386,721 97,881 218,416 119,075 474,614
$ 372,105 $ 352,663 $ 3,483,330 $ - $ 138,254 $ 48,289 $ 367,575
77
CITY OF SHAKO PEE
Scott County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-
NON MAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2007
(Continued)
Debt Service
2000A 2002A 2002B 2003A 2004A
Improvement Improvement Improvement Improvement Improvement
Bonds Bonds Bonds Bonds Bonds
REVENUES:
Property Taxes $ 55,858 $ 98,569 $ - $ - $
Tax Increments - - - -
Special Assessments 109,461 41,277 378,090 25,652 466,292
Licenses and Permits - - - - -
Intergovernmental:
State Grants - - - - -
Other Grants and Aids - - - - -
Charges for Services - - - - -
Fines and Forfeitures - - - - -
Miscellaneous:
Investment Income 32,115 19,535 65,974 49,269 71,345
Contributions and Donations - - - -
Other - - - - -
Total Revenues 197,434 159,381 444,064 74,921 537,637
EXPENDITURES:
Current:
General Government - - - - -
Public Safety - - - - -
Public Works - - - - -
Culture and Recreation - - - - -
Debt Service:
Principal 240,000 125,000 730,000 185,000 510,000
Interest and Other Charges 51,728 35,917 78,796 32,161 133,475
Capital Outlay - - - -
Total Expenditures 291,728 160,917 808,796 217,161 643,475
Excess of Revenues Over
(Under) Expenditures (94,294) (1,536) (364,732) (142,240) (105,838)
OTHER FINANCING SOURCES (USES):
Bonds Issued - - - -
Premium on Bonds Issued - - - -
Transfers In - - 3,505 92,261
Transfers Out - - - - -
Total Other Financing Sources (Uses) - - - 3,505 92,261
Net Change in Fund Balances (94,294) (1,536) (364,732) (138,735) (13,577)
FUND BALANCES:
Beginning of Year 646,901 355,161 1,515,075 892,302 1,444,805
End of Year $ 552,607 $ 353,625 $ 1,150,343 $ 753,567 $ 1,431,228
78
Debt Service
2004B 2004C 2004D 2006A 2007 A 2007B
Refunding Improvement Building Improvement Improvement Improvement
Bonds Bonds Bonds Bonds Bonds Bonds Total
$ 242,638 $ 146,075 $ - $ 343,026 $ - $ - $ 1,069,911
- - - - - -
13,521 - 136,937 172,358 509,299 1,958,634
- - - - - -
- - - - -
- - - - - - -
- - - - - - -
15,556 57,135 10,083 30,878 5,384 10,718 399,209
- - - - - - -
- - - - - - -
258,194 216,731 10,083 510,841 177,742 520,017 3,427,754
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
165,000 250,000 225,000 - - - 3,110,000
72,208 73,900 219,949 149,490 700 351 934,164
- - - - -
237,208 323,900 444,949 149,490 700 351 4,044,164
20,986 (107,169) (434,866) 361,351 177,042 519,666 (616,410)
- - - - - 13,010 13,010
- - - - - -
- - 430,047 - - - 614,725
- - - - - - -
- 430,047 - - 13,010 627,735
20,986 (107,169) (4,819) 361,351 177,042 532,676 11,325
354,550 1,049,336 455,944 306,054 - - 7,930,114
$ 375,536 $ 942,167 $ 451,125 $ 667,405 $ 177,042 $ 532,676 $ 7,941,439
79
CITY OF SHAKO PEE
Scott County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-
NON MAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2007
(Continued)
Capital Projects
Capital East Dean's
State Aid Park Reserve Improvements TIF No. 10 Lake
REVENUES:
Property Taxes $ - $ - $ - $ - $
Tax Increments - - 33,586 -
Special Assessments - 221,521 -
Licenses and Permits - 98,047 - - -
Intergovernmental:
State Grants 506,693 100,000 - - -
Other Grants and Aids - - - - -
Charges for Services - 812 -
Fines and Forfeitures - - - -
Miscellaneous:
Investment Income 201,047 62,829 238,614 - 21,980
Contributions and Donations - 450,900 15,450 - -
Other - - - - -
Total Revenues 707,740 712,588 475,585 33,586 21,980
EXPENDITURES:
Current:
General Government - - - - -
Public Safety - - - - -
Public Works - - - - -
Culture and Recreation - - - - -
Debt Service:
Principal - - - - -
Interest and Other Charges - 58,333 - - -
Capital Outlay - 2,942,523 745,742 33,586 -
Total Expenditures - 3,000,856 745,742 33,586 -
Excess of Revenues Over
(Under) Expenditures 707,740 (2,288,268) (270,157) - 21,980
OTHER FINANCING SOURCES (USES):
Bonds Issued - - - - -
Premium on Bonds Issued - - - - -
Transfers In - 86,131 - - -
Transfers Out (261,775) - (175,043) - -
Total Other Financing Sources (Uses) (261,775) 86,131 (175,043) - -
Net Change in Fund Balances 445,965 (2,202,137) (445,200) - 21,980
FUND BALANCES:
Beginning of Year 2,622,983 418,398 3,958,831 - 328,130
End of Year $ 3,068,948 $ (1,783,739) $ 3,513,631 $ - $ 350,110
80
Capital Projects
West Dean's Public Works
TIFNo.l1 2003 Projects Lake Building 2005 Projects TIF No. 12 2006 Projects 2007 Projects
$ - $ - $ - $ - $ - $ - $ - $ -
246,602 - - - 69,388
- - - - - - - 116,000
-
- - - - - -
- - - 300,000 - -
- - - - - -
- - - - - - - -
- 3,505 7,457 26,031 6;536 - 19,145 -
- - - - - -
- - - - - -
246,602 3,505 7,457 26,031 306,536 69,388 19,145 116,000
- - - - - - -
- - - - - - - -
- - - - - - -
- - - - - - - -
- - - - - - - -
- - - - - . - - 28,948
246,602 - - 8,496 345,814 65,919 59,576 2,069,212
246,602 - - 8,496 345,814 65,919 59,576 2,098,160
- 3,505 7,457 17,535 (39,278) 3,469 ( 40,431) (1,982,160)
- - - - 1,370,000 - - 1,431,990
- - - 9,228 - - 728
- - - - - - 632,512
- (3,505) (92,261) (430,047) - (6,655) -
- (3,505) (92,261) (430,047) 1,379,228 (6,655) - 2,065,230
- - (84,804) ( 412,512) 1,339,950 (3,186) (40,431) 83,070
- - 84,804 412,512 (1,139,194) 3,186 257,141 (69,891)
$ - $ $ - $ - $ 200,756 . $ - $ 216,710 $ 13,179
81
CITY OF SHAKO PEE
Scott County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2007
(Continued)
Capital Projects
Total Other
Governmental
2008 Projects TIF No. 13 Total Funds
REVENUES:
Property Taxes $ $ - $ - $ 1,146,353
Tax Increments 19,664 369,240 369,240
Special Assessments - - 337,521 2,296,155
Licenses and Permits - - 98,047 404,912
Intergovernmental:
State Grants - - 606,693 1,623,770
Other Grants and Aids - 300,000 326,376
Charges for Services - - 812 999,357
Fines and Forfeitures - - - 49,810
Miscellaneous:
Investment Income - - 587,144 1,242,050
Contributions and Donations - - 466,350 466,350
Other - - - 28,218
Total Revenues - 19,664 2,765,807 8,952,591
EXPENDITURES:
Current:
General Government - - - 358,416
Public Safety - - - 58,315
Public Works - - 1,159,817
Culture and Recreation - - - 2,154,861
Debt Service:
Principal - - - 3,110,000
Interest and Other Charges - - 87,281 1,025,868
Capital Outlay 56,130 17,698 6,591,298 6,669,789
Total Expenditures 56,130 17,698 6,678,579 14,537,066
Excess of Revenues Over
(Under) Expenditures (56,130) 1,966 (3,912,772) (5,584,475)
OTHER FINANCING SOURCES (USES):
Bonds Issued - - 2,801,990 2,815,000
Premium on Bonds Issued - - 9,956 9,956
Transfers In - - 718,643 2,522,170
Transfers Out - (1,966) (971,252) (1,008,152)
Total Other Financing Sources (Uses) - (1,966) 2,559,337 4,338,974
Net Change in Fund Balances (56,130) - (1,353,435) (1,245,501)
FUND BALANCES:
Beginning of Year - - 6,876,900 18,193,735
End of Year $ (56,130) $ - $ 5,523,465 $ 16,948,234
82
CITY OF SHAKOPEE
Scott County, Minnesota
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL -
TRANSIT FUND
For the Year Ended December 31, 2007
Variance with
Budgeted Amounts Actual Final Budget -
Original Final Amounts Over (Under)
REVENUES:
Property Taxes $ - $ - $ 14 $ 14
Intergovernmental Revenue:
State Grants 799,580 799,580 1,017,077 217,497
Charges for Services 152,760 152,760 26,434 (126,326)
Miscellaneous Revenues:
Investment Income 8,500 8,500 120,147 111,647
Total Revenues 960,840 960,840 1,163,672 202,832
EXPENDITURES:
Public Works:
Current 935,460 935,460 1,159,817 224,357
Capital Outlay 1,331,000 1,331,000 27,088 (1,303,912)
Total Expenditures 2,266,460 2,266,460 1,186,905 (1,079,555)
Excess of Revenues Over
(Under) Expenditures $ (1,305,620) $ (1,305,620) (23,233) $ 1,282,387
FUND BALANCES:
Beginning of Year 1,801,861
End of Year $ 1,767,428
83
CITY OF SHAKO PEE
Scott County, Minnesota
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL -
TELECOMMUNICATION FUND
For the Year Ended December 31, 2007
Variance with
Budgeted Amounts Actual Final Budget -
Original Final Amounts Over (Under)
REVENUES:
Licenses and Permits $ 300,000 $ 300,000 $ 306,865 $ 6,865
Miscellaneous Revenues:
Investment Incorne 8,000 8,000 35,885 27,885
Other - - 309 309
Total Revenues 308,000 308,000 343,059 35,059
EXPENDITURES:
General Government:
Current 306,860 307,980 242,993 (64,987)
Excess of Revenues
Over Expenditures 1,140 20 100,066 100,046
OTHER FINANCING USES:
Transfers Out (6,500) (6,500) (6,500) -
Excess of Revenues and Other
Financing Uses Over (Under) Expenditures $ (5,360) $ (6,480) 93,566 $ 100,046
FUND BALANCES:
Beginning of Year 547,326
End of Year $ 640,892
84
CITY OF SHAKOPEE
Scott County, Minnesota
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES -BUDGET AND ACTUAL -
ECONOMIC DEVELOPMENT AUTHORITY
For the Year Ended December 31,2007
Variance with
Budgeted Amounts Actual Final Budget -
Original Final Amounts Over (Under)
REVENUES:
Property Taxes $ 80,000 $ 80,000 $ 76,428 $ (3,572)
Intergovernmental Revenue:
Other Grants and Aids 28,000 28,000 26,376 (1,624)
Charges for Services:
General Government 5,200 5,200 - (5,200)
Miscellaneous Revenues:
Investment Income 6,000 6,000 20,685 14,685
Total Revenues 119,200 119,200 123,489 4,289
EXPENDITURES:
General Government:
Current 238,290 238,290 115,423 (122,867)
Excess of Revenues Over
(Under) Expenditures (119,090) (119,090) 8,066 127,156
OTHER FINANCING SOURCES (USES):
Transfers In 70,000 70,000 80,032 10,032
Transfers Out (19,200) (19,200) (19,200) -
Total Other Financing Sources (Uses) 50,800 50,800 60,832 10,032
Excess of Revenues and Other
Financing Sources Over (Under) Expenditures $ (68,290) $ (68,290) 68,898 $ 137,188
FUND BALANCES:
Beginning of Year 303,207
End of Year $ 372,105
85
CITY OF SHAKOPEE
Scott County, Minnesota
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL -
RECREATION FUND
For the Year Ended December 31, 2007
Variance with
Budgeted Amounts Actual Final Budget -
Original Final Amounts Over (Under)
REVENUES:
Charges for Services $ 971,120 $ 971,120 $ 972,111 $ 991
Miscellaneous Revenues:
Investment Income 15,000 15,000 54,607 39,607
Other 19,000 19,000 14,091 (4,909)
Total Revenues 1,005,120 1,005,120 1,040,809 35,689
EXPENDITURES:
Culture and Recreation:
Current 2,103,890 2,110,280 2,154,861 44,581
Capital Outlay 10,000 10,000 51,403 41,403
Total Expenditures 2,113,890 2,120,280 2,206,264 85,984
Excess of Revenues
Under Expenditures (1,108,770) (1,115,160) (1,165,455) (50,295)
OTHER FINANCING SOURCES:
Transfers In 1,108,770 1,108,770 1,108,770 -
Excess of Revenues and Other
Financing Sources Under Expenditures $ - $ (6,390) (56,685) $ (50,295)
FUND BALANCES:
Beginning of Year 409,348
End of Year $ 352,663
86
CITY OF SHAKO PEE
Scott County, Minnesota
COMBINING STATEMENT OF FUND NET ASSETS-
INTERNAL SERVICE FUNDS
December 31,2007
Governmental Activities - Internal Service Funds
Employee
Equipment Buildings Benefits Total
ASSETS:
Current Assets:
Cash and Cash Equivalents $ - $ , - $1,500,487 $ 1,500,487
Investments 3,735,247 1,985,327 - 5,720,574
Interest Receivable 27,196 14,677 11,058 52,931
Long-Term Receivable (Current Portion) 55,000 - - 55,000
Total Current Assets 3,817,443 2,000,004 1,511,545 7,328,992
Noncurrent Assets:
Long-Term Receivable 505,000 - - 505,000
Capital Assets:
Buildings and System - 29,725,095 - 29,725,095
Machinery and Equipment 7,832,223 - - 7,832,223
Construction in Progress - 4,800 - 4,800
Total Cost 7,832,223 29,729,895 - 37,562,118
Less Accumulated Depreciation (3,258,133) (5,654,359) - (8,912,492)
Net Capital Assets 4,574,090 24,075,536 - 28,649,626
Total Noncurrent Assets 5,079,090 24,075,536 - 29,154,626
Total Assets $8,896,533 $26,075,540 $1,511,545 $36,483,618
LIABILITIES AND NET ASSETS:
Current Liabilities:
Accounts Payable $ - $ 7,366 $ - $ 7,366
Contracts Payable - 2,900 - 2,900
Due to Other Funds - - 49,538 49,538
Current Compensated Absences - - 730,000 730,000
Total Current Liabilities - 10,266 779,538 789,804
Noncurrent Liabilities:
Compensated Absences - - 560,398 560,398
Total Liabilities - 10,266 1,339,936 1,350,202
Net Assets:
Invested in Capital Assets, Net of Related Debt 4,574,090 24,075,536 - 28,649,626
Unrestricted 4,322,443 1,989,738 171,609 6,483,790
Total Net Assets 8,896,533 26,065,274 171,609 35,133,416
Total Liabilities and Net Assets $8,896,533 $26,075,540 $1,511,545 $36,483,618
87
CITY OF SHAKOPEE
Scott County, Minnesota
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS -
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2007
Governmental Activities - Internal Service Funds
Employee
Equipment Buildings Benefits Total
OPERATING REVENUES:
Rental Charges $1,013,400 $ 863,928 $ - $ 1,877,328
Other Charges - - 642,483 642,483
Total Operating Revenues 1,013,400 863,928 642,483 2,519,811
OPERATING EXPENSES:
Employee Benefits - - 642,483 642,483
Depreciation 501,678 729,129 - 1,230,807
Total Operating Expenses 501,678 729,129 642,483 1,873,290
Operating Income 511,722 134,799 - 646,521
NONOPERATING REVENUES (EXPENSES):
Investment Income 259,121 119,137 88,736 466,994
Gain on Disposal of Assets 4,928 - - 4,928
Total Nonoperating Revenues (Expenses) 264,049 119,137 88,736 471,922
Income before Capital Contributions 775,771 253,936 88,736 1,118,443
Capital Contributions - 36,734 - 36,734
Change in Net Assets 775,771 290,670 88,736 1,155,177
NET ASSETS:
Beginning of Year 8,120,762 25,774,604 82,873 33,978,239
End of Year $8,896,533 $26,065,274 $171,609 $35,133,416
88
CITY OF SHAKOPEE
Scott County, Minnesota
COMBINING STATEMENT OF CASH FLOWS -
INTERNAL SERVICE FUNDS
For the Year Ended December 31,2007
Employee
Equipment Buildings Benefits Total
CASH FLOWS - OPERATING ACTIVITIES:
Receipts from Customers and Users $ 1,013,400 $ 863,928 $ 642,483 $ 2,519,811
Payments to Suppliers - (383,265) - (383,265)
Payments to Employees - - (608,645) (608,645)
Payments for Interfund Services - - 49,538 49,538
Net Cash Flows - Operating Activities 1,013,400 480,663 83,376 1,577,439
CASH FLOWS - CAPITAL AND RELATED
FINANCING ACTIVITIES:
Proceeds from Disposal of Capital Assets 191,524 - - 191,524
Acquisition of Capital Assets (959,847) (669,138) - (1,628,985)
Net Cash Flows - Capital and Related
Financing Activities (768,323) (669,138) - (1,437,461)
CASH FLOWS - INVESTING ACTIVITIES:
Proceeds (Purchases) ofInvestments (557,567) 69,517 (488,050)
Payment Received for Notes Receivable 55,000 - - 55,000
Interest Received 257,490 118,958 87,578 464,026
Net Cash Flows - Investing Activities (245,077) 188,475 87,578 30,976
Net Change in Cash and Cash Equivalents - - 170,954 170,954
CASH AND CASH EQUIVALENTS:
January 1 - - 1,329,533 1,329,533
December 31 $ - $ - $ 1,500,487 $ 1,500,487
RECONCILIATION OF OPERATING INCOME
TO NET CASH FLOWS - OPERATING ACTIVITIES:
Operating Income $ 511,722 $ 134,799 $ - $ 646,521
Adjustments to Reconcile Operating Income
to Net Cash Flows - Operating Activities:
Depreciation Expense 501,678 729,129 - 1,230,807
Accounts Payable - (367,217) - (367,217)
Contracts Payable - (16,048) - (16,048)
Due to Other funds - - 49,538 49,538
Compensated Absences Payable - - 33,838 33,838
Total Adjustments 501,678 345,864 83,376 930,918
Net Cash Flows - Operating Activities $ 1,013,400 $ 480,663 $ 83,376 $ 1,577,439
NONCASH INVESTING, CAPITAL AND FINANCING
ACTIVITIES:
Contributions of Capital Assets from the Municipality $ - $ 36,734 $ - $ 36,734
Purchases of Capital Assets on Account - (29,214) - (29,214)
Disposals and Transfers of Capital Assets (422,390) - - (422,390)
Disposals and Transfers of Accmnulated Depreciation 235,794 - - 235,794
89
CITY OF SHAKOPEE
Scott County, Minnesota
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES -
ESCROW AGENCY FUND
For the Year Ended December 31, 2007
Balance at Balance at
December 31, December 31,
2006 Additions Deductions 2007
ASSETS:
Current:
Cash and Investments
(Including Cash Equivalents) $ 1,592,928 $ 1,064,443 $ 1,323,494 $ 1,333,877
Other Receivables 77 ,053 - 77,053 -
Total Assets $ 1,669,981 $ 1,064,443 $ 1,400,547 $ 1,333,877
LIABILITIES:
Accounts Payable $ 81,411 $ 1,372,367 $ 1,453,778 $ -
Deposits Payable 1,588,570 1,156,527 1,411,220 1,333,877
Total Liabilities $ 1,669,981 $ 2,528,894 $ 2,864,998 $ 1,333,877
90
STATISTICAL SECTION
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 92
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 97
Portrayed is information to help the reader assess the
City's most important local revenue source, the property tax.
Debt Capacity 101
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 106
Shown are demographic and economic indicators to help the
reader understand the environment within which the City's
financial activities take place.
Operating Information 108
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.
91
CITY OF SHAKO PEE
Scott County, Minnesota
Table 1
NET ASSETS BY COMPONENT
Years 2003 Through 2007
2003 2004 2005 2006 2007
Governmental Activities:
Invested in Capital Assets, Net of Related Debt $ 94,388,758 $ 90,281,410 $ 111,237,672 $ 119,661,761 $ 113,534,416
Restricted 15,231,314 29,731,412 21,638,112 12,998,982 13,081,337
Unrestricted 15,241,647 21,214,073 21,845,121 29,264,714 28,316,571
Total Governmental Activities Net Assets $ 124,861,719 $ 141,226,895 $ 154,720,905 $ 161,925,457 $ 154,932,324
Business-Type Activities:
Invested in Capital Assets, Net of Related Debt $ 81,725,264 $ 89,415,817 $ 99,140,973 $ 109,337,014 $ 114,546,218
Restricted 978,371 1,867,077 2,232,469 880,069 1,026,351
Unrestricted 38,234,063 37,354,576 41,291,469 42,400,797 46,169,289
Total Business-Type Activities Net Assets $ 120,937,698 $ 128,637,470 $ 142,664,911 $ 152,617,880 $ 161,741,858
Primary Govemment:
Invested in Capital Assets, Net of Related Debt $ 176,114,022 $ 179,697,227 $ 210,378,645 $ 228,998,775 $ 228,080,634
Restricted 16,209,685 31,598,489 23,870,581 13,879,051 14,107,688
Unrestricted 53,475,710 5S,568,649 63,136,590 71,665,511 74,486,860
Total Primary Govemment Net Assets $ 245,799,417 $ 269,864,365 $ 297,385,816 $ 314,543,337 $ 316,675,182
Note: The City began to report accrual information when it implemented GASB Statement No. 34 in fiscal year 2003.
92
CITY OF SHAKO PEE
Scott County, Minnesota
Table 2
CHANGES IN NET ASSETS
Years 2003 Through 2007
2003 2004 2005 2006 2007
EXPENSES:
Governmental Activities:
General Government $ 2,761,2\0 $ 3,135,421 $ 2,563,526 $ 3,\61,106 $ 3,543,980
Public Safety 4,995,127 5,461,190 6,190,689 6,856,485 8,301,075
Public Works 3,673,623 6,036,920 8,298,258 6,798,917 15,264,606
Economic Development 683,035 360,\67 314,858 333,462 363,805
Culture and Recreation 894,321 2,150,765 3,664,944 4,653,240 5,323,087
Other 668,531 861,864 924,270 896,110 1,042,133
Total Governmental Activities Expenses 13,675,847 18,006,327 21,956,545 22,699,320 33,838,686
Business- Type Activities:
Electric 17 ,634,004 19,820,900 23,378,764 29,169,297 34,710,974
Water 2,337,860 2,723,003 2,460,977 2,949,990 3,332,132
Sewer 1,835,242 2,009,468 2,349,047 2,786,234 2,938,955
Storm 800,092 941,842 999,849 1,523,343 \ ,352,078
Recreation 1,552,524 - - -
Total Business-Type Activities Expenses 24,159,722 25,495,213 29,188,637 36,428,864 42,334,139
Total Primary Government Expenses $ 37,835,569 $ 43,501,540 $ 51,145,182 $ 59,128,184 $ 76,172,825
PROGRAM REVENUES:
Governmental Activities:
Charges for Services:
General Government $ \,706,644 $ 3,591,64\ $ 791,504 $ 714,105 $ 583,247
Public Safety 2,408,012 3,446,465 3,462,283 2,063,023 1,650,235
Public Works 3,69\,149 4,534,285 2,668,728 2,986,495 2,615,402
Culture and Recreation \,330,062 1,497,853 1,826,847 \,676,630 1,086,750
Operating Grants and Contributions 2,622,953 4,303,581 3,646,605 1,653,238 1,943,805
Capital Grants and Contributions 11,009 - 8,666,283 6,116,366 2,463,129
Total Governmental Activities Program Revenues 11,769,829 17,373,825 21,062,250 \5,209,857 10,342,568
Business-Type Activities:
Charges for Services:
Electric 19,733,990 22,\6\,542 27,425,921 31,906,714 37,407,565
Water 2,569,848 2,349,505 2,627,084 3,127,207 3,525,140
Sewer 2,827,777 3,078,191 2,971,60\ 3,471,984 2,806,371
Storm 1,947,139 \,806,974 1,937,430 \,859,9\2 1,505,247
Recreation 758,124 - - - -
Operating Grants and Contributions 2,345 - - - -
Capital Grants and Contributions 8,800,811 10,844,269 10,913,464 6,174,786 4,138,977
Total Business-Type Activities Program Revenues 36,640,034 40,240,48\ 45,875,500 46,540,603 49,383,300
Total Primary Government Program Revenues $ 48,409,863 $ 57,6\4,306 $ 66,937,750 $ 61,750,460 $ 59,725,868
NET (EXPENSE) REVENUE:
Governmental Activities $ (1,906,018) $ (632,502) $ (894,295) $ (7,489,463) $ (23,496,118)
Business-Type Activities 12,480,312 14,745,268 16,686,863 10,111,739 7,049,161
Total Primary Government Net Expense $ 10,574,294 $ 14,112,766 $ \5,792,568 $ 2,622,276 $ (16,446,957)
93
CITY OF SHAKOPEE
Scott County, Minnesota
Table 2
CHANGES IN NET ASSETS
Years 2003 Through 2007
2003 2004 2005 2006 2007
GENERAL REVENUES AND OTHER
CHANGES IN NET ASSETS:
Governmental Activities:
Taxes:
Property Taxes $ 7,995,002 $ 7,842,043 $ 9,341,977 $ 10,547,177 $ 12,767,354
Other Taxes 507,706 364,211 314,858 336,648 369,240
Unrestricted Investment Earnings 550,705 740,612 951,795 1,661,257 2,232,717
Gain on Disposal of Assets 69,623 294,833 746,340 2,700 22,628
Enterprise Fund Reclassified to Special Revenue - 5,539,108 1,658,132 -
Transfers 443,651 2,215,871 1,375,203 2,146,233 1,111,046
Total Governmental Activities 9,566,687 16,996,678 14,388,305 14,694,015 16,502,985
Business-Type Activities:
Investment Earnings 942,040 709,483 870,714 1,973,715 3,185,863
Gain on Disposal of Assets 9,260 - 409,918 13,749
Specialltem - (5,539,108) (1,658,132)
Transfers (443,651 ) (2,215,871) (1,375,203) (2,146,233) (1,111 ,046)
Total Business-Type Activities 507,649 (7,045,496) (1,752,703) (158,769) 2,074,817
Total Primary Government $ 10,074,336 $ 9,951,182 $ 12,635,602 $ 14,535,246 $ 18,577,802
CHANGE IN NET ASSETS:
Government Activities $ 7,660,669 $ 16,364,176 $ 13,494,010 $ 7,204,552 $ (6,993,133)
Business-Type Activities 12,987,961 7,699,772 14,934,160 9,952,970 9,123,978
Total Primary Government $ 20,648,630 $ 24,063,948 $ 28,428,170 $ 17,157,522 $ 2,130,845
Note: The City began to report accrual information when it implemented GASB Statement No. 34 in fiscal year 2003,
94
CITY OF SHAKO PEE
Scott County, Minnesota
Table 3
FUND BALANCES - GOVERNMENTAL FUNDS
Last 10 Fiscal Years
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
GENERAL FUND:
Reserved $ - $ $ 200,000 $ $ $ 79,003 $ 13,586 $ 16,465 $ [,490,157 $ 1,810,650
Unreserved 4,019,747 4,700,338 4,673,116 3,144,560 3,534,080 5,565,816 7,233,268 9,662,677 8,354,477 7,896,883
Total General Fund $ 4,019,747 $ 4,700,338 $ 4,873,116 $ 3,144,560 $ 3,534,080 $ 5,644,819 $ 7,246,854 $ 9,679,142 $ 9,844,634 $ 9,707,533
All Other Governmental Funds:
Reserved:
Special Revenue Funds 654,833 676,404 680,537 945,041 1,456,237 1,778,684 2,232,061 2,861,564 3,386,721 2,489,775
Debt Service Funds 8,608,467 10,082,459 9,321,002 8,502,950 7,653,349 6,369,303 10,837,684 9,236,020 7,930,114
Capital Projects Funds 9,674,967 6,107,324 6,959,298 4,547,275 6,818,306 7,088,887 17,088,803 9,915,610 8,082,799 3,849,703
Unreserved:
Special Revenue Funds - - - (4,971) - 993,555
Debt Service Funds - - - - - - - 7,941,439
Capital Projects Funds (294,026) (970,952) (512,538) (24,624) (777,600) (705,537) (28,081) (1,833,937) (1,205,899) 1,673,762
Total all Other Governmental
Funds $ 18,644,241 $ 15,895,235 $ 16,448,299 $ 13,970,642 $ 15,150,292 $ 14,531,337 $ 30,125,496 $ 20,179,257 $ 18,193,735 $ 16,948,234
'Cl
u,
CITY OF SHAKOPEE
Scott County, Minnesota
Table 4
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Last 10 Fiscal Years
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Revenues:
Taxes $ 5,200,663 $ 5,499,168 $ 5,148,137 $ 6,069,719 $ 7,128,598 $ 7,991,699 $ 8,207,254 $ 9,621,72] $ 10,815,367 $ 13,084,595
Special Assessments 5,154,203 2,351,600 2,959,962 2,380,186 1,466,432 3,158,560 3,175,161 2,564,470 1,751,871 2,301,560
Licenses and Permits 1,853,115 2,415,281 2,517,470 3,159,222 3,814,646 4,748,457 4,173,804 4,444,491 2,675,935 1,378,570
Intergovernmental 2,084,018 1,293,661 2,234,040 1,627,879 5,230,607 2,612,877 4,162,581 3,646,605 2,877,245 2,540,584
Charges for Service 1,359,853 1,964,050 1,982,395 1,093,146 1,489,516 1,537,412 2,382,405 2,455,171 2,290,996 2,089,375
Fines and Forfeits 99,140 148,835 172,017 230,085 253,348 275,583 288,492 322,579 422,850 501,228
Miscellaneous 1,418,724 922,833 1,892,997 1,386,351 1,656,828 605,947 766,614 1,159,536 1,979,419 2,322,755
Total Revenues 17,169,716 14,595,428 16,907,018 15,946,588 21,039,975 20,930,535 23,156,311 24,214,573 22,813,683 24,218,667
Expenditures:
General Government 1,748,550 2,269,248 2,458,342 2,770,732 3,186,072 3,192,768 3,486,029 3,120,544 3,149,717 3,479,925
Police 1,693,868 1,971,138 2,090,873 2,421,948 3,014,829 3,148,785 3,698,352 4,159,724 4,842,268 5,562,945
Fire 453,576 576,220 728,749 767,061 889,390 975,656 1,141,700 1,194,610 1,481,327 1,833,876
Protective Inspection 253,465 359,572 499,892 521,856 555,384 645,030 690,920 855,864 829,526 945,196
Public Works 1,975,808 2,022,599 1,907,102 2,019,943 2,258,903 2,221,004 2,564,662 3,003,554 3,095,392 3,769,491
Culture and Recreation 390,557 458,417 621,306 664,340 622,099 669,570 2,489,749 2,792,590 3,453,545 3,651,539
Miscellaneous 413,064 109,182 86,805 103,681 109,455 317,167
Debt Service:
Principal 2,250,000 2,010,000 4,195,000 3,265,000 3,015,000 3,720,000 1,775,000 1,845,000 3,055,000 3,110,000
Interest and other charges 804,576 964,694 847,692 770,152 729,300 717,098 701,976 1,106,324 1,195,618 1,025,868
Capital Outlay 8,044,678 2,619,354 4,585,657 4,396,346 9,249,946 5,532,652 7,432,575 14,058,508 10,650,449 7,288,033
Total Expenditures 18,028,142 13,360,424 18,021,418 17,701,059 23,630,378 21,139,730 23,980,963 32,136,718 31,425,856 30,666,873
Excess of Revenues Over
(Under) Expenditures (858,426) 1,235,004 (1,114,400) (1,754,471) (2,590,403) (209,195) (824,652) (7,922,145) (8,612,]73) (6,448,206)
Other Financing Sources
(Uses ):
Bonds Issued 6,838,664 2,550,892 4,938,612 2,215,567 15,070,000 3,440,000 2,815,000
Sale of Assets 130,100 278,628 102,517 13,680 9,644 41,761 299,183 753,024 2,700 17,700
Premium on Bonds Issued 20,275 9,956
Refunded Bond Escrow (2,190,000) -
Transfers In 3,038,580 2,866,069 2,273,569 1,718,995 1,701,837 1,732,872 5,963,741 3,374,566 6,683,532 4,411,281
Transfers Out (2,495,342) (4,154,048) (3,086,736) (4,268,740) (2,490,520) (2,289,221) (3,312,078) (1,529,396) (3,354,364) (2,188,333)
Total Other Financing Sources
(Uses) 7,512,002 (1,009,351) 1,840,242 (2,536,065) 4,159,573 1,700,979 18,020,846 408,194 6,792,143 5,065,604
Net Change in Fund Balance $ 6,653,576 $ 225,653 $ 725,842 $(4,290,536) $ 1,569,170 $ 1,491,784 $17,196,194 $ (7,513,951) $ (1,820,030) $ (1,382,602)
Debt Service as a Percentage of
Noncapital Expenditures 31% 28% 38% 30% 26% 28% 15% 16% 19% 16%
-0
0,
CITY OF SHAKOPEE
Scott County, Minnesota
Table 5
TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
Last 10 Fiscal Years
Taxable Tax
Estimated Capacity as a
Commercial Less Less Net Net Taxable Taxable Percentage of
Fiscal Residential Industrial Other Tax Increment Fiscal Tax Market Estimated
Year Property Property Property Property Disparities Capacity Value Market Value
1998 $ 6,860,681 $ 9,138,720 $ 548,855 $ \ ,332,062 $ \ ,668,299 $ 13,547,895 $ 776,534,400 1.74%
1999 7,580,688 9,460,927 551,646 1,231,584 1,452,992 14,908,685 897,901,119 1.66%
2000 8,920,457 10,681,728 530,294 1,211,989 1,718,112 17,202,378 1,087,145,000 1.58%
200\ 1\ ,560,704 13,820,811 542,037 1,801,828 1,997,080 22,124,644 1,369,102,400 1.62%
2002 11,469,272 10,023,762 409,721 975,773 1,543,453 19,383,529 1,743,136,300 1.11%
2003 13,890,536 10,452,944 589,540 497,860 2,035,749 22,399,41\ 2,062,115,200 1.09%
2004 16,721,302 10,609,240 913,912 497,255 2,\21,170 25,626,029 2,464,564,300 1.04%
2005 20,394,086 11,749,438 528,300 327,963 2,\32,628 30,211,233 2,654,161,900 1.14%
2006 23, \62,320 12,710,783 565,215 352,543 1,615,190 31,618,556 2,987,657,400 1.06%
2007 26,817,616 14,013,644 675,479 378,593 1,963,379 36,078,921 3,419,040,600 1.06%
Source: Scott County Auditor
97
CITY OF SHAKOPEE
Scott County, Minnesota
Table 6
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Last 10 Fiscal Years
City Direct Rate General
Special Obligation
Assessment Shako pee Debt Service
Fiscal Operating Debt Service Total Direct School Scott Other Market Value
Year Rate Rate Rate District County Jurisdictions Rate
1998 0.19506 0.01621 0,21127 0,73306 0.40679 0.06329 0,03237
1999 0.21660 0.01698 0,23358 0,58686 0.39282 0.03192 0.02909
2000 0,18699 0.01433 0.20132 0.50203 0.36182 0.04324 0,02497
2001 0.16959 0.01024 0.17983 0.42982 0.31729 0.03034 0.01980
2002 0.33194 0,00782 0.33976 0.26080 0.39517 0.04976 0.00764
2003 0.33172 0,00767 0.33939 0.24168 0.38554 0.05685 0.01393
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
Sources: Scott County Auditor
98
CITY OF SHAKO PEE
Scott County, Minnesota
Table 7
PRINCIPAL TAXPA YERS
Current Year and Nine Years Ago
2007 1997
Percentage Percentage
2006/07 of Total 1996/97 of Total
Tax Cap, Tax Cap. Tax Cap. Tax Cap.
Taxpayer Type of Business Value Rank Value Value Rank Value
Excel Energy Electrical Generation $ 565,320 I 1.57% $ 931,178 I 6.95%
Shakopee Crossings Retail 424,789 2 1.18%
Rahr Malting Grain Processing 411,700 3 1.14% 914,122 2 6.83%
Seagate ManufacturinglResearch 399,250 4 1.11%
Wal-Mart Real Estate 373,630 5 1.04% -
Inland Shakopee Valley Market Retail 349,682 6 0.97%
Certain teed Manufacturing 344,552 7 0.95% 299,731 7 2.24%
Valley Fair Amusement Park 319,819 8 0.89% 572,765 5 4.28%
First Industrial LP Property Management 305,462 9 0,85%
Ryan Companies Property Management 292,170 10 0.81%
KMart Warehouse WarehouselDistribution Center - 869,719 3 6.50%
Tsumara Manufacturing - 559,145 4 4.18%
Opus Warehouse - 309,056 6 2.31%
Canterbury Park Horse Racing - - 274,400 8 2.05%
AA Holdings Auto Auction - - 252,008 9 1,88%
Anchor Glass Manufacturing - - 213,192 10 1.59%
Total $ 3,786,374 10.49% $ 5,195,316 38.80%
Source: Scott County Auditor
99
CITY OF SHAKOPEE
Scott County, Minnesota
Table 8
PROPERTY TAX LEVIES AND COLLECTIONS
Last 10 Fiscal Years
Ratio of
Accumulated
Percentage Delinquent
Collections Percentage Collections of Tota! 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
1998 $ 3,263,583 $ 3,230,184 99% $ 22,665 $ 3,252,849 100% $ 78,834 2.42%
1999 3,819,736 3,757,750 98% 25,186 3,782,936 99% 65,389 1.71%
2000 3,853,808 3,738,963 97% 24,342 3,763,305 98% 88,656 2.30%
2001 4,477,969 4,335,602 97% 62,905 4,398,507 98% 61,661 1.38%
2002 6,645,713 6,484,920 98% 41,342 6,526,262 98% 70,622 1,06%
2003 7,889,018 7,191,567 91% 47,055 7,238,622 92% 79,710 1.01%
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 12,725,449 12,418,768 98% 91,200 12,418,768 98% 331,315 2.60%
Source: Scott County Auditor
I. The above data does not include tax increment districts.
2, In 2003 to 2006, the State of Minnesota cancelled $ 561,000 in annual aid payments to the
City of Shako pee that were part of the tax levy,
100
CITY OF SHAKOPEE
Scott County, Minnesota
Table 9
RATIO OF OUTSTANDING DEBT BY TYPE
Last 10 Fiscal Years
Governmental Activities
G.O. Revenue B usiness- Type
General Tax Special Activities Total Percentage
Fiscal Obligation Increment Assessment Revenue Primary of Personal Per
Year Bonds Bonds Bonds Bonds Government Income Capita
1998 $ 2,980,000 $ 2,615,000 $ 16,405,000 $ 4,820,000 $ 26,820,000 5.6% $ 1,635
1999 2,880,000 2,020,000 15,090,000 14,480,000 34,470,000 6.5% 2,004
2000 2,780,000 1,400,000 14,215,000 14,235,000 32,630,000 4,7% 1,586
2001 2,675,000 755,000 11,660,000 26,000,000 41,090,000 5.5% 1,852
2002 2,565,000 390,000 14,055,000 25,660,000 42,670,000 5.5% 1,785
2003 2,445,000 - 13,060,000 25,215,000 40,720,000 5.0% 1,631
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 4.6% 1,593
2006 7,950,000 - 17,070,000 34,535,000 59,555,000 5.0% 1,747
2007 7,560,000 - 17,165,000 33,895,000 58,620,000 N/A 1,720
Sources: See Table 14 for income and population data.
101
CITY OF SHAKO PEE
Scott County, Minnesota
Table 10
RATIOS OF GENERAL BONDED OUTSTANDING
Last 10 Fiscal Years
Percentage of Percentage of
General Actual Taxable Total
Fiscal Obligation Value of Per Personal
Year Bonds Property Capita Income
1998 $ 2,980,000 0.38% $ 182 0.62%
1999 2,880,000 0.32% 167 0.54%
2000 2,780,000 0.26% 135 0.40%
2001 2,675,000 0.20% 121 0.36%
2002 2,565,000 0.15% 107 0.33%
2003 2,445,000 0.12% 98 0.30%
2004 10,595,000 0.43% 366 1.07%
2005 8,275,000 0.27% 267 0.76%
2006 7,950,000 0.27% 242 N/A
2007 7,560,000 0.21% 223 N/A
Sources:
1. Metropolitan Council population estimated except for 2000 which is the
the official census figure. 2005/6/7 is the City's estimate.
2. Scott County Auditor
102
CITY OF SHAKOPEE
Scott County, Minnesota
Table 11
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
December 31, 2007
Percentage Amount
Applicable Applicable
G.O, to City of to City of
Debt Shakopee Shakopee
City of Shakopee $ 7,560,000 100,0% $ 7,560,000
Independent School District No. 720 136,760,000 85.3% 116,656,280
Independent School District No. 191 50,820,000 1.9% 965,580
Scott County 78,400,000 24.8% 19,419,680
Metropolitan Council 31,795,000 1.1% 349,745
Metropolitan Transit 184,170,000 1.3% 2,394,210
Total Direct and Overlapping Debt $ 489,505,000 $ 147,345,495
Source: Scott County Auditor
Dakota County Auditor
State Department of Revenue
103
CITY OF SHAKOPEE
Scott County, Minnesota
Table 12
LEGAL DEBT MARGIN INFORMA nON
Last 10 Fiscal Years
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Market Value (taxable) $ 776,534,400 $ 897,901,119 $ 1,087,145,000 $ 1,369,102,400 $ 1,743,136,300 $ 2,062,115,200 $ 2,464,564,300 $ 2,654,161,900 $ 2,987,657,400 $ 3,419,040,600
Debt Limit 2% of
Market Value (Note A) 15,530,688 17,958,022 21,742,900 27,382,048 34,862,726 41,242,304 49,291,286 53,083,238 59,753,148 68,380,812
Amount of Debt Applicable to
Debt Limit:
General Obligation Bonds 2,980,000 2,880,000 2,780,000 2,675,000 2,565,000 2,445,000 10,595,000 8,275,000 7,950,000 7,560,000
Available in Debt Service
Funds (209,286) (326,985) (357,547) (390,619) (284,119) (297,657) (2,539,292 ) (1,155,148) (810,494) (834,155)
Total Debt Applicable
to Debt Limit 2,770,714 2,553,015 2,422,453 2,284,381 2,280,881 2,147,343 8,055,708 7,119,852 7,139,506 6,725,845
Legal Debt Margin $ 12,759,974 $ 15,405,007 $ 19,320,447 $ 25,097,667 $ 32,581,845 $ 39,094,961 $ 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 of2% 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:
(I) 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 extinguislunent 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.
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CITY OF SHAKOPEE
Scott County, Minnesota
Table 13
PLEDGED-REVENUE COVERAGE
Last 10 Fiscal Years
Utility Bonds
Utility Less Net
Fiscal Service Operating Available Debt Service
Year Charges Expense Revenue Principal Interest Coverage
1998 $ 13,479,624 $ 10,436,594 $ 3,043,030 $ 200,000 $ 261,217 6.60
1999 15,615,257 11,990,257 3,625,000 205,000 252,687 7.92
2000 19,212,094 14,212,682 4,999,412 230,000 620,116 5.88
2001 21,667,471 16,153,413 5,514,058 235,000 797,759 5.34
2002 21,148,771 16,343,532 4,805,239 340,000 1,468,242 2.66
2003 22,871,121 17,585,831 5,285,290 580,000 1,348,883 2.74
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 3.13
1. Operating expense excludes depreciation and amortization.
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CITY OF SHAKO PEE
Scott County, Minnesota
Table 14
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last 10 Calendar Years
Fiscal School Unemployment Total Per Capita Personal
Year Population (1) Enrollment (2) Rate (3) Employment Income (4) Income (5)
1998 16,400 3,528 2.0% N/A $ 29,076 $ 476,846,400
1999 17,200 3,723 1.8% N/A 30,894 531,376,800
2000 20,568 3,900 2.6% 12,740 33,709 693,326,712
2001 22,192 3,892 4.0% 13,809 33,401 741,234,992
2002 23,900 4,487 4.0% 15,024 32,575 778,542,500
2003 24,967 4,790 4.3% 15,887 32,760 817,918,920
2004 28,913 5,121 3.9% 16,213 34,284 991,253,292
2005 31,000 6,247 3.6% 16,192 34,955 1,083,605,000
2006 32,800 6,643 3.7% 17,787 N/A N/A
2007 33,960 6,905 4.6% 18,225 N/A N/A
Source: 1. Metropolitan Council population estimates except for 2000 which is the official
census figure. 2005/6/7 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 - Scott County data
5. Scott County per capita income times population
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CITY OF SHAKOPEE
Scott County, Minnesota
Table 15
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
2007 1997
Total Total
City City
Taxpayer Type of Business Employees Rank Employment Employees Rank Employment
Valley Fair Amusement Park 1,600 I 8.78% 1,500 I 14,01%
Seagate ManufacturinglResearch 1,500 2 8.23%
Canterbury Park Horse Racing 1,000 3 5.49%
St. Francis RMC Health Care 800 4 4.39% 363 7 3.39%
Independent School District No. 720 Education 785 5 4.31% 400 6 3.74%
Scott County Government 675 6 3.70% 500 3 4.67%
North Star Auto Auction Auto Auction 313 7 1.72%
TORO Manufacturing 280 8 1.54% 275 10 2.57%
CertainTeed Roofing Manufacturing 275 9 1.51% 300 8 2.80%
Anchor Glass Glass Container Manufacturing 272 10 280 9 2.62%
ADC Manufacturing - 650 2 6.07%
Kmart Distribution Center - - 424 4 3.96%
American Color - SVP Printing 273 1.50% 415 5 3.88%
6,173 42,33% 5,107 41.08%
Total Employment 18,225 10,703
Source: Minnesota Department of Employment and Economic Development.
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CITY OF SHAKO PEE
Scott County, Minnesota
Table 16
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
Last 10 Fiscal Years
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
General Government:
Administration 4 4 4 6 6 6 6 6 6 5
City Clerk 3 4 4 4 3 4 4 4 4 4
Finance 4 4 4 4 4 3 3 3 3 3
Planning 5 7 5 5 6 6 5 5 5 5
Facilities Maintenance 1 1 1 1 1 1 4 4 6 6
Information Technology 1 1 1 2 2 2 2
Public Safety:
Police:
Licensed 22 23 24 25 34 34 40 42 45 46
Other 4 5 6 6 7 7 7 9 7 7
Fire:
Full Time 1
Paid on Call 44 45 47 47 50 50 50 50 48 48
Building Inspection 4 5 7 7 7 7 8 8 8 7
Public Works:
Engineering 7 8 8 9 9 9 9 9 9 7
Street 8 7 9 9 9 9 11 12 12 12
Shop 2 2 2 2 2 3 3 3 3 3
Park and Recreation:
Park Maintenance 4 5 5 6 7 7 7 7 7 8
Recreation 6 7 7 9 8 8 8 10 10 10
Subtotal 118 126 132 141 154 155 167 174 175 174
Shakopee Public Utilities:
Electric 15 18 16
Water 7 8 8
Other 22 22 22
Subtotal 44 48 46
Total 218 223 220
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CITY OF SHAKO PEE
Scott County, Minnesota
Table 17
OPERATING INDICA TORS BY FUNCTIONIPROGRAM
Last Ten Fiscal Years
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
General Government:
Planning:
Number of Case Files 115 118 101 102 121 127 109 120 91 67
Number of Plats Filed 27 26 16 19 10 11 9 7 10 3
Number of Acres Platted N/A N/A 119 142 378 385 238 321 155 38
Public Safety:
Police:
Arrests N/A N/A N/A N/A 1,348 1,147 1,248 1,451 1,770 2,199
Citations N/A N/A N/A N/A 3,805 3,129 3,802 3,843 4,970 6,073
Calls for Service N/A N/A N/A 13,213 13,939 14,799 16,062 17,363 18,333 19,606
Fire:
Calls for Service 340 370 457 488 446 482 479 539 494 609
Building Inspection:
Building Permits Issued 819 1,057 1,473 1,469 1,310 1,744 1,638 1,512 1,131 1,194
Number of Inspections N/A 1,844 12,204 11,878 11,416 15,016 14,535 15,175 9,671 8,174
Single Family Homes Permitted 175 357 458 442 260 384 396 352 223 138
Public Works:
Engineering:
Amount of Construction (000) 3,908 3,839 3,850 7,048 14,160 9,569 17,927 13,178 10,279 4,730
Street:
Miles of Roadway 108 115 119 124 131 138 114 123 153 154
Park and Recreation:
Park Maintenance:
Acres Maintained 612 612 612 638 655 671 760 925 930 930
Recreation:
Program Participants N/A N/A N/A N/A 9,911 10,194 9,693 9,842 9,928 10,847
Community Center Members N/A N/A N/A N/A 520 556 541 516 578 597
Community Center Admissions N/A N/A N/A N/A 70,088 77,014 75,018 77,543 91,776 100,044
Shakopee Public Utilities:
Electric:
Number of Metered Accounts - - - 14,698 15,275 15,436
KWH Sold (row) - - - - 401 371 397
Peak Demand KW 45,300 56,200 62,500 71,l 00 67,000 74,700 70,000 86,500 94,100 93,058
Water:
Number of Metered Accounts 9,310 9,717 9,924
Gallons Pumped (mg) 951 923 1,271 1,422 1,364 1,629 1,716 1,762 1,931 1,909
Peak Demand (mg) 6,22 6.20 8.81 10.03 8,60 12.30 10,36 12.41 13.37 15,00
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CITY OF SHAKOPEE
Scott County, Minnesota
Table 18
CAPITAL ASSET STATISTICS BY FUNCTIONIPROGRAM
Last 10 Fiscal Years
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Police:
Stations 1 1 1 1 1 1 1 1 1 1
Patrol Zones 3 3 4 4 4 4 4 4 4 4
Patrol Units N/A N/A 10 11 12 12 13 13 15 15
Fire Stations 2 2 2 2 2 2 2 2 2 2
Street:
Miles of Roadway 108 115 119 124 131 138 114 123 153 154
Traffic Signals 18 21 21 21 21 23 25 25 25 25
Parks:
Acres 612 612 612 638 655 671 760 925 1,015 1,015
Ball Fields 42 42 42 42 42 42 46 46 47 47
Playgrounds 11 11 11 12 12 13 13 13 14 14
Electric:
Number of Substations 3 3 4 4 4 4 4 4 4 4
Water:
Miles of Water Mains - - - - - - - - 145 145
Fire Hydrants - - - - - - - - 1,750 1,750
Storage Capacity (mg) - - - - - - 10 10 10 10
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I CITY OF SHAKO PEE
Scott County, Minnesota
I Reports on
Government Auditing Standards
and Legal Compliance
For the Fiscal Year Ended December 31, 2007
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TABLE OF CONTENTS
I REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
I AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ............................... 1
I REPO R TON LEGAL CO MPLIAN CE............................... ................................................... 3
SCHEDULE OF FINDINGS AND RESPONSES ON LEGAL
CO MPLIAN CE AND INTERNAL CONTROL.... .............................................................. 4
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I REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
I ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
I June 27, 2008
I Honorable Mayor and Members
of the City Council
City of Shakopee
I Shakopee, Minnesota
I We have audited the financial statements of the governmental activities, the business-type
activities, each major fund, the aggregate remaining fund information and fiduciary activities of
the City of Shakopee, Minnesota, as of and for the year ended December 31, 2007, and have
I issued our report thereon dated June 27, 2008. We conducted our audit in accordance with U.S.
generally accepted auditing standards and the standards applicable to financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United States.
I INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit, we considered the City's internal control over financial
I reporting as a basis for designing our auditing procedures 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 internalcontrol over financial reporting. Accordingly, we do not
I express an opinion on the effectiveness of the City's internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose
I described in the preceding paragraph and would not necessarily identify all deficiencies in
internal control over financial reporting that might be significant deficiencies or material
weaknesses. However, as discussed below, we identified certain deficiencies in internal control
over financial reporting that we consider to be significant deficiencies.
I A control deficiency exists when the design or operation of a control does not allow management
or employees, in the normal course or performing their assigned functions, to prevent or detect
I misstatements on a timely basis. A significant deficiency is a control deficiency, or combination
of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record,
process or report financial data reliably in accordance with U.S. generally accepted accounting
I principles such that there is more than a remote likelihood that a misstatement of the City's
financial statements that is more than inconsequential will not be detected by the City's internal
control. We consider the deficiencies described in the accompanying Schedule of Findings and
I Responses on Legal Compliance and Internal Control as Audit Findings 06-01 and 06-02 to be
significant deficiencies over financial reporting.
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I A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material misstatement of the financial statements
will not be prevented or detected by the City's internal control.
I Our consideration of the internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify all deficiencies
I in the internal control that might be significant deficiencies and, accordingly, would not
necessarily disclose all significant deficiencies that are also considered to be material
weaknesses. However, of the significant deficiencies described on the previous page, we
I consider Audit Finding 06-02 to be a material weakness.
COMPLIANCE AND OTHER MATTERS
I As part of obtaining reasonable assurance about whether the City's financial statements are free
of 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
I 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
I noncompliance that are required to be reported under Government Auditing Standards.
We also noted certain additional matters that we reported to management of the City in a
I separate letter dated June 27, 2008.
The City's responses to the findings identified in our audit are described in the accompanying
Schedule of Findings and Responses on Legal Compliance and Internal Control. We did not
I audit the City's responses and, accordingly, we express no opinion on it.
This report is intended solely for the information and use of the City Council, management,
I federal and state oversight awarding agencies and pass-through entities, and is not intended to be
and should not be used by anyone other than these specified parties.
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KERN, DEWENTER, VIERE, LTD.
I Minneapolis, Minnesota
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I REPORT ON LEGAL COMPLIANCE
I June 27,2008
I
I Honorable Mayor and Members
of the City Council
City of Shakopee
Shakopee, Minnesota
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We have audited the financial statements of the governmental activities, the business-type
I activities, each major fund, the aggregate remaining fund information and fiduciary activities of
the City of Shakopee, Minnesota, as of and for the year ended December 31, 2007, and have
issued our report thereon dated June 27, 2008.
I We conducted our audit in accordance with U.S. generally accepted auditing standards and the
provisions ofthe Minnesota Legal Compliance Audit Guide for Local Government, promulgated
by the State Auditor pursuant to Minnesota Statutes Sec. 6.65. Accordingly, the audit included
I such tests of the accounting records and such other auditing procedures as we considered
necessary in the circumstances.
I The Minnesota Legal Compliance Audit Guide for Local Government covers seven main
categories of compliance to be tested: contracting and bidding, deposits and investments,
conflicts of interest, public indebtedness, claims and disbursements, miscellaneous provisions
I and tax increment financing. Our study included all of the listed categories.
The results of our tests indicate that for the items tested, the City complied with the material
I terms and conditions of applicable legal provisions, except as described in the Schedule of
Findings and Responses on Legal Compliance and Internal Control.
This report is intended solely for the information and use of management, the City Council, and
I state regulatory agencies, and is not intended to be and should not be used by anyone other than
these specified parties.
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Minneapolis, Minnesota
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I Scott County, Minnesota
SCHEDULE OF FINDINGS AND RESPONSES ON
LEGAL COMPLIANCE AND INTERNAL CONTROL
I December 31, 2007
I CURRENT YEAR LEGAL COMPLIANCE FINDINGS:
Prompt Payment to Subcontractors
I Minnesota Statutes 471.425, Subd. 4a requires contracts of a municipality to have the prime
contractor pay any subcontractor within 10 days of the prime contractor's receipt of payment.
I The contract also must require the prime contractor pay interest of 1.5% per month or any part of
a month to the subcontractor for any undisputed amount not paid to the subcontractor within the
10 days.
I During our audit, we noted the City's standard contract for improvement projects does not
contain specific verbiage referencing payment within 10 days or the payment of interest at 1.5%
as required by Minnesota Statutes.
I City's Response
I The City has modified the 2008 standard contract to include the specific verbiage as required by
Minnesota Statutes.
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I CITY OF SHAKO PEE
Scott County, Minnesota
I SCHEDULE OF FINDINGS AND RESPONSES ON
LEGAL COMPLIANCE AND INTERNAL CONTROL
I December 31,2007
I PRIOR YEAR LEGAL COMPLIANCE FINDING:
Obtain Two Quotations for Contracts Between $ 10,000 and $ 50,000
I Minnesota Statutes 471.345 Subd. 4 states for contracts estimated to exceed $ 10,000 but not to
exceed $ 50,000, the contract may be made either upon sealed bids or by direct negotiation, by
obtaining two or more quotations for the purchase or sale when possible, and without advertising
I for bids or otherwise complying with the requirements of competitive bidding. The Statute also
states all quotations obtained must be kept on file at least a year.
I During our 2006 audit, it was noted the City only obtained one quote for the purchase of seven
Scott Air Packs.
I The City was in compliance with all bid and quote requirements for 2007.
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Scott County, Minnesota
I SCHEDULE OF FINDINGS AND RESPONSES ON
LEGAL COMPLIANCE AND INTERNAL CONTROL
I December 31, 2007
I CURRENT YEAR INTERNAL CONTROL FINDINGS:
Material Weakness
I Audit Finding 06-02 - Material Audit Adjustment
During our audit, we proposed an audit adjustment that we considered to be quantitatively
I material to the financial statements. The audit adjustment we proposed that was material to
the financial statements related to transfers.
I City's Response
A year-end journal entry was written backwards by a senior accounting staff member. In the
I future, the Finance Director will more closely monitor and review all entries to ensure this
does not happen again.
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Scott County, Minnesota
I SCHEDULE OF FINDINGS AND RESPONSES ON
LEGAL COMPLIANCE AND INTERNAL CONTROL
I December 31, 2007
I CURRENT YEAR INTERNAL CONTROL FINDINGS:
Significant Deficiency
I Audit Finding 06-01 - Lack of Segregation of Accounting Duties
Adequate segregation of accounting duties is in place when the four areas of a transaction
I have been separated: authorization, custody, recording and reconciliation.
As part of this year's audit, we reviewed the City's documentation of its internal control over
I significant areas including: cash receipts, cash disbursements and payroll. Areas in which
we noticed a lack of segregation are included below.
I Payroll
The Payroll Clerk processes payroll, posts payroll to the general ledger, issues direct
I deposits, prepares the payroll taxes, initiates transfers for payment of payroll, prepares all
W2s and maintains all data files as well as the payroll program.
Cash Receipts
I Deposits at the City Hall- The front desk personnel receives money, codes the revenue
and prepares bank deposits. The Senior Accounting Clerk reconciles cash and posts all
I deposits into the general ledger.
Deposits at the Recreation Center - One employee is able to receipt money and prepare
I the bank deposit.
Cash Disbursements
I The Accounting Clerk enters invoices, matches purchase orders to invoices and prepares
checks for payment.
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I Scott County, Minnesota
SCHEDULE OF FINDINGS AND RESPONSES ON
LEGAL COMPLIANCE AND INTERNAL CONTROL
I December 31,2007
I CURRENT YEAR INTERNAL CONTROL FINDINGS:
Significant Deficiency (Continued)
I Audit Finding 06-01 - Lack of Segregation of Accounting Duties (Continued)
I City's Response
The small size of the City's accounting staff limits how efficiently the segregation of duties
can be accomplished. In order to minimize the risk associated with having a limited
I accounting staff, the City has the following oversight procedures in place:
. The Payroll Supervisor reviews a detailed payroll report each pay period.
I . The Finance Director takes the deposits for the City Hall and Community Center to the
bank.
. All invoices are approved by an authorized purchaser.
I . The Finance Director reviews each bill for payment and manually signs each check.
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CITY OF SHAKO PEE
I Scott County, Minnesota
Management Letter
I For the Fiscal Year Ended December 31, 2007
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Scott County, Minnesota
I TABLE OF CONTENTS
I REPORT ON MATTERS IDENTIFIED AS A RESULT OF
THE A UD IT OF THE FIN AN CIAL STATEMENTS.......... ........... ...... ....... ................. 1
I MA TERIAL WEAKNESS...................................................................... ............................ 3
SI GNIFICANT DEFICIENCy.......................................................................................... 4
I CO NTRO L D EFI CIEN CY................................................................................................. 5
I LEGAL COMPLIANCE FIND IN G ......................... _..................... ................................... 6
REQUIRED COMMUNICA TION .................................................................................... 7
I FIN AN CIAL ANALySIS......................................................................... .......................... 10
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I REPORT ON MATTERS IDENTIFIED AS A RESULT OF
THE AUDIT OF THE FINANCIAL STATEMENTS
I June 27, 2008
I
Honorable Mayor and Members
I of the City Council
City of Shakopee
Shakopee, Minnesota
I 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, 2007, in accordance with U.S. generally
I accepted auditing standards and Government Auditing Standards, we considered the City's
internal control over financial reporting (internal control) as a basis for designing our auditing
procedures for the purpose of expressing our opinion on the financial statements, but not for the
I 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.
I Our consideration of internal control was for the limited purpose described in the preceding
paragraph and would not necessarily identify all deficiencies in internal control that might be
significant deficiencies or material weaknesses. The deficiencies in internal control we
I identified, if any, are stated within this letter.
A control deficiency 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
I misstatements on a timely basis. A significant deficiency is a control deficiency, or combination
of control deficiencies, that adversely affects the City's ability to initiate, authorize, record,
process or report financial data reliably in accordance with U.S. generally accepted accounting
I principles such that there is more than a remote likelihood that a misstatement of the City's
financial statements that is more than inconsequential will not be prevented or detected by the
City's internal control.
I A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material misstatement of the financial statements
I will not be prevented or detected by the City's internal control.
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I The accompanying memorandum includes financial analysis and recommendations for
improvement of accounting procedures and internal control measures that came to our attention
as a result of our audit of the financial statements of the City for the year ended December 31,
I 2007. The matters discussed herein were considered by us during our audit and they do not
modify the opinion expressed in our Independent Auditors' Report dated June 27,2008, on such
statements.
I This communication is intended solely for the information and use of management and the City
Council and is not intended to be and should not be used by anyone other than these specified
parties.
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I KERN, DEWENTER, VIERE, LTD.
Minneapolis, Minnesota
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I CITY OF SHAKOPEE
Scott County, Minnesota
I MATERIAL WEAKNESS
December 31,2007
I MATERIAL AUDIT ADJUSTMENT
I We proposed an audit adjustment that we considered to be quantitatively material to the financial
statements. The audit adjustment we proposed that was material to the financial statements
related to transfers.
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CITY OF SHAKOPEE I
Scott County, Minnesota
SIGNIFICANT DEFICIENCY I
December 31,2007
LACK OF SEGREGATION OF ACCOUNTING DUTIES I
Adequate segregation of accounting duties is in place when the four areas of a transaction have I
been separated: authorization, custody, recording and reconciliation.
As part of this year's audit, we reviewed the City's documentation of its internal control over I
significant areas including: cash receipts, cash disbursements and payroll. Areas in which we
noticed a lack of segregation are included below.
Payroll I
The Payroll clerk processes payroll, posts payroll to the general ledger, issues direct deposits, I
prepares the payroll taxes, initiates the transfer for payment of payroll, prepares all W2s,
maintains all data files and the payroll program.
Cash Receipts I
Deposits at the City Hall- The front desk personnel receive money, code the revenue and
prepare bank deposits. The Accountant reconciles cash and posts all deposits in to the I
general ledger.
Deposits received at the Recreation Center - One employee is able to receipt money, prepare I
the bank deposits and take the deposits to the bank.
Cash Disbursements I
The Accounting Clerk enters invoices, matches purchase orders to invoices and prepares
checks of payment. I
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 I
derived. However, management must remain aware of this situation and should continually
monitor the accounting system, including changes that occur.
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I CITY OF SHAKO PEE
Scott County, Minnesota
I CONTROL DEFICIENCY
December 31,2007
I IMPROVE ICE ARENA RECEIPTING INTERNAL CONTROLS
I During our audit, we reviewed the receipts collection system 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 funds and also maintains copies of signed ice rental
I contracts and a list of payors. There also appears to be a lack of verification or reconciliation of
the ice arena receipts to actual deposits.
I To improve internal controls over the ice arena receipting process and to prevent omissions and
errors, we recommend the performance of periodic reconciliation of ice arena receipts to actual
deposits.
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CITY OF SHAKO PEE I
Scott County, Minnesota
LEGAL COMPLIANCE FINDING I
December 31, 2007
PROMPT PAYMENT TO SUBCONTRACTORS I
Minnesota Statutes 471.425, Subd. 4a requires contracts of a municipality to have the prime I
contractor pay any subcontractor within 10 days of the prime contractor's receipt of payment.
The contract also must require the prime contractor pay interest of 1.5% per month or any part of I
a month to the subcontractor for any undisputed amount not paid to the subcontractor within the
10 days.
During our audit, we noted the City's standard contract for improvement projects does not I
contain specific verbiage referencing payment within 10 days or the payment of interest at 1.5%.
We recommend the City modify its contract to include this specific verbiage as required by
Minnesota Statutes. I
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I CITY OF SHAKOPEE
Scott County, Minnesota
I REQUIRED COMMUNICATION
December 31, 2007
I We have audited the basic financial statements of the City for the year ended December 31,
I 2007, and have issued our report dated June 27,2008. Professional standards require that we
provide you with the following information related to our audit.
OUR RESPONSIBILITY UNDER U.S. GENERALLY ACCEPTED AUDITING
I STANDARDS, GOVERNMENT AUDITING STANDARDS
As stated in our engagement letter, our responsibility, as described by professional standards, is
I 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 U.S. generally accepted
accounting principles. Our audit of the financial statements does not relieve you or management
I of your responsibilities. Our responsibility is to plan and perform our audit to obtain reasonable,
but not absolute, assurance that the financial statements are free of material misstatement. As
part of our audit, we considered the internal control of the City. Such considerations were solely
I for the purpose of determining our audit procedures and not to provide any assurance concerning
such internal control. Weare responsible for communicating significant matters related to the
audit that are, in our professional judgment, relevant to your responsibilities in overseeing the
financial reporting process. However, we are not required to design procedures specifically to
I identify such matters.
As part of obtaining reasonable assurance about whether the City's financial statements are free
I of 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
I opinion on compliance with those provisions was not an objective of our audit.
PLANNED SCOPE AND TIMING OF THE AUDIT
I We performed the audit according to the planned scope and timing previously communicated to
you.
I QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES
Management is responsible for the selection and use of appropriate accounting policies. In
I accordance with the terms of our engagement letter, we will advise management about the
appropriateness of accounting policies and their application. The significant accounting policies
used by the City are described in Note 1 to the financial statements. No new accounting policies
I were adopted and the application of existing policies was not changed during 2007. We noted no
transactions entered into during the year for which there is a lack of authoritative guidance or
consensus. There are no significant transactions that have been recognized in the financial
I statements in a different period than when the transaction occurred.
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CITY OF SHAKO PEE I
Scott County, Minnesota
REQUIRED COMMUNICATION I
December 31, 2007
QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES I
Accounting estimates are an integral part of the financial statements prepared by management I
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 I
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 I
useful lives, as determined by management, using the straight-line method.
Expense Allocation - The City is currently allocating certain costs among the programs and I
supporting services benefited. The costs are allocated based on management's estimates.
We evaluated the key factors and assumptions used to develop the above estimates in I
determining they are reasonable in relation to the financial statements taken as a whole.
DIFFICUL TIES ENCOUNTERED IN PERFORMING THE AUDIT I
We encountered no difficulties in dealing with management in performing and completing our
audit. I
CORRECTED AND UNCORRECTED MISSTATEMENTS
Professional standards require us to accumulate all known and likely misstatements identified I
during the audit, other than those that are trivial, and communicate them to the appropriate level
of management. There were uncorrected misstatements related to capital contributions and bond I
issuance costs. Management has determined their effects are immaterial, both individually and
in the aggregate, to the financial statements taken as a whole. A material misstatement related to
transfers, detected as a result of audit procedures, was corrected by management.
DISAGREEMENTS WITH MANAGEMENT I
For purposes of this letter, professional standards define a disagreement with management as a I
financial accounting, reporting or auditing matter, whether or not resolved to our satisfaction that
could be significant to the financial statements or the auditors' report. We are pleased to report
that no such disagreements arose during the course of our audit. I
MANAGEMENT REPRESENT A TIONS
We requested certain representations from management which were provided to us in the I
management representation letter.
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CITY OF SHAKOPEE I
Scott County, Minnesota
I REQUIRED COMMUNICATION I
I
December 31, 2007
I I
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MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNT ANTS
I 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
I I consultation involves application of an accounting principle to the City's financial statements or
I a determination of the type of auditors' opinion that may be expressed on those statements, our
I
professional standards require the consulting accountant to check with us to determine that the
I consultant has all the relevant facts. We are not aware of any consultations by the City's
management with other accountants during the course of our audit.
OTHER ISSUES
I 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.
I However, these discussions occurred in the normal course of our professional relationship and
our responses were not a condition to our retention.
I OTHER INFORMATION IN DOCUMENTS CONTAINING AUDITED FINANCIAL
STATEMENTS
I We have not reviewed, and it is our understanding, that no other published documents exist that
contain audited financial statement information, for which we are currently auditing. As stated
in our engagement letter, if you publish or reproduce the financial statements or make reference
to our Firm name in relation to such documents, you agree to provide us with a copy of the final
I reproduced material for our approval before it is distributed.
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CITY OF SHAKO PEE I
Scott County, Minnesota I
FINANCIAL ANALYSIS
December 31,2007
I
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 I
presented to provide a basis for discussion of past performance and how implementing certain
changes may enhance future performance. We suggest you view each graph and document if our
analysis is consistent with yours. A subsequent discussion of this information should be useful I
for planning purposes.
GENERAL FUND
In 2007, expenditures exceeded revenues for the second time in five years. As a result, the fund I
balance decreased slightly from $ 9,844,634 in 2006 to $ 9,707,533 in 2007. Of the total 2007
fund balance, $ 7,896,883 is umeserved. It is the City's policy to maintain an umeserved fund I
balance between 40% and 45% of the subsequent year's expenditures and transfers out. The
umeserved fund balance at December 31, 2007 represents 43% of the 2008 budgeted
expenditures and transfers out. The bar chart below highlights the General Fund total revenues, I
expenditures and fund balance for the last five years.
I
i IGeneral Fundi I
$18,000,000 / I
$16,000,000 / ~
~
~
$14,000,000 - / I
..&iii!i ~fiiI -
/ l- - "
$12,000,000 \ .
~, 'i:
1/ 'Ii: - ~'- ~ I
$10,000,000 ~ ~ ~!!!!! ~.!;;;;; ~s
1- ~
~
1/ ~ f- - f---
$8,000,000 ~ ~!!!!! .1
I~ ,.; I
1/ 'I- , - l- I-
$6,000,000 , i
, j ,
V ;,1 - , - ; ,.j f-- - f---
~,~. .~
I $4,000,000 , .j . J I
~".'
1/ .) - ,j l- f-- 1_ " f---
$2,000,000 t...;( I .,
~~! . , ...
1/ .,- , l- f-- - !-----,
1
$- - I
2003 2004 2005 2006 2007
o Revenues $12,753,322 $12,887,186 $14,495,115 $13,750,652 $15,266,076
! o Expenditures 9,833,284 11,199,607 12,259,973 13,862,250 16,129,807 I
o Fund Balance 5,644,819 7,246,854 9,679,142 9,844,634 9,707,533
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CITY OF SHAKOPEE I
Scott County, Minnesota
I FINANCIAL ANALYSIS ]
December 31, 2007 I
I I
GENERAL FUND
I The City has experienced increased revenues in four of the last five years. In 2007, revenues I
increased $ 1,515,424, or II %, from $ 13,750,652 in 2006 to $ 15,266,076 in 2007. This I
I increase was primarily a result of a 22% increase in taxes as a result of a levy increase. I
Offsetting the increase in property tax revenue was a decrease in license and permit revenue of
$ 670,514, or 41 %, as a result of a general decline in the economy. The following graphs I
illustrate the allocation of the revenues for 2007 and 2006.
I 12007 General Fund Revenuesl I
I
I Charges for Services Miscellaneous I
7% 4% I
I Fines and Forfeitures
3%
Licenses and Permits
I 6%
Intergovernmental ]
4%
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I Taxes I
76%
I
I 12006 General Fund Revenuesl I
Charges for I
I Services Miscellaneous ]
Fines and 9% 3%
Forfeitures I
3%
I Licenses and I
Permits
12% I
I I
I Intergovernmental Taxes \
4% 69% I
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I
CITY OF SHAKO PEE I
Scott County, Minnesota I
FINANCIAL ANALYSIS
December 31,2007
I
GENERAL FUND
General Fund Revenues I
Budget and Actual
$12,000,000 I
$10,000,000 I
I $8,000,000 I
I
I $6,000,000 I
I
$4,000,000 I
I
I $2,000,000 ~cI-.EiJIIII LI I
I ~-
$- ~"-'"-. ",_...,-..-
Taxes Special Assessments Intergo\"ernmental Licenses and Permits Fines and Forfeits Charges for Scryiccs Miscellaneous I
DActual $11,569,002 $5,405 $590,438 $973,658 $451,418 $1,090,018 $586,137
. Budgel 11,560,500 2J)()() 402,820 1.504,700 280.UOO 1,558,800 283,500
As shown in the above graph, actual revenues were fairly close to budgeted amounts for 2007. I
Actual revenues fell short of budgeted revenues by $ 326,244. The largest variances between
budgeted and actual amounts were is licenses and permits and charges for services where
budgeted amounts exceeded actual amounts by $ 531,042 and $ 468,782, respectively. These I
variances were caused by a downturn in the housing market as well as a general decline in the
~conomy. This was somewhat offset by a positive budget variance of$ 302,637 in investment
Income.
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I CITY OF SHAKO PEE
Scott County, Minnesota I
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FINANCIAL ANALYSIS I
I December 31,2007
I I,
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GENERAL FUND I
I I
Total General Fund expenditures increased in 2007 from $ 13,862,250 to $ 16,129,807, or 16%. I
I
Expenditures have steadily increased over the past five years due to growth in the City. The I
following is an illustrated expenditure breakdown for 2007 and 2006. The largest expenditure I
I !
increase during 2007 was in public safety with an increase of $ 1,609,518. This increase was
primarily related to increases in police and fire wages and benefits of approximately $ 660,000 I
I and $ 77,000, respectively. Additional expenditure increases were attributed to the purchase of I
new radios at an approximate cost of $ 420,000, as well as increased fire calls, building
inspections and the settlement of a lawsuit. I
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I 12007 General Fund Expendituresl I
I Recreation General
10% Government
20%
I Public Works
16%
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Public Safety I
I I 54%
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12006 General Fund Expendituresl
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Recreation
10%
General Government
I 22%
Public Works
17%
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I Public Safety
51%
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CITY OF SHAKOPEE I
Scott County, Minnesota I
FINANCIAL ANALYSIS
December 31,2007
I I
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GENERAL FUND
General Fund Expenditures I
I Budget and Actual I
$9,000,000
$8,000,000 I
$7,000,000
$6,000,000 I
I
I $5,000,000 I
!
I $4,000,000
I $3,000,000 - I
!
I $2,000,000
$1,000,000 I
$-
General Government Public Safety Public Works Recreation
DActual $3,161,694 $8,716,495 $2,632,347 $1,619,27\ I
. Budget 3,398,970 8,777 ,800 2,777,640 1,778,460
I Actual expenditures were under budgeted amounts in the General Fund by $ 692,873. As shown I
I above, actual expenditures came in below budgeted amounts in every function. The largest
I differences between actual and budgeted amounts were in general government and recreation,
i where actual expenditures were under budgeted expenditures by $ 237,276 and $ 159,189, I
respectively. In addition to the programs shown above, the City annually budgets an amount for
unexpected expenses whieh may occur. For 2007, the City budged $ 89,810 but did not need to
utilize any of this budget. I
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I CITY OF SHAKO PEE
I Scott County, Minnesota
FINANCIAL ANALYSIS
December 31,2007
I
DEBT SERVICE
I The following charts illustrate debt service requirements through 2030 and bonded debt for the
last five years.
I Debt Service Schedule
(Including Principal and Interest)
I $20,000,000
S18,000,OOO
I SI6,000,000
$14,000,000
I SI2,000,000
SIO,OOO,OOO i
S8,OOO,000
I $6,000,000
S4,000,000 ~ \
,
I S2,000,000
$-
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023+
I I . G.O. Bonds o Revenue Bonds I
[I IBonded G.O. Debtl
S30,000,000
I $25,000,000 I
I S20,000,000 I
S15,000,000 \
I
S10,000,OOO
I $5,000,000
I S-
2003 2004 2005 2006 2007
o Gross Bonded Debt o Net Bonded Debt . Debt Service Fund Balance
I 15
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CITY OF SHAKO PEE I
Scott County, Minnesota I
FINANCIAL ANALYSIS
December 31,2007
I
ENTERPRISE FUNDS
The City has four Enterprise Funds. The following charts compare the segment information and I
retained earnings of all the Enterprise Funds for the last five years.
!Electric Fundi I
$40,000,000 I
$35,000,000
$30,000,000 I
$25,000,000
S20,OOO,000 I
$15,000,000
I $10,000,000 I
! $5,000,000
$- I
2003 2004 2005 2006 2007
o Operating Expenses
o Cncome before Contributions and Transfers I
JWater Fundi I
S4,500,000
S4,000,Ooo
S3,500,000 I
$3,000,000
$2,500,000 I
S2,000,000
$1,500,000 I
SI,OOO,OOO
$500,000
$- I
$(500,000)
2003 2004 2005 2006 2007
o Operating Expenses I
o Income before Contributions and Transfers
16 I
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I CITY OF SHAKO PEE
I Scott County, Minnesota
FINANCIAL ANALYSIS
I December 31,2007
I
ENTERPRISE FUNDS
I I I Sewer Fund I
] I $4,500,000
i
$4,000,000
] I ~
$3,500,000 ~
1
P
$3,000,000 }
I
$2,500,000
,
I $2,000,000 ~
I
I $1,500,000
1
I $1,000,000
,j
$500,000 1
~
~
I $- ----.
$(500,000)
2003 2004 2005 2006 2007
I . Operating Revenues o Operating Expenses o Operating Income (Loss) o Change in Net Assets
I During 2007, the Sewer Fund had an operating loss for the second consecutive year. This was a
result of increases in operating expenses, including depreciation. Operating expenses increased
$ 152,721, or 5%, from 2006 to 2007. Although the Fund had an operating loss for the year, the
I Fund net assets increased by $ 3,884,672, primarily as a result of capital contributions from the
City and the Metropolitan Council in the amount of $ 3,280,993 and an increase in investment
income of $ 266,20 I.
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CITY OF SHAKO PEE
Scott County, Minnesota I
FINANCIAL ANALYSIS
December 31, 2007
I
ENTERPRISE FUNDS
i IStorm Drainage Fundi I
I
$5,000,000 I
I
I $4,000,000 I
I
$3,000,000
I
$2,000,000
$1,000,000 I
I $- I
I $( 1 ,000,000) I
2003 2004 2005 2006 2007
. Service Charges o Operating Expenses o Operating Income (Loss) o Change in Net Assets I
Operating income in the Storm Drainage Fund has been slowly declining from 2003 to 2006 with I
a slight increase in 2007. The fund still realized an $ 85,720 operating loss for the year, which is
a significant improvement from the $ 351,300 operating loss in 2006. The primary reason for the
increase in operating income from the prior year was due to a $ 205,647 reduction in operating I
expenses as a result of fewer repair projects being done in 2007 than in 2006, In addition,
operating revenues increased $ 95,295 due to increases in rates. Although the Fund had an
operating loss again this year, the Fund nd assets increased by $ 1,527,949, primarily as a result
of $ 693,194 in capital contributions from the City and developers and an increase in investment I
income of$ 334,787.
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I CITY OF SHAKO PEE
I Scott County, Minnesota
FINANCIAL ANALYSIS
December 31,2007
I
INTERNAL SERVICE FUNDS
I The Equipment Fund was started in 1995 to fund City equipment purchases. The Fund has
I shown increasing growth and income each year as illustrated by the following chart. This
increase is primarily due to new equipment additions and user charge adjustments to the various
I departments.
I IEquipment Fundi
$1,200,000
I I
] $1,000,000
I $800,000
I $600,000
I I
I $400,000 I
I
$200,000 ".1
I I i_
$-
2005 2007
, [] Operating ExpensesfDepreciation o Operating Income o Change in Net Assets
I I The Building Fund was established in 1999 to fund City building improvements. The following I
I
chart illustrates fund activity for 2003 through 2007. The Fund saw a large increase in net assets I
I in 2005 mainly due to the completion of the City's public works building. I
IBuilding Fundi I
I
I $3,500,000 I
;
$3,000,000
I ., I
$2,500,000
!
$2,000,000 I
I
$1,500,000 I
$1,000,000 I
I
$500,000
I
$-
I $(500,000) I
2003 2004 2005 2006 2007
. Rental Charges !;!I Operating ExpenseslDepreciation o Operating Income o Change in Net Assets
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CITY OF SHAKO PEE I
Scott County, Minnesota I
FINANCIAL ANALYSIS
December 31, 2007
I
INTERNAL SERVICE FUNDS
The Employee Benefits Fund was established in 2004 to account for funds accumulated for City I
employee compensated absences. The Fund is fully funded with $ 1,511,545 in assets and
$ 1,339,936 in liabilities. I
ADDITIONAL INFORMATION
As seen in the chart below, the City's taxable tax capacity has been consistently increasing since I
tax reforms were implemented in 2002. Taxable tax capacity increased 14% from 2006 to 2007
which enabled the City to increase the certified levy amount by 16%. As a result of these
I changes, the City's tax capacity rate increased from 30.970 for property taxes payable in 2006 to I
I 31.940 for property taxes payable in 2007.
[Taxable Tax Capacity and Certified Levyl I
$40,000,000 I
$35,000,000
$30,000,000 I
$25,000,000 I
$20,000,000
I
I $15,000,000 I
$10,000,000
$5.000,000 I
$- I
2003 2004 2005 2006 2007
o Taxable Tax Capacity $22,399,411 $25,626,029 $30,211,233 $31,618,556 $36,078,921
. Certified Levy 7,889,018 8,625,695 9,703,206 10,951,917 12,725,449
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I CITY OF SHAKOPEE
I Scott County, Minnesota
FINANCIAL ANALYSIS
December 31,2007
I
ADDITIONAL INFORMATION
I !Tax Capacity Ratel
34.500
,I 34.000 _ 1339391
33.500 -
I 33,000 . -
32.500 - [3W3l
1319401
32 000 - ,--
I 31500 - ~ -
31.115 1309701
.----
31.000 - -
I 30.500 - -
30.000 - -
29.500 - -
I 29.000
2003 2004 2005 2006 2007
I General Fund Revenues/Expenditures
Per Capita
I $600 ~
$500 1$4231
$419
I $400
I $300
$200
I $100
""~
- -l'! - -- -
$- ,.,...'" .., ---",-,"",,- ---0_"_,'
I 2003 2004 2005 2006 2007
I o Revenues Q Expenditures I
I 2003 2004 2005 2006 2007
Population 24,967 28,913 31,000 32,800 33,960
I Number of Full- Time Employees 155 167 174 175 174
Population Per Employee 161 173 178 187 195
I 21
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I
I CITY OF SHAKO PEE
I Scott County, Minnesota
I FINANCIAL ANALYSIS I
I December 31, 2007
I I
I
ADDITIONAL INFORMATION
I I
I INational Bond Ratingsl
I
I 18% I
!
16%
14% I
12% I
10%
I
8%
6% ,I
4% I
2%
0% I
Aaa Aal Aa2 Aa3* Al A2 A3 Baal Baa2 B aa3 Below
* - Denotes City of Shako pee's Rating I
The City's bond rating was raised to Aa3 in April 2004. I
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CITY OF SHAKO PEE I
Scott County, Minnesota I
I I
FINANCIAL ANALYSIS I
December 31, 2007
I I
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ADDITIONAL INFORMATION
I The following information shows 2007 per capita data for the City in comparison to three other I
I
cities similar in size and/or operations (Savage, Crystal and Apple Valley). This information is
I based on the population estimates listed below. When analyzing this information, keep in mind
that each City is unique in its operations.
Po ulation Em 10 ees
I 33,960 174
25,485 146
I I 22,306 84
I 48,938 275
I 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.
I' 2007 General Fund
Revenues and Expenditures Per Capita
I 600.00
I
500.00 i
I 400.00
I 300.00
I
\
I 200.00 \
I
I 100.00
Total Expenditures Total Revenues Tax Revenues
I o Shakopee 474.96 449.53 340.67
. Savage 4\6.86 430.25 326.36
o Crystal 431.53 496.61 309.24
I o Apple Valley 420.71 475.82 363.33
* Revenues and expenditures obtained from audited financial data
I ** Number of employees and population for the City of Apple Valley is 2006 information as
2007 data is unavailable
I 23
I
CITY OF SHAKO PEE I
Scott County, Minnesota I
FINANCIAL ANALYSIS
December 31,2007
I
ADDITIONAL INFORMATION
The following graphs show the General Fund expenditures by function per capita for the various I
Cities. The first graph includes all expenditures and the second graph excludes the expenditures
for Internal Service Fund rents which are charged to the various functions. I
2007 General Fund
Expenditures Per Capita I
180.00
160.00
140.00 I I
120.00
100.00
80.00 I I
60.00
40.00 I
20.00
Genera} Government Police Fire Public Works Recreation I
o Shakopee 93.10 168.09 60.75 77.51 47.68
. Savage 80.65 133.68 38.51 84.67 50.04
o Crystal 84.53 160.70 45.59 82.66
o Apple Valley 93.60 137.70 34.69 61.34 82.12 I
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I 2007 General Fund Expenditures
Per Capita (Excluding ISF Rents) I
I 180.00
I 160.00
140.00 I
120.00
I 100.00 I
I
80.00
60.00
40.00 I
20.00
General Government Police Fire Public Works Recreation I
[] Shakopee 90.98 159.66 42.15 68.75 39.98
. Savage 80.65 133.68 38.51 84.67 50.04
o Crystal 84.53 160.70 45.59 82.66 I
o Apple Valley 93.60 137.70 34.69 61.34 82.12
* Expenditures obtained from audited financial data
24 I
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I
I CITY OF SHAKOPEE
I Scott County, Minnesota
FINANCIAL ANALYSIS
i December 31,2007
I I
I
ADDITIONAL INFORMATION
I The graph below shows the total revenues, expenditures, capital outlay and outstanding debt per I
capita for the various Cities. Information is based on totals for all governmental funds.
I I
2007 Per Capita Information I
Governmental Funds
I 3,000.00
I
I I 2,500.00
I
I 2,000.00
I ,I
I
I \,500.00
I
I \,000.00
I 500.00
I Outstanding Debt Total Revenues Tax Revenues Capital Outlay
I o Shako pee 728.06 7\3.15 385.29 214.6\
. Savage 2,669.61 971.38 605.07 4\8.\8
I o Crystal 424.03 820.26 406.\4 \34.\6
o Apple Valley 869.6\ 682.46 429.55 217.38
I * Revenues, expenditures and outstanding debt obtained from audited financial data
J
I
I
I
I 25